SINGAPORE–(Marketwire -01/30/12)- Saxo Capital Markets (Australia) Pty Ltd (‘SCM Australia’), the online trading and investment specialist, today announced the launch of its retail operations in Australia, offering investors the opportunity to trade various asset classes across award-winning online platforms.
Saxo Capital Markets (Australia) Pty Ltd is a wholly owned subsidiary of Saxo Bank A/S. It holds an Australian Financial Services Licence 280372 and is regulated by the Australian Securities & Investments Commission.
The move extends Saxo Bank Group’s reach in the fast-growing Asia-Pacific region, and is consistent with its goal of being the premier multi-asset online trading platform in the world.
SCM Australia offers local traders sophisticated trading platforms such as SaxoTrader and SaxoWebTrader, permitting the trading of foreign exchange, CFDs and stocks with live streaming prices and lightning-fast stock trades.
SCM Australia provides clients with access to over 160 foreign exchange crosses, more than 13,000 stocks from 25 major exchanges and over 140 Futures contracts on live market prices from over 19 exchanges. SCM Australia’s CEO Anthony Griffin said the company believed it had the services and competitive offering to transform the online trading market in Australia.
Mr. Griffin states, “In Australia, we will be adopting the standard Saxo business model that has been successfully implemented in over 20 countries and bringing our award-winning platforms to the market.”
Further, he states, “It was critical to ensure that investors were educated as much as possible on the asset classes they were trading in and the risks involved. As a result, SCM has a number of online educational tools available to ensure investors are informed.”
SCM Australia recently completed the acquisition of Logos Commodities Pty Ltd, the holding company of Commodity Broking Services Pty Ltd, bringing with it an excellent client base and broadening its suite of services.
Kim Fournais and Lars Seier Christensen, co-founders and CEOs of Saxo Bank, said in a joint statement:
“While opening an office in Sydney is a strategic decision to support our Asia-Pacific expansion and growth strategy, it has always been a priority for Saxo Bank. The acquisition has brought with it both tremendous staff as well as a great range of clients. That has given us the critical mass for doing business here. This is a good time for us to prove our commitment to the Australian market.”
Saxo Bank was founded in 1992. Saxo Bank’s trading platforms have defined the company’s success in the online trading space for over a decade. Since introducing the SaxoTrader in 1998, Saxo Bank has enhanced and improved its platforms to meet the evolving needs of traders and investors in a continuously changing industry. The Group has expanded overseas since 2006 and now has operations in more than 20 countries including major financial centres such as Tokyo, Singapore, Hong Kong, London, Zurich, Dubai, and Paris.
Company’s logohttp://release.media-outreach.com/i/Download/322
Disclaimer:Saxo Capital Markets Pte. Ltd. (“Saxo Capital Markets”) is licensed as a Capital Market Services provider and an Exempt Financial Advisor, and is supervised by the Monetary Authority of Singapore.
You should carefully consider whether trading in leveraged products is appropriate for you in the light of your financial circumstances. You should be aware that dealing in products that are highly leveraged carry significantly greater risk than non-geared investments such as share trading. As such, you could both gain and lose large amounts of money. You may sustain losses in excess of the moneys you initially deposit and also in excess of the margin required to establish and maintain any positions in leveraged products.
For further information, please see:
http://sg.saxomarkets.com/about-us/general-disclaimer
About Saxo Capital Markets
Saxo Capital Markets Pte Ltd is a wholly owned subsidiary of Saxo Bank A/S, the Copenhagen-headquartered online trading and investment specialist. It serves as the Asia Pacific headquarters and holds a Capital Markets Services license from the Monetary Authority of Singapore. Saxo Capital Markets also holds a Commodity Broker licence from The International Enterprise Singapore.
Clients can trade Forex, CFDs, Stocks, Futures, Options and other derivatives via SaxoWebTrader and SaxoTrader, its leading multi-asset online trading platforms.
SaxoTrader is available directly through Saxo Capital Markets or through one of its institutional clients. White labelling is a significant business area for Saxo Capital Markets, and involves customising and branding of its online trading platform for other financial institutions and brokers.
For more information, please visit http://www.saxomarkets.com.sg/
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2012年1月30日星期一
Financial planner vs adviser: Know the difference
There is a real confusion among investors over who a financial planner is and who an investment adviser is. These terms are used very loosely, so it is necessary that one understands the function of each of these professionals and approach the right people.
A few decades ago, there was confusion between what comprises sales and marketing. People thought they were very much the same. But it is to be understood that sales is just an important ingredient of the functions of marketing. Sales lies in persuading and convincing a person to buy a product that is suitable. Marketing involves all the activities right from the conception of the product, to branding, advertising and retailing.
It is an all-pervasive function from the product being ready to reach the market and ultimately being sold to the customer.
There prevails a similar confusion with who is an investment adviser and who is a financial planner. It is quite common to find these terms used interchangeably, but it is necessary to understand that an investment adviser and a financial planner have vast differences as between sales and marketing.
The author is Ramalingam K, an MBA (Finance) and Certified Financial Planner. He is the director and chief financial planner of Holistic Investment Planners (www.holisticinvestment.in) a firm that offers Financial Planning and Wealth Management. He can be reached at ramalingam@holisticinvestment.in.
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A few decades ago, there was confusion between what comprises sales and marketing. People thought they were very much the same. But it is to be understood that sales is just an important ingredient of the functions of marketing. Sales lies in persuading and convincing a person to buy a product that is suitable. Marketing involves all the activities right from the conception of the product, to branding, advertising and retailing.
It is an all-pervasive function from the product being ready to reach the market and ultimately being sold to the customer.
There prevails a similar confusion with who is an investment adviser and who is a financial planner. It is quite common to find these terms used interchangeably, but it is necessary to understand that an investment adviser and a financial planner have vast differences as between sales and marketing.
The author is Ramalingam K, an MBA (Finance) and Certified Financial Planner. He is the director and chief financial planner of Holistic Investment Planners (www.holisticinvestment.in) a firm that offers Financial Planning and Wealth Management. He can be reached at ramalingam@holisticinvestment.in.
http://tourism9.com/ http://vkins.com/
Crowd waiting for Pres. Obama to speak in Ann Arbor WITH SLIDESHOW
By Erica McClain
For the Press & Guide
For the Press & Guide
ANN ARBOR — As 3,000 people wait to hear from President Barack Obama at U of M’s Al Glick Fieldhouse, there are quite a few expectations from the crowd on education. “Hopefully, the government will help with socialized loans again, and the cost of education will be affordable for all,” said 28-year-old Cooley Law student Jason Andrews.
He added education is not a bubble.
“It should be affordable for meaningful people who have a desire to better themselves,” he said.
Andrews referenced Obama’s background as the son of an immigrant and how far he has been able to come.
“I just want my children to be able to afford that, too,” he said.
With Stafford loan rates set to double in July, from 3.4 percent to 6.8 percent, due to the upcoming expiration of the College Cost Reduction and Access Act, Andrews isn’t alone in his concern.
“For some it might be worth going to a private school, but for me, personally, I agree with lowering the rates because it doesn’t seem fair for someone to pay $25,000 per year for school,” U-M freshman Alec Lessner said.
U of M’s Office of Financial Aid estimates that a school year at the university as a fulltime freshman or sophomore costs $25,204 – with $12,634 making up tuition costs alone. Continued… Continued…
He added education is not a bubble.
“It should be affordable for meaningful people who have a desire to better themselves,” he said.
Andrews referenced Obama’s background as the son of an immigrant and how far he has been able to come.
“I just want my children to be able to afford that, too,” he said.
With Stafford loan rates set to double in July, from 3.4 percent to 6.8 percent, due to the upcoming expiration of the College Cost Reduction and Access Act, Andrews isn’t alone in his concern.
“For some it might be worth going to a private school, but for me, personally, I agree with lowering the rates because it doesn’t seem fair for someone to pay $25,000 per year for school,” U-M freshman Alec Lessner said.
U of M’s Office of Financial Aid estimates that a school year at the university as a fulltime freshman or sophomore costs $25,204 – with $12,634 making up tuition costs alone. Continued… Continued…
Ethan Fitzgerald, another U of M student, hoped the president would announce plans for a new program to aid college students with financial woes. Deleise Cole Wilson said she wanted to hear what Obama had to say for college students.
“I was impressed with what he had to say in the State of the Union,” Cole Wilson said.
Others, however, were just excited to have the chance to hear the president in person.
“I’ve been very supportive of the president, and I just wanted to see him in person,” said Ann Arbor resident Nancy Stoll.
“I was impressed with what he had to say in the State of the Union,” Cole Wilson said.
Others, however, were just excited to have the chance to hear the president in person.
“I’ve been very supportive of the president, and I just wanted to see him in person,” said Ann Arbor resident Nancy Stoll.
ANN ARBOR — As 3,000 people wait to hear from President Barack Obama at U of M’s Al Glick Fieldhouse, there are quite a few expectations from the crowd on education. “Hopefully, the government will help with socialized loans again, and the cost of education will be affordable for all,” said 28-year-old Cooley Law student Jason Andrews.
He added education is not a bubble.
“It should be affordable for meaningful people who have a desire to better themselves,” he said.
Andrews referenced Obama’s background as the son of an immigrant and how far he has been able to come.
“I just want my children to be able to afford that, too,” he said.
With Stafford loan rates set to double in July, from 3.4 percent to 6.8 percent, due to the upcoming expiration of the College Cost Reduction and Access Act, Andrews isn’t alone in his concern.
“For some it might be worth going to a private school, but for me, personally, I agree with lowering the rates because it doesn’t seem fair for someone to pay $25,000 per year for school,” U-M freshman Alec Lessner said.
U of M’s Office of Financial Aid estimates that a school year at the university as a fulltime freshman or sophomore costs $25,204 – with $12,634 making up tuition costs alone. Continued…
Ethan Fitzgerald, another U of M student, hoped the president would announce plans for a new program to aid college students with financial woes.
Deleise Cole Wilson said she wanted to hear what Obama had to say for college students.
“I was impressed with what he had to say in the State of the Union,” Cole Wilson said.
Others, however, were just excited to have the chance to hear the president in person.
“I’ve been very supportive of the president, and I just wanted to see him in person,” said Ann Arbor resident Nancy Stoll.
http://tourism9.com/ http://vkins.com/
He added education is not a bubble.
“It should be affordable for meaningful people who have a desire to better themselves,” he said.
Andrews referenced Obama’s background as the son of an immigrant and how far he has been able to come.
“I just want my children to be able to afford that, too,” he said.
With Stafford loan rates set to double in July, from 3.4 percent to 6.8 percent, due to the upcoming expiration of the College Cost Reduction and Access Act, Andrews isn’t alone in his concern.
“For some it might be worth going to a private school, but for me, personally, I agree with lowering the rates because it doesn’t seem fair for someone to pay $25,000 per year for school,” U-M freshman Alec Lessner said.
U of M’s Office of Financial Aid estimates that a school year at the university as a fulltime freshman or sophomore costs $25,204 – with $12,634 making up tuition costs alone. Continued…
Ethan Fitzgerald, another U of M student, hoped the president would announce plans for a new program to aid college students with financial woes.
Deleise Cole Wilson said she wanted to hear what Obama had to say for college students.
“I was impressed with what he had to say in the State of the Union,” Cole Wilson said.
Others, however, were just excited to have the chance to hear the president in person.
“I’ve been very supportive of the president, and I just wanted to see him in person,” said Ann Arbor resident Nancy Stoll.
http://tourism9.com/ http://vkins.com/
First Financial Holdings, Inc. Announces Quarterly Financial Results and Declares Cash Dividend
CHARLESTON, S.C., Jan. 30, 2012 (GLOBE NEWSWIRE) — First Financial Holdings, Inc. (“First Financial“) (Nasdaq:FFCH – News), the holding company for First Federal Savings and Loan Association of Charleston (“First Federal”), announced today net income of $15.6 million for the three months ended December 31, 2011, compared with $1.1 million for the three months ended September 30, 2011 and $1.2 million for the three months ended December 31, 2010. After the effect of the preferred stock dividend and related accretion, First Financial reported net income available to common shareholders of $14.6 million for the three months ended December 31, 2011, compared with $113 thousand and $210 thousand for the three months ended September 30, 2011 and December 31, 2010, respectively. Diluted net income per common share was $0.88 for the quarter ended December 31, 2011, compared with $0.01 for both the prior quarter and for the same quarter last year. Diluted net income per common share from continuing operations was $0.88 for the quarter ended December 31, 2011, compared with $0.12 and $0.01 for the quarters ended September 30, 2011 and December 31, 2010, respectively.
“The successful completion of the bulk loan sale during this quarter marked yet another strategic initiative in the transformation of our company and has positioned First Financial to produce improved results for our shareholders,” said R. Wayne Hall, president and chief executive officer of First Financial and First Federal. “We are focused on providing superior products and services to our customers, generating organic loan growth and improving the efficiency of our operations.”
Highlights for the Quarter ended December 31, 2011
Total assets at December 31, 2011 were $3.1 billion, a decrease of $59.3 million or 1.9% from September 30, 2011 and a decrease of $154.4 million or 4.7% from December 31, 2010. The decline from September 30, 2011 was primarily the result of a decrease in loans held for sale due to the bulk loan sale and other assets, partially offset by an increase in portfolio loans. The decline from December 31, 2010 was primarily the result of the bulk loan sale, as well as the sales of First Southeast Insurance Services Inc. and Kimbrell Insurance Group, Inc. during 2011, partially offset by an increase in total investment securities.
Investment securities at December 31, 2011 totaled $457.7 million, a decrease of $11.8 million or 2.5% over September 30, 2011 and an increase of $22.2 million or 5.1% over December 31, 2010. The decrease from September 30, 2011 was primarily the result of normal cash flows and prepayments received during the quarter, partially offset by investment securities purchased. The increase over December 31, 2010 was primarily the result of purchasing new securities during 2011.
The following table summarizes the loan portfolio by major categories.
Total loans at December 31, 2011 increased $30.2 million or 1.3% over September 30, 2011 and decreased $197.9 million or 7.7% from December 31, 2010. The increase over September 30, 2011 was primarily the result of a higher volume of 15-year fixed rate residential loan originations, which were held in the portfolio, partially offset by declines in the commercial and consumer loan portfolios. While the total commercial loan portfolio declined, the commercial business portfolio increased 3.6% over September 30, 2011, and this pipeline has displayed recent signs of improvement. The decrease from December 31, 2010 was primarily the result of the bulk loan sale, partially offset by continued demand for residential mortgage loans due to the low interest rate environment. For both comparative periods, continued lower loan demand from creditworthy borrowers, charge-offs, transfers of nonperforming loans to other real estate owned (“OREO”), and paydowns due to normal borrower activity contributed to a reduction in loans.
The allowance for loan losses was $53.5 million at December 31, 2011 or 2.24% of total loans, compared with $54.3 million or 2.31% of total loans at September 30, 2011 and $88.3 million or 3.42% of total loans at December 31, 2010. The decrease from September 30, 2011 was primarily the result of the continued reduced level of charge-offs since the bulk loan sale. The decrease from December 31, 2010 was primarily the result of the bulk loan sale and improvement in credit quality measures during the past twelve months, as discussed further below. The allowance for loan losses at December 31, 2011 was 2.39% of loans excluding loans covered under a purchase and assumption loss-share agreement (“loss-share agreement”) with the FDIC (“covered loans”), and represented 1.77 times coverage of the non-covered nonperforming loans.
At December 31, 2011, loans held for sale totaled $48.3 million, a decrease of $46.6 million from September 30, 2011 and an increase of $19.8 million over December 31, 2010. Loans held for sale at September 30, 2011 consisted of $40.8 million of residential mortgage loans to be sold in the secondary market and $54.1 million of nonperforming and performing loans selected for the bulk loan sale, while during the other two periods the loans held for sale were solely comprised of residential mortgage loans to be sold in the secondary market. The increases in residential mortgage loans to be sold in the secondary market over both prior periods were primarily the result of higher borrower demand due to recent reductions in market interest rates. These loans generally settle in 45 to 60 days. The decrease in the bulk loan pool, which was established as of June 30, 2011, was the result of the sale and settlement of the entire pool during the December 31, 2011 quarter.
The FDIC indemnification asset, net at December 31, 2011 was $51.0 million, essentially unchanged from September 30, 2011 and a decrease of $17.3 million or 25.3% from December 31, 2010. The decrease was primarily the result of receiving claims reimbursement from the FDIC, partially offset by the normal accretion recorded to the indemnification asset.
Other assets totaled $98.9 million at December 31, 2011, a decrease of $22.6 million or 18.6% from September 30, 2011 and an increase of $4.7 million or 5.0% over December 31, 2010. The decrease from September 30, 2011 was primarily the result of lower levels of OREO properties, current tax adjustments and federal tax refunds received. The increase over December 31, 2010 was primarily the result of an increase in the deferred tax asset associated with the loss recorded in the June 30, 2011 quarter.
Core deposits, which include checking, savings, and money market accounts, totaled $1.2 billion at December 31, 2011, essentially unchanged from September 30, 2011 and an increase of $121.2 million or 10.9% over December 31, 2010. The increase was primarily the result of new retail deposit products introduced during 2011 as well as several marketing initiatives and campaigns during the last twelve months to attract and retain core deposits. Time deposits at December 31, 2011 totaled $1.0 billion, a decrease of $70.8 million or 6.6% from September 30, 2011 and a decrease of $291.7 million or 22.5% from December 31, 2010. The decreases were primarily the result of a planned reduction in maturing high rate retail and wholesale time deposits and lower funding needs relative to asset growth during the last twelve months.
Advances from the FHLB at December 31, 2011 totaled $561.0 million, essentially unchanged from September 30, 2011 and an increase of $63.9 million or 12.9% over December 31, 2010. The increase was primarily the result of a shift in funding mix due to the planned reduction of high rate time deposits, partially offset by using cash flow from investment securities and the loan portfolio to paydown FHLB advances.
Shareholders’ equity at December 31, 2011 was $277.2 million, an increase of $8.7 million or 3.2% over September 30, 2011 and a decrease of $38.1 million or 12.1% from December 31, 2010. The variances were primarily the result of net operating results during the last twelve months combined with a reduction in accumulated other comprehensive income due to a change in market value related to recent activity and updated assumptions on the valuation of certain securities. While First Financial is not currently required to report risk-based capital metrics at the holding company level, using December 31, 2011 data on a pro-forma basis, the Tier 1 capital ratio for First Financial would have been 14.13% and the total risk-based capital ratio would have been 15.39%. First Federal’s regulatory capital ratios continue to be above “well-capitalized” minimums, as evidenced by the key capital ratios and additional capital information presented in the following table.
Asset Quality
The following tables illustrate the trend in quality and risk inherent in the loan portfolio over the past twelve months.
Total delinquent loans at December 31, 2011 increased $3.6 million or 24.2% over September 30, 2011. The increases in delinquent residential and consumer loans were primarily the result of several customers with modification requests in process as well as a seasonal increase normally experienced in the fourth calendar quarter each year. Total delinquent loans at December 31, 2011 included $2.3 million in covered loans, as compared with $2.7 million at September 30, 2011.
Total nonperforming assets at December 31, 2011 decreased $40.3 million or 37.2% from September 30, 2011. The decrease was primarily the result of the bulk loan sale as well as lower OREO due to property sales exceeding transfers to OREO and lower nonperforming commercial loans due to the resolution of several non-performing loans. These decreases were partially offset by higher nonperforming residential loans due to six accounts totaling $2.8 million; higher home equity loans related to impaired loans totaling $1.7 million; and additional restructured loans still accruing due to completing customer modification requests. Nonperforming loans covered under the loss-share agreement decreased $1.5 million from September 30, 2011 to $17.5 million at December 31, 2011. Covered OREO totaled $7.6 million at December 31, 2011, a decrease of $1.1 million from September 30, 2011.
The decrease in net charge-offs for the quarter ended December 31, 2011 as compared with the prior quarter was the result of the lower risk inherent in the loan portfolio after the bulk loan sale. The increase in commercial real estate charge-offs was primarily the result of the resolution of several nonperforming loans. Net charge-offs for the prior quarter were comprised of $7.9 million of charge-offs related to normal credit practices and $2.2 million of charge-offs on additional loans transferred to loans held for sale, the majority of which were related to existing loans in the pool.
The following table provides details on classified assets by category.
Discontinued Operations Financial Statement Presentation
As a result of First Financial’s sales of its insurance agency subsidiary, First Southeast Insurance Services, Inc., which was completed on June 1, 2011, and its managing general insurance agency subsidiary, Kimbrell Insurance Group, Inc., which was completed on September 30, 2011, the financial condition, operating results, and the gain or loss on the sales, net of transaction costs and taxes, for these subsidiaries have been segregated from the financial condition and operating results of First Financial’s continuing operations throughout this release and, as such, are presented as discontinued operations. While all prior periods have been revised retrospectively to align with this treatment, these changes do not affect First Financial’s reported consolidated financial condition or operating results for any of the prior periods.
Quarterly Results of Operations
First Financial reported net income from continuing operations of $15.6 million for the three months ended December 31, 2011, compared with $2.9 million for the three months ended September 30, 2011 and $1.1 million for the three months ended December 31, 2010. The quarter ended December 31, 2011 included a $20.8 million pre-tax gain ($12.7 million after-tax) from the bulk loan sale. The changes in the key components of net income from continuing operations are discussed below.
Net interest income
Net interest margin, on a fully tax-equivalent basis, was 3.91% for the quarter ended December 31, 2011, as compared with 3.87% for the quarter ended September 30, 2011 and 3.83% for the quarter ended December 31, 2010. The increase over the linked quarter was primarily the result of a reduction in the rate paid on interest-bearing liabilities. The increase from the same quarter last year was primarily the result of the decrease in yield on interest-bearing liabilities exceeding the decrease in the yield on earning assets as First Financial continues to grow core deposits, especially noninterest-bearing deposits.
Net interest income for the quarter ended December 31, 2011 was $28.9 million, essentially unchanged from the prior quarter and a decrease of $1.3 million or 4.5% from the same quarter last year. The decrease from the same quarter last year was primarily the result of a decline in average earning assets due to the bulk loan sale, combined with the decline in net loans due to the generally lower loan demand from creditworthy borrowers and loan charge-offs.
Provision for loan losses
After determining what First Financial believes is an adequate allowance for loan losses based on the estimated risk inherent in the loan portfolio, the provision for loan losses is calculated based on the net effect of the change in the allowance for loan losses and net charge-offs. The provision for loan losses was $7.4 million for the quarter ended December 31, 2011, compared with $8.9 million for the linked quarter and $10.5 million for the same quarter last year. The provision for loan losses for the linked quarter included $1.4 million related to loans transferred to the bulk sale pool, and represents the net result of the incremental charge-offs on those loans less their related reserve release. The decrease from both prior periods was primarily the result of lower net charge-offs and lower classified loans at December 31, 2011.
Noninterest income
Noninterest income totaled $32.8 million for the quarter ended December 31, 2011, an increase of $18.5 million over the prior quarter and an increase of $22.2 million over the same quarter last year. The quarter ended December 31, 2011 included a $20.8 million pre-tax gain from the bulk loan sale. The prior quarter included net gains totaling $1.9 million related to the resolution of certain loans in the bulk loan pool. Noninterest income from core operations totaled $12.0 million and $12.3 for the quarters ended December 31, 2011 and September 30, 2011, respectively.
The increase over the same quarter last year was primarily the result of the gain on the bulk loan sale as well as higher service charges on deposit accounts ($821 thousand) due to higher transaction-related revenue from increases in both volume and fees.
Noninterest expense
Noninterest expense totaled $28.9 million for the quarter ended December 31, 2011, a decrease of $701 thousand or 2.4% over the linked quarter and essentially unchanged from the same quarter last year. The decrease from the linked quarter was primarily the result of lower OREO, net ($1.6 million) and lower professional services expenses ($502 thousand), partially offset by higher other expense ($1.2 million). The decrease in OREO costs was primarily the result of fewer valuation adjustments on properties held. The decrease in professional services was primarily the result of $521 thousand in legal and other advisory services in the prior quarter related to preparing the loans held in the bulk sale pool for final disposition. The increase in other expense was primarily the result of higher processing fees related to a new reward program for deposit customers, higher loss reserves for the reinsurance subsidiary, and higher operational losses related to uncollectible foreclosure expenses.
Noninterest expense was essentially unchanged from the same quarter last year as increases in other expense ($1.1 million) and OREO, net ($414 thousand) were essentially offset by reductions in salaries and employee benefits ($969 thousand), professional services ($523 thousand), and FDIC insurance and regulatory fees ($350 thousand). The variances in other expense and OREO, net were primarily the result of the factors discussed above. The decrease in salaries and employee benefits was primarily the result of lower staff levels due to initiatives implemented during 2011. The reduction in professional services was primarily the result of using external resources to assist in the implementation of several strategic initiatives including loss-sharing management, OREO management, and compensation studies during the December 31, 2010 quarter. The decrease in FDIC insurance and regulatory fees was primarily the result of the new assessment methodology implemented by the FDIC during 2011.
Cash Dividend Declared
On January 30, 2012, First Financial’s Board of Directors declared a quarterly cash dividend of $0.05 per share. The dividend is payable on February 27, 2012 to shareholders of record as of February 13, 2012.
Conference Call
R. Wayne Hall, president and CEO; Blaise B. Bettendorf, EVP and CFO; and Joseph W. Amy, EVP and CCO; will review the quarter’s results in a conference call at 2:00 pm (ET), January 30, 2012. The live audio webcast is available on First Financial’s website at www.firstfinancialholdings.com and will be available for 90 days.
About First Financial
First Financial Holdings, Inc. (“First Financial”) (Nasdaq:FFCH – News) is a Charleston, South Carolina financial services provider with $3.1 billion in total assets as of December 31, 2011. First Financial offers integrated financial solutions, including personal, business, and wealth management services. First Federal Savings and Loan Association (“First Federal”), which was founded in 1934 and is the primary subsidiary, serves individuals and businesses throughout coastal South Carolina, Florence, South Carolina and Wilmington, North Carolina. First Financial subsidiaries include: First Federal; First Southeast Investor Services, Inc., a registered broker-dealer; and First Southeast 401(k) Fiduciaries, Inc., a registered investment advisor. First Federal is the largest financial institution headquartered in the Charleston, South Carolina metropolitan area and the third largest financial institution headquartered in South Carolina, based on asset size. Additional information about First Financial is available at www.firstfinancialholdings.com.
Non-GAAP Financial Information
In addition to results presented in accordance with U.S. generally accepted accounting principles (“GAAP”), this press release includes non-GAAP financial measures such as the efficiency ratio, the tangible common equity to tangible assets ratio, tangible common book value per share, and pre-tax pre-provision earnings. First Financial believes these non-GAAP financial measures provide additional information that is useful to investors in understanding its underlying performance, business, and performance trends and such measures help facilitate performance comparisons with others in the banking industry. Non-GAAP measures have inherent limitations, are not required to be uniformly applied, and are not audited. Readers should be aware of these limitations and should be cautious to their use of such measures. To mitigate these limitations, First Financial has procedures in place to ensure that these measures are calculated using the appropriate GAAP or regulatory components in their entirety and to ensure that its performance is properly reflected to facilitate consistent period-to-period comparisons. Although management believes the above non-GAAP financial measures enhance investors’ understanding of First Financial’s business and performance, these non-GAAP measures should not be considered in isolation, or as a substitute for GAAP basis financial measures.
In accordance with industry standards, certain designated net interest income amounts are presented on a taxable equivalent basis, including the calculation used in the efficiency ratio.
First Financial believes the exclusion of goodwill and other intangible assets facilitates the comparison of results for ongoing business operations. The tangible common equity (“TCE”) ratio and tangible common book value per share (“TBV”) have become a focus of some investors, analysts and banking regulators. Management believes these measures may assist in analyzing First Financial’s capital position absent the effects of intangible assets and preferred stock. Because TCE and TBV are not formally defined by GAAP or codified in the federal banking regulations, these measures are considered to be non-GAAP financial measures. However, analysts and banking regulators may assess First Financial’s capital adequacy using TCE or TBV, therefore, management believes that it is useful to provide investors the ability to assess its capital adequacy on the same basis.
First Financial believes that pre-tax, pre-provision earnings are a useful measure in assessing its core operating performance, particularly during times of economic stress. This measurement, as defined by management, represents total revenue (net interest income plus noninterest income) less noninterest expense. As recent results for the banking industry demonstrate, credit writedowns, loan charge-offs, and related provisions for loan losses can vary significantly from period to period, making a measure that helps isolate the impact of credit costs on profitability important to investors.
Please refer to the Selected Financial Information table and the Non-GAAP Reconciliation table later in this release for additional information.
Forward-Looking Statements
Statements in this release that are not statements of historical fact, including without limitation, statements that include terms such as “believes,” “expects,” “anticipates,” “estimates,” “forecasts,” “intends,” “plans,” “targets,” “potentially,” “probably,” “projects,” “outlook,” or similar expressions or future conditional verbs such as “may,” “will,” “should,” “would,” or “could” constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements regarding First Financial’s future financial and operating results, plans, objectives, expectations and intentions involve risks and uncertainties, many of which are beyond First Financial’s control or are subject to change. No forward-looking statement is a guarantee of future performance and actual results could differ materially. Factors that could cause or contribute to such differences include, but are 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 and trend of delinquent and nonperforming loans and charge-offs, changes in First Federal’s allowance for loan losses and provision for loan losses that may be affected by deterioration in the housing and real estate markets; results of examinations by banking regulators, including the possibility that any such regulatory authority may, among other things, require First Federal to increase its allowance for loan losses, writedown assets, change First Federal’s regulatory capital position or affect its ability to borrow funds or maintain or increase deposits, which could adversely affect liquidity and earnings; First Financial’s ability to control operating costs and expenses, First Financial’s ability to successfully integrate any assets, liabilities, customers, systems, and management personnel acquired or may in the future acquire into its operations and its 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, and regulatory changes including the Dodd-Frank Wall Street Reform and Consumer Protection Act. Other risks are also detailed in First Financial’s Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and current reports on Form 8-K filings with the Securities and Exchange Commission (“SEC”), which are available at the SEC’s website www.sec.gov. Other factors not currently anticipated may also materially and adversely affect First Financial’s results of operations, financial position, and cash flows. There can be no assurance that future results will meet expectations. While First Financial believes that the forward-looking statements in this release are reasonable, the reader should not place undue reliance on any forward-looking statement. In addition, these statements speak only as of the date made. First Financial does not undertake, and expressly disclaims any obligation to update or alter any statements, whether as a result of new information, future events or otherwise, except as required by applicable law.
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“The successful completion of the bulk loan sale during this quarter marked yet another strategic initiative in the transformation of our company and has positioned First Financial to produce improved results for our shareholders,” said R. Wayne Hall, president and chief executive officer of First Financial and First Federal. “We are focused on providing superior products and services to our customers, generating organic loan growth and improving the efficiency of our operations.”
Highlights for the Quarter ended December 31, 2011
- On October 26, 2011, First Financial sold certain performing loans and classified assets in a bulk sale (the “bulk loan sale”) with an aggregate contractual principal balance of $197.9 million to affiliates of Varde Partners, Inc. and recorded a pre-tax gain of $20.8 million on the transaction.
- Net interest margin remained strong for the quarter ended December 31, 2011 at 3.91%, an increase of four basis points over the prior quarter ended September 30, 2011.
- The allowance for loan losses totaled $53.5 million at December 31, 2011 or 2.24% of total loans, compared with $54.3 million or 2.31% of total loans at September 30, 2011.
- Credit metrics remain strong with non-covered nonperforming assets to total assets of 1.35% at December 31, 2011 compared with 1.23% at September 30, 2011.
- The provision for loan losses for the quarter ended December 31, 2011 totaled $7.4 million, compared with $8.9 million for the linked quarter.
- Net charge-offs totaled $8.3 million for the quarter ended December 31, 2011, compared with $10.1 million for the linked quarter.
- First Financial’s tangible common equity to tangible common assets ratio increased to 6.67% at December 31, 2011, as compared with 6.27% at September 30, 2011. The consolidated total risk-based capital ratio (pro-forma) would have been 15.39% at December 31, 2011, as compared with 14.36% at September 30, 2011.
- On December 21, 2011 First Financial announced that it filed an application with the Federal Reserve Bank of Richmond to convert from a savings and loan holding company to a bank holding company, that First Federal had received conditional approval from the State of South Carolina to convert from a federal savings and loan association to a state-chartered commercial bank (subject to the holding company approval), and that First Financial’s Board of Directors approved an amendment to the bylaws to change the fiscal year from September 30th to December 31st.
Total assets at December 31, 2011 were $3.1 billion, a decrease of $59.3 million or 1.9% from September 30, 2011 and a decrease of $154.4 million or 4.7% from December 31, 2010. The decline from September 30, 2011 was primarily the result of a decrease in loans held for sale due to the bulk loan sale and other assets, partially offset by an increase in portfolio loans. The decline from December 31, 2010 was primarily the result of the bulk loan sale, as well as the sales of First Southeast Insurance Services Inc. and Kimbrell Insurance Group, Inc. during 2011, partially offset by an increase in total investment securities.
Investment securities at December 31, 2011 totaled $457.7 million, a decrease of $11.8 million or 2.5% over September 30, 2011 and an increase of $22.2 million or 5.1% over December 31, 2010. The decrease from September 30, 2011 was primarily the result of normal cash flows and prepayments received during the quarter, partially offset by investment securities purchased. The increase over December 31, 2010 was primarily the result of purchasing new securities during 2011.
The following table summarizes the loan portfolio by major categories.
| LOANS(in thousands) | December 31, 2011 | September 30, 2011 | June 30, 2011 | March 31, 2011 | December 31, 2010 | |||||
| Residential loans | ||||||||||
| Residential 1-4 family | $ 975,405 | $ 909,907 | $ 895,650 | $ 916,146 | $ 887,924 | |||||
| Residential construction | 15,117 | 16,431 | 19,603 | 20,311 | 15,639 | |||||
| Residential land | 41,612 | 40,725 | 42,763 | 48,955 | 53,772 | |||||
| Total residential loans | 1,032,134 | 967,063 | 958,016 | 985,412 | 957,335 | |||||
| Commercial loans | ||||||||||
| Commercial business | 83,814 | 80,871 | 80,566 | 91,005 | 91,129 | |||||
| Commercial real estate | 456,541 | 471,296 | 482,315 | 570,300 | 590,816 | |||||
| Commercial construction | 16,477 | 15,051 | 16,037 | 22,269 | 23,895 | |||||
| Commercial land | 61,238 | 67,432 | 70,562 | 119,326 | 133,899 | |||||
| Total commercial loans | 618,070 | 634,650 | 649,480 | 802,900 | 839,739 | |||||
| Consumer loans | ||||||||||
| Home equity | 357,270 | 369,213 | 379,122 | 387,957 | 396,010 | |||||
| Manufactured housing | 275,275 | 276,047 | 274,192 | 270,694 | 269,555 | |||||
| Marine | 52,590 | 55,243 | 57,406 | 59,428 | 62,830 | |||||
| Other consumer | 50,118 | 53,064 | 53,853 | 53,454 | 57,898 | |||||
| Total consumer loans | 735,253 | 753,567 | 764,573 | 771,533 | 786,293 | |||||
| Total loans | 2,385,457 | 2,355,280 | 2,372,069 | 2,559,845 | 2,583,367 | |||||
| Less: Allowance for loan losses | 53,524 | 54,333 | 55,491 | 85,138 | 88,349 | |||||
| Net loans | $ 2,331,933 | $ 2,300,947 | $ 2,316,578 | $ 2,474,707 | $ 2,495,018 | |||||
Total loans at December 31, 2011 increased $30.2 million or 1.3% over September 30, 2011 and decreased $197.9 million or 7.7% from December 31, 2010. The increase over September 30, 2011 was primarily the result of a higher volume of 15-year fixed rate residential loan originations, which were held in the portfolio, partially offset by declines in the commercial and consumer loan portfolios. While the total commercial loan portfolio declined, the commercial business portfolio increased 3.6% over September 30, 2011, and this pipeline has displayed recent signs of improvement. The decrease from December 31, 2010 was primarily the result of the bulk loan sale, partially offset by continued demand for residential mortgage loans due to the low interest rate environment. For both comparative periods, continued lower loan demand from creditworthy borrowers, charge-offs, transfers of nonperforming loans to other real estate owned (“OREO”), and paydowns due to normal borrower activity contributed to a reduction in loans.
The allowance for loan losses was $53.5 million at December 31, 2011 or 2.24% of total loans, compared with $54.3 million or 2.31% of total loans at September 30, 2011 and $88.3 million or 3.42% of total loans at December 31, 2010. The decrease from September 30, 2011 was primarily the result of the continued reduced level of charge-offs since the bulk loan sale. The decrease from December 31, 2010 was primarily the result of the bulk loan sale and improvement in credit quality measures during the past twelve months, as discussed further below. The allowance for loan losses at December 31, 2011 was 2.39% of loans excluding loans covered under a purchase and assumption loss-share agreement (“loss-share agreement”) with the FDIC (“covered loans”), and represented 1.77 times coverage of the non-covered nonperforming loans.
At December 31, 2011, loans held for sale totaled $48.3 million, a decrease of $46.6 million from September 30, 2011 and an increase of $19.8 million over December 31, 2010. Loans held for sale at September 30, 2011 consisted of $40.8 million of residential mortgage loans to be sold in the secondary market and $54.1 million of nonperforming and performing loans selected for the bulk loan sale, while during the other two periods the loans held for sale were solely comprised of residential mortgage loans to be sold in the secondary market. The increases in residential mortgage loans to be sold in the secondary market over both prior periods were primarily the result of higher borrower demand due to recent reductions in market interest rates. These loans generally settle in 45 to 60 days. The decrease in the bulk loan pool, which was established as of June 30, 2011, was the result of the sale and settlement of the entire pool during the December 31, 2011 quarter.
The FDIC indemnification asset, net at December 31, 2011 was $51.0 million, essentially unchanged from September 30, 2011 and a decrease of $17.3 million or 25.3% from December 31, 2010. The decrease was primarily the result of receiving claims reimbursement from the FDIC, partially offset by the normal accretion recorded to the indemnification asset.
Other assets totaled $98.9 million at December 31, 2011, a decrease of $22.6 million or 18.6% from September 30, 2011 and an increase of $4.7 million or 5.0% over December 31, 2010. The decrease from September 30, 2011 was primarily the result of lower levels of OREO properties, current tax adjustments and federal tax refunds received. The increase over December 31, 2010 was primarily the result of an increase in the deferred tax asset associated with the loss recorded in the June 30, 2011 quarter.
Core deposits, which include checking, savings, and money market accounts, totaled $1.2 billion at December 31, 2011, essentially unchanged from September 30, 2011 and an increase of $121.2 million or 10.9% over December 31, 2010. The increase was primarily the result of new retail deposit products introduced during 2011 as well as several marketing initiatives and campaigns during the last twelve months to attract and retain core deposits. Time deposits at December 31, 2011 totaled $1.0 billion, a decrease of $70.8 million or 6.6% from September 30, 2011 and a decrease of $291.7 million or 22.5% from December 31, 2010. The decreases were primarily the result of a planned reduction in maturing high rate retail and wholesale time deposits and lower funding needs relative to asset growth during the last twelve months.
Advances from the FHLB at December 31, 2011 totaled $561.0 million, essentially unchanged from September 30, 2011 and an increase of $63.9 million or 12.9% over December 31, 2010. The increase was primarily the result of a shift in funding mix due to the planned reduction of high rate time deposits, partially offset by using cash flow from investment securities and the loan portfolio to paydown FHLB advances.
Shareholders’ equity at December 31, 2011 was $277.2 million, an increase of $8.7 million or 3.2% over September 30, 2011 and a decrease of $38.1 million or 12.1% from December 31, 2010. The variances were primarily the result of net operating results during the last twelve months combined with a reduction in accumulated other comprehensive income due to a change in market value related to recent activity and updated assumptions on the valuation of certain securities. While First Financial is not currently required to report risk-based capital metrics at the holding company level, using December 31, 2011 data on a pro-forma basis, the Tier 1 capital ratio for First Financial would have been 14.13% and the total risk-based capital ratio would have been 15.39%. First Federal’s regulatory capital ratios continue to be above “well-capitalized” minimums, as evidenced by the key capital ratios and additional capital information presented in the following table.
| For the Three Months Ended | ||||||||||||
| December 31, 2011 | September 30, 2011 | June 30, 2011 | March 31, 2011 | December 31, 2010 | ||||||||
| First Financial | ||||||||||||
| Equity to assets | 8.81% | 8.37% | 8.27% | 9.43% | 9.55% | |||||||
| Tangible common equity to tangible assets (non-GAAP) | 6.67 | 6.27 | 6.08 | 6.40 | 6.51 | |||||||
| Book value per common share | $ 12.84 | $ 12.31 | $ 12.20 | $ 14.92 | $ 15.15 | |||||||
| Tangible common book value per share (non-GAAP) | 12.69 | 12.16 | 11.83 | 12.65 | 12.86 | |||||||
| Dividends paid per common share, authorized | 0.05 | 0.05 | 0.05 | 0.05 | 0.05 | |||||||
| Common shares outstanding, end of period (000s) | 16,527 | 16,527 | 16,527 | 16,527 | 16,527 | |||||||
| First Federal | Regulatory Minimum for “Well-Capitalized” | |||||||||||
| Leverage capital ratio | 5.00% | 8.92% | 8.26% | 7.48% | 8.58% | 8.58% | ||||||
| Tier 1 risk-based capital ratio | 6.00 | 12.35 | 11.26 | 10.07 | 11.51 | 11.42 | ||||||
| Total risk-based capital ratio | 10.00 | 13.61 | 12.53 | 11.33 | 12.78 | 12.69 | ||||||
Asset Quality
The following tables illustrate the trend in quality and risk inherent in the loan portfolio over the past twelve months.
| DELINQUENT LOANS | December 31, 2011 | September 30, 2011 | June 30, 2011 | March 31, 2011 | December 31, 2010 | |||||||||||||||
| (30-89 days past due) (in thousands) | $ | % of Portfolio | $ | % of Portfolio | $ | % of Portfolio | $ | % of Portfolio | $ | % of Portfolio | ||||||||||
| Residential loans | ||||||||||||||||||||
| Residential 1-4 family | $ 2,986 | 0.31% | $ 1,722 | 0.19% | $ 1,404 | 0.16% | $ 3,050 | 0.33% | $ 6,712 | 0.76% | ||||||||||
| Residential construction | – | – | – | – | – | – | – | – | – | – | ||||||||||
| Residential land | 561 | 1.35 | 65 | 0.16 | 325 | 0.76 | 1,398 | 2.86 | 432 | 0.80 | ||||||||||
| Total residential loans | 3,547 | 0.34 | 1,787 | 0.18 | 1,729 | 0.18 | 4,448 | 0.45 | 7,144 | 0.75 | ||||||||||
| Commercial loans | ||||||||||||||||||||
| Commercial business | 908 | 1.08 | 868 | 1.07 | 2,387 | 2.96 | 1,618 | 1.78 | 3,476 | 3.81 | ||||||||||
| Commercial real estate | 3,514 | 0.77 | 3,394 | 0.72 | 2,703 | 0.56 | 9,322 | 1.63 | 10,600 | 1.79 | ||||||||||
| Commercial construction | – | – | 595 | 3.95 | – | – | – | – | 635 | 2.66 | ||||||||||
| Commercial land | 1,185 | 1.94 | 537 | 0.80 | 821 | 1.16 | 4,220 | 3.54 | 5,348 | 3.99 | ||||||||||
| Total commercial loans | 5,607 | 0.91 | 5,394 | 0.85 | 5,911 | 0.91 | 15,160 | 1.89 | 20,059 | 2.39 | ||||||||||
| Consumer loans | ||||||||||||||||||||
| Home equity | 4,525 | 1.27 | 3,408 | 0.92 | 3,266 | 0.86 | 3,550 | 0.92 | 4,355 | 1.10 | ||||||||||
| Manufactured housing | 3,267 | 1.19 | 2,600 | 0.94 | 2,298 | 0.84 | 2,491 | 0.92 | 4,043 | 1.50 | ||||||||||
| Marine | 597 | 1.14 | 980 | 1.77 | 264 | 0.46 | 296 | 0.50 | 707 | 1.13 | ||||||||||
| Other consumer | 831 | 1.66 | 629 | 1.19 | 589 | 1.09 | 592 | 1.11 | 905 | 1.56 | ||||||||||
| Total consumer loans | 9,220 | 1.25 | 7,617 | 1.01 | 6,417 | 0.84 | 6,929 | 0.90 | 10,010 | 1.27 | ||||||||||
| Total delinquent loans | $ 18,374 | 0.77% | $ 14,798 | 0.63% | $ 14,057 | 0.59% | $ 26,537 | 1.04% | $ 37,213 | 1.44% | ||||||||||
Total delinquent loans at December 31, 2011 increased $3.6 million or 24.2% over September 30, 2011. The increases in delinquent residential and consumer loans were primarily the result of several customers with modification requests in process as well as a seasonal increase normally experienced in the fourth calendar quarter each year. Total delinquent loans at December 31, 2011 included $2.3 million in covered loans, as compared with $2.7 million at September 30, 2011.
| December 31, 2011 | September 30, 2011 | June 30, 2011 | March 31, 2011 | December 31, 2010 | ||||||||||||||||
| NONPERFORMING ASSETS(in thousands) | $ | % of Portfolio | $ | % of Portfolio | $ | % of Portfolio | $ | % of Portfolio | $ | % of Portfolio | ||||||||||
| Residential loans | ||||||||||||||||||||
| Residential 1-4 family | $ 4,977 | 0.51% | $ 1,595 | 0.18% | $ 1,242 | 0.14% | $ 23,663 | 2.58% | $ 20,371 | 2.29% | ||||||||||
| Residential construction | – | – | – | – | – | – | – | – | – | – | ||||||||||
| Residential land | 1,448 | 3.48 | 1,140 | 2.80 | 451 | 1.05 | 3,604 | 7.36 | 4,997 | 9.29 | ||||||||||
| Total residential loans | 6,425 | 0.62 | 2,735 | 0.28 | 1,693 | 0.18 | 27,267 | 2.77 | 25,368 | 2.65 | ||||||||||
| Commercial loans | ||||||||||||||||||||
| Commercial business | 3,665 | 4.37 | 4,322 | 5.34 | 3,664 | 4.55 | 9,151 | 10.06 | 9,769 | 10.72 | ||||||||||
| Commercial real estate | 17,160 | 3.76 | 18,400 | 3.90 | 16,396 | 3.40 | 60,256 | 10.57 | 57,724 | 9.77 | ||||||||||
| Commercial construction | 573 | 3.48 | 266 | 1.77 | 1,451 | 9.05 | 4,074 | 18.29 | 4,484 | 18.77 | ||||||||||
| Commercial land | 5,232 | 8.54 | 6,310 | 9.36 | 5,411 | 7.67 | 40,740 | 34.14 | 43,824 | 32.73 | ||||||||||
| Total commercial loans | 26,630 | 4.31 | 29,298 | 4.62 | 26,922 | 4.15 | 114,221 | 14.23 | 115,801 | 13.79 | ||||||||||
| Consumer loans | ||||||||||||||||||||
| Home equity | 8,192 | 2.29 | 6,871 | 1.86 | 9,165 | 2.42 | 9,379 | 2.42 | 9,450 | 2.39 | ||||||||||
| Manufactured housing | 3,461 | 1.26 | 2,922 | 1.06 | 2,953 | 1.08 | 3,517 | 1.30 | 3,609 | 1.34 | ||||||||||
| Marine | 246 | 0.47 | 47 | 0.09 | 94 | 0.16 | 42 | 0.07 | 67 | 0.11 | ||||||||||
| Other consumer | 224 | 0.45 | 127 | 0.24 | 129 | 0.24 | 181 | 0.34 | 555 | 0.96 | ||||||||||
| Total consumer loans | 12,123 | 1.65 | 9,967 | 1.32 | 12,341 | 1.61 | 13,119 | 1.70 | 13,681 | 1.74 | ||||||||||
| Total nonaccrual loans | 45,178 | 1.89 | 42,000 | 1.78 | 40,956 | 1.73 | 154,607 | 6.04 | 154,850 | 5.99 | ||||||||||
| Loans 90+ days still accruing | 121 | 171 | 76 | 109 | 204 | |||||||||||||||
| Restructured Loans, still accruing | 2,411 | 734 | 1,535 | 1,550 | 1,578 | |||||||||||||||
| Total nonperforming loans | 47,710 | 2.00% | 42,905 | 1.82% | 42,567 | 1.79% | 156,266 | 6.10% | 156,632 | 6.06% | ||||||||||
| Nonperforming loans held for sale | – | 39,412 | 42,656 | – | – | |||||||||||||||
| Other repossessed assets acquired | 20,487 | 26,212 | 27,812 | 25,986 | 19,660 | |||||||||||||||
| Total nonperfoming assets | $ 68,197 | $108,529 | $113,035 | $182,252 | $176,292 | |||||||||||||||
Total nonperforming assets at December 31, 2011 decreased $40.3 million or 37.2% from September 30, 2011. The decrease was primarily the result of the bulk loan sale as well as lower OREO due to property sales exceeding transfers to OREO and lower nonperforming commercial loans due to the resolution of several non-performing loans. These decreases were partially offset by higher nonperforming residential loans due to six accounts totaling $2.8 million; higher home equity loans related to impaired loans totaling $1.7 million; and additional restructured loans still accruing due to completing customer modification requests. Nonperforming loans covered under the loss-share agreement decreased $1.5 million from September 30, 2011 to $17.5 million at December 31, 2011. Covered OREO totaled $7.6 million at December 31, 2011, a decrease of $1.1 million from September 30, 2011.
| December 31, 2011 | September 30, 2011 | June 30, 2011 | March 31, 2011 | December 31, 2010 | ||||||||||||||||
| NET CHARGE-OFFS(in thousands) | $ | % of Portfolio* | $ | % of Portfolio* | $ | % of Portfolio* | $ | % of Portfolio* | $ | % of Portfolio* | ||||||||||
| Residential loans | ||||||||||||||||||||
| Residential 1-4 family | $ 391 | 0.16% | $ 414 | 0.18% | $ 12,177 | 5.28% | $ 976 | 0.43% | $ 612 | 0.29% | ||||||||||
| Residential construction | – | – | – | – | – | – | – | – | – | – | ||||||||||
| Residential land | 532 | 5.31 | 165 | 1.58 | 4,099 | 34.79 | 620 | 4.83 | 735 | 5.26 | ||||||||||
| Total residential loans | 923 | 0.37 | 579 | 0.24 | 16,276 | 6.59 | 1,596 | 0.65 | 1,347 | 0.59 | ||||||||||
| Commercial loans | ||||||||||||||||||||
| Commercial business | 640 | 3.22 | 136 | 0.69 | 6,826 | 30.60 | 1,829 | 8.00 | 264 | 1.04 | ||||||||||
| Commercial real estate | 1,417 | 1.22 | 433 | 0.36 | 41,022 | 29.15 | 2,195 | 1.51 | 237 | 0.16 | ||||||||||
| Commercial construction | (3) | (0.07) | 635 | 16.12 | 3,067 | 53.06 | (3) | (0.05) | 314 | 3.93 | ||||||||||
| Commercial land | 804 | 4.94 | 2,052 | 12.15 | 33,995 | 118.23 | 4,824 | 14.94 | 2,127 | 5.70 | ||||||||||
| Total commercial loans | 2,858 | 1.83 | 3,256 | 2.04 | 84,910 | 42.98 | 8,845 | 4.28 | 2,942 | 1.34 | ||||||||||
| Consumer loans | ||||||||||||||||||||
| Home equity | 2,955 | 3.26 | 4,910 | 5.28 | 4,725 | 4.91 | 3,368 | 3.43 | 2,974 | 2.97 | ||||||||||
| Manufactured housing | 845 | 1.23 | 978 | 1.42 | 1,049 | 1.54 | 1,172 | 1.74 | 834 | 1.25 | ||||||||||
| Marine | 142 | 1.05 | 158 | 1.12 | 44 | 0.30 | 258 | 1.69 | 184 | 1.12 | ||||||||||
| Other consumer | 531 | 4.09 | 217 | 1.61 | 446 | 3.28 | 647 | 4.66 | 724 | 4.80 | ||||||||||
| Total consumer loans | 4,473 | 2.41 | 6,263 | 3.31 | 6,264 | 3.26 | 5,445 | 2.80 | 4,716 | 2.38 | ||||||||||
| Total net charge-offs | $ 8,254 | 1.39% | $ 10,098 | 1.71% | $107,450 | 16.87% | $ 15,886 | 2.45% | $ 9,005 | 1.39% | ||||||||||
| *Represents an annualized rate | ||||||||||||||||||||
The decrease in net charge-offs for the quarter ended December 31, 2011 as compared with the prior quarter was the result of the lower risk inherent in the loan portfolio after the bulk loan sale. The increase in commercial real estate charge-offs was primarily the result of the resolution of several nonperforming loans. Net charge-offs for the prior quarter were comprised of $7.9 million of charge-offs related to normal credit practices and $2.2 million of charge-offs on additional loans transferred to loans held for sale, the majority of which were related to existing loans in the pool.
The following table provides details on classified assets by category.
| December 31, 2011 | September 30, 2011 | |||||||
| CLASSIFIED ASSETS (in thousands) | Covered Classified | Non-covered Classified | Total Classified | Total Classified | ||||
| Residential loans | ||||||||
| Residential 1-4 family | $ 734 | $ 7,232 | $ 7,966 | $ 3,246 | ||||
| Residential land | 253 | 1,518 | 1,771 | 1,461 | ||||
| Total residential loans | 987 | 8,750 | 9,737 | 4,707 | ||||
| Commercial loans | ||||||||
| Commercial business | 4,386 | 9,466 | 13,852 | 12,689 | ||||
| Commercial real estate | 22,569 | 39,936 | 62,505 | 62,740 | ||||
| Commercial construction | 588 | 261 | 849 | 2,166 | ||||
| Commercial land | 3,516 | 10,697 | 14,213 | 15,550 | ||||
| Total commercial loans | 31,059 | 60,360 | 91,419 | 93,145 | ||||
| Consumer loans | ||||||||
| Home equity | 1,359 | 8,087 | 9,446 | 7,278 | ||||
| Manufactured housing | – | 3,461 | 3,461 | 2,922 | ||||
| Marine | 15 | 231 | 246 | 47 | ||||
| Other consumer | 89 | 256 | 345 | 298 | ||||
| Total consumer loans | 1,463 | 12,035 | 13,498 | 10,545 | ||||
| Total classified loans | 33,509 | 81,145 | 114,654 | 107,854 | ||||
| Loans held for sale | – | – | – | 50,063 | ||||
| Other repossessed assets acquired | – | 20,487 | 20,487 | 26,212 | ||||
| Total classified assets | $ 33,509 | $ 101,632 | $ 135,141 | $ 184,129 | ||||
| Classified assets/FFCH tier 1 capital + ALLL | 24.97% | 36.12% | 51.18% | |||||
| Classified assets excluding Loans Held for Sale/FFCH tier 1 capital + ALLL | 24.97 | 36.12 | 36.77 | |||||
Discontinued Operations Financial Statement Presentation
As a result of First Financial’s sales of its insurance agency subsidiary, First Southeast Insurance Services, Inc., which was completed on June 1, 2011, and its managing general insurance agency subsidiary, Kimbrell Insurance Group, Inc., which was completed on September 30, 2011, the financial condition, operating results, and the gain or loss on the sales, net of transaction costs and taxes, for these subsidiaries have been segregated from the financial condition and operating results of First Financial’s continuing operations throughout this release and, as such, are presented as discontinued operations. While all prior periods have been revised retrospectively to align with this treatment, these changes do not affect First Financial’s reported consolidated financial condition or operating results for any of the prior periods.
Quarterly Results of Operations
First Financial reported net income from continuing operations of $15.6 million for the three months ended December 31, 2011, compared with $2.9 million for the three months ended September 30, 2011 and $1.1 million for the three months ended December 31, 2010. The quarter ended December 31, 2011 included a $20.8 million pre-tax gain ($12.7 million after-tax) from the bulk loan sale. The changes in the key components of net income from continuing operations are discussed below.
Net interest income
Net interest margin, on a fully tax-equivalent basis, was 3.91% for the quarter ended December 31, 2011, as compared with 3.87% for the quarter ended September 30, 2011 and 3.83% for the quarter ended December 31, 2010. The increase over the linked quarter was primarily the result of a reduction in the rate paid on interest-bearing liabilities. The increase from the same quarter last year was primarily the result of the decrease in yield on interest-bearing liabilities exceeding the decrease in the yield on earning assets as First Financial continues to grow core deposits, especially noninterest-bearing deposits.
Net interest income for the quarter ended December 31, 2011 was $28.9 million, essentially unchanged from the prior quarter and a decrease of $1.3 million or 4.5% from the same quarter last year. The decrease from the same quarter last year was primarily the result of a decline in average earning assets due to the bulk loan sale, combined with the decline in net loans due to the generally lower loan demand from creditworthy borrowers and loan charge-offs.
Provision for loan losses
After determining what First Financial believes is an adequate allowance for loan losses based on the estimated risk inherent in the loan portfolio, the provision for loan losses is calculated based on the net effect of the change in the allowance for loan losses and net charge-offs. The provision for loan losses was $7.4 million for the quarter ended December 31, 2011, compared with $8.9 million for the linked quarter and $10.5 million for the same quarter last year. The provision for loan losses for the linked quarter included $1.4 million related to loans transferred to the bulk sale pool, and represents the net result of the incremental charge-offs on those loans less their related reserve release. The decrease from both prior periods was primarily the result of lower net charge-offs and lower classified loans at December 31, 2011.
Noninterest income
Noninterest income totaled $32.8 million for the quarter ended December 31, 2011, an increase of $18.5 million over the prior quarter and an increase of $22.2 million over the same quarter last year. The quarter ended December 31, 2011 included a $20.8 million pre-tax gain from the bulk loan sale. The prior quarter included net gains totaling $1.9 million related to the resolution of certain loans in the bulk loan pool. Noninterest income from core operations totaled $12.0 million and $12.3 for the quarters ended December 31, 2011 and September 30, 2011, respectively.
The increase over the same quarter last year was primarily the result of the gain on the bulk loan sale as well as higher service charges on deposit accounts ($821 thousand) due to higher transaction-related revenue from increases in both volume and fees.
Noninterest expense
Noninterest expense totaled $28.9 million for the quarter ended December 31, 2011, a decrease of $701 thousand or 2.4% over the linked quarter and essentially unchanged from the same quarter last year. The decrease from the linked quarter was primarily the result of lower OREO, net ($1.6 million) and lower professional services expenses ($502 thousand), partially offset by higher other expense ($1.2 million). The decrease in OREO costs was primarily the result of fewer valuation adjustments on properties held. The decrease in professional services was primarily the result of $521 thousand in legal and other advisory services in the prior quarter related to preparing the loans held in the bulk sale pool for final disposition. The increase in other expense was primarily the result of higher processing fees related to a new reward program for deposit customers, higher loss reserves for the reinsurance subsidiary, and higher operational losses related to uncollectible foreclosure expenses.
Noninterest expense was essentially unchanged from the same quarter last year as increases in other expense ($1.1 million) and OREO, net ($414 thousand) were essentially offset by reductions in salaries and employee benefits ($969 thousand), professional services ($523 thousand), and FDIC insurance and regulatory fees ($350 thousand). The variances in other expense and OREO, net were primarily the result of the factors discussed above. The decrease in salaries and employee benefits was primarily the result of lower staff levels due to initiatives implemented during 2011. The reduction in professional services was primarily the result of using external resources to assist in the implementation of several strategic initiatives including loss-sharing management, OREO management, and compensation studies during the December 31, 2010 quarter. The decrease in FDIC insurance and regulatory fees was primarily the result of the new assessment methodology implemented by the FDIC during 2011.
Cash Dividend Declared
On January 30, 2012, First Financial’s Board of Directors declared a quarterly cash dividend of $0.05 per share. The dividend is payable on February 27, 2012 to shareholders of record as of February 13, 2012.
Conference Call
R. Wayne Hall, president and CEO; Blaise B. Bettendorf, EVP and CFO; and Joseph W. Amy, EVP and CCO; will review the quarter’s results in a conference call at 2:00 pm (ET), January 30, 2012. The live audio webcast is available on First Financial’s website at www.firstfinancialholdings.com and will be available for 90 days.
About First Financial
First Financial Holdings, Inc. (“First Financial”) (Nasdaq:FFCH – News) is a Charleston, South Carolina financial services provider with $3.1 billion in total assets as of December 31, 2011. First Financial offers integrated financial solutions, including personal, business, and wealth management services. First Federal Savings and Loan Association (“First Federal”), which was founded in 1934 and is the primary subsidiary, serves individuals and businesses throughout coastal South Carolina, Florence, South Carolina and Wilmington, North Carolina. First Financial subsidiaries include: First Federal; First Southeast Investor Services, Inc., a registered broker-dealer; and First Southeast 401(k) Fiduciaries, Inc., a registered investment advisor. First Federal is the largest financial institution headquartered in the Charleston, South Carolina metropolitan area and the third largest financial institution headquartered in South Carolina, based on asset size. Additional information about First Financial is available at www.firstfinancialholdings.com.
Non-GAAP Financial Information
In addition to results presented in accordance with U.S. generally accepted accounting principles (“GAAP”), this press release includes non-GAAP financial measures such as the efficiency ratio, the tangible common equity to tangible assets ratio, tangible common book value per share, and pre-tax pre-provision earnings. First Financial believes these non-GAAP financial measures provide additional information that is useful to investors in understanding its underlying performance, business, and performance trends and such measures help facilitate performance comparisons with others in the banking industry. Non-GAAP measures have inherent limitations, are not required to be uniformly applied, and are not audited. Readers should be aware of these limitations and should be cautious to their use of such measures. To mitigate these limitations, First Financial has procedures in place to ensure that these measures are calculated using the appropriate GAAP or regulatory components in their entirety and to ensure that its performance is properly reflected to facilitate consistent period-to-period comparisons. Although management believes the above non-GAAP financial measures enhance investors’ understanding of First Financial’s business and performance, these non-GAAP measures should not be considered in isolation, or as a substitute for GAAP basis financial measures.
In accordance with industry standards, certain designated net interest income amounts are presented on a taxable equivalent basis, including the calculation used in the efficiency ratio.
First Financial believes the exclusion of goodwill and other intangible assets facilitates the comparison of results for ongoing business operations. The tangible common equity (“TCE”) ratio and tangible common book value per share (“TBV”) have become a focus of some investors, analysts and banking regulators. Management believes these measures may assist in analyzing First Financial’s capital position absent the effects of intangible assets and preferred stock. Because TCE and TBV are not formally defined by GAAP or codified in the federal banking regulations, these measures are considered to be non-GAAP financial measures. However, analysts and banking regulators may assess First Financial’s capital adequacy using TCE or TBV, therefore, management believes that it is useful to provide investors the ability to assess its capital adequacy on the same basis.
First Financial believes that pre-tax, pre-provision earnings are a useful measure in assessing its core operating performance, particularly during times of economic stress. This measurement, as defined by management, represents total revenue (net interest income plus noninterest income) less noninterest expense. As recent results for the banking industry demonstrate, credit writedowns, loan charge-offs, and related provisions for loan losses can vary significantly from period to period, making a measure that helps isolate the impact of credit costs on profitability important to investors.
Please refer to the Selected Financial Information table and the Non-GAAP Reconciliation table later in this release for additional information.
Forward-Looking Statements
Statements in this release that are not statements of historical fact, including without limitation, statements that include terms such as “believes,” “expects,” “anticipates,” “estimates,” “forecasts,” “intends,” “plans,” “targets,” “potentially,” “probably,” “projects,” “outlook,” or similar expressions or future conditional verbs such as “may,” “will,” “should,” “would,” or “could” constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements regarding First Financial’s future financial and operating results, plans, objectives, expectations and intentions involve risks and uncertainties, many of which are beyond First Financial’s control or are subject to change. No forward-looking statement is a guarantee of future performance and actual results could differ materially. Factors that could cause or contribute to such differences include, but are 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 and trend of delinquent and nonperforming loans and charge-offs, changes in First Federal’s allowance for loan losses and provision for loan losses that may be affected by deterioration in the housing and real estate markets; results of examinations by banking regulators, including the possibility that any such regulatory authority may, among other things, require First Federal to increase its allowance for loan losses, writedown assets, change First Federal’s regulatory capital position or affect its ability to borrow funds or maintain or increase deposits, which could adversely affect liquidity and earnings; First Financial’s ability to control operating costs and expenses, First Financial’s ability to successfully integrate any assets, liabilities, customers, systems, and management personnel acquired or may in the future acquire into its operations and its 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, and regulatory changes including the Dodd-Frank Wall Street Reform and Consumer Protection Act. Other risks are also detailed in First Financial’s Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and current reports on Form 8-K filings with the Securities and Exchange Commission (“SEC”), which are available at the SEC’s website www.sec.gov. Other factors not currently anticipated may also materially and adversely affect First Financial’s results of operations, financial position, and cash flows. There can be no assurance that future results will meet expectations. While First Financial believes that the forward-looking statements in this release are reasonable, the reader should not place undue reliance on any forward-looking statement. In addition, these statements speak only as of the date made. First Financial does not undertake, and expressly disclaims any obligation to update or alter any statements, whether as a result of new information, future events or otherwise, except as required by applicable law.
| FIRST FINANCIAL HOLDINGS, INC. | |||||
| CONSOLIDATED BALANCE SHEETS (Unaudited) | |||||
| (in thousands) | December 31, 2011 | September 30, 2011 | June 30, 2011 | March 31, 2011 | December 31, 2010 |
| ASSETS | |||||
| Cash and due from banks | $ 61,400 | $ 54,307 | $ 60,905 | $ 59,495 | $ 48,340 |
| Interest-bearing deposits with banks | 15,275 | 31,630 | 4,094 | 5,167 | 5,064 |
| Total cash and cash equivalents | 76,675 | 85,937 | 64,999 | 64,662 | 53,404 |
| Investment securities | |||||
| Securities available for sale, at fair value | 404,550 | 412,108 | 418,967 | 383,229 | 372,277 |
| Securities held to maturity, at amortized cost | 20,486 | 21,671 | 21,977 | 21,962 | 21,948 |
| Nonmarketable securities – FHLB stock | 32,694 | 35,782 | 37,626 | 41,273 | 41,273 |
| Total investment securities | 457,730 | 469,561 | 478,570 | 446,464 | 435,498 |
| Loans | 2,385,457 | 2,355,280 | 2,372,069 | 2,559,845 | 2,583,367 |
| Less: Allowance for loan losses | 53,524 | 54,333 | 55,491 | 85,138 | 88,349 |
| Net loans | 2,331,933 | 2,300,947 | 2,316,578 | 2,474,707 | 2,495,018 |
| Loans held for sale | 48,303 | 94,872 | 84,288 | 19,467 | 28,528 |
| FDIC indemnification asset, net | 51,021 | 50,465 | 58,926 | 61,135 | 68,326 |
| Premises and equipment, net | 79,979 | 80,477 | 81,001 | 81,251 | 81,806 |
| Goodwill | – | – | – | 630 | 630 |
| Other intangible assets, net | 2,401 | 2,491 | 2,571 | 2,653 | 2,735 |
| Other assets | 98,922 | 121,560 | 129,332 | 108,891 | 94,256 |
| Assets of discontinued operations | – | – | 5,279 | 42,152 | 41,137 |
| Total assets | $ 3,146,964 | $ 3,206,310 | $ 3,221,544 | $ 3,302,012 | $ 3,301,338 |
| LIABILITIES | |||||
| Deposits | |||||
| Noninterest-bearing checking | $ 279,520 | $ 279,152 | $ 234,478 | $ 233,197 | $ 222,023 |
| Interest-bearing checking | 429,697 | 440,377 | 437,179 | 437,113 | 405,727 |
| Savings and money market | 522,496 | 505,059 | 506,236 | 501,924 | 482,717 |
| Retail time deposits | 791,544 | 824,874 | 854,202 | 893,064 | 991,253 |
| Wholesale time deposits | 215,941 | 253,395 | 283,650 | 279,482 | 307,892 |
| Total deposits | 2,239,198 | 2,302,857 | 2,315,745 | 2,344,780 | 2,409,612 |
| Advances from FHLB | 561,000 | 558,000 | 557,500 | 561,506 | 497,106 |
| Long-term debt | 47,204 | 47,204 | 47,204 | 47,204 | 47,204 |
| Other liabilities | 22,384 | 29,743 | 29,432 | 30,539 | 27,183 |
| Liabilities of discontinued operations | – | – | 5,099 | 6,456 | 4,911 |
| Total liabilities | 2,869,786 | 2,937,804 | 2,954,980 | 2,990,485 | 2,986,016 |
| SHAREHOLDERS’ EQUITY | |||||
| Preferred stock | 1 | 1 | 1 | 1 | 1 |
| Common stock | 215 | 215 | 215 | 215 | 215 |
| Additional paid-in capital | 196,002 | 195,790 | 195,597 | 195,361 | 195,090 |
| Treasury stock, at cost | (103,563) | (103,563) | (103,563) | (103,563) | (103,563) |
| Retained earnings | 187,367 | 173,587 | 174,300 | 219,088 | 221,304 |
| Accumulated other comprehensive (expense) income | (2,844) | 2,476 | 14 | 425 | 2,275 |
| Total shareholders’ equity | 277,178 | 268,506 | 266,564 | 311,527 | 315,322 |
| Total liabilities and shareholders’ equity | $ 3,146,964 | $ 3,206,310 | $ 3,221,544 | $ 3,302,012 | $ 3,301,338 |
| FIRST FINANCIAL HOLDINGS, INC. | ||||||||||
| CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) | ||||||||||
| Three Months Ended | ||||||||||
| (in thousands, except share data) | December 31, 2011 | September 30, 2011 | June 30, 2011 | March 31, 2011 | December 31, 2010 | |||||
| INTEREST INCOME | ||||||||||
| Interest and fees on loans | $ 33,460 | $ 33,828 | $ 34,497 | $ 34,844 | $ 36,366 | |||||
| Interest and dividends on investments | 3,859 | 4,390 | 4,527 | 4,774 | 5,023 | |||||
| Other | 293 | 338 | 448 | 566 | 683 | |||||
| Total interest income | 37,612 | 38,556 | 39,472 | 40,184 | 42,072 | |||||
| INTEREST EXPENSE | ||||||||||
| Interest on deposits | 4,554 | 5,323 | 5,929 | 6,879 | 7,600 | |||||
| Interest on borrowed money | 4,159 | 4,169 | 4,127 | 4,018 | 4,224 | |||||
| Total interest expense | 8,713 | 9,492 | 10,056 | 10,897 | 11,824 | |||||
| NET INTEREST INCOME | 28,899 | 29,064 | 29,416 | 29,287 | 30,248 | |||||
| Provision for loan losses | 7,445 | 8,940 | 77,803 | 12,675 | 10,483 | |||||
| Net interest income (loss) after provision for loan losses | 21,454 | 20,124 | (48,387) | 16,612 | 19,765 | |||||
| NONINTEREST INCOME | ||||||||||
| Service charges on deposit accounts | 7,099 | 7,196 | 6,982 | 6,381 | 6,278 | |||||
| Mortgage and other loan income | 2,681 | 2,743 | 2,051 | 1,124 | 2,642 | |||||
| Trust and plan administration | 1,192 | 1,333 | 1,116 | 1,112 | 1,177 | |||||
| Brokerage fees | 532 | 588 | 657 | 666 | 514 | |||||
| Other | 650 | 647 | 670 | 675 | 503 | |||||
| Gains on sold loan pool, net | 20,796 | 1,900 | – | – | – | |||||
| Net securities (loses) gains | (180) | (169) | (54) | 1,297 | (534) | |||||
| Total noninterest income | 32,770 | 14,238 | 11,422 | 11,255 | 10,580 | |||||
| NONINTEREST EXPENSE | ||||||||||
| Salaries and employee benefits | 14,511 | 14,672 | 15,373 | 17,396 | 15,480 | |||||
| Occupancy costs | 2,144 | 2,188 | 2,116 | 2,208 | 2,058 | |||||
| Furniture and equipment | 1,870 | 1,725 | 1,769 | 1,825 | 1,725 | |||||
| Other real estate owned, net | 1,541 | 3,115 | 800 | (133) | 1,127 | |||||
| FDIC insurance and regulatory fees | 830 | 576 | 850 | 1,484 | 1,180 | |||||
| Professional services | 1,019 | 1,521 | 1,094 | 1,326 | 1,542 | |||||
| Advertising and marketing | 792 | 868 | 810 | 993 | 562 | |||||
| Other loan expense | 1,043 | 990 | 1,099 | 925 | 902 | |||||
| Goodwill impairment | – | – | 630 | – | – | |||||
| Intangible asset amortization | 90 | 79 | 82 | 82 | 82 | |||||
| Other expense | 5,046 | 3,854 | 3,976 | 4,039 | 3,912 | |||||
| Total noninterest expense | 28,886 | 29,588 | 28,599 | 30,145 | 28,570 | |||||
| Income (loss) income from continuing operations before taxes | 25,338 | 4,774 | (65,564) | (2,278) | 1,775 | |||||
| Income tax (benefit) from continuing operations | 9,766 | 1,893 | (25,288) | (913) | 636 | |||||
| NET INCOME (LOSS) FROM CONTINUING OPERATIONS | 15,572 | 2,881 | (40,276) | (1,365) | 1,139 | |||||
| (Loss) income from discontinued operations, net of tax | – | (1,804) | (2,724) | 935 | 28 | |||||
| NET INCOME (LOSS) | $ 15,572 | $ 1,077 | $ (43,000) | $ (430) | $ 1,167 | |||||
| Preferred stock dividends | 813 | 813 | 812 | 812 | 813 | |||||
| Accretion on preferred stock discount | 153 | 151 | 149 | 147 | 144 | |||||
| NET INCOME (LOSS) AVAILABLE TO COMMON SHAREHOLDERS | $ 14,606 | $ 113 | $ (43,961) | $ (1,389) | $ 210 | |||||
| Net income (loss) per common share from continuing operations: | ||||||||||
| Basic | $ 0.88 | $ 0.12 | $ (2.50) | $ (0.14) | $ 0.01 | |||||
| Diluted | 0.88 | 0.12 | (2.50) | (0.14) | 0.01 | |||||
| Net (loss) income per common share from discontinued operations: | ||||||||||
| Basic | – | (0.11) | (0.16) | 0.06 | 0.00 | |||||
| Diluted | – | (0.11) | (0.16) | 0.06 | 0.00 | |||||
| Net income (loss) per common share: | ||||||||||
| Basic | 0.88 | 0.01 | (2.66) | (0.08) | 0.01 | |||||
| Diluted | 0.88 | 0.01 | (2.66) | (0.08) | 0.01 | |||||
| Average common shares outstanding: | ||||||||||
| Basic | 16,527 | 16,527 | 16,527 | 16,527 | 16,527 | |||||
| Diluted | 16,527 | 16,527 | 16,527 | 16,527 | 16,529 | |||||
| For the Quarters Ended | |||||||||
| December 31, 2011 | December 31, 2010 | Change in | |||||||
| (in thousands) | Average Balance | Interest | Average Rate | Average Balance | Interest | Average Rate | Average Balance | Interest | Basis Points |
| Earning Assets | |||||||||
| Interest-bearing deposits with banks | $ 10,212 | $ 4 | 0.16% | $ 11,587 | $ 6 | 0.21% | $ (1,375) | $ (2) | (5) |
| Investment securities1 | 469,925 | 3,859 | 3.41 | 452,900 | 5,023 | 4.57 | 17,025 | (1,164) | (116) |
| Loans2 | 2,428,743 | 33,460 | 5.48 | 2,614,918 | 36,366 | 5.52 | (186,175) | (2,906) | (3) |
| FDIC Indemnification Asset | 50,700 | 289 | 2.27 | 67,854 | 677 | 3.96 | (17,154) | (388) | (169) |
| Total Earning Assets | 2,959,580 | 37,612 | 5.06 | 3,147,259 | 42,072 | 5.32 | (187,679) | (4,460) | (26) |
| Interest-bearing Liabilities | |||||||||
| Deposits | 1,992,957 | 4,554 | 0.91 | 2,197,647 | 7,600 | 1.37 | (204,690) | (3,046) | (46) |
| Borrowings | 565,114 | 4,159 | 2.93 | 543,039 | 4,224 | 3.09 | 22,075 | (65) | (16) |
| Total interest-bearing liabilities | 2,558,071 | 8,713 | 1.35 | 2,740,686 | 11,824 | 1.71 | (182,615) | (3,111) | (36) |
| Net interest income | $ 28,899 | $ 30,248 | $(1,349) | ||||||
| Net interest margin | 3.91% | 3.83% | 8 | ||||||
| 1 Interest income used in the average rate calculation includes the tax equivalent adjustment of $145 thousand, and $157 thousand for the quarters ended December 31, 2011 and 2010, respectively, calculated based on a federal tax rate of 35%. | |||||||||
| 2 Average loans include loans held for sale and nonaccrual loans. Loan fees, which are not material for any of the periods, have been included in loan interest income for the rate calculation. | |||||||||
| FIRST FINANCIAL HOLDINGS, INC. | |||||
| SELECTED FINANCIAL INFORMATION (Unaudited) | For the Quarters Ended | ||||
| (in thousands, except ratios) | December 31, 2011 | September 30, 2011 | June 30, 2011 | March 31, 2011 | December 31, 2010 |
| Average for the Quarter | |||||
| Total assets | $ 3,153,286 | $ 3,201,416 | $ 3,294,350 | $ 3,310,796 | $ 3,323,825 |
| Investment securities | 469,925 | 468,360 | 464,277 | 435,568 | 452,900 |
| Loans | 2,428,743 | 2,442,071 | 2,566,827 | 2,607,161 | 2,614,918 |
| Allowance for loan losses | 54,178 | 55,503 | 81,025 | 88,086 | 87,605 |
| Deposits | 2,272,035 | 2,302,518 | 2,360,572 | 2,397,801 | 2,424,807 |
| Borrowings | 565,114 | 595,508 | 593,103 | 555,630 | 543,039 |
| Shareholders’ equity | 279,066 | 267,404 | 302,996 | 313,663 | 318,202 |
| Performance Metrics from Continuing Operations | |||||
| Return on average assets | 1.98% | 0.36% | (4.89)% | (0.16)% | 0.14% |
| Return on average shareholders’ equity | 22.32 | 4.31 | (53.17) | (1.74) | 1.43 |
| Net interest margin (FTE) 1 | 3.91 | 3.87 | 3.83 | 3.83 | 3.83 |
| Efficiency ratio (non-GAAP) | 70.12% | 70.90% | 69.69% | 76.53% | 68.81% |
| Pre-tax pre-provision earnings (non-GAAP) | $ 32,783 | $ 13,714 | $ 12,239 | $ 10,397 | $ 12,258 |
| Performance Metrics From Consolidated Operations | |||||
| Return on average assets | 1.98% | 0.13% | (5.22)% | (0.05)% | 0.14% |
| Return on average shareholders’ equity | 22.32 | 1.61 | (56.77) | (0.55) | 1.47 |
| Asset Quality Metrics | |||||
| Allowance for loan losses as a percent of loans | 2.24% | 2.31% | 2.34% | 3.33% | 3.42% |
| Allowance for loan losses as a percent of nonperforming loans | 112.19 | 126.64 | 130.36 | 54.48 | 56.41 |
| Nonperforming loans as a percent of loans | 2.00 | 1.82 | 1.79 | 6.10 | 6.06 |
| Nonperforming assets as a percent of loans and other repossessed assets acquired2 | 2.83 | 4.48 | 4.63 | 7.05 | 6.77 |
| Nonperforming assets as a percent of total assets | 2.17 | 3.38 | 3.51 | 5.52 | 5.34 |
| Net loans charged-off as a percent of average loans (annualized) | 1.39% | 1.71 | 16.87 | 2.45 | 1.39 |
| Net loans charged-off | $ 8,254 | $ 10,098 | $ 107,450 | $ 15,886 | $ 9,005 |
| Asset Quality Metrics excluding Nonperforming Loans Held For Sale | |||||
| Nonperforming assets excluding nonperforming loans held for sale as a percent of loans and other repossessed assets acquired | 2.83% | 2.82% | 2.93% | 7.05% | 6.77% |
| Nonperforming assets excluding nonperforming loans held for sale as a percent of total assets | 2.17 | 2.10 | 2.18 | 5.52 | 5.34 |
| Asset Quality Metrics Excluding Covered Loans | |||||
| Allowance for loan losses as a percent of non-covered loans | 2.39% | 2.47% | 2.51% | 3.57% | 3.68% |
| Allowance for loan losses as a percent of non-covered nonperforming loans | 177.35 | 227.09 | 216.35 | 60.79 | 61.83 |
| Nonperforming loans as a percent of non-covered loans | 1.34 | 1.09 | 1.16 | 5.87 | 5.95 |
| Nonperforming assets as a percent of non-covered loans and other repossessed assets acquired2 | 1.88 | 3.58 | 3.91 | 6.65 | 6.46 |
| Nonperforming assets as a percent of total assets | 1.35 | 2.52 | 2.76 | 4.84 | 4.72 |
| Asset Quality Metrics Excluding Covered Loans and Nonperforming Loans Held for Sale | |||||
| Nonperforming assets excluding nonperforming loans held for sale as a percent of non-covered loans and other repossessed assets acquired | 1.88% | 1.79% | 2.07% | 6.65% | 6.46% |
| Nonperforming assets excluding nonperforming loans held for sale as a percent of total assets | 1.35 | 1.23 | 1.43 | 4.84 | 4.72 |
| 1 Net interest margin is presented on an annual basis, includes taxable equivalent adjustments to interest income and is based on a federal tax rate of 35%. | |||||
| 2 Nonperforming loans held for sale in the amount of $39,412, and $42,656 thousand is included in loans at September 30, 2011 and June 30, 2011, respectively. | |||||
| FIRST FINANCIAL HOLDINGS, INC. | |||||
| Non-GAAP Reconciliation (Unaudited) | For the Quarters Ended | ||||
| (in thousands, except share data) | December 31, 2011 | September 30, 2011 | June 30, 2011 | March 31, 2011 | December 31, 2010 |
| Efficiency Ratio from Continuing Operations | |||||
| Net interest income (A) | $ 28,900 | $ 29,064 | $ 29,416 | $ 29,287 | $ 30,248 |
| Taxable equivalent adjustment (B) | 145 | 159 | 144 | 144 | 157 |
| Noninterest income (C) | 32,770 | 14,238 | 11,422 | 11,255 | 10,580 |
| Gains on sold loan pool, net (D) | 20,796 | 1,900 | – | – | – |
| Net securities gains (losses) (E) | (180) | (169) | (54) | 1,297 | (534) |
| Noninterest expense (F) | 28,887 | 29,588 | 28,599 | 30,145 | 28,570 |
| Efficiency Ratio: F/(A+B+C-D-E) (non-GAAP) | 70.12% | 70.90% | 69.69% | 76.53% | 68.81% |
| Tangible Assets and Tangible Common Equity | |||||
| Total assets | $ 3,146,964 | $ 3,206,310 | $ 3,221,544 | $ 3,302,012 | $ 3,301,338 |
| Goodwill1 | – | – | (3,250) | (28,260) | (28,260) |
| Other intangible assets, net2 | (2,401) | (2,491) | (2,776) | (9,278) | (9,515) |
| Tangible assets (non-GAAP) | $ 3,144,563 | $ 3,203,819 | $ 3,215,518 | $ 3,264,474 | $ 3,263,563 |
| Total shareholders’ equity | $ 277,178 | $ 268,506 | $ 266,564 | $ 311,527 | $ 315,322 |
| Preferred stock | (65,000) | (65,000) | (65,000) | (65,000) | (65,000) |
| Goodwill1 | – | – | (3,250) | (28,260) | (28,260) |
| Other intangible assets, net2 | (2,401) | (2,491) | (2,776) | (9,278) | (9,515) |
| Tangible common equity (non-GAAP) | $ 209,777 | $ 201,015 | $ 195,538 | $ 208,989 | $ 212,547 |
| Shares outstanding, end of period (000s) | 16,527 | 16,527 | 16,527 | 16,527 | 16,527 |
| Tangible common equity to tangible assets (non-GAAP) | 6.67% | 6.27% | 6.08% | 6.40% | 6.51% |
| Tangible common book value per share (non-GAAP) | $ 12.69 | $ 12.16 | $ 11.83 | $ 12.65 | $ 12.86 |
| Pre-tax Pre-provision Earnings from Continuing Operations | |||||
| Income (loss) before income taxes | $ 25,338 | $ 4,774 | $ (65,564) | $ (2,278) | $ 1,775 |
| Provision for loan losses | 7,445 | 8,940 | 77,803 | 12,675 | 10,483 |
| Pre-tax pre-provision earnings (non-GAAP) | $ 32,783 | $ 13,714 | $ 12,239 | $ 10,397 | $ 12,258 |
| 1 Goodwill represents goodwill for Continuing Operations, as shown on the balance sheet, and includes goodwill for Discontinued Operations of $3,250 for the quarter ended June 30, 2011 and $27,630 for the quarters ended March 31, 2011, December 31, 2010, respectively. | |||||
| 2 Intangible assets represents intangible assets for Continuing Operations, as shown on the balance sheet, and includes intangible assets for Discontinued Operations of $205, $6,625, and $6,780, for the quarters ended June 30, 2011, March 31, 2011, and December 31, 2010, respectively. | |||||
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Cheap loans plan to help elderly keep independence
The work of the advisers, experts and charities on the panel will underpin a White Paper on the social care system expected in April.
The so-called “Prevention” group has told ministers to do much more to “support individuals to maintain their independence and well-being for as long as possible in their own homes”.
The group has called for “a programme of work to support future proofing and adaptation of accommodation to enable people to live independently at home for longer”.
Adaptation work can be costly, and the advisers suggest that ministers should provide direct financial help for people undertaking such projects.
The Government should offer older people a “loan guarantee scheme” similar to those recently offered to first-time homebuyers, the group said.
Such low-cost loans would be used for “property improvements” for older and disabled home owners, carried out by either charities or the private sector.
The group also told ministers that many people lack adequate information about the care system, meaning they do not plan properly for going into care and sometimes make the wrong choices.
In response, a “comprehensive national advice and information service” should be set up to allow people to take better-informed choices earlier in life about care.
Helping older people “feel less isolated and better connected to others” should be a central objective of social care policies, the panel said.
One approach is “timebanking” where people who spend time volunteering are awarded credits that they can exchange for services.
Such projects have been used in Japan for many years.
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