First Financial Holdings, Inc. Announces First Quarter Fiscal 2011 Net Income
Noninterest expense totaled $33.8 million for the quarter ended December 31, 2010, a decrease of $925 thousand or 2.7% from the linked quarter and an increase of $1.2 million or 3.7% over the same quarter last year. As compared with the linked quarter, the decrease in noninterest expense was primarily the result of lower REO expenses, partially offset by increases in salaries and employee benefits and professional services. The $1.5 million decrease in REO expenses was primarily the result of fewer writedowns on REO properties to reflect further fair value declines for the underlying properties during the current quarter, combined with lower net losses on sales of REO properties. The $701 thousand increase in salaries and employee benefits was primarily the result of fiscal year end accrual and other adjustments resulting in a net credit recorded in the September 30, 2010 quarter and higher group insurance expense related to the level and timing of claims, partially offset by lower incentives and commissions paid in the current quarter. Professional services increased $486 thousand, primarily as a result of using external resources to assist in the implementation of several strategic initiatives including loss-share management, REO management, and compensation studies. The net decrease in the other noninterest expense categories was primarily the result of various expense management initiatives implemented throughout First Financial.
The increase in noninterest expense over the same quarter last year was primarily the result of higher salaries and employee benefits and professional services, partially offset by lower other expense. The $1.5 million increase in salaries and employee benefits was primarily the result of new positions added during 2010 in wealth management, correspondent lending, mortgage originations, operations and administrative areas. The increase in professional services was primarily the result of the outsourced services related to the aforementioned implementation of several strategic initiatives. The decrease in other expense was primarily the result of a $1.2 million contribution in conjunction with the donation of a branch location recorded during the quarter ended December 31, 2009.
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