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First Financial Holdings, Inc. Announces Fourth Quarter And Fiscal 2010 Year End Results

Refer to the Selected Financial Information Table and the Non-GAAP Reconciliation Table later in this release for additional information.

About the Company

First Federal operates 66 financial centers located in the Charleston metropolitan area, Horry, Georgetown, Florence and Beaufort counties in South Carolina and Brunswick, New Hanover and Pender counties in coastal North Carolina offering banking, trust and pension administration services. The Company also provides insurance and brokerage services through First Southeast Insurance Services, The Kimbrell Insurance Group and First Southeast Investor Services.

NOTE: R. Wayne Hall, President and CEO of the Company, Blaise B. Bettendorf, Executive Vice President and CFO, and Joseph W. Amy, Executive Vice President and CCO, will discuss these results in a conference call at 2:00 PM (EDT), October 27, 2010. The call can be accessed via a webcast available on First Financial's website at www.firstfinancialholdings.com.

Forward Looking Statements

Certain matters in this news release constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act 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. Management's ability to predict results or the effect of future plans or strategies is inherently uncertain. The Company's actual results, performance or achievements may differ materially from those suggested, expressed or implied by these forward-looking statements as a result of a wide range of factors. These factors 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 loan delinquencies and charge-offs, changes in our 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 our banking regulators, including the possibility that any such regulatory authority may, among other things, require us to increase our reserve for loan losses, write-down assets, change our regulatory capital position or affect our ability to borrow funds or maintain or increase deposits, which could adversely affect our liquidity and earnings; our ability to control operating costs and expenses, our ability to successfully integrate any assets, liabilities, customers, systems, and management personnel we have acquired or may in the future acquire into our operations and our 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, regulatory changes and other risks detailed in the Company's reports filed with the Securities and Exchange Commission ("SEC"), including the Annual Report on Form 10-K for the fiscal year ended September 30, 2009, Quarterly Reports on Form 10-Q and current reports on Form 8-K. Accordingly, these factors should be considered in evaluating the forward-looking statements, and undue reliance should not be placed on these statements.

Many aspects of the Dodd-Frank Act are subject to rulemaking and will take effect over several years, making it difficult to anticipate the overall financial impact on the Company and the financial services industry more generally.  Provisions in the legislation could also increase the capital requirements applicable to the Company and First Federal and could require the Company and First Federal to seek additional sources of capital in the future.

Such forward-looking statements may include projections. Such projections were not prepared in accordance with published guidelines of the American Institute of Certified Public Accountants or the SEC regarding projections and forecasts nor have such projections been audited, examined or otherwise reviewed by independent auditors of the Company. In addition, such projections are based upon many estimates and inherently subject to significant economic and competitive uncertainties and contingencies, many of which are beyond the control of management of the Company. Accordingly, actual results may be materially higher or lower than those projected. The inclusion of such projections herein should not be regarded as a representation by the Company that the projections will prove to be correct. The Company does not undertake to update any forward-looking statement that may be made on behalf of the Company. 

For additional information about First Financial, please visit our web site at www.firstfinancialholdings.com or contact Dorothy B. Wright, Senior Vice President-Investor Relations and Corporate Secretary, (843) 529-5931 or (843) 729-7005.          

 
FIRST FINANCIAL HOLDINGS, INC.
CONSOLIDATED BALANCE SHEETS (Unaudited)
           
(in thousands) September 30,  2010 June 30, 2010 March 31, 2010 December 31, 2009 September 30, 2009
          (audited)
ASSETS          
Cash and due from banks  $ 49,837  $ 53,596  $ 54,491  $ 58,244  $ 54,565
Interest-bearing deposits with banks  10,710  8,412  7,596  8,185  23,505
 Total cash and cash equivalents  60,547  62,008  62,087  66,429  78,070
Investment securities:          
Securities available for sale, at fair value  407,976  413,617  446,414  478,768  492,754
Securities held to maturity, at amortized cost  22,529  22,512  22,496  22,481  22,401
Nonmarketable securities - FHLB stock  42,867  46,141  46,141  46,141  46,141
 Total investment securities  473,372  482,270  515,051  547,390  561,296
Loans  2,564,348  2,590,819  2,612,215  2,644,202  2,661,742
Less: Allowance for loan losses  86,871  86,945  82,731  73,534  68,473
 Net loans  2,477,477  2,503,874  2,529,484  2,570,668  2,593,269
Loans held for sale  28,400  15,030  12,681  22,903  25,603
Premises and equipment, net  83,413  83,529  83,417  80,113  81,021
Goodwill  28,260  28,260  28,024  28,025  29,278
Other intangible assets, net  9,754  9,997  10,228  10,470  8,683
FDIC indemnification asset, net  67,583  66,794  65,461  64,130  62,754
Other assets  94,209  72,582  74,434  86,020  70,313
Total assets  $ 3,323,015  $ 3,324,344  $ 3,380,867  $ 3,476,148  $ 3,510,287
           
LIABILITIES          
Deposits:          
Noninterest-bearing  $ 223,915  $ 223,058  $ 220,375  $ 216,221  $ 206,081
Interest-bearing  2,191,148  2,240,599  2,233,655  2,077,206  2,113,452
 Total deposits  2,415,063  2,463,657  2,454,030  2,293,427  2,319,533
Advances from FHLB  508,235  478,364  530,493  565,622  492,751
Other short-term borrowings  812  813  812  181,812  258,813
Long-term debt  46,392  46,392  46,392  46,392  46,392
Other liabilities  34,323  11,321  14,139  34,441  41,149
Total liabilities  3,004,825  3,000,547  3,045,866  3,121,694  3,158,638
           
SHAREHOLDERS' EQUITY          
Preferred stock  1  1  1  1  1
Common stock  215  215  215  214  208
Additional paid-in capital  194,767  195,175  194,851  194,654  185,249
Treasury stock, at cost  (103,563)  (103,563)  (103,563)  (103,563)  (103,563)
Retained earnings  221,920  224,871  238,678  259,511  265,821
Accumulated other comprehensive income  4,850  7,098  4,819  3,637  3,933
Total shareholders' equity  318,190  323,797  335,001  354,454  351,649
Total liabilities and shareholders' equity  $ 3,323,015  $ 3,324,344  $ 3,380,867  $ 3,476,148  $ 3,510,287
 
 Note: Certain amounts have been reclassified to conform with current period presentation.
 
FIRST FINANCIAL HOLDINGS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
               
  Three Months Ended Twelve Months Ended
(in thousands, except share data) September 30, 2010 June 30, 2010 March 31, 2010 December 31, 2009 September 30, 2009 September 30,  2010 September 30,  2009
               
INTEREST INCOME              
Interest and fees on loans  $ 36,752  $ 37,485  $ 38,267  $ 40,018  $ 39,941  $ 152,522  $ 155,674
Interest and dividends on investments  5,574  5,892  6,140  6,967  7,492  24,573  30,711
Other  798  904  1,009  1,115  2,382  3,826  2,411
Total interest income  43,124  44,281  45,416  48,100  49,815  180,921  188,796
INTEREST EXPENSE              
Interest on deposits  8,042  8,189  7,835  8,718  9,407  32,784  40,894
Interest on borrowed money  4,232  4,863  6,085  6,494  6,357  21,674  26,220
Total interest expense  12,274  13,052  13,920  15,212  15,764  54,458  67,114
NET INTEREST INCOME  30,850  31,229  31,496  32,888  34,051  126,463  121,682
Provision for loan losses  17,579  36,373  45,915  25,327  21,280  125,194  66,883
Net interest income (loss) after provision for loan losses  13,271  (5,144)  (14,419)  7,561  12,771  1,269  54,799
NONINTEREST INCOME              
Service charges on deposit accounts  6,446  6,645  6,183  6,300  6,371  25,574  24,407
Insurance  6,273  6,298  7,507  5,429  6,571  25,507  27,022
Mortgage and other loan income  4,382  2,469  2,104  2,439  2,708  11,394  8,203
Trust and plan administration  1,087  1,016  1,040  1,269  1,093  4,412  1,841
Brokerage fees  591  644  550  496  532  2,281  2,028
Other  510  1,944  797  1,698  493  4,949  1,927
Net securities losses  (230)  (311)  (1,818)  (494)  (615)  (2,853)  (3,993)
Total noninterest income  19,059  18,705  16,363  17,137  17,153  71,264  61,435
               
NONINTEREST EXPENSE              
Salaries and employee benefits  18,586  18,894  18,697  17,780  18,816  73,957  66,221
Occupancy costs  2,516  2,308  2,442  2,447  2,428  9,713  8,856
Furniture and equipment  2,373  2,256  2,052  2,139  2,504  8,820  8,315
Real estate owned expenses, net  2,723  925  1,915  1,560  631  7,123  3,071
FDIC insurance and regulatory fees  1,274  1,112  1,345  941  1,345  4,672  5,787
Professional services  1,081  1,454  859  767  972  4,161  3,670
Advertising and marketing  951  707  821  786  818  3,265  2,852
Other loan expense  514  335  403  417  381  1,669  1,074
Intangible asset amortization  243  231  243  243  194  960  761
Other expense  4,456  4,881  4,519  5,514  4,298  19,370  15,779
Total noninterest expense  34,717  33,103  33,296  32,594  32,387  133,710  116,386
Loss before income taxes  (2,387)  (19,542)  (31,352)  (7,896)  (2,463)  (61,177)  (152)
Income tax benefit  (1,215)  (7,513)  (12,296)  (3,364)  (1,199)  (24,388)  (615)
(Loss) income before extraordinary item  (1,172)  (12,029)  (19,056)  (4,532)  (1,264)  (36,789)  463
EXTRAORDINARY ITEM              
Gain on acquisition, less income taxes of $18,833  --  --      --  --  28,857
NET (LOSS) INCOME   $ (1,172)  $ (12,029)  $ (19,056)  $ (4,532)  $ (1,264)  $ (36,789)  $ 29,320
Preferred stock dividends  813  813  813  813  802  3,252  2,663
Accretion on preferred stock discount  142  140  138  136  127  556  431
NET (LOSS) INCOME AVAILABLE TO COMMON  SHAREHOLDERS  $ (2,127)  $ (12,982)  $ (20,007)  $ (5,481)  $ (2,193)  $ (40,597)  $ 26,226
               
Net (loss) income per common share:              
Basic  $ (0.13)  $ (0.79)  $ (1.21)  $ (0.33)  $ (0.19)  $ (2.46)  $ 2.24
Diluted  $ (0.13)  $ (0.79)  $ (1.21)  $ (0.33)  $ (0.19)  $ (2.46)  $ 2.24
               
Average common shares outstanding:              
Basic  16,527  16,527  16,526  16,464  11,791  16,511  11,721
Diluted  16,527  16,527  16,526  16,464  11,791  16,511  11,721
 
 Note: Certain amounts have been reclassified to conform with current period presentation.
 
FIRST FINANCIAL HOLDINGS, INC.          
SELECTED FINANCIAL INFORMATION (Unaudited) For the Quarter Ended
(in thousands, except ratios) September 30,  2010 June 30, 2010 March 31, 2010 December 31, 2009 September 30,  2009
Average for the Quarter          
Total assets  $ 3,316,098  $ 3,358,635  $ 3,429,172  $ 3,487,674  $ 3,563,973
Earning assets  3,144,763  3,192,199  3,256,664  3,311,040  3,382,201
Loans  2,602,059  2,617,584  2,645,741  2,684,929  2,724,079
Deposits  2,450,148  2,466,284  2,334,035  2,312,129  2,362,731
Interest-bearing liabilities  2,743,785  2,790,884  2,854,834  2,859,013  2,989,317
Shareholders' equity  321,379  330,829  346,194  356,897  309,287
           
Performance Metrics          
Return on average assets (0.14)% (1.43)% (2.22)% (0.52)% (0.14)%
Return on average shareholders' equity (1.46) (14.54) (22.02) (5.08) (1.57)
Net interest margin (FTE) (1)  3.91  3.94  3.94  3.96  4.03
Efficiency ratio (non-GAAP)  69.04  65.69  66.83  64.29  62.17
Pre-tax pre-provision earnings  (non-GAAP)  $ 15,192  $ 16,831  $ 14,563  $ 17,431  $ 18,817
           
Credit Quality Metrics          
Allowance for loan losses as a percent of loans 3.39% 3.36% 3.17% 2.78% 2.57%
Allowance for loan losses as a percent of nonperforming loans  61.54  65.75  60.94  67.55  85.00
Nonperforming loans as a percent of loans  5.51  5.10  5.20  4.12  3.03
Nonperforming assets as a percent of loans and other  repossessed assets acquired  5.94  5.56  5.63  4.87  3.82
Nonperforming assets as a percent of total assets  4.61  4.35  4.37  3.73  2.92
Net loans charged-off as a percent of average loans (annualized)  2.71  4.91  5.55  3.02  1.07
Net loans charged-off  $ 17,652  $ 32,159  $ 36,718  $ 20,266  $ 7,307
 
(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%.
 
FIRST FINANCIAL HOLDINGS, INC.          
Non-GAAP Reconciliation (Unaudited) For the Quarter Ended
(in thousands, except per share data) September 30, 2010 June 30, 2010 March 31, 2010 December 31, 2009 September 30,  2009
Efficiency Ratio          
Net interest income (A)  $ 30,850  $ 31,229  $ 31,496  $ 32,888  $ 34,051
Taxable equivalent adjustment (B)  149  148  148  183  274
Noninterest income (C)  19,059  18,705  16,363  17,137  17,153
Net securities losses (D)  (230)  (311)  (1,818)  (494)  (615)
Noninterest expense (E)  34,717  33,103  33,296  32,594  32,387
Efficiency Ratio: E/(A+B+C-D) 69.04% 65.69% 66.83% 64.29% 62.17%
           
Tangible Assets and Tangible Common Equity        
Total assets  $ 3,323,015  $ 3,324,344  $ 3,380,867  $ 3,476,148  $ 3,510,287
Goodwill  (28,260)  (28,260)  (28,024)  (28,025)  (29,278)
Other intangible assets, net  (9,754)  (9,997)  (10,228)  (10,470)  (8,683)
Tangible assets (non-GAAP)  $ 3,285,001  $ 3,286,087  $ 3,342,615  $ 3,437,653  $ 3,472,326
           
Total shareholders' equity  $ 318,190  $ 323,797  $ 335,001  $ 354,454  $ 351,649
Preferred stock  (65,000)  (65,000)  (65,000)  (65,000)  (65,000)
Goodwill  (28,260)  (28,260)  (28,024)  (28,025)  (29,278)
Other intangible assets, net  (9,754)  (9,997)  (10,228)  (10,470)  (8,683)
Tangible common equity (non-GAAP)  $ 215,176  $ 220,540  $ 231,749  $ 250,959  $ 248,688
           
Shares outstanding, end of period (000s)  16,527  16,527  16,527  16,526  15,897
           
Tangible common equity to tangible assets 6.55% 6.71% 6.93% 7.30% 7.16%
Tangible common book value per share  $ 13.02  $ 13.34  $ 14.02  $ 15.19  $ 15.64
           
Pre-tax pre-provision earnings          
(Loss) income before income taxes  $ (2,387)  $ (19,542)  $ (31,352)  $ (7,896)  $ (2,463)
Provision for loan losses  17,579  36,373  45,915  25,327  21,280
Pre-tax pre-provision earnings  $ 15,192  $ 16,831  $ 14,563  $ 17,431  $ 18,817
 
CONTACT: First Financial Holdings, Inc.
         Dorothy B. Wright, Senior Vice President/Investor Relations
          and Corporate Secretary
         (843) 529.5931
         (843) 729.7005
         dwright@firstfinancialholdings.com

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