**UNITED STATES SECURITIES AND EXCHANGECOMMISSIONWashington, D.C.  20549**

** FORM 10-QSB**

** ** X        QUARTERLY REPORTUNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Forthe quarterly period ended March 31, 2003

__        TRANSITION REPORTUNDER SECTION 13 OR 15(D) ON THE EXCHANGE ACT

For the transition period from_______________ to _______________

**Commission file number      0-5559     **

**FIRST FINANCIAL CORPORATION**(Exact name of small business issuer as specified in its charter)

|                      Texas                |            74-1502313                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              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| (State or other jurisdiction of      incorporation or organization)                                                                                                                             | (I.R.S. Employer IdentificationNo.)       
 
    800 Washington Avenue, Waco, Texas       
             76701              
(Address of principal executive offices)  (Zip Code)
 

Issuer's telephone number       (254) 757-2424                    

Number of shares of theIssuer's Common stock outstanding on April 30, 2003 was 173,528.

Transitional SmallBusiness Disclosure Format (check one)                    Yes ____         No_X__

 

FORM 10-QSB

FIRST FINANCIAL CORPORATIONMARCH 31, 2003

 

INDEX

 

Part I FinancialInformation                                                       Page No.

            Item 1. FinancialStatements     

                                   ConsolidatedBalance Sheet                            1                                   as of March 31, 2003

                                   Consolidated Statements of Income                  2forthe Three-Months endedMarch31, 2003 and 2002

                                   ConsolidatedStatements of Cash Flow                                   for the Three-Months                                     endedMarch 31, 2003 and 2002                     3

                                   Notesto Consolidated Financial                                     Statements                                                        4-5

           Item 2. Management'sDiscussion and Analysis                                    ofResults of Operations and Financial               5-8                                    Condition                                                         

           Item 3.Controls and Procedures                                               8

                        

Part II Other Information

           Item 1. LegalProceedings                                                        8

           Item 5. OtherInformation                                                         8

           Item 6. Exhibitsand Reports on Form 8-K                               8

 

 
        First Financial CorporationConsolidated Balance Sheet              March 31, 2003               (Unaudited)Assets------      Cash and cash equivalents$2,433,040 Restricted cash          797,927       Accounts receivable, net of allowance for doubtful accounts       1,251,435   of $113,272      Marketable investment securities            63,181       Restricted marketable investment securities          600,951       Real estate held for investment,at cost          444,000 Mortgage loans  
36,948,178       Property and equipment          631,968 Other assets       1,848,106    --------------------     Total Assets$45,018,786     ============         Liabilities and Stockholders' Equity        --------------------------------------      Notes on line of credit$36,664,318 Note payable            50,000 Accounts payable       1,016,635       Estimated reserve for losses under servicing  agreements           234,595 Other liabilities       1,495,726    --------------------     Total Liabilities     39,461,274    --------------------       Stockholders' equity:        Common stock - no par value; authorized    500,000 shares;      issued 183,750 shares,          of which 10,222 shares are held in    treasury shares             1,000         Additional paid-in capital          518,702   Retained earnings       5,045,580         Accumulated other comprehensive income:          Unrealized gain (loss) on marketable securities, net of tax            27,539    --------------------        5,592,821   Less:       Treasury stock - at cost           (35,309)   --------------------     Total Stockholders' Equity       5,557,512    --------------------           Total Liabilities and Stockholders' Equity $   45,018,786     ============      See accompanying notes to consolidated financial statements.
 

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First Financial Corporation      Consolidated Statements of Income       Three months ended March 31, 2003 and 2002(Unaudited)2003     2002        ----------             ----------    Revenues:  Loan administration$3,208,319 $1,214,338   Interest income          670,550           495,728   Other income          391,750           275,929    --------------------    --------------------      Total revenues       4,270,619        1,985,995 Expenses:  Salaries and related expenses       1,627,182        1,327,097   Interest expense          537,929           277,769         Provision for losses under servicing    agreements                  -                     -     Other operating expenses       1,401,362           797,768    --------------------    --------------------      Total expenses       3,566,473        2,402,634    --------------------    --------------------            Income before income taxes,            minority interest, and equity in earnings      (loss) of affiliates           704,146          (416,639)Federal income taxes                  -                     -      --------------------    --------------------            Income before minority interest          704,146          (416,639)Minority interest in net loss     -    235,744    --------------------    --------------------            Income before equity in earnings       (loss) of affiliates           704,146          (180,895)      Equity in earnings (loss) of affiliates                  -               (7,617)     Net income          704,146          (188,512)Other comprehensive income:        Unrealized holding gains (losses)             1,742            (28,072)   --------------------    --------------------      Comprehensive income $       705,888  $      (216,584)    ============    ============Income per common share$4.07 ($1.25)    ============    ============      See accompanying notes to consolidated financial statements.
 

2
      First Financial Corporation         Consolidated Statement of Cash Flows(Unaudited)       Three Months Ended March 31,          ----------------------------2003     2002         -----------              -----------          Cash flows from operating activities:   Net income (loss)$704,146 ($188,512)   Adjustments to reconcile net income(loss) to    net cash used by operating activities:   Depreciation            54,242             29,138    Provision for loan losses           178,308                   -      Equity in (income) loss of affiliates                  -                7,617          Realized (gains) losses on marketable investment securities                  -              (30,886)         Net (increase) decrease in accounts receivable            20,278          (104,559)   Net (increase) decrease in other assets            59,877             95,786          Net increase (decrease) in accounts payable         (181,086)            40,669          Net increase (decrease) in other liabilities          127,144          (118,375)   Increase in minority interest                  -            (235,529)         (Increase) decrease in restricted cash used      in operating activities - net           (92,253)           (63,246)   Mortgage loans funded   (175,020,264)   (125,829,421)   Mortgage loans sold    180,963,465     142,278,777          Increase in mortgage loans participations sold         (390,726)                  -      Other            85,869             10,049    --------------------    --------------------               Net cash provided (used) for operating activities       6,508,999      15,891,509     --------------------    -------------------- Cash flows from investing activities:         Proceeds from sale of marketable investment securities                  -             181,525          Purchases of marketable investment securities                  -               18,571    Unrealized holding (gain) loss             1,742            (28,072)   Purchase of property and equipment           (21,894)         (162,166)   Principal collections on mortgage loans            12,664             13,444          (Increase) decrease in deferred gain on sale of property & equipment            43,780             12,495    --------------------    --------------------               Net cash provided (used) for investing activities            36,292             35,798    --------------------    -------------------- Cash flows from financing activities:   Net change in short term borrowings      (5,498,775)    (16,063,258)   --------------------    --------------------               Net cash used for financing activities      (5,498,775)    (16,063,258)   --------------------    --------------------       Net increase (decrease) in cash and cash equivalents       1,046,517          (135,951)      Cash and cash equivalents at beginning of year       1,386,523        1,060,876    --------------------    -------------------- Cash and cash equivalents at end of period$2,433,040 $924,925     ===========    ===========      Supplemental Disclosure of Cash Flow Information   Interest Paid$590,578 $324,923     ===========    ===========      See accompanying notes to consolidated financial statements.
 

3

FIRST FINANCIALCORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATEDFINANCIAL STATEMENTS(Unaudited)

PART I - FINANCIAL INFORMATION

 

1 - Basis of Presentation

The financial informationincluded herein for First Financial Corporation, and all of its wholly ownedsubsidiaries (the "Company") is unaudited; however, such unauditedinformation reflects all adjustments which are, in management's opinion,necessary for a fair presentation of the financial position, results ofoperations and statement of cash flows for the interim periods. In preparingthese financial statements, management is required to make estimates andassumptions that affect the reported amounts of assets and liabilities as ofthe date of the balance sheet and revenue and expense for the period. Actualresults could differ significantly from those estimates. 

As more fully discussed inthe Annual Report Form 10-KSB for the year ended December 31, 2002, effectiveJuly 31, 2002, the Company acquired all of the outstanding common stock ofFirst Preference Mortgage Corp. ("FPMC") so that the Company directly owns 100%of the capital stock of FPMC. FPMC was a third-tier subsidiary of Key Group,Ltd. ("Key Group"), a Texas Limited Partnership, which the Company owned anapproximately 53% interest. The Company's consolidated statements of incomeinclude the revenue and expense of Key Group for the period January 1, 2002 toMarch 31, 2002 and the revenue and expense of FPMC for the period January 1,2003 to March 31, 2003. The minority interest in net loss for the three monthsended March 31, 2002 represents the ownership of other entities in the net lossof Key Group.

The results of operationsand changes in cash flow for the three-month period ended March 31, 2003 arenot necessarily indicative of the results to be expected for the full year orany future period.

Certain reclassificationswere made to prior periods to ensure comparability with the current period.

2 - Earnings Per Share

Earnings per common sharewere computed by dividing net income by the weighted average number of sharesoutstanding during the period. 

 

4

 

3 - Income Taxes

Income taxes are providedfor the tax effects of transactions reported in the financial statements andconsist of taxes currently due plus deferred taxes related primarily todifferences between the basis of the loan loss reserve for financial and incometax reporting.  The deferred tax assets and liabilities represent the futuretax return consequences of those differences, which will either be taxable ordeductible when the assets and liabilities are recovered or settled.  Deferredtaxes also are recognized for operating losses that are available to offsetfuture taxable income and tax credits that are available to offset futurefederal income taxes.  The Company has approximately $6,000,000 in availablenet operating loss carryforward benefits for financial statement purposes tooffset future income, if any. A valuation allowance has been provided for alltax benefits.

4 - Contingencies

Substantially all of theconventional pools of manufactured home loans serviced by the Company,approximately $325,000 at March 31, 2003, were sold to investors withrecourse.  The recourse provisions typically require the Company to repurchasedelinquent loans at the unpaid balances plus accrued interest, or replacedelinquent loans with another loan which is current.  Further, several of theagreements require the Company to establish and maintain cash reserveaccounts.  Deposits are periodically made to the accounts equal to a specifiedpercent of the outstanding loans. The accounts may be used to coverdeficiencies from foreclosure and liquidation of delinquent pooled mortgageloans.  Such cash reserve accounts totaled $4,495 and are included inrestricted cash at March 31, 2003.

Item 2. Management's Discussionand Analysis of Results of Operations and Financial Condition

Results of Operations

The Company had  netincome of $704,146 for the quarter ended March 31, 2003 compared to net loss of($188,512) for the same period in 2002.  Loan administration revenues were$3,208,319 for the first quarter for 2003 compared to $1,214,338 for the firstquarter of 2002.  The increase in loan administration revenues is the result ofincreased loan origination fees from the Company's residential mortgage loanoperations. During the quarter ended March 31, 2003, FPMC funded approximately$175.0 million in new residential mortgage loans compared to approximately$125.8 million during the same period in 2002. In addition, the revenues fromthe sale of the mortgage loans to governmental and private investors increasedby approximately $1.5 million for the three months ended March 31, 2003compared to the same period in 2002. This increase is due to a significantimprovement in the net margins realized on the sale of these mortgage loans anda $38.5 million increase in the amount of mortgage loans sold during theperiod. The net margins realized during the first quarter of 2002 weredecreased due to the unstable market conditions that prevailed during theperiod.

 

5

For the quarter endedMarch 31, 2002, Key Group had a net loss of ($500,955). The Company's share ofthe net loss of Key Group was ($265,211) for the quarter ended March 31, 2002.The minority interest in the net loss of Key Group amounted to $235,744 for thequarter ended March 31, 2002. The minority interest represents the ownership ofother entities in the Key Group net  loss. As a result of transactionspreviously discussed that took place in July 2002, Key Group was dissolved andFPMC is now 100% directly owned by the Company.

For the quarter endedMarch 31, 2003, FPMC had net income of $361,189 resulting from loanoriginations fees and revenues from the sale of mortgage loans for the quarterended March 31, 2003 as described above.

Interest income for thequarter ended March 31, 2003 amounted to $670,550 compared to $495,728 for thesame period in 2002.  During 2003, the interest income earned by the Company oninvestments declined by approximately $40,000 or 79%. This decline is primarilydue to the reduction in the rates of return on the Company's investments due todeclining interest rates. During the quarter ended March 31, 2003, the interestincome earned on mortgages held-for-sale increased by approximately $214,958from the same period in 2002 primarily due to the approximate $49.2 millionincrease in loan originations from 2003 to 2002. FPMC earns interest from thedate the mortgage loan is closed until the date the mortgage loan is sold toinvestors.

Other income for thequarter ended March 31, 2003 amounted to $391,750 compared to $275,929 for thesame period in 2002. This increase is primarily due to increased fees earnedunder fronting and reinsurance agreements

Salaries and relatedexpenses increased to $1,627,182 for the three months ended March 31, 2003,compared to $1,327,097 for the three months ended March 31, 2002. This increaseis primarily due to the overall increase in the volume of new residentialmortgage loans originated during the quarter ended March 31, 2003 compared tothe same period in 2002 as previously discussed.

For the quarter endedMarch 31, 2003, interest expense amounted to $537,929 compared to $277,769 forthe same period in 2002.  The significant increase in interest expense for thequarter ended March 31, 2003 is primarily the result of increased utilizationof the warehouse line of credit and loan participation agreements due to thepreviously discussed increase in loan origination volume. During this period,the weighted average interest rate on the Company's financing of its mortgagelending activities increased to approximately 4.65% compared to approximately4.45% for the same period in 2002.

Operating expenses for thequarter ended March 31, 2003 were $1,401,362 compared to $797,768 for the sameperiod in 2002. This increase is primarily due to the overall increase in thevolume of new residential mortgage loans originated during the quarter endedMarch 31, 2003 compared to the same period in 2002 as previously discussed.

 

6

The Company made noprovision for losses under servicing agreements in either the quarter endedMarch 31, 2003 or 2002. The reserve for losses under servicing agreementsamounted to $234,595 and $236,929 at March 31, 2003 and 2002, respectively.Under the terms of certain of its servicing agreements, the Company is at riskfor any credit losses and costs of foreclosure, net of credit insuranceproceeds, if any, sustained on default of the borrower. The Company hasanalyzed its servicing portfolio characteristics, including servicing portfoliobalance, loss experience, maturity and aging of the loans and the creditinsurance coverage on the loans. Based on this analysis, it is the Company'sbelief that its reserve for losses under servicing agreements is adequate forpotential losses attributable to the servicing agreements.

The consolidatedstatements of income for the three months ended March 31, 2002 reflect equityin the net loss of affiliates of ($7,617). As more fully discussed in theAnnual Report Form 10-KSB for the year ended December 31, 2002, the Companyexchanged its interest in affiliates in acquiring all of the outstanding commonstock of FPMC effective July 31, 2002.  

Other comprehensive incomeconsists of unrealized holding gains (losses) on marketable investmentsecurities net of income taxes. For the quarter ended March 31, 2003,unrealized holding gains amounted to $1,742 compared to unrealized holdinglosses of ($28,072) for the quarter ended March 31, 2002.

Financial Condition

At March 31, 2003, theCompany's total assets were $45,018,786 compared to $34,988,232 at March 31,2002.  Included in the Company's total assets at March 31, 2002, are the assetsof Key Group which amounted to $32,140,030. The Key Group assets at March 31,2002 consisted primarily of cash and cash equivalents of $703,358, mortgageloans of $28,367,196, property and equipment of $952,094 and accountsreceivable, prepaid expenses and other assets of $2,117,382.  The minorityinterest in the net assets of Key Group at March 31, 2002 amounted to$1,335,815. 

On consolidated basis,cash and cash equivalents (including restricted cash) were $3,230,967 at March31, 2003.  Included therein was cash and cash equivalents of Apex LloydsInsurance Company of $917,479 and First Apex Re of $385,590.  The cash flow ofApex Lloyds Insurance Company and First Apex Re are only available to theCompany as allowed by state insurance regulations.

As more fully discussed inthe Annual Report Form 10-KSB for the year ended December 31, 2002, FPMC has amortgage warehouse line of credit with a financial institution totaling$45,000,000 which expired April 30, 2003. On April 9, 2003, the maturity datewas extended to May 31, 2003. On April 30, 2003, the maturity date was extendedto July 31, 2003 and the amount of the line of credit increased to $50,000,000.This agreement includes certain financial covenants including requirements tomaintain FPMC stockholders' equity above $3,600,000 and adjusted-tangible-networth above $3,400,000. Also, FPMC's total liabilities to adjusted tangible networth may never exceed 15 to 1. 

 

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In addition, FPMC has aloan participation agreement with another financial institution, which is arelated party by common ownership,  amounting to $17,500,000. Under thisagreement, the financial institution has the option to purchase an undividedinterest in the residential mortgage loans originated by FPMC. When the subjectmortgage loan is sold in the secondary market, the financial institutionrecoups its investment plus a specified yield on its investment. At March 31,2003, $13,123,962 in participations were outstanding under this agreement.

 

Item 3. Controls and Procedures

Within the 90 days prior to the filing of this report,the Company evaluated the effectiveness of the design and operation of itsdisclosure controls and procedures. The evaluation was carried out under thesupervision and with the participation of the Company's management, includingthe Company's Chief Executive Officer and Chief Financial Officer. Based on andas of the date of the evaluation, the Chief Executive Officer and the ChiefFinancial Officer concluded that the Company's disclosure controls andprocedures are effective in timely alerting them to material informationrelating to the Company, including it consolidated subsidiaries, required to beincluded in reports the Company files with or submits to the Securities andExchange Commission under the Securities Exchange Act of 1934. There have beenno significant changes in the Company's internal controls or in other factorsthat could significantly affect the Company's internal controls subsequent tothe date of the evaluation.

 

PART II -OTHER INFORMATION

Item 1. Legal Proceedings

The Company is involved inroutine litigation incidental to its business, both as a plaintiff and adefendant. Management of the Company, after consulting with legal counsel,feels that liability resulting from the litigation, if any, will no have amaterial effect on this financial position of the Company.

Item 5. Other Information

This report on Form 10-Q is accompanied by a statement ofthe Chief Executive Officer and the Chief Financial Officer of the registrantmaking certain certifications as to the contents hereof, as required by Section906 of the Sarbanes-Oxley Act of 2002.

Item 6. Exhibits andReports on Form 8-K

No Form 8-K was filedduring the quarter ended March 31, 2003.

 

8

 

SIGNATURES

Pursuant to therequirements of the Securities and Exchange Act of 1934, the registrant hasduly caused this report to be signed on its behalf by the undersigned thereuntoduly authorized.

 

First FinancialCorporation____________________________________________________________________________

 

 

 

 

 
Date                May13, 2003       
   /s/  David W. Mann                                              DavidW. Mann
 
President
 DulyAuthorized Officer and   
PrincipalFinancial Officer
 
 
 
 
Date                 May13, 2003        
  /s/ Robert L. Harris                                        RobertL. Harris
 
VicePresident and
 
PrincipalAccounting Officer

 

 

 

(Remainder of pagepurposely left blank.)

 

 

 

 

9

 

Annual and Quarterly CertificationsPursuant to Section 302 of theSarbanes-Oxley Act of 2002 

I, David W. Mann, certify that:

1.          I have reviewed this quarterly report on Form 10-Q ofFirst Financial Corporation;

2.         Based on my knowledge, this quarterlyreport does not contain any untrue statement of a material fact or omit tostate a material fact necessary to make the statements made, in light of thecircumstances under which such statements were made, not misleading withrespect to the period covered by this quarterly report; 

3.         Based on my knowledge, the financialstatements, and other financial information included in this quarterly report,fairly present in all material respects the financial condition, results ofoperations and cash flows of the registrant as of, and for, the periodspresented in this quarterly report; 

4.         The registrant's other certifyingofficers and I are responsible for establishing and maintaining disclosurecontrols and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14)for the registrant and we have:

a)         designed such disclosurecontrols and procedures to ensure that material information relating to theregistrant, including its consolidated subsidiaries, is made known to us byothers within those entities, particularly during the period in which thisquarterly report is being prepared;

b)        evaluated the effectivenessof the registrant's disclosure controls and procedures as of a date within 90days prior to the filing date of this quarterly report (the "Evaluation Date");and

c)        presented in thisquarterly report our conclusions about the effectiveness of the disclosure controlsand procedures based on our evaluation as of the Evaluation Date;

5.         The registrant's other certifyingofficers and I have disclosed, based on our most recent evaluation, to theregistrant's auditors and the audit committee of registrant's board ofdirectors (or persons performing the equivalent function):

a)        all significantdeficiencies in the design or operation of internal controls which couldadversely affect the registrant's ability to record, process, summarize andreport financial data and have identified for the registrant's auditors anymaterial weaknesses in internal controls; and

b)        any fraud, whether or notmaterial, that involves management or other employees who have a significantrole in the registrant's internal controls; and

6.        The registrant's other certifyingofficers and I have indicated in this quarterly report whether or not therewere significant changes in internal controls or in other factors that couldsignificantly affect internal controls subsequent to the date of our most recentevaluation, including any corrective actions with regard to significantdeficiencies and material weaknesses.

Date:May 13, 2003  

 

/s/David W. MannDavidW. MannChiefExecutive Officer and Chief Financial Officer

 

 

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