First Financial Holdings, Inc. Reports Results for First Quarter.Business Editors CHARLESTON, S.C.--(BUSINESS WIRE)--Jan. 16, 2003 First Financial Holdings, Inc. (NASDAQ NASDAQ in full National Association of Securities Dealers Automated Quotations U.S. market for over-the-counter securities. Established in 1971 by the National Association of Securities Dealers (NASD), NASDAQ is an automated quotation system that reports on : FFCH) today announced net income of $6.7 million for the first quarter of fiscal 2003. On a diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. per share basis, earnings were $.50 for the first quarter. Net income in the comparable quarter ended December 31, 2001 totaled $6.8 million with diluted earnings per share diluted earnings per share An earnings measure calculated by dividing net income less preferred stock dividends for a period by the average number of shares of common stock that would be outstanding if all convertible securities were converted into shares of of $.49 in the previous period. President and Chief Executive Officer A. Thomas Hood This article is about the British poet and humorist. Another Thomas Hood (died June 1702) was Mayor of New York City in that year. Thomas Hood (May 23, 1799 - May 3, 1845) was a British humorist and poet. His son, Tom Hood, became a well known playwright and editor. commented, "We believe that the quarter represented solid earnings, based on the current interest rate environment. During the current quarter, we experienced record originations of single-family loans internally and through correspondents of $251 million. We have continued our strategy of selling agency conforming fixed-rate single family mortgage loans in the secondary market rather than assume long-term interest rate risk. As a result of higher levels of loan sales and higher refinances of portfolio loans into saleable sale·a·ble adj. Variant of salable. saleable or US salable Adjective fit for selling or capable of being sold saleability or US mortgage products, we experienced a decline of approximately $45 million in our loan portfolio during the quarter. Assets for the quarter ended December 31, 2002 declined $39.8 million, or approximately 1.8% from balances at the end of September 2002 and $94.0 million, or approximately 4.1%, from December 31, 2001. Despite the decline in our loan portfolio, our net interest margin expanded slightly to 3.86% in the quarter ended December 31, 2002 from 3.75% in the comparable quarter ended December 31, 2001. Net interest income, however, was slightly less in the quarter ended December 31, 2002 as average interest earning assets Earning Assets Any income-earning asset owned by a company. Notes: These assets are generally interest-bearing accounts, bonds, and securities available for sale. See also: Asset, Asset Valuation, Earnings, Net Interest Margin declined 3.2% compared with the first quarter of fiscal 2002." Hood commented further, "Non-interest revenues for the quarter ended December 31, 2002 increased 28.8%, to $9.2 million, from $7.1 million in the December 31, 2001 quarter. Insurance revenues contributed most to this increase, growing by 41.9%, or $778 thousand, over levels in the first quarter of fiscal 2002. A substantial portion of the growth in insurance revenues is attributable to the purchase of Johnson Insurance Associates in August 2002. Gains on sales of loans for the current quarter also increased $839 thousand, or approximately 71.5%, from one year ago. As a result of the 50 basis point cut by the Federal Reserve Open Market Committee at its November meeting, we have continued to experience lower market interest rates and corresponding lower mortgage rates. Loan servicing Loan servicing is the process by which a mortgage bank or subservicing firm collects the timely payment of interest and principal from borrowers. The level of service varies depending on the type loan and the terms negotiated between the firm and the investor seeking their services. fees declined in the current quarter to $71 thousand from $470 thousand one year ago, partially reflective of increased amortizations of originated servicing rights as loan prepayment speeds Prepayment speed Also called speed, the estimated rate at which mortgagors pay off their loans ahead of schedule, critical in assessing the value of mortgage pass-through securities. have accelerated. During the quarter, the Company also recorded a $192 thousand impairment Impairment 1. A reduction in a company's stated capital. 2. The total capital that is less than the par value of the company's capital stock. Notes: 1. This is usually reduced because of poorly estimated losses or gains. 2. charge to adjust the carrying value Carrying Value Also know as "book value," it is a company's total assets minus intangible assets and liabilities, such as debt. Notes: This is different than market value, as it can be higher or lower depending on the circumstances. of the Company's mortgage servicing Mortgage servicing The collection of monthly payments and penalties, record keeping, payment of insurance and taxes, and possible settlement of default , involved with a mortgage loan. rights." Other expenses increased 13.5%, or approximately $2.1 million to $17.7 million in the first quarter of fiscal 2003 compared with the first quarter of fiscal 2002. The increases are partially attributable to the acquisition of Johnson Insurance Associates in late fiscal 2002 and to costs associated with higher commission and incentive-based payments. The Company also incurred higher than expected benefit costs associated with the Company's employee health benefit plan. In addition, the Company recently completed its project to rebuild the Surfside surf·side adj. Situated or sited at or near the seashore: surfside parties; a surfside road. branch sales office, incurring short-term relocation RELOCATION, Scotch law, contracts. To let again to renew a lease, is called a relocation. 2. When a tenant holds over after the expiration of his lease, with the consent of his landlord, this will amount to a relocation. costs during the quarter. During the first quarter of fiscal 2003, the Company incurred moderately higher operating costs operating costs npl → gastos mpl operacionales due to the one-time additional customer mailings and other expenses related to the October 2002 systems consolidation of its two banking subsidiaries into one operating unit operating unit A type of operating company that engages in transactions with outsiders and that is owned by another business. For example, in 1995 the stockholders of Capital Cities/ABC approved a $19 billion merger with the Walt Disney Company, whereupon . As of December 31, 2002, total assets of First Financial were $2.2 billion and deposits were $1.4 billion. Loans receivable totaled $1.9 billion at December 31, 2002 and stockholders' equity Stockholders' Equity The portion of the balance sheet that includes capital received from investors in exchange for stock (paid-in capital), donated capital, and retained earnings. This is equal to total assets minus liabilities, preferred stock and intangible assets. totaled $165 million. Book value per common share Book Value Per Common Share A measure used by owners of common shares in a firm to determine the level of safety associated with each individual share after all debts are paid accordingly. Formula: increased to $12.67 at December 31, 2002 compared to $11.99 one year ago. Total problem assets at December 31, 2002 increased slightly to $15.8 million from $15.1 million at September 30, 2002 but declined approximately 17% from $19.0 million at December 31, 2001. The ratio of problem assets to total assets was .71% at December 31, 2002 compared to .67% at September 30, 2002 and .82% at December 30, 2001. The ratio of net loan charge-offs to average net loans annualized annualized Of or relating to a variable that has been mathematically converted to a yearly rate. Inflation and interest rates are generally annualized since it is on this basis that these two variables are ordinarily stated and compared. was 35 basis points in the current quarter compared to 27 basis points in the comparable quarter one year ago and 37 basis points in the September 2002 quarter. Hood concluded, "Recently the Company began the process of obtaining permits for a new branch sales office in Little River, South Carolina Little River is a census-designated place (CDP) in Horry County, South Carolina, USA. The population was 7,027 at the 2000 census. The river from which it takes its name flows into the Atlantic at the border between South Carolina and North Carolina, the inlet being a . Construction is expected to commence this quarter. Additional sites have been purchased in Myrtle Beach for future expansion. We also initiated a project to convert our banking applications to the Jack Henry Silverlake System with expectations of a conversion by fiscal year end. We are optimistic op·ti·mist n. 1. One who usually expects a favorable outcome. 2. A believer in philosophical optimism. op that we will continue to execute our plans and achieve our profitability goals in this challenging operating environment In computing, an operating environment is the environment in which users run programs, whether in a command line interface, such as in MS-DOS or the Unix shell, or in a graphical user interface, such as in the Macintosh operating system. . We are hopeful that our markets will continue to perform well despite this period of slow national economic growth. We are optimistic that Congress will be successful in passing measures that will provide economic stimulus but are at the same time cognizant cog·ni·zant adj. Fully informed; conscious. See Synonyms at aware. [From cognizance.] Adj. 1. of the potential for military action that could have a dampening effect on both consumer and business activity. During the quarter we repurchased 202,000 shares of common stock in our 650,000 share repurchase Share Repurchase A program by which a company buys back its own shares from the marketplace, reducing the number of outstanding shares. This is usually an indication that the company's management thinks the shares are undervalued. program announced in September 2002." First Financial is the holding company of First Federal, which operates 44 offices located in the Charleston Metropolitan area, Horry, Georgetown, Florence and Beaufort counties Beaufort County is the name of several counties in the United States:
Area, 31,055 sq mi (80,432 sq km). Pop. (2000) 4,012,012, a 15. and Brunswick County Brunswick County is the name of several counties in the United States:
Area, 52,586 sq mi (136,198 sq km). Pop. . The Company also provides brokerage, trust and insurance services through First Southeast Investor Services, First Southeast Fiduciary and Trust Services and First Southeast Insurance Services. For additional information about First Financial, please visit our web site at www.firstfinancialholdings.com. Certain matters in this news release constitute forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. within the meaning of the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995. These forward-looking statements relate to, among others, expectations of the business environment in which the Company operates, projections of future performance, including operating efficiencies, perceived opportunities in the market, potential future credit experience, and statements regarding the Company's mission and vision. These forward-looking statements are based upon current management expectations, and may, therefore, involve risks and uncertainties. The Company's actual results, performance or achievements may differ materially from those suggested, expressed or implied by forward-looking statements due to a wide range of factors including, but not limited to, the general business environment, general economic conditions nationally and in the State of South Carolina, interest rates, the South Carolina real estate market, competitive conditions between banks and non-bank financial services The examples and perspective in this article or section may not represent a worldwide view of the subject. Please [ improve this article] or discuss the issue on the talk page. providers, regulatory changes and other risks detailed in the Company's reports filed with the Securities and Exchange Commission, including the Annual Report on Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. for the fiscal year ended September 30, 2002.
FIRST FINANCIAL HOLDINGS, INC.
Unaudited Consolidated Financial Highlights
(in thousands, except share data)
Three Months Ended
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12/31/02 12/31/01 09/30/02
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Statements of Income
Interest income $ 35,919 $ 40,542 $ 37,143
Interest expense 15,533 20,066 16,502
Net interest income 20,386 20,476 20,641
Provision for loan losses (1,485) (1,516) (1,400)
Net interest income after
provision 18,901 18,960 19,241
Other income
Net gain on sale of loans 2,012 1,173 1,977
Net gain on sale of
investments and
mortgage-backed securities 326 24 301
Brokerage fees 395 471 428
Commissions on insurance 2,636 1,858 2,777
Service charges and fees on
deposit accounts 2,677 2,368 2,441
Loan servicing fees 71 470 (449)
Real estate operations (net) (157) (119) (176)
Other 1,244 902 892
Total other income 9,204 7,147 8,191
Other expenses
Salaries and employee
benefits 11,103 9,474 10,034
Occupancy costs 1,324 1,319 1,308
Marketing 414 480 415
Depreciation, amort., etc. 1,376 1,176 1,334
FDIC insurance premiums 62 66 62
Other 3,393 3,051 3,721
Total other expenses 17,672 15,566 16,874
Income before income taxes 10,433 10,541 10,558
Provision for income taxes 3,725 3,737 3,795
Net income 6,708 6,804 6,763
Earnings per common share:
Basic 0.51 0.51 0.51
Diluted 0.50 0.49 0.49
Average shares outstanding 13,157 13,396 13,326
Average diluted shares outstanding 13,506 13,835 13,763
Ratios:
Return on average equity 16.23% 17.14% 16.30%
Return on average assets 1.20% 1.17% 1.19%
Net interest margin 3.86% 3.75% 3.85%
Operating expense/average
assets 3.15% 2.68% 2.98%
Efficiency ratio 60.07% 56.16% 58.78%
Net charge-offs/average net
loans, annualized 0.35% 0.27% 0.37%
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12/31/02 12/31/01 09/30/02
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Statements of Financial Condition
Assets
Cash and cash equivalents $ 82,958 $ 85,427 $ 87,884
Investments 45,797 41,622 37,035
Loans receivable 1,880,290 1,930,565 1,924,829
Mortgage-backed securities 130,791 186,333 133,568
Office properties, net 35,644 32,473 33,545
Real estate owned 3,323 3,930 2,913
Other assets 46,034 38,522 44,900
Total Assets 2,224,837 2,318,872 2,264,674
Liabilities
Deposits 1,442,310 1,408,501 1,440,271
Advances from FHLB 556,000 683,000 577,000
Other borrowings 26,872 23,750 26,907
Other liabilities 34,599 42,981 54,848
Total Liabilities 2,059,781 2,158,232 2,099,026
Stockholders' equity
Stockholders' equity 202,216 179,016 197,493
Treasury stock (39,189) (21,330) (34,071)
Accumulated other
comprehensive income 2,029 2,954 2,226
Total stockholders'
equity 165,056 160,640 165,648
Total liabilities
and stockholders'
equity 2,224,837 2,318,872 2,264,674
Stockholders' equity/assets 7.42% 6.93% 7.31%
Common shares outstanding 13,026 13,401 13,196
Book value per share $ 12.67 $ 11.99 $ 12.55
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12/31/02 12/31/01 09/30/02
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Credit quality-quarterly results
Total reserves for loan
losses $ 15,660 $ 16,144 $ 15,824
Loan loss reserves/net
loans 0.83% 0.84% 0.82%
Reserves/non-performing
loans 125.47% 106.90% 129.77%
Provision for losses $ 1,485 $ 1,516 $ 1,400
Net loan charge-offs $ 1,649 $ 1,315 $ 1,755
Problem assets
Non-accrual loans $ 12,160 $ 12,358 $ 11,860
Accruing loans 90 days or
more past due 17 48 29
Renegotiated loans 304 2,696 305
REO thru foreclosure 3,323 3,930 2,913
Total $ 15,804 $ 19,032 $ 15,107
As a percent of total
assets 0.71% 0.82% 0.67%
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