CHARLESTON, S.C., Oct. 27, 2009 (GLOBE NEWSWIRE) -- 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" or the "Association"), today reported results for its fourth quarter and fiscal year ended September 30, 2009. The net income (loss) for the quarter ended September 30, 2009 was $(1.3) million compared to $6.3 million from the comparative quarter ended September 30, 2008. Basic and diluted earnings (loss) per share available to common shareholders were ($0.19) for the current quarter, compared to $0.54 per basic and diluted per common share for the quarter ended September 30, 2008. Net income for the twelve months ended September 30, 2009 totaled $29.3 million, compared with $22.6 million, for the twelve months ended September 30, 2008. Diluted earnings per common share for the twelve months ended September 30, 2009 was $2.24 compared with $1.94 for the twelve months ended September 30, 2008. Included in the results during this fiscal year was an after-tax extraordinary gain of $28.9 million related to the difference between the purchase price and the acquisition-date fair value of the assets purchased and liabilities assumed in the Federal Deposit Insurance Corporation ("FDIC") assisted acquisition of the former Cape Fear Bank in Wilmington, North Carolina.

President and Chief Executive Officer A. Thomas Hood commented, "We are very pleased with our performance given the impact of the current economic environment. Our core operating metrics remain strong and, during the fourth quarter of 2009, we successfully sold $65.0 million of our common stock in a public offering and completed the conversion of the systems of the former Cape Fear Bank. Additionally, in early October 2009, we opened two new in-store financial service centers in Lowes Foods stores in Wilmington, North Carolina bringing seven day-a-week banking services to that market. We continue to devote significant resources to the monitoring and early recognition of potential problems in our loan portfolio. Consumers in our markets are still experiencing high unemployment and lower home values. While our policy of proactively identifying and managing problem credits resulted in a higher level of non-performing loans as of September 30, 2009, we were encouraged by the improvement in our level of net loan charge-offs during the fourth quarter."

"Compared with the quarter ended June 30, 2009, the net interest margin decreased by 17 basis points from a net interest margin of 4.16% to 3.99% for the quarter ended September 30, 2009. Net interest income for the quarter ended September 30, 2009 was $34.1 million, decreasing from $35.5 million or 4.16% for the linked quarter ended June 30, 2009. Hood commented, "We anticipate the deposits assumed and the loans acquired from the former Cape Fear Bank to have a positive but lessening impact on our net interest margin through fiscal 2010. Lower funding costs also continue to have a positive impact on our net interest margin. Our focus remains on increasing our core deposits and developing long-term customer relationships across our entire footprint."

The Company recognized a provision for loan losses of $21.3 million for the quarter ended September 30, 2009 compared to $12.4 million for the quarter ended June 30, 2009, and $5.2 million for the quarter ended September 30, 2008. The increase in the provision on both a linked and comparative quarter basis is attributable to increased non-performing loans and an ongoing assessment of current economic conditions specific to the markets we serve. The Company increased its allowance for loan losses as a percent of total loans from 205 basis points during the quarter ended June 30, 2009 to 257 basis points during the quarter ended September 30, 2009. Problem assets, which include non-accrual loans, accruing loans more than 90 days past due and real estate owned, as a percentage of total assets were 2.92% at September 30, 2009 compared with 0.84% at September 30, 2008 and 2.20% at June 30, 2009. The Company's loan loss reserve coverage of non-performing loans was 85.0% at September 30, 2009 compared to 116.3% at September 30, 2008 and 82.0% at June 30, 2009. The Company continues to work with borrowers searching for alternatives to mortgage foreclosure.

Mortgage banking income was $2.7 million for the fourth quarter of fiscal 2009, an increase of $1.7 million or 171.0% for the linked quarter ended June 30, 2009 and an increase of $1.9 million or 225.5% for the comparative quarter ended September 30, 2008. This increase is attributed to the Company's strategy of having certain economic hedging strategies in place to protect the value of our capitalized mortgage servicing asset from interest rate risk.

During the quarter ended September 30, 2009, there was further deterioration in our bank trust preferred collateralized debt obligations ("CDOs") portfolio. As a result, the Company recognized a credit-related other than temporary impairment (OTTI) charge totaling $614 thousand on seven CDOs comprised of bank trust preferred securities and one private label collateralized mortgage obligation ("CMO"). Total CDOs comprised of bank trust preferreds is $5.6 million or 1.1% of our total investment portfolio.

Total non-interest revenues were $15.4 million for the fourth quarter of fiscal 2009 compared to $15.1 million for the quarter ended September 30, 2008. Total revenues, defined as net interest income plus total other income, excluding gains on sales of investments and gains on disposition of assets, increased to $49.4 million for the quarter ended September 30, 2009, an increase of $11.1 million, or 29.0%, from $38.3 million during the comparable quarter ended September 30, 2008.

Total non-interest expense increased by $6.7 million, or 28.1%, to $30.6 million for the quarter ended September 30, 2009 compared to $23.9 million for the quarter ended September 30, 2008. Salary and employee benefits costs and occupancy costs increased in the fourth quarter of fiscal 2009 as a result of the acquisition of the operations of the former Cape Fear Bank and American Pensions, Inc. The assets and trade name of American Pensions, Inc., one of South Carolina's largest retirement plan consulting, fiduciary and administration firms, were purchased on July 1, 2009.

Hood continued, "While current market conditions continue to present many challenges for all financial institutions, our Board of Directors, officers and employees are committed to finding the best financial solutions for our customers and the best results for our shareholders. We are very proud of our performance in fiscal 2009 and we welcome the new fiscal year and are committed to achieving our financial and operational goals for fiscal 2010."

The Company also announced today that its Board of Directors has declared a regular quarterly cash dividend of $0.05 per share. The dividend is payable November 27, 2009, to stockholders of record as of November 13, 2009. Hood concluded, "Our board of directors continues to carefully evaluate the level of our dividend. We believe there is a critical need to preserve our strong capital base through these challenging economic times and this conservative approach continues to be the most appropriate action at this time."

As of September 30, 2009, First Financial's total assets were $3.5 billion, loans receivable totaled $2.6 billion and deposits were $2.3 billion. Stockholders' equity was $351.6 million and book value per common share totaled $18.03 at September 30, 2009. First Federal's capital ratio (i.e., equity divided by assets) was 7.92% at September 30, 2009, compared to 7.43% and 6.91% at June 30, 2009 and September 30, 2008, respectively. Tangible equity to assets was 7.67% at September 30, 2009, compared to 7.29% and 7.32% at June 30, 2009 and September 30, 2008, respectively. As of September 30, 2009, First Federal remained categorized "well capitalized" under regulatory standards.

As a participant in the Treasury's Capital Purchase Program, the Company continues to use this capital to help borrowers avoid foreclosures in our markets, and to expand our loan and investment portfolios. The Company paid a dividend of $813 thousand to the U.S. Treasury for its investment during the fourth quarter of fiscal 2009.

On September 29, 2009, the Company raised $65.0 million through a public offering by issuing 4,193,550 shares of common stock at a price of $15.50 per share. Subsequently, on October 9, the Company announced that the underwriters fully exercised their over-allotment option, resulting in the issuance of an additional 629,032 shares. Including the over-allotment option, the net proceeds to the Company after deducting underwriting discounts, commissions and estimated offering expenses are expected to be $69.8 million.

First Financial is the holding company for First Federal Savings and Loan Association of Charleston , which operates 65 offices located in the Charleston metropolitan area, Horry, Georgetown, Florence and Beaufort counties in South Carolina and Brunswick, New Hanover and Pender counties in coastal North Carolina offering banking, trust and pension administration services. The Company also provides insurance and brokerage services through First Southeast Insurance Services, The Kimbrell Insurance Group and First Southeast Investor Services.

NOTE: A. Thomas Hood, President and CEO of the Company, and R. Wayne Hall, Executive Vice President and CFO, will discuss these results in a conference call at 2:00 PM (EDT), October 27, 2009. The call can be accessed via a webcast available on First Financial's website at www.firstfinancialholdings.com.

Forward Looking Statements

Certain matters in this news release constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements relate to, among others, expectations of the business environment in which the Company operates, projections of future performance, including operating efficiencies, perceived opportunities in the market, potential future credit experience, and statements regarding the Company's mission and vision. These forward-looking statements are based upon current management expectations, and may, therefore, involve risks and uncertainties. Management's ability to predict results or the effect of future plans or strategies is inherently uncertain. The Company's actual results, performance or achievements may differ materially from those suggested, expressed or implied by forward-looking statements as a result of a wide range of factors including, but not limited to, the general business environment, general economic conditions nationally and in the States of North and South Carolina, interest rates, the North and South Carolina real estate markets, the demand for mortgage loans, the credit risk of lending activities, including changes in the level of and trend of loan delinquencies and charge-offs, results of examinations by our banking regulators, our ability to successfully integrate any assets, liabilities, customers, systems, and management personnel we have acquired or may in the future acquire into our operations and our ability to realize related revenue synergies and cost savings within expected time frames and any goodwill charges related thereto, competitive conditions between banks and non-bank financial services providers, regulatory changes and other risks detailed in the Company's reports filed with the Securities and Exchange Commission ("SEC"), including the Annual Report on Form 10-K for the fiscal year ended September 30, 2008. Accordingly, these factors should be considered in evaluating the forward-looking statements, and undue reliance should not be placed on these statements.

Such forward-looking statements may include projections. Such projections were not prepared in accordance with published guidelines of the American Institute of Certified Public Accountants or the SEC regarding projections and forecasts nor have such projections been audited, examined or otherwise reviewed by independent auditors of the Company. In addition, such projections are based upon many estimates and inherently subject to significant economic and competitive uncertainties and contingencies, many of which are beyond the control of management of the Company. Accordingly, actual results may be materially higher or lower than those projected. The inclusion of such projections herein should not be regarded as a representation by the Company that the projections will prove to be correct. The Company does not undertake to update any forward-looking statement that may be made on behalf of the Company.

For additional information about First Financial, please visit our web site at www.firstfinancialholdings.com or contact Dorothy B.