FORM 10-Q



                       SECURITIES AND EXCHANGE COMMISSION

                            WASHINGTON, D.C.  20549

              QUARTERLY REPORT UNDER SECTION 13 OR 15 (D) OF THE

                        SECURITIES EXCHANGE ACT OF 1934

                          FIRST FINANCIAL CORPORATION

                              September 30, 1996



<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 September 30, 1996

Commission File Number 0-16759

                                FIRST FINANCIAL CORPORATION
                  (Exact name of registrant as specified in its charter)

                              INDIANA                                35-1546989
                  (State or other jurisdiction             (I.R.S. Employer
                   incorporation or organization)          Identification No.)

                  One First Financial Plaza, Terre Haute, IN    47807
                  (Address of principal executive office)     (Zip Code)

                  (812)-238-6000
                  (Registrant's telephone number, including area code)


Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 
during the preceding 12 months (or for such period that the registrant was 
required to file such reports), and (2) has been subject to such filing 
requirements for the past 90 days. Yes   X    No      .

As of September 30, 1996 were outstanding 6,681,876 shares without par value, of
the registrant.



                                        1 <PAGE> 





                               FIRST FINANCIAL CORPORATION

                                         FORM 10-Q

                                           INDEX

                                                                        Page No.
PART I.  Financial Information

      Item 1.  Financial Statements:


            Consolidated Statements of Condition...............................3

            Consolidated Statements of Income..................................4

            Consolidated Statements of Cash Flows..............................5

            Notes to Consolidated Financial Statements.........................6

      Item 2.  Management's Discussion and Analysis of
                  Financial Condition and Results of Operations................7

PART II.  Other Information:

      Item 4.  Submission of Matters to a Vote of
                  Security Holders............................................10

      Signatures..............................................................11










                                       2 <PAGE> 




<TABLE>
                           FIRST FINANCIAL CORPORATION
                           CONSOLIDATED STATEMENTS OF CONDITION
<CAPTION>                                                                           <F1>)  
                                                                   Sept 30,     Dec. 31,
                                                                     1996         1995  
                                                             (Dollar amounts in thousands)


<S>                                                           <C>         <C>     
 Cash and due from banks                                          $70,885    $65,276 
                                                                           
 Federal funds sold and securities purchased under                       
  agreements to resell                                              2,525     10,000 
 Investments                                                             
  Available-For-Sale                                              585,693    545,367  
 Loans:                                                                  
   Commercial, financial and agricultural                         204,093    180,858 
   Real estate - construction                                      21,284     22,882 
   Real estate - mortgage                                         490,503    460,060  
   Installment                                                    194,144    213,696 
   Lease financing                                                  3,284      4,151 
                                                                  913,308    881,647 
   Less:                                                                  
     Unearned income                                                1,372      2,131 
     Allowance for possible loan losses                            10,587     10,616 
                                                                  901,349    868,900 
 Accrued interest receivable                                       15,756     13,600  
 Premises and equipment                                            26,455     25,639 
 Other assets                                                      16,912     16,525 
                TOTAL ASSETS                                   $1,619,575 $1,545,307 
                                                                                   
                                                                
                        LIABILITIES AND SHAREHOLDERS' EQUITY             
 Deposits:                                                               
  Noninterest-bearing                                            $151,933   $136,356  
  Interest-bearing:                                                      
    Certificates of deposit of $100,000 or more                   207,879    153,092 
    Other interest-bearing deposits                               822,282    874,033 
                                                                1,182,094  1,163,481  
 Short-term borrowings:                                                  
  Federal funds purchased and securities                                 
   sold under agreements to repurchase                             62,358     69,661 
  Treasury tax and loan open-end note                               8,631      3,872  
  Advances from Federal Home Loan Bank                            118,502     95,296 
                                                                  189,491    168,829 
 Other liabilities                                                 10,065     16,171 
 Long-term debt                                                     6,640      6,680  
 Long-term advances from Federal Home Loan Bank                    86,121     50,070 
            TOTAL LIABILITIES                                   1,474,411  1,405,231 
                                                                         
 Shareholders' equity:                                                    
  Common stock, $.125 stated value per share;                            
   authorized 10,000,000 shares; issued and outstanding                  
   6,681,876 shares for 1996 and 6,667,312 shares for 1995            835        799 
  Additional capital                                               43,761     34,117  
  Retained earnings                                                99,127     98,625 
  Unrealized gains(losses) on AFS securities, net of tax            1,441      6,535 
            TOTAL SHAREHOLDERS' EQUITY                            145,164    140,076 
                                                                                 
            TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY         $1,619,575 $1,545,307    

The accompanying notes are an integral part of the consolidated financial statements.

<F1> Figures have been restated to reflect the acquisition of Crawford Bancorp, Inc. 
</TABLE>

                                         3 <PAGE> 

<TABLE>
                           FIRST FINANCIAL CORPORATION
                         CONSOLIDATED STATEMENTS OF INCOME
<CAPTION>                                              <F1>                      <F1>  
                                          Three Months Ended         Nine Months ended
                                             September 30,           September   30,
                                             1996       1995          1996       1995   
                                        (Amounts in thousands, except per share amounts)   
<S>                                      <C>        <C>         <C>        <C> 
INTEREST INCOME:
   Loans                                   $19,952    $19,925     $58,390    $57,422
   Investment securities:                                                
     Taxable                                 7,473      5,062      22,047     14,651
     Tax-exempt                              1,747      1,824       5,049      5,495
                                             9,220      6,886      27,096     20,146
   Other interest income                        38        216         403        674
     TOTAL INTEREST INCOME                  29,210     27,027      85,889     78,242
                                                                          
 INTEREST EXPENSE:                                                       
   Deposits                                 11,527     11,794      34,410     34,054
   Other                                     3,077      2,129       8,249      5,714
     TOTAL INTEREST EXPENSE                 14,604     13,923      42,659     39,768
                                                                         
     NET INTEREST INCOME                    14,606     13,104      43,230     38,474
                                                                         
   Provision for possible                                                
     loan losses                             1,207        618       2,910      1,773 
                                                                         
     NET INTEREST INCOME AFTER                                           
      PROVISION FOR POSSIBLE                                             
        LOAN LOSSES                         13,399     12,486      40,320     36,701
 OTHER INCOME                                                            
   Trust department income                     435        380       1,293      1,110
   Service charges on deposit                                            
     accounts                                  421        408       1,232      1,189
   Other service charges and fees              769        770       2,292      2,332
   Investment securities gains                                            
     (losses)                                   60         -3         214        -27
   Other                                       215        311         851        979
                                             1,900      1,866       5,882      5,583
 OTHER EXPENSES                                                          
   Salaries and employee benefits            5,127      4,971      15,586     14,544
   Occupancy expense                           724        737       2,397      2,114
   Equipment expense                           846        551       2,058      1,638
   Data processing expense                      30        515         726      1,528
   FDIC insurance expense                        5        -50          29      1,133
   Other                                     3,252      2,571       8,653      7,832 
                                             9,984      9,295      29,449     28,789
                                                                         
     INCOME BEFORE INCOME TAXES              5,315      5,057      16,753     13,495
 Income Tax Expense                          1,670      1,378       5,087      3,684
     NET INCOME                              3,645      3,679      11,666      9,811
                                                                         
 EARNINGS PER SHARE:                         $0.55      $0.55       $1.75      $1.47
                                                                         
 Weighted average number of                                              
  shares outstanding                         6,682      6,678       6,677      6,690

The accompanying notes are an integral part of the consolidated financial statements.      

<F1> Figures have been restated to reflect the acquisition of Crawford Bancorp, Inc.
</TABLE>

                                             4 <PAGE>
<TABLE>
                                FIRST FINANCIAL CORPORATION
                           CONSOLIDATED STATEMENTS OF CASH FLOWS
<CAPTION>                                                                          <F1> 
                                                                     Nine Months Ended     
                                                                      September 30,

                                                                       1996        1995
<S>                                                               <C>         <C>    
 CASH FLOWS FROM OPERATING ACTIVITIES:                                      
 Net income                                                         $11,666      $9,811 
 Adjustment to reconcile net income to net cash                             
  provided by operating activities:                                         
    Provision for possible loan losses                                2,910       1,773 
    Provision for depreciation and amortization                       1,923       1,956 
    Net increase in accrued interest receivable                      -2,156      -1,599 
    Other, net                                                       -1,830        -924 
      NET CASH PROVIDED BY OPERATING ACTIVITIES                      12,513      11,017 
                                                                            


 CASH FLOWS FROM INVESTING ACTIVITIES:                                          

 Sales and maturities of investment securities                            0           0 
 Maturities of held-to-maturity securities                                0      42,780 
  Sales and maturities of available-for-sale securities             119,896      33,156 
  Purchases of investment securities:                                       
    Held-to-maturity security                                             0     -17,888 
    Available-for-sale security                                    -167,315    -107,613 
  Loans made to customers, net of repayments                        -36,306     -48,806 
  Net decrease in federal funds sold                                  7,475      18,200 
  Additions to premises and equipment                                -2,649      -4,782 
       NET CASH USED BY INVESTING ACTIVITIES                        -78,899     -84,953 
                                                                            
 CASH FLOWS FROM FINANCING ACTIVITIES:                                      
                                                                             
  Net increase from sales and                                               
   redemptions of certificates of deposit                            33,994      92,840 
  Net decrease in other deposits                                    -15,381     -29,977 
  Net decrease in short-term borrowings                              20,662      14,903 
  Cash dividends                                                     -3,760      -3,489 
  Proceeds from reissuance of Treasury Stock                            600         525 
  Purchase of treasury stock                                           -131      -1,855 
  Net increase from long-term debt                                   36,022       1,222 
  Repayments of long-term debt                                          -11         -10 
      NET CASH PROVIDED BY FINANCING ACTIVITIES                      71,995      74,159 
                                                                             
      NET DECREASE IN CASH AND CASH EQUIVALENTS                       5,609         223 
 CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD                      65,276      54,498 
                                                                            
       CASH AND CASH EQUIVALENTS, END OF PERIOD                     $70,885     $54,721 
 SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:                         
   Cash paid during the period for interest                         $42,245     $37,494 
                                                                            
   Income taxes paid                                                 $5,445      $3,959 

    The accompanying notes are an integral part of the consolidated financial statements.

<F1> Figures have been restated to reflect the acquisition of Crawford Bancorp, Inc.
</TABLE>
                                         5 <PAGE>


                      FIRST FINANCIAL CORPORATION
                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



1.   The accompanying September 30, 1996 and 1995 consolidated financial
statements are unaudited.  The December 31, 1995, consolidated statement of
condition amounts are as reported in the Corporation's 1995 annual report
except for the restatement necessary for the acquisition of Crawford Bancorp,
Inc.

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


2.   The Statements of Financial Standards No's 114 and 118 (SFAS 114),
"Accounting by Creditors for Impairment of a Loan" and "Accounting by
Creditors for Impairment of a Loan-Income Recognition and Disclosures"
requires that certain impaired loans be measured based either on the present
value of expected future cash flows discounted at the loan's effective
interest rate, or the loan's observable market price or the fair value of the
collateral if the loan is collateral dependent. The adoption of SFAS 114 did
not result in additional provisions for loan losses primarily because the
majority of impaired loan valuations continue to be based on the fair value of
collateral.

     The provision for loan and lease losses charged to expense is based upon
each affiliate's past loan and lease loss experience and an evaluation of
potential losses in the current loan and lease portfolio, including the
evaluation of impaired loans under SFAS 114.  A loan is considered to be
impaired when based upon current information and events, it is probable that
Corporation will be unable to collect all amounts due according to the
contractual terms of the loan. Impairments are primarily measured based on the
fair value of the loans' collateral.  Impairment losses are included in the
provision for loan and lease losses.  SFAS 114 does not apply to large groups
of smaller balance homogeneous loans that are collectively evaluated for
impairment, except for those loans restructured under a troubled debt
restructuring.  Loans collectively evaluated for impairment include certain
smaller balance commercial loans, consumer loans, residential real estate
loans, and credit card loans, and are not included in the data that follows.

The following table summarizes impaired loan information.

$(thousands)...................................................     Sept. 30
                                                                      1996
Impaired loans.........................................................$ 3,211
Impaired loans with related reserve for loan losses calculated under  
 SFAS 114..............................................................  3,196
Impaired loans with no realized reserve for loan losses calculated
 under SFAS 114........................................................     15

                                                                       Sept.30  
                                                                          1996 
Average impaired loans.................................................$ 3,976
Interest income recognized on impaired loans...........................    110
Cash basis interest income recognized on impaired loans................      0

                                     6 <PAGE>



                      FIRST FINANCIAL CORPORATION

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

      The purpose of the review is to point out key factors in First
Financial's recent performance, compared with earlier periods.  The review
should be read in conjunction with the financial statements beginning on Page
3 of this report.  All figures are for the consolidated entities.  It is
presumed the readers of these financial statements and the following narrative
have previously read the Corporation's annual report for 1995.

      At the May 21, 1996 meeting, the Board of Directors approved a 5% stock
dividend to shareholders of record June 18, 1996.  This stock dividend is
reflected in the accompanying financial statements.


Earnings Analysis

                         Summary of Operating Results


      Net income for the first nine month of $11,666,000 represents a
$1,855,000 increase or 18.9% from the $9,811,000 reported for the same period
a year earlier. Earnings per share was $1.75 an increase of 19.0% from the
$1.47 per share reported in the prior year.

      Net income for the current quarter of $3,645,000 represents a 0.9% below
1995 because of merger expenses of First Crawford State Bank and reduced
earnings at that affiliate.  Earnings per share for quarters remained
unchanged at $.55 for both 1996 and 1995.

Net Interest Income

      First Financial Corporation's primary source of earnings is net interest
income, which is the difference between the interest earned on loans and other
investments and the interest incurred for deposits and other sources of funds. 
In the first nine months of 1996 net interest income increased $4,756,000 or
12.4% as compared to the same period of 1995. This increase was the result of
continued growth in earning assets and an increase in the net interest margin
from 4.20% in 1995 to 4.31% in 1996.

      For the third quarter of 1996 a net interest income increased $1,502,000
or 11.5% as compared to the same period of 1995, and the net interest margin
also increased from 4.23% in 1995 to 4.33% in 1996.    


Other Income

      Other income for the nine months of 1996, as compared to the same period
of 1995, increased $299,000 or 5.3%.  The major contributing factor was the
increase in investment securities gains of $214,000 in 1996 compared to
$27,000 loss as in the same period of 1995. This also affected third quarter
other income which increased $34,000 or 1.8% from same quarter of 1995. There
were no other significant changes.
                                     7<PAGE> 

Other Expenses

      Other expenses for the first nine months of 1996, as compared to the
same period of 1995, increased $660,000 or 2.3%. The expenses for the employee
salaries and benefits, occupancy, and equipment increased by $1,042,000,
$283,000 and $420,000 respectively for the first nine months of 1996 compared
to the same period a year earlier. In addition, all other category expenses
increased by $821,000 primarily because of merger expenses of First Crawford
State Bank. These increases were offset by the favorable FDIC insurance
adjustment which decreased by $1,104,000 or 97.4% and data processing expense
by $802,000 or 52.5%. The Corporation changed data processing service from a
facilities management firm to an in-house operation which impacted data
processing expenses favorably.  

      Other expenses for the three months ended September 30, 1996 were
increased by $689,000 or 7.4%.  These increases is primarily the result of the
First Crawford State Bank merger expenses.
 

Allowance for Possible Loan Losses


     The Corporation's provision for possible loan losses totaled $2,910,000
for the first nine months of 1996 compared to $1,773,000 for the same period a
year earlier.  The increase provision is the result of increased delinquencies
and charge-offs in consumer loans.

      At September 30, 1996 the allowance for possible loan losses was 1.16%
of total loans, net of unearned income.  This compares with an allowance of
1.21% at December 31, 1995.  Net charge-offs for the first nine months of 1996
were $2,939,000 compared to $1,344,000 for the same period of 1995.  The ratio
of net charge-offs to average loans outstanding for the last five years ended
December 31, 1995, was .43%.  With this experience and based on management's
review of the portfolio, management believes the allowance of $10,587,000 at
September 30, 1996 is adequate.


Underperforming Assets



      The following is a listing of all categories of non-performing assets
which includes potential problem loans at September 30, 1996 and December 31,
1995.

                                            
                                                                    <F1>
                                           (000')                  (000')
                                           9-30-96                12-31-95

Nonaccrual Loans                           $ 4,423                 $ 3,088
Restructured Loans                              50                     219     
                                           $ 4,473                 $ 3,307


Past due                                                                    
> 90 days                                  $ 6,168                 $ 5,809
Land sold on contract                        2,833                   1,218
Total non-performing asset                 $13,474                 $10,334

<F1> Figures have been restated to reflect the acquisition of Crawford 
     Bankcorp, Inc.

     The ratio of the allowance for loan losses as a percentage of non-
performing loans was 99.5% at September 30, 1996 compared to 116% from
December 31, 1995.  This decrease is the result of an increase in the amount
of non-accrual loans amounting to $1,335,000 or 43%. There was no one
significant factor which affected this increase but on a consolidated basis
each category of loans increased a small amount.

     The following loan categories comprise significant components of the
non-performing loans at September 30, 1996:

Non-Accrual Loans

1. 1-4 family residential:             $606 thousand or 13% of non-accrual loans
2. Commercial loans:                   $2.7 million or 61% of non-accrual loans
3. Non farm nonresidential properties: $745 thousand or 17% of non-accrual loans

Past due > 90 days

1.  1-4 family residential:             $2.1 million or 34% of past due loans
2.  Commercial loans:                   $1.3 million  or 21% of past due loans
3.  Non farm nonresidential properties: $826 thousand or 14% of past due loans
4.  Consumer Loans                      $1.4 million or 23% of past due loans

      There are no material industry concentrations within the non-performing 
loans.  
     
      In addition to the above under-performing loans, certain loans are felt
by management to be impaired for reasons other than the current repayment
status.  Such reasons may include but not be limited to previous payment
history, bankruptcy proceedings, industry concerns, or information related to
a specific borrower that may result in a negative future event to that
borrower.  The Corporation had $1.5 million of doubtful loans which are still
in accrual status. 

                                     8 <PAGE>                       

Liquidity and Interest Rate Sensitivity

      The Corporation's objective in liquidity management is to manage the
assets and liabilities to meet the needs of borrowers while allowing for the
possibility of deposit withdrawals. 

      Part of the strategy in maintaining a satisfactory level of liquidity is
to structure a maturity schedule for the investment and loan portfolios that
will allow for fluctuations in the availability of funds.  Within the next
twelve months $187,502,000 of investments will mature which represents 33.9%
of the investment portfolio.  Investments with maturities of one to five years
comprise an additional 38.4% of the investment portfolio.

      The investment maturities along with the normal run-off of loans coupled
with a large supply of unpledged securities for repurchase agreements, federal
funds purchased, additional negotiable certificates of deposits, and other
available borrowings affords the Corporation flexibility in funding loan
growth and meeting other market opportunities as they present themselves.

      During the next twelve months the Corporation will either reprice or
mature a total  of $622,112,000 of assets.  In this same period a total of
$584,432,000 of liabilities will either be repriced or mature.  Thus, the
ratio of rate sensitive assets to rate sensitive liabilities as measured on a
static basis, is 106% as September 30, 1996.  The Corporation will continue to
monitor this relationship to determine if it is appropriate to maintain a
satisfactory level of net interest margin, while considering interest rate
sensitivity.


Capital Adequacy

      As of September 30, the Corporation's leverage ratio was 9.27% which
compared 9.31% at December 31, 1995.

      At September 30, 1996, the Corporation's total capital which includes
tier II capital  was 17.34% compared to 15.65% at December 31, 1995.

                                      9 <PAGE>

                          FIRST FINANCIAL CORPORATION

                           PART II OTHER INFORMATION



ITEM 4.  Submission of Matters to a Vote of Security Holders

      (a)   The Annual meeting of the shareholders of the Corporation was held
            on April 17 1996.

      (b)   The following were elected Directors of the Corporation:
            Walter A. Bledsoe, B. Guille Cox, Jr., Thomas T. Dinkel, Anton
            Hulman George, Mari Hulman George, Gregory L. Gibson, Max Gibson,
            Norman L. Lowery, William Niemeyer, Patrick O'Leary, John W. 
            Ragle, Chapman J. Root II, Donald E. Smith, and Virginia Smith.

      (c)   The shareholders unanimously approved the annual report of the
            Corporation and unanimously approved the actions of the Directors
            and Officers of the Corporation for the fiscal year ended December
            31, 1995.





      No other information is required to be filed under Part II of this form.



                                         10 <PAGE> 


                            FIRST FINANCIAL CORPORATION

                                      FORM 10-Q

                                      SIGNATURES


      Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.

                                                     FIRST FINANCIAL CORPORATION
                                                             (Registrant)





Date:  November 13, 1996                             By       (Signature)      
                                                     Donald E. Smith, President




Date:  November 13, 1996                             By       (Signature)      
                                                     John W. Perry, Secretary




Date:  November 13, 1996                             By       (Signature)      
                                                     Michael A. Carty, Treasurer














                                      11 <PAGE>