First Financial records 9 percent drop

First Financial Holdings Inc., the biggest banking company based in the Charleston area, reported a 9 percent drop in earnings in its latest fiscal year, blaming the decline on an unexpected drop in business loans and the sluggish real estate market.

First Financial, the parent of First Federal Savings and Loan Association of Charleston, reported earnings of $25.1 million, or $2.07 a share, for the year ended Sept. 30. The company earned $27.6 million, or $2.27 a share, in its 2006 fiscal year.

Fourth-quarter earnings totaled $5.2 million, or 44 cents a share, down from $6.9 million, or 57 cents a share, in 2006.

A. Thomas Hood, First Financial's president and chief executive, said the lender fell short of its goals for the fiscal year. The target was to increase earnings per share by about 7 percent to 8 percent, Hood said. Instead, the company saw a decrease of 8.8 percent.

In that regard, "we're very, very disappointed with our performance for fiscal 2007," Hood said during a conference call Tuesday.

The residential real estate slowdown and lower-than-expected volume in commercial and other business loans was compounded by a decline in credit quality.

The company is seeing some increases in delinquent loans, Hood said, but foreclosures amounted to just 0.2 percent of the bank's single-family residential loan portfolio. First Federal had 12 foreclosures valued at about $2 million during its 2007 fiscal year, Hood said.

Hood predicted the current environment is likely to continue into the coming quarters.

First Federal operates 55 offices in the Charleston area, Horry, Georgetown, Florence and Beaufort counties, and in Brunswick County in North Carolina.

Reach Peter Hull at 937-5594 or phull@postandcourier.com.