First Financial Holdings, Inc. Announces First Quarter Fiscal 2011 Net Income
Net interest income for the quarter ended December 31, 2010 was $30.3 million, a decrease of $590 thousand or 1.9% from the prior quarter and a decrease of $2.6 million or 8.0% from the same quarter last year. The decreases were primarily the result of the lower net interest margin, combined with a decrease in average earning assets. The decreases in average earning assets were primarily the result of a decline in loan balances due to lower loan demand from creditworthy borrowers and loan charge-offs, as well as using cash flow from investment securities to paydown borrowings.
Provision for loan losses
After determining what First Financial believes is an adequate allowance for loan losses based on the risk in the portfolio, the provision for loan losses is calculated based on the net effect of the quarterly change in the allowance for loan losses and net charge-offs. The provision for loan losses was $10.5 million for the quarter ended December 31, 2010, compared with $17.6 million for the linked quarter and $25.3 million for the same quarter last year. The decreases were primarily the result of lower net charge-offs and some stabilization in the level of impaired loans requiring specific reserves, combined with no significant additional valuation adjustments required as a result of updated appraisals.
Noninterest incomeNoninterest income totaled $15.8 million for the quarter ended December 31, 2010, a decrease of $3.2 million or 16.9% from the prior quarter and a decrease of $1.3 million or 7.6% from the same quarter last year. The decrease from the prior quarter was primarily the result of lower mortgage and other loan income and a seasonal reduction in insurance revenue. The decrease in mortgage and other loan income was primarily the result of a reduction in pricing on the loans sold during the current quarter. The decrease in noninterest income from the same quarter of last year was primarily the result of lower other income due to a $1.2 million gain on the donation of a branch location recorded during the quarter ended December 31, 2009.
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