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<title>First Financial Corporation Form 8-K</title>



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<p align=center style='text-align:center'>&nbsp;</p>
<p align=center style='text-align:center'>UNITED STATES<br>
SECURITIES AND
EXCHANGE COMMISSION<br>
Washington, D.C.
20549<br>
____________</p>



<p align="center"><b>FORM 8-K</b></p>



<p align=center style='text-align:center'><b>CURRENT REPORT<br>
</b>Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934<br>
_____________________</p>



<p align=center style='text-align:center'>Date of Report <i>(Date
of earliest event reported)</i> August 7, 2006</p>



<p align=center style='text-align:center'><b><font size="4">First Financial Corporation<br>
</font></b><i><font size="2">(Exact name of
registrant as specified in its charter)</font></i></p>
<p align=center style='text-align:center'><font size="2"><i>&nbsp;</i></font></p>
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<table border="0" style="border-collapse: collapse" width="740" id="table1">
  <tr>
    <td align="center" width="252" nowrap>Texas</td>
    <td width="226" align="center" nowrap>0-5559</td>
    <td width="256" align="center" nowrap>





<p align=center style='text-align:center;'>74-1502313</p></td>
  </tr>
  <tr>
    <td align="center" width="252" nowrap> <i>(State of incorporation) </i></td>
    <td width="226" align="center" nowrap><i>(Commission File Number)</i></td>
    <td width="256" align="center" nowrap>

<p align=center style='text-align:center;
'><i>(IRS Employer Identification No.)</i></p>





    </td>
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  <tr>
    <td align="center" width="252" nowrap>&nbsp;</td>
    <td width="226" align="center" nowrap>&nbsp;</td>
    <td width="256" align="center" nowrap>&nbsp;</td>
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    <td align="center" colspan="2" nowrap>800 Washington Avenue, Waco, Texas</td>
    <td width="256" align="center" nowrap>76701</td>
  </tr>
  <tr>
    <td align="center" colspan="2" nowrap> <i>(Address of principal executive offices) </i>
    </td>
    <td width="256" align="center" nowrap><i>(Zip Code)</i></td>
  </tr>
</table>



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<p align=center style='text-align:center'>(254) 757-2424<br>
<i>(Registrant's
telephone number, including area code)</i></p>



<p align=center style='text-align:center'>N/A<br>
<i>(Former name or
former address, if changed since last report)</i></p>





<p>Check the appropriate box below if the Form 8-K filing is
intended to simultaneously satisfy the filing obligations of the registrant
under any of the following provisions:</p>



<p>[&nbsp; ]&nbsp; Written communications pursuant to Rule 425 under the
Securities Act (17 CFR 230.425)</p>



<p>[&nbsp; ]&nbsp; Soliciting material pursuant to Rule 14a-12 under the
Exchange Act (17 CFR 240.14a-12)</p>



<p>[&nbsp; ]&nbsp; Pre-commencement communications pursuant to Rule
14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))</p>



<p>[&nbsp; ]&nbsp; Pre-commencement communications pursuant to Rule
13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))</p>



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<p><b>Item 2.04&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Triggering Events that Accelerate or
Increase a Direct Financial Obligation or an Obligation Under an Off-Balance
Sheet Arrangement.</b></p>



<p><i>Background</i></p>



<p style='text-indent:.5in'>As previously reported, effective
July 20, 2005, First Preference Mortgage Corp. (&quot;FPMC&quot;), a wholly owned
subsidiary of First Financial Corporation (&quot;FFC&quot;), and CitiMortgage, Inc.
(&quot;CMI&quot;) entered into a Workout and Forebearance Agreement (the &quot;Workout
Agreement&quot;). The Workout Agreement settled claims by CMI under certain loan
purchase agreements by which CMI had purchased loans from FPMC. </p>



<p style='text-indent:.5in'>The terms of the Workout Agreement
provided in part that FPMC would pay CMI the sum, without interest, of
$1,920,844 (the &quot;Deferred Payment Amount&quot;), consisting of (a) $254,544 paid on
the signing date, (b) two payments of $50,000 each on June 1, 2006 and December
1, 2006 and (c) monthly installments escalating from $20,000 in October 2005 to
$50,000 in November 2008 and a final installment of $251,300 in December 2008. </p>



<p><i>Events Giving Rise to Filing</i></p>



<p style='text-indent:.5in'>On August 8, 2006, FPMC received a
letter from legal counsel to CMI dated August 7, 2006, declaring FPMC to be in
default of the Workout Agreement and certain loan purchase agreements.&nbsp; In
particular, CMI asserted that FPMC breached the Workout Agreement by failing to
pay the following amounts when due:&nbsp; (1) the $25,000 monthly payment due June
1, 2006; (2) the $50,000 curtailment payment due June 1, 2006; (3) the $27,500
monthly payment due July 1, 2006; and (4) the $30,000 monthly payment due
August 1, 2006.</p>



<p style='text-indent:.5in'>As a result, CMI asserted that all
amounts payable by FPMC under the Workout Agreement and the underlying loan
agreements have been accelerated and demanded that amounts currently totaling
$3,570,087.95 be paid by FPMC, or that acceptable arrangements be made for
those amounts to be paid, no later than August 17, 2006. CMI also asserted
related claims against certain affiliates of FPMC, including David W. Mann,
FFC's chief executive officer and the beneficial owner of a majority of FFC's
outstanding common stock.</p>



<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; FPMC is reviewing with legal counsel its
response to the letter.</p>

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<p align=center style='text-align:center'>SIGNATURE</p>



<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 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.</p>



<p style="margin-left: 3.75in">FIRST
FINANCIAL CORPORATION</p>
<p style="margin-left: 3.75in">&nbsp;</p>







<p style="margin-left: 3.75in">By: <u>/s/ David
W. Mann&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<br>
</u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;David
W. Mann<br>
&nbsp;&nbsp;&nbsp; President
and Chief Executive Officer </p>

<p>Date: August 11, 2006</p>

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[{"type": "8-K", "sequence": "1", "filename": "ffc8k1.htm", "secsgml_size_bytes": 7073}]
{"company-data": {"conformed-name": "FIRST FINANCIAL CORP /TX/", "cik": "0000036315", "assigned-sic": "6162", "irs-number": "741502313", "state-of-incorporation": "TX", "fiscal-year-end": "1231"}, "filing-values": {"form-type": "8-K", "act": "34", "file-number": "000-05559", "film-number": "061024070"}, "business-address": {"street1": "800 WASHINGTON AVE", "city": "WACO", "state": "TX", "zip": "76701", "phone": "8177572424"}, "mail-address": {"street1": "800 WASHINGTON AVE", "city": "WACO", "state": "TX", "zip": "76701"}}
First Financial Corporation Form 8-K
UNITED STATES
SECURITIES AND
EXCHANGE COMMISSION
Washington, D.C.
20549
____________
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
_____________________
Date of Report
(Date
of earliest event reported)
August 7, 2006
First Financial Corporation
(Exact name of
registrant as specified in its charter)
Texas
0-5559
74-1502313
(State of incorporation)
(Commission File Number)
(IRS Employer Identification No.)
800 Washington Avenue, Waco, Texas
76701
(Address of principal executive offices)
(Zip Code)
(254) 757-2424
(Registrant's
telephone number, including area code)
N/A
(Former name or
former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is
intended to simultaneously satisfy the filing obligations of the registrant
under any of the following provisions:
[  ]  Written communications pursuant to Rule 425 under the
Securities Act (17 CFR 230.425)
[  ]  Soliciting material pursuant to Rule 14a-12 under the
Exchange Act (17 CFR 240.14a-12)
[  ]  Pre-commencement communications pursuant to Rule
14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
[  ]  Pre-commencement communications pursuant to Rule
13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Item 2.04        Triggering Events that Accelerate or
Increase a Direct Financial Obligation or an Obligation Under an Off-Balance
Sheet Arrangement.
Background
As previously reported, effective
July 20, 2005, First Preference Mortgage Corp. ("FPMC"), a wholly owned
subsidiary of First Financial Corporation ("FFC"), and CitiMortgage, Inc.
("CMI") entered into a Workout and Forebearance Agreement (the "Workout
Agreement"). The Workout Agreement settled claims by CMI under certain loan
purchase agreements by which CMI had purchased loans from FPMC.
The terms of the Workout Agreement
provided in part that FPMC would pay CMI the sum, without interest, of
$1,920,844 (the "Deferred Payment Amount"), consisting of (a) $254,544 paid on
the signing date, (b) two payments of $50,000 each on June 1, 2006 and December
1, 2006 and (c) monthly installments escalating from $20,000 in October 2005 to
$50,000 in November 2008 and a final installment of $251,300 in December 2008.
Events Giving Rise to Filing
On August 8, 2006, FPMC received a
letter from legal counsel to CMI dated August 7, 2006, declaring FPMC to be in
default of the Workout Agreement and certain loan purchase agreements.  In
particular, CMI asserted that FPMC breached the Workout Agreement by failing to
pay the following amounts when due:  (1) the $25,000 monthly payment due June
1, 2006; (2) the $50,000 curtailment payment due June 1, 2006; (3) the $27,500
monthly payment due July 1, 2006; and (4) the $30,000 monthly payment due
August 1, 2006.
As a result, CMI asserted that all
amounts payable by FPMC under the Workout Agreement and the underlying loan
agreements have been accelerated and demanded that amounts currently totaling
$3,570,087.95 be paid by FPMC, or that acceptable arrangements be made for
those amounts to be paid, no later than August 17, 2006. CMI also asserted
related claims against certain affiliates of FPMC, including David W. Mann,
FFC's chief executive officer and the beneficial owner of a majority of FFC's
outstanding common stock.
FPMC is reviewing with legal counsel its
response to the letter.
SIGNATURE
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
By:
/s/ David
W. Mann
David
W. Mann
President
and Chief Executive Officer
Date: August 11, 2006