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

                                              June 30 , 1998  
<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, 1998   

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 June 30, 1998 were outstanding 7,210,183  shares without par value, of the
registrant.







 










                                                    1<PAGE> 





                                       FIRST FINANCIAL CORPORATION 

                                                FORM 10-Q

                                                  INDEX


PART I.  Financial Information                                          Page No.

     Item 1.   Financial Statements:

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

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

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

          Consolidated Statements of Cash Flows................................6

          Notes to Consolidated Financial Statements...........................7

     Item 2.   Management s Discussion and Analysis of
                  Financial Condition and Results of Operations................9

PART II.   Other Information:

      Item 4.   Submission of Matters to a Vote of 
                   Security Holders...........................................11
                                       
      Signatures..............................................................13
                                                     



















                                                       2<PAGE> 




<TABLE>
                                    FIRST FINANCIAL CORPORATION
                               CONSOLIDATED STATEMENTS OF CONDITION
<CAPTION>
                                                                                          June 30,       December 31,
                                                                                            1998              1997
                                                                                         (Unaudited)
                                                                                           (Amounts in thousands)
<S>                                                                                  <C>                  <C>         
     ASSETS
Cash and due from banks                                                                   $58,964           $53,815
Federal funds sold and securities purchased under agreement to resell                           0               280
Investments:     
 Available-For-Sale                                                                       567,559           527,993
Loans:                                                                                                            
 Commercial, financial and agricultural                                                   211,162           229,855
 Real  estate - construction                                                               28,702            23,734
 Real estate - mortgage                                                                   615,198           561,466
 Installment                                                                              201,118           188,552
 Lease financing                                                                            3,363             3,271
                                                                                        1,059,543         1,006,878
Less:
  Unearned income                                                                           1,008             1,079
  Allowance for loan losses                                                                15,452            13,503
                                                                                        1,043,083           992,296
Accrued interest receivable                                                                14,567            14,086
Premises and equipment, net                                                                24,478            24,925
Other assets                                                                               22,768            21,541
           TOTAL ASSETS                                                                $1,731,419        $1,634,936
           LIABILITIES AND SHAREHOLDERS  EQUITY
Deposits:
 Noninterest-bearing                                                                     $133,966          $162,880
 Interest-bearing:                 
    Certificates of deposit of $100,000 or more                                           235,054           195,487
    Other interest-bearing deposits                                                       901,451           836,157
                                                                                        1,270,471         1,194,524
Short-term borrowings:
 Federal funds purchased and securities
  sold under agreements to repurchase                                                      46,397            47,015
 Treasury tax and loan open-end note                                                        9,720             4,282
 Advances from Federal Home Loan Bank                                                     168,913           167,680
                                                                                          225,030           218,977
Other liabilities                                                                          19,310            18,718                 
Long-term debt                                                                              6,630             6,641
Long-term advances from Federal Home Loan Bank                                             34,752            30,596
           TOTAL LIABILITIES                                                            1,556,193         1,469,456

Shareholders  equity:
 Common stock, $.125 stated value per share;
  authorized 10,000,000 shares; issued and outstanding                                        903               877
  7,015,504 shares for 1997 and 7,225,483 shares for 1998 
  including treasury shares of 15,300
Additional capital                                                                         60,309            59,787                 
Retained earnings                                                                         107,766            98,046
Accumulated other comprehensive income:
 Unrealized gains on securities, net of tax                                                 7,028             6,770
Less: Treasury shares at cost                                                                -780                 0
            TOTAL SHAREHOLDERS  EQUITY                                                    175,226           165,480
            TOTAL LIABILITIES AND SHAREHOLDERS  EQUITY                                 $1,731,419        $1,634,936
The accompanying notes are an integral part of the consolidated financial statements.
</TABLE>


                                                                  3<PAGE>




<TABLE>
                                     FIRST FINANCIAL CORPORATION
                                  CONSOLIDATED STATEMENTS OF INCOME
<CAPTION>
                                                           Three Months Ended             Six Months Ended
                                                                   June 30,                    June 30,
                                                           1998            1997           1998          1997 
                                                                                (Unaudited)
                                                                (Amounts in thousands, except per share amounts)
<S>                                                   <C>             <C>             <C>            <C>           
 INTEREST INCOME:

  Loans                                                 $23,151          $20,502        $45,755        $40,442  
  Investment securities:
         Taxable                                          6,659            8,098         13,272         16,205
         Tax-exempt                                       2,072            1,864          4,036          3,647
                                                          8,731            9,962         17,308         19,852
 Other interest income                                      224               57            522             77
     TOTAL INTEREST INCOME                               32,106           30,521         63,585         60,371

 INTEREST EXPENSE:
     Deposits                                            12,885           11,585         25,076         22,889
     Other                                                3,700            3,930          7,583          7,811
         TOTAL INTEREST EXPENSE                          16,585           15,515         32,659         30,700
  
         NET INTEREST INCOME                             15,521           15,006         30,926         29,671
  
         Provision for loan losses                        1,549            1,336          2,956          2,737
  
         NET INTEREST INCOME AFTER
             PROVISION FOR LOAN LOSSES                   13,972           13,670         27,970         26,934
 OTHER INCOME
     Trust department income                                503              495          1,085            985     
     Service charges on deposit  accounts                   325              338            645            676
     Other service charges and fees                       1,184              804          2,264          1,690
     Investment securities gains                             39              124            391            355
     Other                                                  274              158            556            572
                                                          2,325            1,919          4,941          4,278
 OTHER EXPENSES
     Salaries and employee benefits                       5,983            5,326         11,977         10,601
     Occupancy expense                                      684              702          1,388          1,396
     Equipment expense                                      830              769          1,648          1,531
     Other                                                3,200            2,800          6,190          5,680 
                                                         10,697            9,597         21,203         19,208

         INCOME BEFORE INCOME TAX
           EXPENSE                                        5,600            5,992         11,708         12,004
 Income Tax Expense                                       1,430            1,618          3,038          3,199
         NET INCOME                                      $4,170           $4,374         $8,670         $8,805
  
 BASIC EARNINGS PER SHARE                                 $0.58            $0.62          $1.20          $1.25
  
 Weighted average number of      
     shares outstanding                                   7,217            7,016          7,221          7,016
  

The accompanying notes are an integral part of the consolidated financial statements. 
</TABLE>


                                                                  4<PAGE> 



<TABLE>

                                                 FIRST FINANCIAL CORPORATION
                                       Consolidated Statements of Comprehensive Income
<CAPTION>


                                                                        Three Months Ended                 Six Months Ended 
                                                                              June 30,                         June 30,
                                                                    1998             1997                1998            1997
                                                                                        (Unaudited)
                                                                                  (Amounts in thousands)
<S>                                                             <C>               <C>                 <C>            <C>            

Net Income                                                        $4,170             $4,374              $8,670         $8,805

Other Comprehensive income, net of tax:
 Unrealized gains (losses) losses on securities:
   Unrealized holding gains (losses) arising during period         1,034              1,969                 512         -1,828
   Less: reclassification adjustment for gains                     -  25            -    81                -254          - 231
   included in net income 
Other Comprehensive income                                         1,009              1,888                 258        - 2,059

Comprehensive Income                                              $5,179             $6,262              $8,928         $6,746      



</TABLE>




























                                                                  5<PAGE> 





    
<TABLE>
                                                                               

                                              FIRST FINANCIAL CORPORATION
                                         CONSOLIDATED STATEMENTS OF CASH FLOWS
<CAPTION>    
                                                                                                          Six Months Ended
                                                                                                              June 30,
                                                                                                      1998           1997
                                                                                                          (Unaudited)
                                                                                                       (Amounts in thousands)       
<S>                                                                                  <C>            <C>      
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income                                                                                $8,670         $8,805
Adjustment to reconcile net income to net cash                                                               
 provided by operating activities:
  Provision for loan losses                                                                2,956          2,737
  Provision for depreciation and amortization                                              1,228          1,352
  Net (increase) decrease in accrued interest receivable                                    -481            152
  Other, net                                                                              -1,671           -912
    NET CASH PROVIDED BY OPERATING ACTIVITIES                                             10,702         12,134
            

CASH FLOWS FROM INVESTING ACTIVITIES:

Net decrease from purchase and maturities of interest-bearing
 deposits with financial institutions                                                          0            499
Sales and maturities of available-for-sale securities                                    146,026         78,787
Purchases of available-for-sale securities                                              -178,689       -105,042
Loans made to customers, net of repayments                                               -23,463        -21,847
Net decrease in federal funds sold                                                           680          1,725
Additions to premises and equipment                                                         -929           -470
   NET CASH USED BY INVESTING ACTIVITIES                                                 -56,375        -46,348

CASH FLOWS FROM FINANCING ACTIVITIES:

Net increase from sales and
 redemptions of certificates of deposit                                                   80,492         19,629
Net (decrease) increase  in other deposits                                               -36,818          1,977
Net increase in short-term borrowings                                                      6,053         16,145
Cash dividends                                                                            -2,740         -2,338
Purchase of treasury stock                                                                  -780              0
Net increase (decrease) in long-term debt                                                  4,145         -5,997
   NET CASH PROVIDED  BY FINANCING ACTIVITIES                                             50,352         29,416

   NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS                                    4,679         -4,798
   CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR                                           54,285         66,658
                  
   CASH AND CASH EQUIVALENTS, END OF PERIOD                                              $58,964        $61,860

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
   Cash paid during the period for interest                                              $32,190        $32,444

   Income taxes paid                                                                      $3,689         $3,134         

The accompanying notes are an integral part of the consolidated financial statements.
</TABLE>

                                                                  6<PAGE> 




                                         FIRST FINANCIAL CORPORATION
                                 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


1.   The accompanying June 30, 1998 and 1997 consolidated financial statements 
are unaudited.  The December 31, 1997, consolidated financial statements are 
as reported in the First Financial Corporation  (the Corporation) 1997 annual
report.

     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.

   On March 16, 1998, the Corporation completed its previously announced 
acquisition of Morris Plan Company of Terre Haute, Inc., (Morris Plan).  In 
exchange for all of the outstanding common shares of Morris Plan,
the Corporation issued 210,000 shares of its common stock.  The acquisition has 
been accounted for as a pooling of interests. The Corporation s consolidated 
financial statements for periods prior to the acquisition have not been 
restated because the acquisition would not result in material changes to
previously reported statements. The acquisition resulted in an increase of 
4.6 million to the Corporation s shareholders   equity at March 16, 1998.

     Effective January 1, 1998 the Corporation adopted Statement of Financial 
Accounting Standards (SFAS) No. 130,  Reporting Comprehensive Income .  SFAS 
No. 130 establishes standards for the reporting and display of comprehensive 
income and its components in a full set of general-purpose financial statements.
The Corporation s comprehensive income, determined in accordance with the 
provisions of the statements, was $8.9 million and $6.7 million for the six 
months ended June 30, 1998 and 1997, respectively.  Accumulated other
comprehensive income, resulting from unrealized gains or losses on available for
sale securities,  at December 31, 1997 and June 30, 1998 was $6.8 and 
$7.0 million respectively.

     Recently Issued Accounting Standards Statement of Financial Accounting 
Standards (SFAS) No. 131, Disclosures about Segments of an Enterprise and 
Related Information  and SFAS No. 133,  Accounting for Derivative Instruments 
and Hedging Activities  have been issued by the Financial Accounting Standards 
Board. The Corporation is currently reviewing these two pronouncements and 
does not anticipate the adoption of SFAS No. 131 and SFAS No. 133 to have a 
material effect on the Corporation s financial position or results of 
operation.       
         
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,
                                                                   1998     1997

Impaired loans with related reserve for loan losses calculated 
under SFAS 114...............................................       993    2,107


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

 

                                                      7 <PAGE> 




    Interest income on commercial loans and residential real estate loans is no 
longer accrued at the time the loan is 90 days delinquent unless the credit is 
well secured and in the process of collection. Commercial loans are charged off 
at the time the loan becomes 180 days delinquent unless the loan is well
secured and in  process of collection, or other circumstances support 
collection.  Credit card loans and other unsecured personal credit lines are 
typically charged off no later than 180 days delinquent.  Other consumer loans 
are typically charged off when they become 150 days delinquent. In all cases, 
loans must be placed on nonaccrual status or charged off at an earlier date if 
collection of principal or interest is considered doubtful.

     The interest on these loans is accounted for on the cash basis or cost 
recovery method, until qualifying for return to accrual status.  Loans may be 
returned to accrual status when all the principal and interest amounts 
contractually due are paid.

3.  The cost and fair value of the Corporation s investments at June 30, 1998 
are shown below. All investments are considered as available-for-sale.

                                                                (000's)
                                                            June 30, 1998
                                               Amortized Cost        Fair Value 
 Available-For-Sale: 
  United States Government                        $155,041             $156,689 
  United States Government Agencies                206,509              208,268
  State and Municipal                              151,540              156,568
  Other                                             45,892               46,034
                                                  $558,982             $567,559
                                               
         
                                                               


























                                                      8 <PAGE> 






                                         FIRST FINANCIAL CORPORATION


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

         
     The purpose of this discussion is to point out key factors in the 
Corporation s recent performance, compared with earlier periods.  The discussion
should be read in conjunction with the financial statements beginning on page 
three of this report.  All 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 1997.

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


                                        Summary of Operating Results

     The Corporation reported earnings of $8.7  million for the first six months
which reflect a 1.5% decrease from the same period for 1997, while the second 
quarter net income of $4.2 million reflects a 4.7% decrease from the second 
quarter of 1997.  Although net interest income was up $1.3 million, or 4.2%, the
first six months results were impacted by expenses resulting from the 
acquisition of Morris Plan in Terre Haute.   Basic earnings per share results of
$1.20 and $0.58 for the six and three month periods in 1998, respectively, 
reflect similar decreases from the respective prior year's $1.25 and $0.62 per 
share. 

Net Interest Income

     The Corporation's primary source of earnings is net interest income, which 
is the difference between the interest earned on loans and other investments and
the interest incurred for deposits and other sources of funds. Although net 
interest income increased to $30.9 million in the first six months of 1998 from 
$29.7 million  in the same period of 1997, the net interest margin decreased to 
4.16% in 1998 from  4.20% in the same period of 1997. This decrease was the 
result of a higher cost of funds in 1998 than the prior year.  Higher costs of 
funds  also affected second quarter net interest income which increased to $15.5
million from $15.0 million for the same quarter of 1997 while net interest 
margin decreased to 4.14% for the second quarter of 1998 from 4.24% in the same 
quarter of 1997.     

Other Income

     Other income for the six months of 1998, as compared to the same period of 
1997, increased $663,000 or 15.5%.  Trust income and other service fee income 
increased to $1.1 million  and $2.3 million  or 10.1% and 34.0%, respectively, 
compared to the same period of 1997 as a result of increased service volume or 
increased service charges.  Second quarter other income increased to $2.3 
million  from $1.9 million compared to the same quarter of 1997. These increases
are the result of a focused effort to increase fee based income.

Other Expenses

     Other expenses for the first six months of 1998, as compared to the same 
period of 1997, increased to $21.2 million from $19.2 million.  This represents 
an increase of $2.0 million  or 10.4%.  Most of the components of other expenses
increased slightly while salaries and related benefits, the largest component
of this group, increased from $10.6 million  to almost $12.0 million or 13.0%.  
The primary reason for this increase were higher average salaries and higher 
health insurance costs.  This also affected second quarter other expenses which 
increased to $10.7 million from $9.6 million  for the same quarter of 1997.   
Expenses were also increased  by the acquisition of   Morris Plan during the 
first quarter of 1998.  There were no other significant changes.

                                      9<PAGE>
Allowance for Loan Losses                             

     The Corporation's provision for loan losses increased to almost $3.0 
million from $2.7 million  for the first six months of 1998 compared to the
same period a year earlier.   
         
      At June 30, 1998, the allowance for loan losses was 1.46% of net loans. 
This compares with an allowance of 1.34% at December 31, 1997.  Net chargeoffs 
for the first six months of 1998 were $2.0 million compared to $.9 million for 
the same period of 1997. This increase was due to the resolution of a few 
problem commercial loans. The ratio of net chargeoffs to average loans 
outstanding for the last five years ended December 31, 1997, was .35%.  With 
this experience and based on management's review of the portfolio, management 
believes the allowance of $15.5 million at June 30, 1998 is adequate.

Underperforming Assets

     Underperforming assets consist primarily of (1) nonaccrual loans and leases
on which the ultimate collectability  of the full amount of interest is 
uncertain, (2) loans and leases which have been renegotiated to provide for a 
reduction or deferral of interest or principal because of a deterioration in the
financial position of the borrower, (3) loans and leases past due ninety days or
more as to principal or interest and (4) land sold on contract.  A summary of 
Underperforming assets at June 30, 1998 and December 31, 1997 follows:
                                           (000')                      (000')
                                       June 30, 1998         December 31, 1997


Nonaccrual loans and leases              $ 4,243                    $   3,866
Renegotiated loans and leases                  7                           17   
Land sold on contract and others           2,037                        2,236   
   Total non-performing assets           $ 6,287                     $  6,119

Ninety days past due loans and leases      5,539                        4,384
   Total Underperforming assets          $11,826                      $10,503

Ratio of the allowance for loan losses
 as a percentage of non-performing assets       246%                        221%
Ratio of the allowance for loan losses
 as a percentage of Underperforming assets      131%                        129%

     The following loan categories comprise significant components of the 
non-performing loans at June 30, 1998

Non-Accrual Loans:
                                      (000's)                        (000's)
                                 June 30, 1998                 December 31, 1997
       1-4 family residential    1,782     42%                   $   728     19%
       Commercial loans          1,268     30                      1,622     42 
       Installment loans           922     22                        872     23 
       Other, various              271      6                        644     16 
                                $4,243    100%                    $3,866    100%
                                                                               
Past due 90 days or more:

       1-4 family residential   $3,418     62%                    $2,785     64%
       Commercial loans            976     18                        112      3 
       Installment loans           688     12                        851     19 
       Other, various              457      8                        636     14 
                                $5,539    100%                    $4,384    100%
                                   10<PAGE>              

         There are no material industry concentrations within the 
         under-performing loans.  
     
         In addition to the above under-performing loans, certain loans are felt
by management to be impaired for reasons other than the current repayment 
status. Such reasons may include but not be limited to previous payment history,
bankruptcy proceedings, industry concerns, or information related to a specific 
borrower that may result in a negative future event to that borrower.  At 
June 30, 1998 the Corporation had $144,000 of doubtful loans which are still in 
accrual status. 

Interest Rate Sensitivity and Liquidity

         The Corporation charges the nine subsidiary banks with monitoring and 
managing their individual sensitivity to fluctuations in interest rates and 
assuring that they have adequate liquidity to meet loan demand or any potential 
unexpected deposit withdrawals.  This function is facilitated by the 
Asset/Liability Committee.  The primary goal of the committee is to maximize net
interest income within the interest rate risk limits approved by the Board of 
Directors. This goal is accomplished through management of the subsidiary banks 
balance sheet liquidity and interest rate risk exposures due to the changes in
economic conditions and interest rate levels.

Interest Rate Risk
         
         Management considers interest rate risk to be the Corporation s most 
significant market risk. Interest rate risk is the exposure to changes in net 
interest income as a result of changes in interest rates.  Consistency in the 
Corporation s net income is largely dependent on the effective management of 
this risk.
                                                                               
         The Committee reviews a series of monthly reports to ensure that 
performance objectives are being met. The Committee monitors and controls 
interest rate risk through earnings simulation. Simulation modeling measures the
effects of changes in interest rates, changes in the shape of the yield curve, 
and changes in prepayment speeds on net interest income.  The primary measure of
Interest Rate Risk is "Earnings at Risk." This measure projects the earnings 
effect of various rate movements over the next three years on net interest 
income.  It is important to note that measures of interest rate risk have 
limitations and are dependent upon certain assumptions.  These assumptions are 
inherently uncertain and, as a result, the model cannot precisely predict the 
impact of interest rate fluctuations on net interest income. Actual results will
differ from simulated results due to timing, frequency and amount of interest
rate changes as well as overall market conditions. The Committee has performed a
thorough analysis and believes the assumptions to be valid and theoretically 
sound.  The relationships are continuously monitored for behavioral changes.
         
         In its interest rate risk management, the Corporation currently does 
not utilize any derivative products and is not engaged in securities trading 
activity. The Corporation instead invests in assets whose value is derived from 
an underlying asset. These assets are mostly government agency issued 
mortgage-backed securities. The performance of these assets in changing rate 
environments is included in the following table.

         The table below shows the Corporation's estimated earnings sensitivity 
profile as of  June 30, 1998.  Given a 100 basis point increase in rates, net 
interest income would increase .10% over the next 12 months and decrease 1.41% 
over the next 24 months.  A 100 basis point decrease would result in a .44% 
decrease in net interest income over the next 12 months and a .65% increase over
the next 24 month periods.  These estimates assume all rates changed overnight 
and management took no action as a result of this change.

    Basis Point                    Percentage Change in net Interest Income
    Interest Rate Change            12 months        24 months        36 months 
    Down 300                          -2 .95%           .46%            -5.26%  
    Down 200                          - 1.31            .93            - 2.76 
    Down 100                         -  . 44            .65            - 1.12 
    Up 100                               .10          -1.41               .07 
    Up 200                               .53          -1.86              1.46
    Up 300                              1.62             .43             4.43
                                           11<PAGE>

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 $14.0 
million of investments that mature throughout the coming 12 months. The 
Corporation also anticipates $76.1 million of principal payments from 
mortgage-backed securities.  Given the current rate environment, the Corporation
anticipates $20.8 million of Federal Agency Securities to be called within the 
next 12 months.  With these sources of funds, the Corporation currently 
anticipates adequate liquidity to meet the expected obligations of its 
customers. 


Capital Adequacy


         As of June 30, 1998 the Corporation's leverage ratio was 9.74% compared
to 9.68% at December 31, 1997.

         At June 30 , 1998 the Corporation's total capital, which includes 
Tier II capital,  was 17.13% compared to 17.10% at December 31, 1997.These 
amounts exceed minimum regulatory capital requirements.

                                                                               
Year 2000

         The Corporation has established a Year 2000 (YR2000) team which is 
meeting and discussing issuesrelated to YR2000.  This team has the background 
and financial support to complete the early-stage assessment of YR2000 issues.  
The Corporation is also in the process of obtaining statements of direction
from all of its hardware and software vendors to determine their plans for 
resolving the YR2000 issue. The statements of direction from the vendors have 
indicated that the vendors have already resolved the issue or have scheduled a 
release that will include YR2000 date fixes.  The goal of the YR2000 team is to 
install all software updates by the first quarter of 1999.  In addition, testing
has been scheduled to perform daily processing on December 31, 1999, January 1, 
2000, and February 29, 2000.  The Corporation believes that YR2000 costs will 
not have a material adverse effect on the Corporation s financial position or 
future results of operations.





                                                     12<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 15, 1998.

(b)      The following were elected Directors of the Corporation for a three 
         year term: Walter A. Bledsoe, Max Gibson, William Niemeyer and 
         Donald E. 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, 
         1997.





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

































                                                     13<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 14, 1998                              By       (Signature)        
                                                    Donald E. Smith, President




Date:  August 14, 1998                              By       (Signature)        
                                                    John W. Perry, Secretary




Date:  August 14, 1998                              By       (Signature)        
                                                    Michael A. Carty, Treasurer

























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