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<title>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</p>



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



<p align="center"><b><font size="4">FORM 8-K</font></b></p>



<p align=center style='text-align:center'><b><font size="4">CURRENT REPORT<br>
</font></b>Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934</p>

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



<p align=center style='text-align:center'>Date of Report <i>(Date of earliest event reported)</i>:
May 16, 2006</p>



<p align=center style='text-align:center'><b><font size="4">First Financial Corporation<br>
</font></b><i>(Exact name of
registrant as specified in its charter)</i></p>
<table border="0" width="100%" id="table1">
	<tr>
		<td width="387" align="center">Texas</td>
		<td width="419" align="center">





<p align=center style='text-align:center;'>0-5559</p></td>
		<td align="center">74-1502313</td>
	</tr>
	<tr>
		<td width="387" align="center"> <i>(State of incorporation)</i></td>
		<td width="419" align="center">

<p align=center style='margin-left:144.0pt;text-align:center;
text-indent:-144.0pt'><i>(Commission File Number)</i></p></td>
		<td align="center"> <i>(IRS Employer Identification No.)</i></td>
	</tr>
	<tr>
		<td width="387" align="center">&nbsp;</td>
		<td width="419" align="center">&nbsp;</td>
		<td align="center">&nbsp;</td>
	</tr>
	<tr>
		<td width="387" align="center">&nbsp;</td>
		<td width="419" align="center">&nbsp;</td>
		<td align="center">&nbsp;</td>
	</tr>
	<tr>
		<td width="387" align="center">800 Washington Avenue, Waco, Texas</td>
		<td width="419" align="center">&nbsp;</td>
		<td align="center">76701</td>
	</tr>
	<tr>
		<td width="387" align="center"><i>(Address of principal
executive offices)&nbsp;</i></td>
		<td width="419" align="center">&nbsp;</td>
		<td align="center"> <i>(Zip Code)</i></td>
	</tr>
</table>





<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>





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

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<p style='text-indent:0pt'><b>Item 1.01&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Entry
into a Material Definitive Agreement</b></p>

<p style='text-indent:36.0pt'>On
May 16, 2006, First Financial Corporation (the &quot;Company&quot;) and its wholly owned
subsidiary, First Preference Mortgage Corp. (&quot;FPMC&quot;), agreed to and consummated
the transactions described below (the &quot;Transactions&quot;) with respect to their
secured debt which, immediately prior to the Transactions, consisted of the
following obligations:</p>



<ul style='margin-top:0pt' type=disc>
 <li class=MsoNormal style='margin-bottom:6.0pt'>Real
     Estate Lien Note (&quot;Note 1&quot;) dated July 1, 2004, made by FPMC, guaranteed
     by the Company, secured by a first-ranking lien and security interest in
     78.471 acres of unimproved real estate owned by FPMC on Highway 77 in
     McLennan County, Texas (the &quot;Highway 77 Property&quot;) and held by Bluebonnet
     Investments, Ltd., a Texas limited partnership (&quot;BIL&quot;).&nbsp; Prior to the
     Transactions, the principal and interest due on Note 1 were $634,373.17
     and $1,768.42, respectively.</li>
 <li class=MsoNormal style='margin-bottom:6.0pt'>Promissory
     Note (&quot;Note 2&quot;) dated December 13, 2005, made by the Company, held by BIL
     and secured by a second-ranking lien and security interest in the Highway
     77 Property.&nbsp; Prior to the Transactions, the principal and interest due on
     Note 2 were $350,000 and $1,682.88, respectively. </li>
 <li class=MsoNormal style='margin-bottom:6.0pt'>Promissory
     Note (&quot;Note 3&quot;) dated December 13, 2005, made by the Company, held by JRPM
     Investments, Ltd., a Texas limited partnership (&quot;JRPM&quot;) and secured by,
     among other things, a third-ranking lien and security interest in the
     Highway 77 Property and a pledge of all of the outstanding shares of FPMC,
     Shelter Resources, Inc. (&quot;SRI&quot;), First Advisory Services, Inc. (&quot;FAS&quot;),
     each a wholly-owned subsidiary of the Company, and all of the outstanding
     shares of First Preference Properties, Inc. (&quot;FPP&quot;), a wholly-owned
     subsidiary of FPMC. Note 3 was convertible at the election of the holder
     into shares of Company common stock (&quot;Common Stock&quot;) at a conversion price
     equal to the greater of $2.50 per share or the book value per share as of
     the date of conversion. Prior to the Transactions, the principal and
     interest due on Note 3 were $350,000 and $1,682.88, respectively.</li>
 <li class=MsoNormal style='margin-bottom:6.0pt'>Promissory
     Note (&quot;Note 4&quot;) dated December 13, 2005, made by the Company, held by
     JRPM, and secured by, among other things, a fourth-ranking lien and
     security interest in the Highway 77 property and a pledge of all of the
     outstanding shares of FPMC, SRI, FAS and FPP.&nbsp; Note 4 was convertible at
     the election of the holder into 326,472 shares of Common Stock at a
     conversion price of $1.5315249 per share. Prior to the Transactions, the
     principal and interest due on Note 4 were $500,000 and $2,404.11,
     respectively.</li>
</ul>



<p style='text-indent:36.0pt'>David
W. Mann, the president, chief executive officer and chief financial officer of
the Company, is a general and limited partner of JRPM. RAM Investors, Inc., a
corporation of which Mr. Mann is the sole owner, is the other general partner
of JRPM.&nbsp; The sole general partner of BIL is Bluebonnet Enterprises, Inc., a
corporation of which Mr. Mann is the president and which is owned by a trust
established for the benefit of Mr. Mann.&nbsp; </p>

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



<p align=center style='text-align:center'>2</p>
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<p style='text-indent:36.0pt'>All
of the following Transactions occurred effective as of May 16, 2006:</p>



<ol>
	<li>
	<p style='margin-left:0.4in;'>On Note 1, FPMC paid to BIL
$21,373.17 of principal and $1,768.42 of interest, reducing the balance due on
Note 1 to $613,000.<br>
&nbsp;</p></li>
	<li>
	<p style='margin-left:0.4in;'>On Note 2 FFC paid to BIL interest
in the amount of $1,682.88, reducing the balance due on Note 2 to $350,000.<br>
&nbsp;</p></li>
	<li>
	<p style='margin-left:0.4in;'>On Note 3 FFC paid to JRPM
interest in the amount of $1,682.88 reducing the balance due on Note 3 to
$350,000. <br>
&nbsp;</p></li>
	<li>
	<p style='margin-left:0.4in;'>On Note 4 FFC paid to JRPM
interest in the amount of $2,404.11, reducing the balance due on Note 4 to
$500,000.<br>
&nbsp;</p></li>
	<li>
	<p style='margin-left:0.4in;'>JRPM and the Company agreed to the
cancellation of all conversion rights under Note 3; thereafter, JRPM assigned
to BIL its rights with respect to principal in the amount of $287,000 under
Note 3 and cancelled its third- and fourth-ranking lien and security interest
in the Highway 77 Property securing Note 3 and Note 4, in exchange for which
assignment and cancellation of liens, BIL transferred to JRPM cash and other
assets having a value of $287,000.<br>
&nbsp;</p></li>
	<li>
	<p style='margin-left:0.4in;'>In full payment and satisfaction
of the amounts owed on Note 1 ($613,000) and Note 2 ($350,000) and that portion
of the principal amount of Note 3 held by BIL ($287,000), which amounts
aggregated $1,250,000, BIL accepted full ownership of the Highway 77 Property
from FPMC.<br>
&nbsp;</p></li>
	<li>
	<p style='margin-left:0.4in;'>In full payment and satisfaction
of the remaining balance payable on Note 3 ($63,000) and in payment and
satisfaction of principal in the amount of $150,000 of Note 4, JRPM accepted
all of the outstanding shares of SRI and FPP from the Company and FPMC,
respectively, leaving a remaining principal balance due on Note 4 of $350,000.<br>
&nbsp;</p></li>
	<li>
	<p style='margin-left:0.4in;'>JRPM agreed to convert the
$350,000 remaining principal balance due on Note 4 on or before December 31,
2006 at the conversion price specified in Note 4, for which JRPM will receive
228,530 shares of Common Stock.</p></li>
</ol>

<p style='text-indent:36.0pt'>As
a result of the foregoing Transactions, all of the secured debt of the Company
and FPMC had been paid and satisfied, with the exception of a principal balance
due on Note 4 in the amount of $350,000, all of which JRPM agreed to convert to
equity no later than December 31, 2006.&nbsp; The credit against the four secured
notes that the Company and FPMC received in the Transactions (apart from the
conversion of and interest forgiveness on Note 4) was an aggregate of
$1,491,911.46, of which $28,911.46 was paid in cash and &nbsp;$1,463,000
was the aggregate value attributed to the Highway 77 Property and to the
outstanding shares of SRI and FPP.</p>

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



<p align=center style='text-align:center'>3</p>

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<p style='text-indent:36.0pt'>All
of the Transactions were negotiated on behalf of the Company by a committee
(the &quot;Committee&quot;) consisting of its directors other than David W. Mann; that
is, Dr. Raymond Parker, who served as chairman of the Committee, Mr. James
Motheral, Mr. Walter J. Rusek and Mr. Joe Walker. None of the directors
constituting the Committee has any interest in or position with BIL or JRPM. In
the negotiations with respect to the Transactions, the Committee was
represented by legal counsel of its own selection. In these negotiations, the
Highway 77 Property was evaluated on the basis of an independent appraisal and
indications of interest in the property from a prospective buyer, as a result
of which the value of the property was determined to be $1,250,000.&nbsp; Each of
SRI and FPP holds a parcel of real estate in Waco, Texas as its only
significant asset. Neither SRI nor FPP has any operations. In the negotiations,
each of SRI and FPP were evaluated on the basis of its net stockholders'
equity, with its real estate asset evaluated on the basis of an independent
appraisal and discounted by 31% to reflect estimated sales commissions and
closing costs related to the sale of the property and estimated carrying costs
of the property prior to any such sale. As a result, SRI and FPP were evaluated
at $213,000 in the aggregate. </p>
<p style='text-indent:36.0pt'>&nbsp;</p>





<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: 3.5in">FIRST
FINANCIAL CORPORATION</p>







<p style='margin-left:3.5in;'>By:<u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; /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;&nbsp;&nbsp;&nbsp;
</u><br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; David
W. Mann<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; President
<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; and
Chief Executive Officer </p>

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

<p>Date: <u>May 22, 2006</u></p>

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



<p align=center style='text-align:center'>4</p>

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[{"type": "8-K", "sequence": "1", "filename": "f8k1.htm", "secsgml_size_bytes": 14175}]
{"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": "06858478"}, "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"}}
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)
:
May 16, 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 1.01        Entry
into a Material Definitive Agreement
On
May 16, 2006, First Financial Corporation (the "Company") and its wholly owned
subsidiary, First Preference Mortgage Corp. ("FPMC"), agreed to and consummated
the transactions described below (the "Transactions") with respect to their
secured debt which, immediately prior to the Transactions, consisted of the
following obligations:
Real
     Estate Lien Note ("Note 1") dated July 1, 2004, made by FPMC, guaranteed
     by the Company, secured by a first-ranking lien and security interest in
     78.471 acres of unimproved real estate owned by FPMC on Highway 77 in
     McLennan County, Texas (the "Highway 77 Property") and held by Bluebonnet
     Investments, Ltd., a Texas limited partnership ("BIL").  Prior to the
     Transactions, the principal and interest due on Note 1 were $634,373.17
     and $1,768.42, respectively.
Promissory
     Note ("Note 2") dated December 13, 2005, made by the Company, held by BIL
     and secured by a second-ranking lien and security interest in the Highway
     77 Property.  Prior to the Transactions, the principal and interest due on
     Note 2 were $350,000 and $1,682.88, respectively.
Promissory
     Note ("Note 3") dated December 13, 2005, made by the Company, held by JRPM
     Investments, Ltd., a Texas limited partnership ("JRPM") and secured by,
     among other things, a third-ranking lien and security interest in the
     Highway 77 Property and a pledge of all of the outstanding shares of FPMC,
     Shelter Resources, Inc. ("SRI"), First Advisory Services, Inc. ("FAS"),
     each a wholly-owned subsidiary of the Company, and all of the outstanding
     shares of First Preference Properties, Inc. ("FPP"), a wholly-owned
     subsidiary of FPMC. Note 3 was convertible at the election of the holder
     into shares of Company common stock ("Common Stock") at a conversion price
     equal to the greater of $2.50 per share or the book value per share as of
     the date of conversion. Prior to the Transactions, the principal and
     interest due on Note 3 were $350,000 and $1,682.88, respectively.
Promissory
     Note ("Note 4") dated December 13, 2005, made by the Company, held by
     JRPM, and secured by, among other things, a fourth-ranking lien and
     security interest in the Highway 77 property and a pledge of all of the
     outstanding shares of FPMC, SRI, FAS and FPP.  Note 4 was convertible at
     the election of the holder into 326,472 shares of Common Stock at a
     conversion price of $1.5315249 per share. Prior to the Transactions, the
     principal and interest due on Note 4 were $500,000 and $2,404.11,
     respectively.
David
W. Mann, the president, chief executive officer and chief financial officer of
the Company, is a general and limited partner of JRPM. RAM Investors, Inc., a
corporation of which Mr. Mann is the sole owner, is the other general partner
of JRPM.  The sole general partner of BIL is Bluebonnet Enterprises, Inc., a
corporation of which Mr. Mann is the president and which is owned by a trust
established for the benefit of Mr. Mann.
2
All
of the following Transactions occurred effective as of May 16, 2006:
On Note 1, FPMC paid to BIL
$21,373.17 of principal and $1,768.42 of interest, reducing the balance due on
Note 1 to $613,000.
On Note 2 FFC paid to BIL interest
in the amount of $1,682.88, reducing the balance due on Note 2 to $350,000.
On Note 3 FFC paid to JRPM
interest in the amount of $1,682.88 reducing the balance due on Note 3 to
$350,000.
On Note 4 FFC paid to JRPM
interest in the amount of $2,404.11, reducing the balance due on Note 4 to
$500,000.
JRPM and the Company agreed to the
cancellation of all conversion rights under Note 3; thereafter, JRPM assigned
to BIL its rights with respect to principal in the amount of $287,000 under
Note 3 and cancelled its third- and fourth-ranking lien and security interest
in the Highway 77 Property securing Note 3 and Note 4, in exchange for which
assignment and cancellation of liens, BIL transferred to JRPM cash and other
assets having a value of $287,000.
In full payment and satisfaction
of the amounts owed on Note 1 ($613,000) and Note 2 ($350,000) and that portion
of the principal amount of Note 3 held by BIL ($287,000), which amounts
aggregated $1,250,000, BIL accepted full ownership of the Highway 77 Property
from FPMC.
In full payment and satisfaction
of the remaining balance payable on Note 3 ($63,000) and in payment and
satisfaction of principal in the amount of $150,000 of Note 4, JRPM accepted
all of the outstanding shares of SRI and FPP from the Company and FPMC,
respectively, leaving a remaining principal balance due on Note 4 of $350,000.
JRPM agreed to convert the
$350,000 remaining principal balance due on Note 4 on or before December 31,
2006 at the conversion price specified in Note 4, for which JRPM will receive
228,530 shares of Common Stock.
As
a result of the foregoing Transactions, all of the secured debt of the Company
and FPMC had been paid and satisfied, with the exception of a principal balance
due on Note 4 in the amount of $350,000, all of which JRPM agreed to convert to
equity no later than December 31, 2006.  The credit against the four secured
notes that the Company and FPMC received in the Transactions (apart from the
conversion of and interest forgiveness on Note 4) was an aggregate of
$1,491,911.46, of which $28,911.46 was paid in cash and  $1,463,000
was the aggregate value attributed to the Highway 77 Property and to the
outstanding shares of SRI and FPP.
3
All
of the Transactions were negotiated on behalf of the Company by a committee
(the "Committee") consisting of its directors other than David W. Mann; that
is, Dr. Raymond Parker, who served as chairman of the Committee, Mr. James
Motheral, Mr. Walter J. Rusek and Mr. Joe Walker. None of the directors
constituting the Committee has any interest in or position with BIL or JRPM. In
the negotiations with respect to the Transactions, the Committee was
represented by legal counsel of its own selection. In these negotiations, the
Highway 77 Property was evaluated on the basis of an independent appraisal and
indications of interest in the property from a prospective buyer, as a result
of which the value of the property was determined to be $1,250,000.  Each of
SRI and FPP holds a parcel of real estate in Waco, Texas as its only
significant asset. Neither SRI nor FPP has any operations. In the negotiations,
each of SRI and FPP were evaluated on the basis of its net stockholders'
equity, with its real estate asset evaluated on the basis of an independent
appraisal and discounted by 31% to reflect estimated sales commissions and
closing costs related to the sale of the property and estimated carrying costs
of the property prior to any such sale. As a result, SRI and FPP were evaluated
at $213,000 in the aggregate.
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:
May 22, 2006
4