Oct. 28--A growing volume of souring loans added up to a quarterly loss for the parent of First Federal Savings and Loan Association of Charleston.

First Financial Holdings Inc. said Tuesday that it posted a $1.3 million loss for the last three months of its fiscal year, which ended Sept. 30, compared to a $6.3 million profit for the same period in 2008.

On a per-share basis, the loss totaled 19 cents.

Shares of First Financial fell 10.6 percent on Tuesday. The stock slid $1.66 to close at $14.

For its latest fiscal year, the Charleston-based company said it earned $29.3 million, up 30 percent from the same 12-month period of 2008. The more recent figure included a one-time, after-tax gain of $28.9 million stemming from First Financial's April purchase of the failed Cape Fear Bank in Wilmington, N.C.

The company said it set aside $21.3 million in the quarter to cover losses from potential bad loans. That compared to $5.2 million a year ago and $12.4 million for the three months ended June 30.

"The increase ... is attributable to increased non-performing loans and an ongoing assessment of current

economic conditions specific to the markets we serve," First Financial said in a statement.

The bank owner said write-downs declined by about $2.1 million to $7.3 million compared to its fiscal third quarter. But delinquencies jumped about 16 percent to $116 million. The biggest trouble spots were residential and commercial land loans classified as more than 30 days past due, which skyrocketed $16.7 million to $47.7 million since the end of June.

First Financial said it is devoting "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," the company said.

The bank owner also said Tuesday that its board approved a quarterly cash dividend of 5 cents a share to be paid Nov. 27 to stockholders of record as of Nov. 13. The company cut the payout 78 percent in February to conserve cash.

First Financial is the largest bank owner based in the Charleston region. It has $3.5 billion in assets and 65 First Federal offices, mostly in coastal South Carolina and North Carolina.

A. Thomas Hood, president and chief executive, said he remains optimistic about the company's future. He also said he see opportunities to expand the First Federal banking franchise by tapping the $65 million raised in a recent stock offering.

"We believe the changes that have occurred will allow the company to better weather the recession and emerge as a much stronger company," Hood said Tuesday.

Contact John McDermott at 937-5572 or jmcdermott@postandcourier.com.

-----

To see more of The Post and Courier, or to subscribe to the newspaper, go to http://www.charleston.net .

Copyright (c) 2009, The Post and Courier, Charleston, S.C.

Distributed by McClatchy-Tribune Information Services.

For reprints, email tmsreprints@permissionsgroup.com, call 800-374-7985 or 847-635-6550, send a fax to 847-635-6968, or write to The Permissions Group Inc., 1247 Milwaukee Ave., Suite 303, Glenview, IL 60025, USA.

NASDAQ-NMS:FFCH, NASDAQ-SMALL:CAPE,

A service of YellowBrix, Inc.