<PAGE>
                       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   June 30, 2002
                    -------------

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 July 31, 2002 were outstanding 6,827,284 shares without par value, of the
registrant.



                                       2
<PAGE>



                           FIRST FINANCIAL CORPORATION

                                    FORM 10-Q

                                      INDEX


PART I.  Financial
Information
Page No.

     Item 1.   Financial Statements:

       Consolidated Statements of Condition.................................. 4

       Consolidated Statements of Income..................................... 5

       Consolidated Statements of Shareholders' Equity and
       Comprehensive Income.................................................. 6

       Consolidated Statements of Cash Flows................................. 8

       Notes to Consolidated Financial Statements............................ 9

     Item 2.   Management's Discussion and Analysis of
                              Financial Condition and Results of Operations..11

     Item 3.  Interest Rate Risk and Quantitative and Qualitative
                              Disclosures about Market Risk..................11

PART II.   Other Information:

     Signatures..............................................................15

     Certification of Financial Results......................................16



                                       3


<PAGE>


                           FIRST FINANCIAL CORPORATION
                      CONSOLIDATED STATEMENTS OF CONDITION
              (Dollar amounts in thousands, except per share data)

<TABLE>
<CAPTION>
                                                                    June 30,      December 31,
                                                                      2002           2001
                                                                      ----           ----
                                                                  (Unaudited)
<S>                                                               <C>             <C>
               ASSETS
Cash and due from banks                                           $    76,575     $    68,205
Federal funds sold and short-term investments                           3,166          43,376
Securities, available-for-sale                                        529,543         463,509
Loans:
  Commercial, financial and agricultural                              327,925         302,496
  Real estate - construction                                           39,030          34,610
  Real estate - mortgage                                              792,798         757,345
  Installment                                                         272,685         249,710
  Lease financing                                                       4,428           5,023
                                                                  -----------     -----------
                                                                    1,436,866       1,349,184
Less:
    Unearned income                                                       704             723
    Allowance for loan losses                                          20,207          18,313
                                                                  -----------     -----------
                                                                    1,415,955       1,330,148
Accrued interest receivable                                            14,859          14,948
Premises and equipment, net                                            29,382          26,237
Bank-owned life insurance                                              49,134          47,756
Goodwill                                                                7,102           7,102
Other intangible assets                                                 4,620           3,767
Other assets                                                           39,207          36,857
                                                                  -----------     -----------
          TOTAL ASSETS                                            $ 2,169,543     $ 2,041,905
                                                                  ===========     ===========

          LIABILITIES AND SHAREHOLDERS' EQUITY
Deposits:
 Noninterest-bearing                                              $   174,995     $   163,985
 Interest-bearing:
      Certificates of deposit of $100 or more                         197,780         204,474
      Other interest-bearing deposits                               1,062,240         945,197
                                                                  -----------     -----------
                                                                    1,435,015       1,313,656
Short-term borrowings                                                  34,442          54,596
Other borrowings                                                      434,575         426,078
Other liabilities                                                      35,437          30,064
                                                                  -----------     -----------
          TOTAL LIABILITIES                                         1,939,469       1,824,394
                                                                  -----------     -----------

Shareholders' equity:
 Common stock, $.125 stated value per share;
   Authorized shares--40,000,000
   Issued shares-7,225,483
   Outstanding shares--6,827,284 in 2002 and 6,844,260 in 2001            903             903
 Additional capital                                                    66,680          66,680
 Retained earnings                                                    167,081         158,038
 Accumulated other comprehensive income                                12,575           8,299
Treasury shares, at cost - 398,199 in 2002 and 381,223 in 2001        (17,165)        (16,409)
                                                                  -----------     -----------

          TOTAL SHAREHOLDERS' EQUITY                                  230,074         217,511
                                                                  -----------     -----------

          TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY              $ 2,169,543     $ 2,041,905
                                                                  ===========     ===========
</TABLE>

See accompanying notes.


                                       4
<PAGE>





                           FIRST FINANCIAL CORPORATION
                        CONSOLIDATED STATEMENTS OF INCOME
              (Dollar amounts in thousands, except per share data)
<TABLE>
<CAPTION>
                                                  Three Months Ended      Six Months Ended
                                                       June 30,               June 30,
                                                   2002         2001       2002       2001
                                                   ----         ----       ----       ----
                                                      (Unaudited)           (Unaudited)
<S>                                               <C>         <C>        <C>         <C>
INTEREST INCOME:
  Loans including related fees                    $ 26,888    $ 27,431   $ 53,423    $ 55,180
  Securities:
    Taxable                                          5,136       6,262     10,081      13,205
   Tax-exempt                                        1,872       2,078      3,924       4,148
  Other                                                944         709      1,717       1,415
                                                  --------    --------   --------    --------

   TOTAL INTEREST INCOME                            34,840      36,480     69,145      73,948

INTEREST EXPENSE:
Deposits                                             8,874      12,447     17,851      25,830
Short-term borrowings                                  198         702        448       1,378
Other borrowings                                     5,688       6,177     11,300      12,678
                                                  --------    --------   --------    --------
   TOTAL INTEREST EXPENSE                           14,760      19,326     29,599      39,886
                                                  --------    --------   --------    --------

   NET INTEREST INCOME                              20,080      17,154     39,546      34,062

   Provision for loan losses                         2,416       1,464      4,348       2,952
                                                  --------    --------   --------    --------

   NET INTEREST INCOME AFTER PROVISION
   FOR LOAN LOSSES                                  17,664      15,690     35,198      31,110
                                                  --------    --------   --------    --------

NON-INTEREST INCOME:
   Trust department income                             866         948      1,708       1,834
   Service charges and fees on deposit accounts      1,461       1,426      2,967       2,634
   Other service charges and fees                    1,174       1,108      2,429       2,020
   Securities gains                                    (80)        172        (79)        172
   Insurance commissions                             1,520         140      2,844         285
   Gain on sales of mortgage loans                     724         506      1,290         734
   Other                                               620       1,066      1,299       1,554
                                                  --------    --------   --------    --------

TOTAL NON-INTEREST INCOME                            6,285       5,366     12,458       9,233
                                                  --------    --------   --------    --------

NON-INTEREST EXPENSES:
   Salaries and employee benefits                    8,848       7,771     17,357      13,962
   Occupancy expense                                   870         901      1,809       1,772
   Equipment expense                                   895         790      1,747       1,742
   Printing and supplies expenses                      295         209        511         467
   Other                                             4,429       3,840      8,741       7,030
                                                  --------    --------   --------    --------

   TOTAL NON-INTEREST EXPENSE                       15,337      13,511     30,165      24,973
                                                  --------    --------   --------    --------

   INCOME BEFORE INCOME TAXES                        8,612       7,545     17,491      15,370

Provision for income taxes                           2,060       1,762      4,211       3,680
                                                  --------    --------   --------    --------

   NET INCOME                                     $  6,552    $  5,783   $ 13,280    $ 11,690
                                                  ========    ========   ========    ========

EARNINGS PER SHARE:
   Net Income                                     $   0.96    $   0.85   $   1.94    $   1.73
                                                  ========    ========   ========    ========


Weighted average number
of shares outstanding (in thousands)                 6,832       6,802      6,832       6,749
                                                  ========    ========   ========    ========
</TABLE>

See accompanying notes


                                       5
<PAGE>




                           FIRST FINANCIAL CORPORATION
                 CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
                            AND COMPREHENSIVE INCOME
                               Three Months Ended
                             June 30, 2002 and 2001
              (Dollar amounts in thousands, except per share data)
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                                     Accumulated
                                                                        Other
                                    Common    Additional   Retained  Comprehensive Treasury
                                    Stock      Capital     Earnings     Income       Stock     Total

<S>                                 <C>         <C>         <C>        <C>        <C>         <C>
Balance, April 1, 2002              $    903    $ 66,680    $164,766   $  7,887   $(16,925)   $223,311

Comprehensive income:
     Net income                                                6,552                             6,552
     Change in net unrealized
     gains/(losses) on available
     for- sale securities,                                                4,688                  4,688
                                                                                              --------
       Total comprehensive income                                                               11,240

Cash dividends, $.62 per share                                (4,237)                           (4,237)
 Treasury stock purchase                                                              (240)       (240)
                                    --------    --------    --------   --------   --------    --------
Balance, June 30, 2002              $    903    $ 66,680    $167,081   $ 12,575   $(17,165)   $230,074
                                    ========    ========    ========   ========   ========    ========



Balance, April 1, 2001              $    903    $ 66,680    $147,560   $  9,315   $(21,913)   $202,545

Comprehensive income:
     Net income                                                5,783                             5,783
     Change in net unrealized
     gains/(losses) on available-
     for-sale securities                                                   (655)                  (655)
                                                                                               --------
       Total comprehensive income                                                                5,128

Cash dividends, $.56 per share                                (3,837)                           (3,837)
Issuance of treasury shares                                                          6,801       6,801
Treasury stock purchase                                                               (827)       (827)
                                    --------    --------    --------   --------   --------    --------
Balance, June 30, 2001              $    903    $ 66,680    $149,506   $  8,660   $(15,939)   $209,810
                                    ========    ========    ========   ========   ========    ========
</TABLE>




See accompanying notes.



                                       6
<PAGE>





                           FIRST FINANCIAL CORPORATION
                 CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
                            AND COMPREHENSIVE INCOME
                                Six Months Ended
                             June 30, 2002, and 2001
              (Dollar amounts in thousands, except per share data)
                                   (Unaudited)

<TABLE>
<CAPTION>

                                                                        Accumulated
                                                                           Other
                                     Common     Additional    Retained Comprehensive  Treasury
                                      Stock      Capital      Earnings  Income/(Loss)   Stock        Total

<S>                                 <C>          <C>          <C>         <C>         <C>          <C>
Balance, January 1, 2002            $     903    $  66,680    $ 158,038   $   8,299   $ (16,409)   $ 217,511
Comprehensive income:
     Net income                                                  13,280                               13,280
     Change in net unrealized
     gains/(losses) on available-
     for-sale securities                                                      4,276                    4,276
                                                                                                   ---------
     Total comprehensive income                                                                       17,556
Cash dividends, $.62 per share                                   (4,237)                              (4,237)
Treasury stock purchase                                                                    (756)        (756)

                                    ---------    ---------    ---------   ---------   ---------    ---------
Balance, June 30, 2002              $     903    $  66,680    $ 167,081   $  12,575   $ (17,165)   $ 230,074
                                    =========    =========    =========   =========   =========    =========



Balance, January 1, 2001            $     903    $  66,680    $ 141,653   $   3,900   $ (21,913)   $ 191,223
Comprehensive income
     Net income                                                  11,690                               11,690
     Change in net unrealized
     gains/(losses) on available-
      for-sale securities                                                     4,760                    4,760
                                                                                                   ---------
       Total comprehensive income                                                                     16,450
Cash dividends, $.56 per share                                   (3,837)                              (3,837)
Issuance of treasury shares                                                               6,801        6,801
Treasury stock purchase                                                                    (827)        (827)

                                    ---------    ---------    ---------   ---------   ---------    ---------
Balance, June 30, 2001              $     903    $  66,680    $ 149,506   $   8,660   $  15,939    $ 209,810
                                    =========    =========    =========   =========   =========    =========
</TABLE>


See accompanying notes.




                                       7
<PAGE>



                           FIRST FINANCIAL CORPORATION
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                          (Dollar amounts in thousands)
<TABLE>
<CAPTION>

                                                           Six Months Ended
                                                                June 30,
                                                           2002           2001
                                                           ----           ----
                                                               (Unaudited)

<S>                                                     <C>             <C>
CASH FLOWS FROM OPERATING ACTIVITIES:

Net Income                                              $  13,280       $  11,690
Adjustments to reconcile net income to net cash
  provided by operating activities:
  Net accretion of discounts on investments                  (765)         (1,055)
  Provision for loan losses                                 4,348           2,952
  Securities (gains)/losses                                    79            (172)
  Depreciation and amortization                             1,533           1,537
  Other, net                                               (1,635)         (1,572)
                                                        ---------       ---------
      NET CASH FROM OPERATING ACTIVITIES                   16,840          13,380
                                                        ---------       ---------



CASH FLOWS FROM INVESTING ACTIVITIES:

Sales of available-for-sale securities                     22,741               -
Maturities and principal reductions on
   available-for-sale securities                           95,353          70,682
Purchases of available-for-sale securities               (138,308)        (13,545)
Loans made to customers, net of repayments                  9,725         (21,112)
Net change in federal funds sold                           40,210           4,175
Purchase of First Community Financial Corp.                14,554               -
Purchase of Forrest Sherer                                      -          (1,699)
Additions to premises and equipment                          (944)         (1,753)
                                                        ---------       ---------
      NET CASH FROM INVESTING ACTIVITIES                   43,331          36,692
                                                        ---------       ---------


CASH FLOWS FROM FINANCING ACTIVITIES:

Net change in deposits                                    (25,277)        (54,088)
Net change in short-term borrowings                       (25,292)         66,323
Dividends paid                                             (3,973)         (3,747)
Purchase of treasury stock                                   (756)           (827)
Proceeds from other borrowings                             21,006          43,940
Repayments on other borrowings                            (17,509)       (109,217
                                                        ---------       ---------
     NET CASH FROM FINANCING ACTIVITIES                   (51,801)        (57,616)
                                                        ---------       ---------

    NET CHANGE IN CASH AND CASH EQUIVALENTS                 8,370          (7,488)
    CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD         68,205          68,755
                                                        ---------       ---------

    CASH AND CASH EQUIVALENTS, END OF PERIOD            $  76,575       $  61,267
                                                        =========       =========

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
    Cash paid during the period for interest            $  30,672       $  41,384
                                                        =========       =========

    Income taxes paid                                   $   3,330       $   3,842
                                                        =========       =========
</TABLE>

See accompanying notes.



                                       8
<PAGE>


                           FIRST FINANCIAL CORPORATION
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


     The accompanying June 30, 2002 and 2001 consolidated financial statements
are unaudited. The December 31, 2001 consolidated financial statements are as
reported in the First Financial Corporation (the Corporation) 2001 annual
report. The following notes should be read together with notes to the
consolidated financial statements included in the 2001 annual report filed with
the Securities and Exchange Commission as an exhibit to Form 10-K.

1. The significant accounting policies followed by the Corporation and its
subsidiaries for interim financial reporting are consistent with the accounting
policies followed for annual financial reporting. All adjustments which are, in
the opinion of management, necessary for a fair statement of the results for the
periods reported have been included in the accompanying consolidated financial
statements and are of a normal recurring nature. The Corporation reports
financial information for only one segment, banking.

2. A loan is considered to be impaired when, based upon current information and
events, it is probable that the Corporation will be unable to collect all
amounts due according to the contractual terms of the loan. Impairment is
primarily measured based on the fair value of the loan's collateral. The
following table summarizes impaired loan information:


                                                              (000's)
                                                       June 30,     December 31,
                                                         2002           2001
                                                         -----          ----

Impaired loans with related allowance for loan losses
   calculated under SFAS No. 114....................... $5,071          $3,610

      Interest payments on impaired loans are typically applied to principal
unless collection of the principal amount is deemed to be fully assured, in
which case interest is recognized on a cash basis.

3. Securities

    The amortized cost and fair value of the Corporation's investments at June
30, 2002 are shown below. All securities are classified as available-for-sale.
<TABLE>
<CAPTION>

                                                  (000's)             (000's)
                                              June 30, 2002        December 31, 2001
                                            Amortized    Fair     Amortized     Fair
                                               Cost     Value       Cost       Value
                                            --------   --------   --------   --------
<S>                                         <C>        <C>        <C>        <C>
United States Government and its agencies   $172,903   $177,445   $208,973   $213,731
Collateralized Mortgage Obligations           75,647     78,280      4,958      5,065
States and Municipal                         166,657    174,207    162,886    166,866
Corporate Obligations                         98,584     99,611     77,576     77,847
                                            --------   --------   --------   --------
                                            $513,791   $529,543   $454,393   $463,509
                                            ========   ========   ========   ========
</TABLE>

4.  Short-Term Borrowings

     Period-end short-term borrowings were comprised of the following:

                                          (000's)
                                    June 30,  December 31,
                                      2002        2001
                                      ----        ----
Federal Funds Purchased             $15,950      $ 9,920
Repurchase Agreements                16,585       37,400
Note Payable - U.S. Government        1,907        7,276
                                    -------      -------
                                    $34,442      $54,596
                                    =======      =======


                                       9
<PAGE>




5. Other Borrowings

     Other borrowings at period-end are summarized as follows:

<TABLE>
<CAPTION>
                                                                            (000's)
                                                                     June 30,   December 31,
                                                                       2002          2001
                                                                       ----          ----

<S>                                                                  <C>           <C>
FHLB Advances                                                        $407,975      $419,478
Note Payable to a Financial Institution                                20,000             -
City of Terre Haute, Indiana Economic Development Revenue bonds         6,600         6,600
                                                                     --------      --------
                                                                     $434,575      $426,078
                                                                     ========      ========
</TABLE>

6.  Derivatives

     During 2000, the Corporation entered into an interest rate swap with a 24
month term and a notional principal balance of $10 million, under which the
Corporation makes variable rate payments, based on LIBOR, and receives fixed
rate payments. The interest rate swap was designated as a hedge against a
similar maturity certificate of deposit promotion. At June 30, 2002, the
interest rate swap contract has a fair value of $291 thousand, which is
approximately the same amount as the fair value adjustment to the hedged
certificates of deposit. The interest rate swap is included in other assets on
the statement of condition. Net settlement income or expense is included in
interest expense.

     During 2001, the Corporation purchased an interest rate cap contract with a
notional principal balance of $50 million. The agreement requires the
counterparty to pay the Corporation the excess of the 3 month LIBOR over 6.00%.
The cap has a 36 month term which runs through June, 2004. No payments are
currently required under the agreement. The agreement was entered into to help
protect the Corporation's net interest income should interest rates increase in
excess of the cap's trigger amount. The interest rate cap is carried at fair
value, approximately $48 thousand at June 30, 2002, and is included in other
assets on the statement of condition.

7. Acquisitions

     Forrest Sherer, Inc. (FSI) - On May 1, 2001, the Corporation acquired all
of the outstanding common stock of FSI, a full-line insurance agency
headquartered in Terre Haute, Indiana. The purchase price was $8.5 million,
consisting of the issuance of 182,672 shares of the Corporation's common stock
and the payment of $1.7 million in cash. Assets acquired, liabilities assumed
and net assets at acquisition were not significant. The acquisition was
accounted for as a purchase and resulted in the recording of goodwill of
approximately $5.4 million and a customer list intangible of approximately $3.1
million. Prior to the adoption of new accounting guidance, effective January 1,
2002, goodwill was being amortized using the straight-line method over 15 years.
The customer list intangible is being amortized, using an accelerated method,
over ten years.

     Community Financial Corporation (CFC) - On January 31, 2002, the
Corporation acquired all of the outstanding stock of CFC for $33 million in
cash. CFC is a bank holding company based in Olney, Illinois, which had total
assets of approximately $190 million and net assets of approximately $32 million
at acquisition. The fair values of significant assets acquired and liabilities
assumed were $98 million of loans, $48 million of cash and cash equivalents, $38
million of securities and $148 million of deposits. The transaction was
accounted for as a purchase and resulted in the recording of a core deposit
intangible of approximately $1 million.

     The following table presents proforma revenue, net income, and earnings per
share determined as if the acquisitions had been consummated at January 1, 2001.
Key assumptions include the add back of the amortization of the intangible
assets of $218 thousand of FSI and CFC.

                                                    Six months ended June 30,
                                                         (000's omitted,
                                                      except per share data)
                                                         2002       2001
                                                         ----      -----
   Revenue                                             $82,463     $92,330
   Net income                                           12,324       9,608
   Earnings per share                                  $  1.80     $  1.42


                                       10
<PAGE>


8.  New Accounting Standards

     A new accounting standard dealing with asset retirement obligations will
apply for 2003. The Corporation does not believe this standard will have a
material affect on its financial position or results of operations.

     Effective January 1, 2002, the Corporation adopted a new accounting
standard dealing with the impairment and disposal of long-lived assets. The
effect of this on the financial position and results of operations of the
Corporation was not significant.

     New accounting standards issued in 2001 required all business combinations
initiated after June 30, 2001 to be recorded using the purchase method of
accounting. Under the purchase method, all identifiable tangible and intangible
assets and liabilities of the acquired company are recorded at fair value at
date of acquisition, and the excess of cost over fair value of net assets
acquired is recorded as goodwill. Identifiable intangible assets with finite
useful lives will be separated from goodwill and amortized over their expected
lives, whereas goodwill, both amounts previously recorded and future amounts
purchased, will cease being amortized on January 1, 2002. Annual impairment
testing will be required for goodwill with impairment being recorded if the
carrying amount of goodwill exceeds its implied fair value.

     The Corporation adopted this standard on January 1, 2002 and ceased
amortizing goodwill associated with the acquisitions of The Morris Plan Company
of Terre Haute in 1998 and FSI in 2001. No additional goodwill has been recorded
during 2002 and management does not believe any amount of the goodwill recorded
by the Corporation is impaired. The $7.1 million of goodwill on the balance
sheet is net of accumulated amortization of $737 thousand.

     Intangible assets at June 30, 2002, subject to amortization are as follows:


                                       (000's)
                                 Gross     Accumulated
                                 Amount    Amortization
                                 ------    ------------

Customer list intangible         $3,108      $  521
Core deposit intangible           1,199          42
Branch purchase intangibles         981         478
Non-compete agreements              500         127
                                 ------      ------
                                 $5,788      $1,168
                                 ======      ======

     Amortization expense for the second quarter of 2002 and year to-date was
$189 thousand and $346 thousand respectively.

     Estimated amortization expense for the next five years is:

                                         (000's)
                                         -------
                                    2002        641
                                    2003        689
                                    2004        689
                                    2005        689
                                    2006        681

     If this standard had been in effect in 2001, net income for the three and
six months ended June 30, 2001, would not have included goodwill amortization of
$100 thousand, and $142 thousand and would have been $5.9 million and $11.8
million. Earnings per share would have been $0.86 and $1.75.


                           FIRST FINANCIAL CORPORATION


ITEMS 2. and 3. Management's Discussion and Analysis of Financial Condition and
 Results of Operations and Quantitative and Qualitative Disclosures About Market
 Risk

     The purpose of this discussion is to point out key factors in the
Corporation's recent performance compared with earlier periods. The discussion
should be read in conjunction with the financial statements beginning on page
four of this report. All figures are for the consolidated entities. It is
presumed the readers of these financial statements and of the following
narrative have previously read the Corporation's annual report for 2001.

                                       11
<PAGE>
     Forward-looking statements contained in the following discussion are based
on estimates and assumptions that are subject to significant business, economic
and competitive uncertainties, many of which are beyond the Corporation's
control and are subject to change. These uncertainties can affect actual results
and could cause actual results to differ materially from those expressed in any
forward-looking statements in this discussion.


                          Summary of Operating Results


     Net income for the six months ended June 30, 2002 was $13.3 million, a
13.6% improvement from the $11.7 million in the same period in 2001. Basic
earnings per share increased to $1.94 through the second quarter of 2002
compared to $1.73 for 2001, a 12.1% improvement.

     Quarterly results for the second period showed net income of $6.6 million,
just shy of the quarterly earnings record of $6.7 million set in the first
quarter of 2002. This represents a 13.3% increase over net income of $5.8
million in the second quarter of 2001. Compared to the same quarter last year,
earnings per share increased 12.9% to $0.96 per share from $0.85 per share, and
the net interest margin increased 9.1% to 4.07% from 3.73%. The return on
average assets increased to 1.2%, a 4.4% improvement in 2002 over 2001.

     The primary components of income and expense affecting net income are
discussed in the following analysis.


Net Interest Income

     The Corporation's primary source of earnings is net interest income, which
is the difference between the interest earned on loans and other investments and
the interest paid for deposits and other sources of funds. Net interest income
increased to $39.5 million in the first six months of 2002 from $34.1 million in
the same period of 2001, a 16.1%, or $5.5 million increase. This was the result
of an increase of $177.4 million in average interest earning assets and an
improved net interest margin for 2002. The net interest margin increased from
3.9% in 2001 to 4.1% in 2002, a 4.6% increase driven by a greater decline in the
average cost of funds than in the yield on earning assets.


Non-Interest Income

     Non-interest income increased $3.2 million, or 34.9%, over 2001, which was
driven by increases in fee-based income, higher gains from the sales of mortgage
loans and insurance commission income related to the recent acquisition of
Forrest Sherer, Inc. in May 2001.


Non-Interest Expenses

     Non-interest expenses increased $5.2 million, or 20.8%, due mainly to added
costs, primarily personnel costs, associated with the recent acquisitions, as
well as increases in employee salaries and fringe benefit programs.


Allowance for Loan Losses

     The Corporation's provision for loan losses increased to $4.3 million for
the first six months of 2002 compared to $3.0 million in the same period of
2001. At June 30, 2002, the allowance for loan losses was 1.41% of net loans, an
increase from 1.36% at December 31, 2001. Net chargeoffs for the first six
months of 2002 were $4.2 million compared to $4.5 million for the same period of
2001. Based on management's analysis of the current portfolio, an evaluation
that includes consideration of historical loss experience and potential loss
exposure on identified problem loans, management believes the allowance of $20.2
million at June 30, 2002 is adequate.


Nonperforming Loans and Leases

     Nonperforming loans and leases consist 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, and (3) loans and leases past due ninety
days or more as to principal or interest. A summary of nonperforming loans and
leases at June 30, 2002 and December 31, 2001 follows:



                                       12
<PAGE>

<TABLE>
<CAPTION>

                                                                    (000's)
                                                        June 30, 2002   December 31, 2001
                                                        -------------   -----------------
<S>                                                         <C>               <C>
Nonaccrual loans and leases                                 $12,605           $ 8,854
Renegotiated loans and leases                                   508               590
Ninety days past due loans and leases                         4,115             4,925
                                                            -------           -------
   Total nonperforming loans and leases                     $17,228           $14,369
                                                            =======           =======

Ratio of the allowance for loan losses
 as a percentage of nonperforming loans and leases              117%              127%
</TABLE>


     The following loan categories comprise significant components of the
nonperforming loans at June 30, 2002 and December 31, 2001.

<TABLE>
<CAPTION>
                                               (000's)
                                    June 30, 2002   December 31, 2001
                                    -------------   -----------------
<S>                                    <C>            <C>
Non-Accrual Loans:
      1-4 family residential           $ 1,918          $ 3,033
      Commercial loans                   9,396            4,406
      Installment loans                  1,291            1,415
      Other, various                         -                -
                                       -------          -------
                                       $12,605          $ 8,854
                                       =======          =======

Past due 90 days or more:
       1-4 family residential          $ 2,318          $ 1,587
       Commercial loans                  1,078            2,177
       Installment loans                   719            1,161
       Other, various                        -                -
                                       -------          -------
                                       $ 4,115          $ 4,925
                                       =======          =======
</TABLE>


  There are no material industry concentrations within the nonperforming loans.

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 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. It 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 valid and theoretically sound. The relationships
are continuously monitored for behavioral changes.

                                       13
<PAGE>

     As outlined in Note 6, the Corporation makes limited use of derivatives to
facilitate its interest rate risk management activities. At June 30, 2002,
derivatives include a $10 million interest rate swap directly related to a
certificate of deposit special and a $50 million interest rate cap designed to
help protect net interest income should rates rise significantly in the near
term. The Corporation currently does not invest in derivative products for
short-term gain, nor is engaged in securities trading activity. The Corporation
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 and the impact of derivatives are
included in the following table.

     The table below shows the Corporation's estimated earnings sensitivity
profile as of June 30, 2002. Given a 100 basis point increase in rates, net
interest income would increase 3.19% over the next 12 months and increase 6.79%
over the second 12 month period. A 100 basis point decrease would result in a
1.89% decrease in net interest income over the next 12 months and a 6.11%
decrease over the second 12 month period. These estimates assume all rates
changed overnight and management took no action as a result of this change.



                                 Percentage Change in Net Interest Income
Basis Point                      ----------------------------------------
Interest Rate Change             12 months     24 months      36 months
-------------------------------------------------------------------------
Down 300                          -11.71         -25.42         -34.75
Down 200                           -6.20         -15.01         -21.15
Down 100                           -1.89          -6.11          -9.13
Up 100                              3.19           6.79           9.55
Up 200                              6.49          13.37          18.60
Up 300                              8.53          18.41          26.23


      The Corporation does have other assets and liabilities, which contain
embedded 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 from using these products. Management believes these
put and call options are clearly and closely related to the underlying
instruments and that they are therefore not considered derivatives. 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.

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 and core deposits. The Corporation has $16.6
million of investments that mature throughout the coming 12 months. The
Corporation also anticipates $38.0 million of principal payments from
mortgage-backed securities. Given the current interest rate environment, the
Corporation anticipates $9.5 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.

Financial Condition

     Comparing 2002 to 2001, year-to-date average deposits were up $176.7
million, or 13.6%. These deposits were used to fund an increase in total average
loans of $138.8 million, or 10.6%, and pay down average borrowings by $27.6
million. Average assets increased $182.9 million, or 9.0%, and average
shareholders' equity increased $30.9 million, or 14.9%. Book value per share
increased 10.1% to $33.70 in 2002 from $30.60 in 2001.

     The purchase of Community Bank and Trust, N.A was consummated on January
31, 2002. The average balances reported above include Community's $96.5 million
of average loans, $132.5 million of average deposits, and $165.0 million of
average total assets.

Capital Adequacy

     As of June 30, 2002, the Corporation's leverage ratio was 9.52% compared to
9.87% at December 31, 2001.

     At June 30, 2002, the Corporation's total risk-based capital ratio, which
includes Tier II capital, was 14.48% compared to 15.15% at December 31, 2001.
These amounts exceed minimum regulatory capital requirements.



                                       14
<PAGE>




                           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: August 9, 2002                            By /s/ Donald E. Smith
                                                   --------------------
                                                   Donald E. Smith, Chairman



Date: August 9, 2002                            By /s/ Norman L. Lowery
                                                   --------------------
                                                   Norman L. Lowery,
                                                   Vice Chairman



Date: August 9, 2002
                                                By /s/ Michael A. Carty
                                                   --------------------
                                                   Michael A. Carty, Treasurer



                                       15
<PAGE>



                           FIRST FINANCIAL CORPORATION
                           PART II. OTHER INFORMATION
                                    FORM 10-Q
                       CERTIFICATION OF FINANCIAL RESULTS




We, Donald E. Smith, Chairman and CEO, and Michael A. Carty, Chief Financial
Officer, of First Financial Corp., hereby certify the following:

     -   This Form 10-Q fully complies with the requirements of Sections 13(a)
         or 15(d) of the Securities Exchange Act of 1934, and,

     -   The information contained in the report fairly presents, in all
         material respects, the financial position and results of operations of
         First Financial Corp. as of and for the periods presented.





August 9, 2002                                         By /s/ Donald E. Smith
                                                          ----------------------
                                                          Donald E. Smith,
                                                          Chairman



August 9, 2002                                         By /s/ Michael A. Carty
                                                          ----------------------
                                                          Michael A. Carty,
                                                          Treasurer & CFO




                                       16