Owner of Charleston’s First Federal posts quarterly profit

Hall

The owner of the largest and oldest bank based in the Charleston region reported a $11.6 million quarterly profit Thursday, fueled in part by its acquisition of a failed Georgetown County lender in April.

First Financial Holdings Inc., the holding company for the 78-year-old First Federal Bank, said the April-to-June gain compared with a $44 million loss for the same period a year ago. On a per-share basis, the parent’s net profit as of June 30 was 70 cents after subtracting dividend payments on preferred stock held by the U.S. Treasury.

The latest quarter included a $9 million gain on the acquisition of the failed Pawleys Island-based Plantation Federal Bank, which First Federal took over April 27 under an agreement with the Federal Deposit Insurance Corp. That was offset by a $3.1 million after-tax charge-off that stemmed from a restructuring of the parent company’s balance sheet.

It was another busy quarter for North Charleston-based First Financial and its core banking business. In addition to the Plantation Federal deal, the company completed its purchase of five branches in the Hilton Head Island area from Liberty Savings Bank, including $22.2 million of current loans and deposits of about $113 million.

The bank owner said it also took steps to shore up its balance sheet by selling mortgage-backed securities valued at $204 million and prepaying $125 million in advances from the Federal Home Loan Bank. The two transactions triggered a $3.1 million after-tax loss.

The quarter included gains in three key categories: loan volume, deposits and total assets. Soured loans rose by $6.4 million, or 8.9 percent, since March 31, primarily because of delinquent debt First Financial acquired in the Plantation Federal takeover.

For the six months of 2012, First Financial’s profit was $12.4 million, compared with a $45.4 million loss for the same period last year.

“First Financial continues to execute on our strategic priorities and we have completed another eventful and successful quarter,” said R. Wayne Hall, president and chief executive of First Financial and First Federal. He said Thursday’s earnings report represents the bank owner’s fifth consecutive quarter “of increased core operating results.”

“These results reflect the positive momentum we have generated as a result of the strategic initiatives implemented,” he said.

The company released its quarterly earnings after U.S. stocks markets had closed. Its stock fell 39 cents Thursday to end the session at $10.50.

Reach John McDermott at 937-5572.