CHARLESTON, S.C., April 24 /PRNewswire-FirstCall/ -- First Financial Holdings, Inc. ('First Financial' or the 'Company') (Nasdaq: FFCH), the holding company for First Federal Savings and Loan Association of Charleston ('First Federal'), today reported results for the second quarter of its fiscal year ended September 30, 2009. Net Income for the quarter were $0.19 for the current quarter, compared to basic and diluted earnings per common share of $0.65 and $0.64, respectively, for the quarter ended March 31, 2008.
President and Chief Executive Officer A. Thomas Hood commented, 'We are pleased with our overall earnings given our higher level of charge-offs and loan loss provisions. We are very committed to working in cooperation with our retail and business customers during this time of economic uncertainty and while many challenges face our industry. On February 18, 2009 the Company announced a moratorium on single-family foreclosures in an effort to work closely with customers at risk of losing their homes. First Federal continues to provide housing solutions to homeowners in our markets through our partnership with several non-profit agencies. Our foreclosure clinics are helpful to both our customers and to customers of many other financial institutions.'
Hood continued, 'Our loan loss provisions were significant for the quarter ended March 31, 2009, and these higher provisions strengthen our ability to navigate through this unprecedented and uncertain economic cycle.' Hood noted, 'The Company recognized a provision for loan losses of $12.8 million for the quarter ended March 31, 2009 compared to $20.5 million for the quarter ended December 31, 2008, and $3.6 million for the quarter ended March 31, 2008. The increase in the provision during the quarter ended March 31, 2009 compared to the comparable quarter in 2008 is attributable to significant increases in non-accrual loans and net charge-offs, overall loan growth and uncertainties in the markets served by the Company.' Non-accrual loans were $54.8 million at March 31, 2009 compared to $35.1 million for the linked quarter and $12.8 million for the quarter ended March 31, 2008. The Company increased its allowance for loan losses as a percent of total loans from 175 basis points during the quarter ended December 31, 2008 to 199 basis points during the quarter ended March 31, 2009. Problem assets, which include problem loans as well as real estate owned, as a percentage of total assets was 1.91% at March 31, 2009 compared with 1.33% at December 31, 2008 and 0.60% at March 31, 2008.
The Company's loan loss reserve coverage of non-performing loans was 86.6% at March 31, 2009 compared to 118.0% at December 31, 2008 and 138.8% at March 31, 2008. Annualized net loan charge-offs as a percentage of net loans totaled 1.14% for the quarter ended March 31, 2009 compared with 0.49% for the quarter ended December 31, 2008 and 0.43% for the comparable quarter one year ago.
During the quarter ended March 31, 2009, mortgage banking income was $2.7 million compared to $1.8 million for quarter ended December 31, 2008 and $3.0 million for the comparative quarter ended March 31, 2008. As in the past quarters, the Company has certain economic hedging strategies in place to protect the value of our capitalized mortgage servicing asset from interest rate risk.
Insurance revenues, including contingent income, for the quarter ended March 31, 2009 were $7.0 million compared to $5.2 million for the linked quarter and $6.8 million for the comparable quarter one year ago. In prior years, contingent revenues were typically distributed by the insurance companies during the March quarter. A number of insurance carriers are now providing guidance allowing contingent income to be recognized each quarter.
Our net interest margin was up significantly at 3.64% for the quarter ended March 31, 2009 compared to a net interest margin of 3.48% for the quarter ended December 31, 2008 and 3.35% for the quarter ended March 31, 2008. Hood noted, 'We continue to see improvement in our margin as a result of lower interest rates on both deposits and borrowings. Rates in our markets have declined since last quarter but they are still higher than wholesale rates.' Net interest income increased to $27.0 million for the quarter ended March 31, 2009, an increase of $1.9 million or 7.6% from $25.1 million for the linked quarter and an increase of $4.8 million or 21.8% for the comparative quarter ended March 31, 2008. The increase was as a result of improvement in our net interest margin along with loan and investment portfolio growth. In total, average earning assets increased $137 million or 4.8% to $3.0 billion for the quarter ended March 31, 2009 compared to $2.9 billion for the linked quarter and 13.2% or $349 million for the comparative quarter ended March 31, 2008.
Non-interest income totaled $14.6 million for the second quarter of fiscal 2009, a decrease of $3.2 million from $17.8 million for the quarter ended March 31, 2008. This decrease is primarily attributable to lower levels of service charges and fees on deposit accounts. The company also recognized other than temporary impairment ('OTTI') on three collateralized debt obligations ('CDOs') and one collateralized mortgage obligation ('CMO'). The Company has determined that approximately $857 thousand of the contractual cash flows will not be received due to credit-related factors, and accordingly this amount has been realized in current earnings.
Total revenues, defined as net interest income plus total other income, excluding credit-related OTTI, gains on sales of investments and gains on disposition of assets, increased to $42.4 million, for the quarter ended March 31, 2009, an increase of $3.2 million or 8.1% from $39.2 million during the comparable quarter ended March 31, 2008.
Total non-interest expenses for the quarter ended March 31, 2009 totaled $23.8 million, a slight decrease of $218 thousand or 0.9% from $24.1 million for the comparable quarter one year ago and a decrease of $2.8 million, or 10.3% from $26.6 million for the linked quarter ended December 31, 2008. In January 2009, the Company announced several significant cost savings initiatives, including decreases in salaries and employee benefits, which resulted in the decrease in non-interest expenses for the current quarter.
