For immediate release

The Federal Reserve Board today announced its approval of the application of First Financial Corporation to acquire The Morris Plan Company of Terre Haute, Inc., both of Terre Haute, Indiana. Attached is the Board's Order relating to this action.

First Financial Corporation Terre Haute, Indiana Order Approving the Acquisition of a Bank

First Financial Corporation ("FFC"), a bank holding company within the meaning of the Bank Holding Company Act ("BHC Act"), has requested the Board's approval under section 3 of the BHC Act (12 U.S.C § 1842) to acquire The Morris Plan Company of Terre Haute, Inc. ("MPC"), an insured bank organized as an industrial development and investment company operating in Terre Haute, Indiana. Notice of the proposal, affording interested persons an opportunity to submit comments, has been published (63 Federal Register 228 (1998)). The time for filing comments has expired, and the Board has considered the proposal and all comments received in light of the factors set forth in section 3 of the BHC Act. FFC is the 14th largest depository institution in Indiana,1 and controls eight subsidiary banks with approximately $1.2 billion in deposits, representing approximately 1.6 percent of total deposits in commercial banking organizations in the state ("state deposits").2 MPC is the 185th largest depository institution in Indiana, controlling approximately $33 million in deposits. On consummation of the proposal, FFC would become the 13th largest depository institution in Indiana, controlling deposits of approximately $1.2 billion, representing 1.7 percent of state deposits. Competitive Considerations The BHC Act prohibits the Board from approving a proposal under section 3 of the BHC Act if the proposal would result in a monopoly or if the effect of the proposal may be substantially to lessen competition in any relevant market unless the Board finds that the anticompetitive effects of the proposed transaction are clearly outweighed in the public interest by the probable effect of the transaction in meeting the convenience and needs of the community to be served. FFC and MPC compete directly in the Terre Haute, Indiana, banking market.3 FFC is the largest depository institution in the banking market, controlling deposits of approximately $872 million, representing 47.4 percent of the total deposits in depository institutions in the market ("market deposits").4 MPC is the eighth largest depository institution in the market, controlling deposits of approximately $16.5 million, representing 0.9 percent of market deposits. On consummation of this proposal, FFC would control deposits of approximately $905 million, representing 48.8 percent of market deposits. Concentration in the market, as measured by the Herfindahl-Hirschman Index ("HHI") would increase by 115 points to 3186.5 In evaluating the competitive effects of the proposal in the Terre Haute banking market, the Board has considered several factors that tend to mitigate the competitive effects of the proposal. On consummation of the proposal, eight competitors would remain in the market, including two of the largest bank holding companies based in Indiana. Four of these competitors, not including MPC, would each have a market share of more than 5 percent, and the second and third largest competitors in the market would have market shares of 24.4 and 10.7 percent, respectively. Since 1995, two banks have entered the market, one through the establishment of a de novo branch and one through the acquisition of a bank operating only in the Terre Haute banking market. As in other cases, the Board sought comments from the Department of Justice on the competitive effects of the proposal. The Department of Justice has reviewed the proposal and advised the Board that consummation of the proposal would not likely have any significantly adverse competitive effects in the Terre Haute banking market or any other relevant banking market. Based on all the facts of record, and for the reasons discussed in this order, the Board concludes that consummation of the proposal is not likely to result in any significantly adverse effects on competition or on the concentration of banking resources in the Terre Haute banking market or any other relevant banking market. Other Factors The BHC Act also requires the Board to consider the financial and managerial resources and future prospects of the companies and banks involved in the proposal, the convenience and needs of the communities to be served, and certain supervisory factors. The Board has reviewed these factors in light of the record, including supervisory reports of examination assessing the financial and managerial resources of the organizations and the Community Reinvestment Act performance records of the institutions involved, and financial information provided by FFC. Based on all the facts of record, the Board concludes that the financial and managerial resources and the future prospects of FFC, its subsidiary banks, and MPC are consistent with approval, as are the other supervisory factors the Board must consider under section 3 of the BHC Act. In addition, considerations related to the convenience and needs of the communities to be served are consistent with approval of the proposal. Conclusion Based on the foregoing, and in light of all the facts of record, the Board has determined that the application should be, and hereby is, approved. The Board's approval is specifically conditioned on compliance by FFC with all the commitments made in connection with this application. For the purpose of this action, the commitments and conditions relied on by the Board in reaching its decisions are deemed to be conditions imposed in writing by the Board in connection with its findings and decision and, as such, may be enforced in proceedings under applicable law. The acquisition of MPC shall not be consummated before the fifteenth calendar day following the effective date of this order, or later than three months after the effective date of this order, unless such period is extended for good cause by the Board or by the Federal Reserve Bank of Chicago, acting pursuant to delegated authority.

By order of the Board of Governors,6 effective February 23, 1998. (signed) Jennifer J. Johnson Jennifer J. Johnson Deputy Secretary of the Board

Footnotes 1 In this context, depository institutions include commercial banks, savings banks, and savings associations. 2 State deposits are as of September 30, 1997. 3 The Terre Haute banking market consists of Clay and Vigo Counties; Clinton and Helt Townships in Vermillion County; Florida, Raccoon and Jackson Townships in Parke County; and Fairbanks, Curry and Jackson Townships in Sullivan County; all in Indiana. 4 Market share data are as of June 30, 1997. These data are based on calculations in which the deposits of thrift institutions are included at 50 percent. The Board previously has indicated that thrift institutions have become, or have the potential to become, significant competitors of commercial banks. See Midwest Financial Group, 75 Federal Reserve Bulletin 386 (1989); National City Corporation, 70 Federal Reserve Bulletin 743 (1984). 5 Under the revised Department of Justice Merger Guidelines, 49 Federal Register 26,823 (June 29, 1984), a market in which the post-merger HHI is above 1800 is considered highly concentrated. The Department of Justice has informed the Board that a bank merger or acquisition generally will not be challenged (in the absence of other factors indicating anticompetitive effects) unless the post-merger HHI is at least 1800 and the merger increases the HHI by more than 200 points. The Department of Justice has stated that the higher than normal HHI thresholds for screening bank mergers for anticompetitive effects implicitly recognize the competitive effect of limited-purpose lenders and other non-depository financial entities. 6 Voting for this action: Vice Chair Rivlin and Governors Kelley, Phillips, Meyer, Ferguson, and Gramlich. Absent and not voting: Chairman Greenspan.

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1998 Orders on banking applications