First Financial Holdings, Inc. Announces Second Quarter Earnings

First Financial Holdings, Inc. Announces Second Quarter Earnings  CHARLESTON, S.C., July 26, 2013 (GLOBE NEWSWIRE) -- First Financial Holdings, Inc. ("First Financial") (Nasdaq:FFCH), the holding company for First Federal Bank ("First Federal"), announced today net income available to common shareholders of $6.9 million for the three months ended June 30, 2013, compared with $4.3 million for the three months ended March 31, 2013 and $11.6 million for the three months ended June 30, 2012. Diluted net income per common share was $0.42 for the quarter ended June 30, 2013, compared with $0.26 for the prior quarter and $0.70 for the same quarter last year. The quarter ended June 30, 2012 included a $9.0 million after-tax gain on the acquisition of Plantation Federal Bank ("Plantation") and a $3.1 million after-tax net charge related to repositioning the balance sheet.  For the six months ended June 30, 2013, net income available to common shareholders was $11.2 million, compared with $12.4 million for the same period of 2012. Diluted net income per common share was $0.68, compared with $0.75 for the first six months of 2012.  Quarterly Results of Operations  First Financial reported net income of $7.9 million for the three months ended June 30, 2013, compared with $5.3 million for the three months ended March 31, 2013 and $12.6 million for the three months ended June 30, 2012.  Net interest income  Net interest margin, on a fully tax-equivalent basis, was 4.37% for the quarter ended June 30, 2013, compared with 4.51% for the quarter ended March 31, 2013 and 4.08% for the quarter ended June 30, 2012. The decrease in net interest margin was a result of a shift in the mix of earning assets from loans to lower yielding investment securities and overnight funds. The increase over the same quarter last year was principally caused by the improved performance on a Cape Fear loan poolas well asa lower cost of funds due to maturing time deposits being replaced with core depositsand the continued funding mix shift from borrowings.  Net interest income for the quarter ended June 30, 2013 was $32.1 million, a decrease of $1.0 million or 3.0% from the prior quarter and essentially unchanged from the same quarter last year. The decrease from the linked quarter was primarily due to a $19.6 million decline in average earning assets and the reduction in net interest margin. The decrease from the same quarter last year was principally caused by a $185.5 million decline in average earning assets, partially offset by the higher net interest margin.  Provision for loan losses  After determining what First Financial believes is an adequate allowance for loan losses based on the estimated risk inherent in the loan portfolio, the provision for loan losses is calculated based on the net effect of the change in the allowance for loan losses and net charge-offs. The provision for loan losses was $822 thousand for the quarter ended June 30, 2013, which included $438 thousand due to recognizing impairment on certain Plantation loan pools which have lower cash flows than originally projected. The decreases were principally due to continued reductions in the historical loss trends as well asimprovements in classified loan levels and other credit metrics through June 30, 2013.  Noninterest income  Noninterest income totaled $14.7 million for the quarter ended June 30, 2013, a decrease of $1.1 million or 7.2% from the prior quarter and a decrease of $17.8 million or 54.8% from the same quarter last year.Noninterest income for the quarter ended March 31, 2013 included a $1.3 million release on the FDIC true-up liability as higher projected losses will reduce the amount that First Federal might have to potentially remit to the FDIC based on the initial purchase bid.The June 30, 2012 quarter included a $14.6 million gain on the acquisition of Plantation and a $3.5 million gain on the sale of investment securities related to a balance sheet repositioning initiative.Excluding the impact of these items from the March 31, 2013 and June 30, 2012 quarters, noninterest income for the June 30, 2013 quarter was essentially unchanged from both prior periods.While noninterest income for the June 30, 2013 quarter was consistent with the same quarter last year, a decrease in service charges on deposit accounts ($317 thousand) was offset by bank owned life insurance income ($392 thousand), as these policies were purchased during the second half of 2012.  Noninterest expense  Noninterest expense totaled $34.1 million for the quarter ended June 30, 2013, a decrease of $1.0 million or 2.9% from the prior quarter and a decrease of $5.2 million or 13.2% from the same quarter last year.The June 30, 2012 quarter included an $8.5 million termination charge on the prepayment of FHLB advances as part of a balance sheet repositioning initiative.Excluding the termination charge, noninterest expenses for the June 30, 2013 quarter increased $3.4 million or 10.9% over the same quarter last year.The decrease from the prior quarter was primarily the result of a decline in other real estate owned ($1.5 million) and other smaller variances, partially offset by an increase in other expense ($1.2 million).The decrease in other real estate owned ("OREO") was the result of lower write-downs on OREO properties and higher gains on the sale of OREO properties in the current quarter.The increase in other expense was principally the result of losses related to sold investor loans.  The increase in noninterest expense over the same quarter of the prior year was principally caused by the $3.5 million in FDIC indemnification asset impairment, as the impairment was not projected until the third quarter of 2012, as well as higher salaries and employee benefits ($921 thousand), partially offset by lower occupancy costs ($834 thousand) and OREO ($675 thousand).The increase in salaries and employee benefits was principally caused by reinstating several employee benefits at the beginning of 2013.The decrease in occupancy costs was primarily the result of expenses associated with closing four unprofitable branches during the second quarter of 2012.The decrease in OREO was due to lower write-downs on OREO properties and higher gains on the sale of OREO properties in the current quarter.  Income Taxes  The income tax expense for the three months ended June 30, 2013 totaled $4.0 million, an increase of $1.4 million or 53.8% over the linked quarter and a decrease of $3.7 million or 47.5% from the same quarter last year.The variances from both prior periods were the result of the change in pre-tax income.The effective tax rate for the three months ended June 30, 2013 was 33.87%, compared with 33.36% and 38.00% for the quarters ended March 31, 2013 and June 30, 2012, respectively.The decrease in the effective tax rate from the prior year was principally due to higher tax-exempt income resulting from purchasing bank owned life insurance during the second half of 2012.  Year-to-Date Results of Operations  First Financial reported net income of $13.2 million for the six months ended June 30, 2013, compared with $14.3 million for the same period of 2012.  Net interest income  Net interest margin, on a fully tax-equivalent basis, was 4.44% for six months ended June 30, 2013, compared with 3.96% for the same period of 2012.The increase was principally caused by the improved performance on a Cape Fear loan pool, accretion and amortization of purchase accounting adjustments related to the Plantation acquisition, a lower cost of funds as maturing time deposits have been replaced with core deposits and the continued funding mix shift from borrowings, as well as higher yields on investments due to accelerated accretion on called investment securities.  Net interest income for the six months ended June 30, 2013 was $65.3 million, an increase of $5.3 million or 8.9% over the same period of 2012.The increase was primarily the result of improved performance on a Cape Fear loan pool as well asthe Plantation and Liberty transactions and the balance sheet repositioning during 2012, partially offset by lower average earning assets.  Provision for loan losses  The provision for loan losses was $6.8 million for the first six months of 2013, compared with $11.4 million for the same period of 2012.As of June 30, 2013, the provision for loan losses included $1.7 million due to recognizing impairment on certain Plantation loan pools which have lower cash flows than originally projected, which was recorded as an increase to the allowance for loan losses.Excluding the impact of the Plantation pools, the provision for loan losses for the first six months of 2013 was $5.1 million, a decrease of $6.3 million or 55.5% from the same period of 2012.The decrease was principally due to continued reductions in the historical loss trends as well asimprovements in classified loan levels and other credit metrics through June 30, 2013.  Noninterest income  Noninterest income totaled $30.5 million for the first six months of 2013, compared with $45.7 million for the same period of 2012.Excluding the FDIC true-up liability in 2013 and the gains on the Plantation acquisition and the sale of investment securities in 2012, as discussed above, noninterest income for the first six months of 2013 totaled $29.2 million, an increase of $1.6 million or 5.8% over the same period of 2012.The increase was principally the result of higher mortgage and other loan income ($941 thousand) due to expanding the corresponding lending channel during 2012 and higher bank owned life insurance ($765 thousand) as these policies were purchased during the second half of 2012.  Noninterest expense  Noninterest expense totaled $69.2 million for the first six months of 2013, essentially unchanged from the same period of 2012.Excluding the termination charge recorded during 2012 as discussed above, noninterest expenses for the first six months of 2013 increased $9.8 million or 16.4% over the same period of 2012.The increase was principally the result of the impact of the Plantation and Liberty transactions, which occurred in the second quarter of 2012, and the FDIC indemnification asset impairment ($7.4 million), which did not begin until the third quarter of 2012, partially offset by lower occupancy costs ($887 thousand) and FDIC insurance and regulatory fees ($682 thousand).The decrease in occupancy costs was primarily the result of closing four unprofitable branches during the second quarter of 2012.The decrease in FDIC insurance and regulatory fees was the result of becoming a Federal Reserve member bank during 2012.  Income Taxes  The income tax expense for the first six months of 2013 totaled $6.7 million, a decrease of $5.3 million or 44.2% from the same period last year.The decrease was primarily the result of lower pre-tax income and recognizing a $2.1 million tax expense associated with writing down the state deferred tax asset related to a difference in applicable South Carolina tax laws for banks versus thrifts upon First Federal's conversion to a state-chartered commercial bank in 2012.The effective tax rate for the first six months of 2013 was 33.67%, compared with 45.49% for the same period of 2012.The decrease in the effective tax rate was principally due to higher tax-exempt income resulting from purchasing bank owned life insurance during the second half of 2012 and the above mentioned state deferred tax write-down during 2012.  Balance Sheet  Total assets at June 30, 2013 were $3.2 billion, essentially unchanged from March 31, 2013 and a decrease of $133.9 million or 4.1% from June 30, 2012.While total assets were essentially unchanged from March 31, 2013, decreases in total investment securities, total loans, and the FDIC indemnification asset were substantially offset by increases in interest-bearing deposits with banks.The decrease in total assets from June 30, 2012 was principally due to declines in total loans, loans held for sale, the FDIC indemnification asset, and other assets, partially offset by higher interest-bearing deposits with banks, investment securities, and bank owned life insurance.  Investment securities at June 30, 2013 totaled $321.8 million, a decrease of $26.9 million or 7.71% from March 31, 2013 and an increase of $28.4 million or 9.7% over June 30, 2012.The decrease from March 31, 2013 was the result of normal principal reductions and cash flows from called securities.The increase over June 30, 2012 was primarily the result of securities purchased after repositioning the balance sheet during the second quarter of 2012, partially offset by normal portfolio cash flows.  Total loans at June 30, 2013 decreased $60.3 million or 2.4% from March 31, 2013 and decreased $216.3 million or 8.2% from June 30, 2012.The decreases were the result of reductions in the commercial and consumer loan categories due to several large payoffs and paydowns on commercial real estate and commercial land loans, higher loss claims on the Plantation portfolio, and normal cash flows.The decline in the commercial loan portfolio is consistent with a strategy to reduce problem and criticized loan balances, both legacy as well as those in acquired portfolios.  First Federal's credit quality metrics at June 30, 2013 reflect improved performance from both the linked quarter and the same quarter last year.Delinquent loans at June 30, 2013 totaled $8.3 million, a decrease of $5.5 million or 39.7% from March 31, 2013 and a decrease of $2.8 million or 25.3% from June 30, 2012.The decreases were driven by lower delinquent commercial loans due to continued collection efforts.Total delinquent loans at June 30, 2013 included $635 thousand in acquired covered loans, as compared with $3.4 million and $2.9 million at March 31, 2013 and June 30, 2012, respectively.  Nonperforming assets at June 30, 2013 totaled $59.5 million, a decrease of $5.5 million or 8.5% from March 31, 2013 and a decrease of $18.6 million or 23.8% from June 30, 2012.The decreases were principally the result of reductions in nonperforming residential and commercial loans as well as OREO sales outpacing new foreclosures.Acquired covered nonperforming loans totaled $7.5 million at June 30, 2013, compared with $8.8 million and $10.4 million at March 31, 2013 and June 30, 2012, respectively.Acquired covered OREO totaled $6.7 million at June 30, 2013, compared with $9.7 million and $20.0 million at March 31, 2013 and June 30, 2012, respectively.  Net charge-offs for the quarter ended June 30, 2013 totaled $6.1 million, essentially unchanged from the prior quarter and a decrease of $612 thousand or 9.2% from the same quarter last year.The June 30, 2013 quarter included charge-offs totaling $1.0 million on acquired loans.  The allowance for loan losses was 1.79% of total loans at June 30, 2013, compared with 1.92% of total loans at March 31, 2013 and 1.85% of total loans at June 30, 2012.The decreases in the allowance ratio from both prior periods were due to the continued improvement in historical loss factors and improved credit metrics over the past twelve months.The decrease in the allowance ratio from June 30, 2012 was partially offset by the effect of recording a $6.1 million reserve as of June 30, 2013 related to estimated higher losses on acquired Plantation loans.Of this amount, $4.4 million was related to acquired covered loans and was recorded as an increase to the FDIC indemnification asset.The allowance for loan losses at June 30, 2013 was 1.93% of loans excluding acquired covered loans, and represented 1.1 times coverage of the non-covered nonperforming loans.  The FDIC indemnification asset at June 30, 2013 was $47.8 million, a decrease of $11.1 million or 18.8% from March 31, 2013 and a decrease of $29.5 million or 38.1% from June 30, 2012.The decreases were due to the receipt of claims reimbursement from the FDIC, and recognizing a potential impairment on the FDIC indemnification asset related to the Cape Fear acquired portfolio, partially offset by recognizing potential additional claims to the FDIC related to the Plantation loss share agreement and normal accretion.  Bank owned life insurance totaled $51.4 million at June 30, 2013, essentially unchanged from March 31, 2013 and an increase of $41.4 million over June 30, 2012.The increase was the result of establishing a bank owned life insurance program on certain corporate officers as part of a strategy to offset the costs of existing employee benefit plans.  Other assets totaled $80.7 million at June 30, 2013, an increase of $6.2 million or 8.3% over March 31, 2013 and a decrease of $22.4 million or 21.7% from June 30, 2012.The increase over March 31, 2013 was principally the result of a $13.7 million increase in tax assets due to adjusting the timing of deductions related to the FDIC indemnification asset based on the findings of a recent tax audit, and a$3.1 million increase in the value of mortgage servicing rights due to changes in market interest rates, partially offset by a $3.2 million decline in OREO as sales of properties continue to outpace foreclosures, and miscellaneous reductions in other asset categories.The decrease from June 30, 2012 was due to a $15.1 million decline in OREO and miscellaneous reductions in other asset categories, partially offset by a $6.6 million increase in mortgage servicing rights due to higher levels of originations sold in the secondary market as well as recent changes in market interest rates.  Core deposits, which include checking, savings, and money market accounts, totaled $1.7 billion at June 30, 2013, essentially unchanged from March 31, 2013 and an increase of $110.8 million or 7.0% over June 30, 2012.The increase was primarily the result of the introduction of new retail deposit products and sales processes during 2012. Time deposits at June 30, 2013 totaled $840.6 million, a decrease of $62.8 million or 7.0% from March 31, 2013 and a decrease of $269.1 million or 24.3% from June 30, 2012.The decreases were due to a strategy to focus on core transaction accounts and to reduce high rate retail and wholesale time deposits as they matured.  Shareholders' equity at June 30, 2013 was $308.0 million, an increase of $3.3 million or 1.1% over March 31, 2013 and an increase of $20.8 million or 7.2% over June 30, 2012.The increases were due to the effect of net operating results, partially offset by paying off the warrants associated with the former TARP preferred stock.First Financial remained well capitalized at June 30, 2013 with total risk-based capital of 17.09%, Tier 1 risk-based capital of 15.81%, and Tier 1 leverage capital of 10.95%.The tangible common equity to tangible common assets ratio increased to 7.46% at June 30, 2013, compared with 7.23% at March 31, 2013 and 6.47% at June 30, 2012.First Federal's regulatory capital ratios are in excess of "well-capitalized" minimums.  About First Financial  First Financial Holdings, Inc. ("First Financial") (Nasdaq:FFCH) is a Charleston, South Carolina financial services provider with $3.2 billion in total assets as of June 30, 2013.First Financial offers integrated financial solutions, including personal, business, and wealth management services.First Federal Bank ("First Federal"), which was founded in 1934 and is the primary subsidiary of First Financial, serves individuals and businesses throughout coastal South Carolina, Florence, and Greenville, South Carolina, and Wilmington, North Carolina.First Financial subsidiaries include: First Federal; First Southeast Investor Services, Inc., a registered broker-dealer; and First Southeast 401(k) Fiduciaries, Inc., a registered investment advisor.First Federal is the largest financial institution headquartered in the Charleston, South Carolina metropolitan area and the third largest financial institution headquartered in South Carolina, based on asset size.Additional information about First Financial is available at www.firstfinancialholdings.com.  Non-GAAP Financial Information  In addition to results presented in accordance with accounting principles generally accepted in the United States of America ("GAAP"), this press release includes non-GAAP financial measures such as the efficiency ratio, the tangible common equity to tangible assets ratio, tangible common book value per share, pre-tax pre-provision earnings, and adjusted net interest margin.First Financial believes these non-GAAP financial measures provide additional information that is useful to investors in understanding its underlying performance, business, and performance trends and such measures help facilitate performance comparisons with others in the banking industry as well as period-to-period comparisons.Non-GAAP measures have inherent limitations, are not required to be uniformly applied, and are not audited.Readers should be aware of these limitations and should be cautious in their use of such measures.To mitigate these limitations, First Financial has procedures in place to ensure that these measures are calculated using the appropriate GAAP or regulatory components in their entirety and to ensure that its performance is properly reflected to facilitate consistent period-to-period comparisons.Although management believes the above non-GAAP financial measures enhance readers' understanding of First Financial's business and performance, these non-GAAP measures should not be considered in isolation, or as a substitute for GAAP basis financial measures.  Please refer to the Selected Financial Information table and the Non-GAAP Reconciliation table later in this release for additional information.  Forward-Looking Statements  Statements in this release that are not statements of historical fact, including without limitation, statements that include terms such as "believes," "expects," "anticipates," "estimates," "forecasts," "intends," "plans," "targets," "potentially," "probably," "projects," "outlook," or similar expressions or future conditional verbs such as "may," "will," "should," "would," or "could" constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995.These forward-looking statements regarding First Financial's future financial and operating results, plans, objectives, expectations and intentions involve risks and uncertainties, many of which are beyond First Financial's control or are subject to change.No forward-looking statement is a guarantee of future performance and actual results could differ materially from those anticipated by the forward-looking statements. Factors that could cause or contribute to such differences 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 delinquent and nonperforming loans and charge-offs; changes in First Federal's 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 banking regulators, including the possibility that any such regulatory authority may, among other things, require First Federal to increase its allowance for loan losses, write-down assets, change First Federal's regulatory capital position or affect its ability to borrow funds or maintain or increase deposits, which could adversely affect liquidity and earnings; First Financial's ability to control operating costs and expenses; First Financial's ability to successfully integrate any assets, liabilities, customers, systems, and management personnel acquired or may in the future acquire into its operations and its 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, including new or revised rules and regulations implemented pursuant to the Dodd-Frank Wall Street Reform and Consumer Protection Act; and closing conditions related to the proposed merger with SCBT.Other risks are also detailed in First Financial's Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and current reports on Form 8-K that are filed with the Securities and Exchange Commission ("SEC"), which are available at the SEC's website www.sec.gov. Other factors not currently anticipated may also materially and adversely affect First Financial's results of operations, financial position, and cash flows.There can be no assurance that future results will meet expectations.While First Financial believes that the forward-looking statements in this release are reasonable, the reader should not place undue reliance on any forward-looking statement.In addition, these statements speak only as of the date made.First Financial does not undertake, and expressly disclaims any obligation to update or alter any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by applicable law.   FIRST FINANCIAL HOLDINGS, INC. SELECTED FINANCIAL INFORMATION (Unaudited)                                                                                          As of and for the Quarters Ended (dollars in          June 30,     March 31,    December 31, September    June 30, thousands)           2013         2013         2012         30,          2012                                                             2012 Average for the                                                       Quarter Assets               $3,181,212 $3,200,485 $3,216,018 $3,283,512 $3,339,705 Investment           338,023     316,426     283,929     291,223     443,181 securities Loans               2,446,789   2,481,410   2,545,956   2,608,522   2,564,789 Allowance for loan   46,567      44,375      45,997      48,329      50,547 losses Deposits             2,560,845   2,576,968   2,594,112   2,664,207   2,596,642 Borrowings           280,208     280,229     282,122     294,796     428,505 Shareholders' equity 305,565     301,921     296,851     290,047     285,672                                                                      Performance Metrics                                                   Return on average    1.00%        0.67%        0.97%        0.81%        1.52% assets^1 Return on average shareholders'        10.37      7.06       10.48      9.14       17.72 equity^1 Net interest margin  4.37       4.51       4.69       4.35       4.08 (FTE)^2 Net interest margin, adjusted             3.89       3.99       4.15       4.29       4.08 (non-GAAP)^3 Efficiency ratio     72.45      73.04      67.69      69.19      66.05 (non-GAAP)^1,3 Pre-tax pre-provision        $12,765   $13,855   $15,905   $14,716   $24,993 earnings (non-GAAP)^3                                                                      Capital Ratios                                                        Equity to assets     9.72%        9.47%        9.32%        9.01%        8.69% Tangible common equity to tangible   7.46       7.23       7.07       6.77       6.47 assets (non-GAAP)^3 Book value per       $ 14.68    $ 14.50    $ 14.20    $ 13.77    $ 13.45 common share Tangible book value per common share     14.25      14.04      13.71      13.25      12.91 (non-GAAP)^3 Dividends            0.05       0.05       0.05       0.05       0.05 Shares outstanding,  16,558     16,533     16,527     16,527     16,527 end of period (000s) Tier 1 leverage      10.95%       10.72%       10.54%       10.12%       9.79% capital ratio Tier 1 risk-based    15.81      15.30      14.89      14.42      13.89 capital ratio Total risk-based     17.09      16.58      16.16      15.70      15.16 capital ratio Tier 1 leverage capital ratio (First 10.58      10.24      9.97       9.47       9.06 Federal) Tier 1 risk-based capital ratio (First 15.29      14.63      14.10      13.50      12.86 Federal) Total risk-based capital ratio (First 16.57      15.92      15.37      14.78      14.13 Federal)                                                                      Asset Quality                                                         Metrics Allowance for loan losses as a percent  1.79%        1.92%        1.77%        1.80%        1.85% of loans Allowance for loan losses as a percent  93.23      97.42      89.30      94.53      97.72 of nonperforming loans Nonperforming loans as a percent of      1.92       1.97       1.98       1.90       1.90 loans Nonperforming assets as a percent of loans and            2.45       2.61       2.70       2.72       2.94 otherrepossessed assets acquired Nonperforming assets as a percent of      1.88       2.02       2.11       2.18       2.36 total assets Net loans charged-off as a     0.99       0.98       0.99       1.07       1.04 percent of average loans^1 Net loans            $6,061    $6,063    $6,333    $6,981    $6,673 charged-off                                                                      Asset Quality Metrics Excluding                                                     Acquired Covered Loans Allowance for loan losses as a percent  1.93%        2.08%        1.94%        1.99%        2.06% of legacy loans Allowance for loan losses as a percent of                   111.13     118.82     108.23     118.82     123.30 legacynonperforming loans Nonperforming loans as a percent of      1.74       1.75       1.79       1.67       1.67 legacy loans Nonperforming assets as a percent of legacy loans         2.02       2.04       2.17       1.97       2.01 andother repossessed assets acquired Nonperforming assets as a percent of      1.43       1.45       1.54       1.42       1.45 total assets  ^1 Represents an annualized rate. ^2 Net interest margin is presented on an annual basis and includes taxable equivalent adjustments to interest income based on a federal tax rate of 35%. ^3 See Non-GAAP Reconciliation table for details.    FIRST FINANCIAL HOLDINGS, INC. CONSOLIDATED STATEMENTS OF INCOME (Unaudited)                                                                                                For the Quarters Ended                            Six Months Ended (in thousands,       June 30,  March 31, December  September June 30,  June 30,  June 30, except per share     2013      2013      31,       30,       2012      2013      2012 data)                                    2012      2012                                                                            INTEREST INCOME                                  Interest and fees on $35,906 $36,993 $38,927 $37,104 $35,643 $72,899 $68,119 loans Interest and dividends on                                                                investment securities Taxable              1,788    1,931     2,207    2,429    3,118    3,719     6,648 Tax-exempt           235      294       312      342      420      529       757 Other                127      111       103      139      162      238       178 Total interest       38,056   39,329   41,549   40,014   39,343   77,385   75,702 income INTEREST EXPENSE                                                            Interest on deposits 2,864    3,172     3,388    3,747    3,981    6,036     7,932 Interest on borrowed 3,044    3,019     3,072    3,070    3,649    6,063     7,805 money Total interest       5,908    6,191    6,460    6,817    7,630    12,099   15,737 expense NET INTEREST INCOME  32,148   33,138   35,089   33,197   31,713   65,286   59,965 Provision for loan   822      5,972     4,161    4,533    4,697    6,794     11,442 losses Net interest income after provision for  31,326   27,166   30,928   28,664   27,016   58,492   48,523 loan losses NONINTEREST INCOME                                                          Service charges on   7,241    7,263     7,900    7,772    7,558    14,504    14,860 deposit accounts Mortgage and other   4,313    4,435     5,987    4,061    4,372    8,748     7,807 loan income Trust and plan administration       1,119    1,067     1,219    1,117    1,078    2,186     2,159 income Brokerage fees       849      714       810      655      875      1,563     1,539 Bank owned life      392      373       382      241      ---      765       --- insurance income Other income         858      932       680      513      699      1,790     1,468 Other-than-temporary impairment losses on (176)    (268)     (144)    (145)    (145)    (444)     (214) investment securities FDIC true-up         ---      1,321    ---      ---      ---      1,321    --- liability release (Loss) gain on       ---      ---      (661)    ---      14,550   ---      14,550 acquisition Gain on sale or call of investment        107      ---      ---      334      3,543    107      3,543 securities Total noninterest    14,703   15,837   16,173   14,548   32,530   30,540   45,712 income NONINTEREST EXPENSE                                                         Salaries and         16,133   16,335    16,020   15,621   15,212   32,468    30,354 employee benefits Occupancy costs      2,099    2,214     2,214    2,333    2,933    4,313     5,200 Furniture and        2,392    2,068     2,033    2,132    1,893    4,460     3,702 equipment Other real estate    (541)    924       18       1,030    134      383       664 owned, net FDIC insurance and   541      531       646      693      761      1,072     1,754 regulatory fees Professional         1,835    2,070     1,838    1,980    1,875    3,905     3,340 services Advertising and      720      866       714      964      966      1,586     1,619 marketing Other loan expense   1,297    1,372     2,283    1,620    1,283    2,669     2,634 Intangible           448      512       512      512      368      960       458 amortization FDIC indemnification 3,565    3,806     3,423    563      ---      7,371     --- asset impairment Other expense        5,597    4,422     5,656    5,581    5,300    10,019    9,709 FHLB prepayment      ---      ---       ---      ---      8,525    ---      8,525 termination charge Total noninterest    34,086   35,120   35,357   33,029   39,250   69,206   67,959 expense Income before income 11,943   7,883    11,744   10,183   20,296   19,826   26,276 taxes Income tax expense   4,045    2,630     3,921    3,516    7,712    6,675     11,953 NET INCOME           7,898    5,253    7,823    6,667    12,584   13,151   14,323 Preferred stock      812      813      812      813      812      1,625    1,625 dividends Accretion on preferred stock      168      165      163      160      158      333      314 discount NET INCOME AVAILABLE TO                   $6,918  $4,275  $6,848  $5,694  $11,614 $11,193 $12,384 COMMON SHAREHOLDERS                                                                            Net income per                                                              common share Basic                $0.42   $0.26   $0.41   $0.34   $0.70   $0.68   $0.75 Diluted              0.42     0.26     0.41     0.34     0.70     0.68     0.75                                                                            Average common                                                              shares outstanding Basic                16,546   16,529   16,527   16,527   16,527   16,537   16,527 Diluted              16,567   16,547   16,531   16,529   16,528   16,560   16,528   FIRST FINANCIAL HOLDINGS, INC. NET INTEREST MARGIN ANALYSIS (Unaudited)                                                                                                          For the Quarters Ended                                                                         June 30, 2013                March 31, 2013               Change in (dollars in     Average    Interest  Average Average    Interest  Average Average    Interest   Basis thousands)       Balance              Rate    Balance              Rate    Balance               Points Earning assets                                                                            Interest-bearing deposits with    $83,011  $53     0.26%   $62,441  $29     0.19%   $20,570  $24      7 banks Investment       339,105   2,023    2.54  316,426   2,225    3.02  22,679    (202)     (48) securities^1 Total loans^2    2,446,789 32,032   5.25  2,481,410 32,764   5.33  (34,621)  (732)     (8) Loans held for   34,228    300      3.50  45,546    380      3.34  (11,318)  (80)      16 sale FDIC indemnification  53,919    74       0.55  70,794    82       0.47  (16,875)  (8)       8 asset Total earning    2,957,052 34,482   4.69  2,976,617 35,480   4.83  (19,565)  (998)     (14) assets Interest-bearing                                                                          liabilities Deposits         2,132,389 2,864    0.54  2,180,739 3,172    0.59  (48,350)  (308)     (5) Borrowings       280,207   3,044    4.35  280,229   3,019    4.35  (22)      25        --- Total interest-bearing 2,412,596 5,908    0.98  2,460,968 6,191    1.02  (48,372)  (283)     (4) liabilities                                                                                          Net interest               $28,574                  $29,289                  $(715)    income                                                                                          Net interest                        3.89%                      3.99%                       (10) margin, adjusted                                                                                          Effect of incremental                3,574    0.48            3,849    0.52            (275)     (4) accretion                                                                                          Net interest               $32,148 4.37%             $33,138 4.51%             $(990)   (14) margin  ^1Interest income used in the average rate calculation includes the tax equivalent adjustments of $127 thousand and $158 thousand for the quarters ended June 30 andMarch 31, 2013, respectively, calculated based on a federal tax rate of 35%. ^2Average loans include nonaccrual loans.Loan fees, which are not material for any of the periods, have been included in loan interest income for the rate calculation.                  For the Six Months Ended                                                                       June 30, 2013                June 30, 2012                Change in (dollars in      Average    Interest  Average Average    Interest  Average Average    Interest   Basis thousands)       Balance              Rate    Balance              Rate    Balance               Points Earning Assets                                                                            Interest-bearing deposits with    $72,783  $82     0.23%   $9,337   $20     0.43%   $63,446  $62      (20) banks Investment       327,828   4,248    2.77  466,769   7,405    3.35  (138,941) (3,157)   (58) securities^1 Total loans^2    2,464,058 64,797   5.29  2,471,834 67,250   5.46  (7,776)   (2,453)   (17) Loans held for   39,856    679      3.41  47,870    869      3.63  (8,014)   (190)     (22) sale FDIC indemnification  62,310    156      0.50  59,295    158      0.54  3,015     (2)       (4) asset Total Earning    2,966,835 69,962   4.76  3,055,105 75,702   5.00  (88,270)  (5,740)   (24) Assets Interest-bearing                                                                          liabilities Deposits         2,156,431 6,036    0.56  2,099,651 7,932    0.76  56,780    (1,896)   (20) Borrowings       280,218   6,063    4.35  520,477   7,805    3.01  (240,259) (1,742)   134 Total interest-bearing 2,436,649 12,099   1.00  2,620,128 15,737   1.21  (183,479) (3,638)   (21) liabilities                                                                                          Net interest               $57,863                  $59,965                  $(2,102)  income                                                                                          Net interest                        3.94%                      3.96%                       (2) margin, adjusted                                                                                          Effect of incremental                7,423    0.50            ---     ---             7,423     50 accretion                                                                                          Net interest               $65,286 4.44%             $59,965 3.96%             $5,321   48 margin  ^1Interest income used in the average rate calculation includes the tax equivalent adjustment of $285 thousand, and $408 thousand for the six months ended June 30, 2013 and 2012, respectively, calculated based on a federal tax rate of 35%. ^2Average loans include nonaccrual loans.Loan fees, which are not material for any of the periods, have been included in loan interest income for the rate calculation.                                                                                            FIRST FINANCIAL HOLDINGS, INC. CONSOLIDATED BALANCE SHEETS (Unaudited)                                                                                         June 30,     March 31,    December 31, September    June 30, (in thousands)      2013         2013         2012         30,          2012                                                            2012                                                                     ASSETS                                                               Cash and due from   $56,001    $49,190    $60,290    $50,749    $62,831 banks Interest-bearing    107,124     80,110      57,161      35,668      7,270 deposits with banks Total cash and cash 163,125     129,300     117,451     86,417      70,101 equivalents Investment                                                           securities Securities available for sale, 288,092     314,597     253,798     236,048     244,059 at fair value Securities held to maturity, at        14,467      14,869      15,555      17,331      20,014 amortized cost Nonmarketable       19,245      19,245      20,914      23,254      29,327 securities Total investment    321,804     348,711     290,267     276,633     293,400 securities Loans                                                                Residential         1,029,838   1,038,140   1,031,613   1,080,406   1,099,486 Commercial          620,235     663,733     681,119     721,587     758,604 Consumer            766,097     774,550     782,672     772,376     774,405 Total loans         2,416,170   2,476,423   2,495,404   2,574,369   2,632,495 Less:Allowance for 43,227      47,427      44,179      46,351      48,799 loan losses Total loans, net    2,372,943   2,428,996   2,451,225   2,528,018   2,583,696 Loans held for sale 41,679      33,752      55,201      53,761      72,402 FDIC indemnification     47,822      58,917      80,268      75,017      77,311 asset Premises and        83,682      83,924      85,378      83,916      85,285 equipment, net Bank owned life     51,389      50,997      50,624      50,241      10,000 insurance Other intangible    7,165       7,573       8,025       8,478       8,931 assets Other assets        80,681      74,477      77,119      83,006      103,048 Total assets        $3,170,290 $3,216,647 $3,215,558 $3,245,487 $3,304,174                                                                     LIABILITIES                                                          Deposits                                                             Noninterest-bearing $439,177   $431,003   $388,259   $382,077   $359,352 checking Interest-bearing    520,667     509,295     511,647     507,262     502,731 checking Savings and money   744,468     756,818     743,970     730,365     731,428 market Retail time         760,568     807,667     845,391     869,544     934,245 deposits Wholesale time      79,988      95,737      106,066     127,509     175,446 deposits Total deposits      2,544,868   2,600,520   2,595,333   2,616,757   2,703,202 Advances from FHLB  233,000     233,000     233,000     253,000     233,000 Long-term debt      47,204      47,204      47,204      47,204      47,204 Other liabilities   37,184      31,234      40,380      36,026      33,504 Total liabilities   2,862,256   2,911,958   2,915,917   2,952,987   3,016,910                                                                     SHAREHOLDERS'                                                        EQUITY Preferred stock     1           1           1           1           1 Common stock        224         215         215         215         215 Additional paid-in  196,252     197,099     196,819     196,612     196,409 capital Treasury stock, at  (103,563)   (103,563)   (103,563)   (103,563)   (103,563) cost Retained earnings   218,392     212,302     208,853     202,832     198,100 Accumulated other   (3,272)     (1,365)     (2,684)     (3,597)     (3,898) comprehensive loss Total shareholders' 308,034     304,689     299,641     292,500     287,264 equity Total liabilities and shareholders'   $3,170,290 $3,216,647 $3,215,558 $3,245,487 $3,304,174 equity    FIRST FINANCIAL HOLDINGS, INC. LOANS (in           June 30,     March 31,    December 31, September    June 30, thousands)    2013         2013         2012         30,          2012                                                      2012 Residential                                                    loans Residential   $965,434   $963,053   $956,355   $1,008,130 $1,023,800 1-4 family Residential   19,254       26,176       22,519       19,660       19,613 construction Residential   45,150       48,911       52,739       52,616       56,073 land Total residential   1,029,838    1,038,140    1,031,613    1,080,406    1,099,486 loans                                                               Commercial                                                     loans Commercial    116,787      130,169      118,379      125,345      107,804 business Commercial    443,708      467,890      491,567      520,135      555,588 real estate Commercial    2,470        1,092        1,064        1,801        17,201 construction Commercial    57,270       64,582       70,109       74,306       78,011 land Total commercial    620,235      663,733      681,119      721,587      758,604 loans                                                               Consumer                                                       loans Home equity   359,618      373,108      384,664      380,000      388,534 Manufactured  284,926      282,114      280,100      277,744      276,607 housing Marine        81,604       79,328       75,736       69,314       59,643 Other         39,949       40,000       42,172       45,318       49,621 consumer Total consumer      766,097      774,550      782,672      772,376      774,405 loans Total loans   2,416,170    2,476,423    2,495,404    2,574,369    2,632,495 Less: Allowance for 43,227       47,427       44,179       46,351       48,799 loan losses Total loans,  $2,372,943 $2,428,996 $2,451,225 $2,528,018 $2,583,696 net    FIRST FINANCIAL HOLDINGS, INC. DELINQUENT LOANS                                                                                                                       June 30, 2013         March 31, 2013        December 31, 2012     September 30, 2012    June 30, 2012 (dollars in    $       % of       $       % of       $       % of       $       % of       $       % of thousands)               Portfolio            Portfolio            Portfolio            Portfolio            Portfolio Residential                                                                                              loans Residential    $1,712  0.18%       $1,433  0.15%       $2,800  0.29%       $2,361  0.23%       $1,244  0.12% 1-4 family Residential    ---      ---        284      1.08      ---      ---        ---      ---        ---      --- construction Residential    ---      ---        725      1.48      47       0.09      157      0.30      475      0.85 land Total residential    1,712    0.17      2,442    0.24      2,847    0.28      2,518    0.23      1,719    0.16 loans                                                                                                         Commercial                                                                                               loans Commercial     390      0.33      1,255    0.96      847      0.72      582      0.46      903      0.84 business Commercial     1,396    0.31      4,252    0.91      3,492    0.71      2,397    0.46      3,014    0.54 real estate Commercial     1,088    1.90      1,540    2.38      1,573    2.24      318      0.43      675      0.87 land Total commercial     2,874    0.46      7,047    1.06      5,912    0.87      3,297    0.46      4,592    0.61 loans                                                                                                         Consumer loans                                                                                           Home equity    1,509    0.42      2,758    0.74      4,414    1.15      2,204    0.58      2,017    0.52 Manufactured   1,948    0.68      1,162    0.41      3,241    1.16      2,506    0.90      1,835    0.66 housing Marine         99       0.12      154      0.19      284      0.37      227      0.33      300      0.50 Other consumer 140      0.35      177      0.44      384      0.91      742      1.64      626      1.26 Total          3,696    0.48      4,251    0.55      8,323    1.06      5,679    0.74      4,778    0.62 consumerloans Total delinquent     $8,282  0.34%       $13,740 0.55%       $17,082 0.68%       $11,494 0.45%       $11,089 0.42% loans    FIRST FINANCIAL HOLDINGS, INC. NONPERFORMING ASSETS                                                                                                                       June 30, 2013         March 31, 2013        December 31, 2012     September 30, 2012    June 30, 2012 (dollars in    $       % of       $       % of       $       % of       $       % of       $       % of thousands)               Portfolio            Portfolio            Portfolio            Portfolio            Portfolio Residential                                                                                              loans Residential    $7,321  0.76%       $7,693  0.80%       $7,137  0.75%       $10,881 1.08%       $10,460 1.02% 1-4 family Residential    980      2.17      576      1.18      785      1.49      1,558    2.96      1,423    2.54 land Total residential    8,301    0.80      8,269    0.80      7,922    0.77      12,439   1.15      11,883   1.08 loans                                                                                                         Commercial                                                                                               loans Commercial     1,258    1.08      1,813    1.39      1,460    1.23      1,407    1.12      1,198    1.11 business Commercial     16,856   3.80      18,213   3.89      18,386   3.74      15,853   3.05      15,918   2.87 real estate Commercial     ---      ---       ---      ---       247      23.21     247      13.71     261      1.52 construction Commercial     2,828    4.94      3,845    5.95      4,058    5.79      2,990    4.02      4,577    5.87 land Total commercial     20,942   3.38      23,871   3.60      24,151   3.55      20,497   2.84      21,954   2.89 loans                                                                                                         Consumer loans                                                                                           Home equity    9,640    2.68      9,295    2.49      10,049   2.61      10,145   2.67      10,636   2.74 Manufactured   3,398    1.19      3,085    1.09      3,355    1.20      2,221    0.80      2,197    0.79 housing Marine         87       0.11      125      0.16      139      0.18      90       0.13      29       0.05 Other consumer 256      0.64      265      0.66      275      0.65      228      0.50      306      0.62 Total          13,381   1.75      12,770   1.65      13,818   1.77      12,684   1.64      13,168   1.70 consumerloans Total nonaccrual     42,624   1.76      44,910   1.81      45,891   1.84      45,620   1.77      47,005   1.79 loans Loans 90+ days ---                 6                   43                  74                  75        still accruing Restructured loans, still   3,743               3,768               3,536               3,340               2,857     accruing Total nonperforming  46,367   1.92%       48,684   1.97%       49,470   1.98%       49,034   1.90%       49,937   1.90% loans Nonperforming loans held for ---                 ---                 ---                 ---                 ---       sale Other repossessed    13,133              16,310              18,338              21,580              28,191    assets acquired Total nonperforming  $59,500            $64,994            $67,808            $70,614            $78,128  assets    FIRST FINANCIAL HOLDINGS, INC. NET CHARGE-OFFS                                                                                                                       June 30, 2013         March 31, 2013        December 31, 2012     September 30, 2012    June 30, 2012 (dollars in    $       % of        $       % of        $       % of        $       % of        $       % of thousands)               Portfolio^1           Portfolio^1           Portfolio^1           Portfolio^1           Portfolio^1 Residential                                                                                              loans Residential    $1,034  0.43%       $1,215  0.50%       $2,756  1.10%       $294    0.12%       $1,070  0.42% 1-4 family Residential    97       0.82      (144)    (1.13)      257      1.89      403      2.91      78       0.59 land Total residential    1,131    0.44      1,071    0.41      3,013    1.13      697      0.26      1,148    0.42 loans                                                                                                         Commercial                                                                                               loans Commercial     892      2.86      268      0.90      126      0.42      924      3.22      334      1.34 business Commercial     1,912    1.70      2,089    1.74      588      0.46      1,994    1.47      714      0.54 real estate^2 Commercial     (1)      (0.18)     5        1.67      (1)      (0.41)     11       0.56      (2)      (0.05) construction Commercial     525      3.47      21       0.13      89       0.48      1,037    5.43      723      4.00 land^3 Total commercial     3,328    2.09      2,383    1.43      802      0.46      3,966    2.14      1,769    0.99 loans                                                                                                         Consumer loans                                                                                           Home equity    954      1.04      1,346    1.42      1,343    1.44      1,125    1.17      2,580    2.71 Manufactured   518      0.73      1,019    1.45      899      1.29      778      1.12      666      0.97 housing Marine         26       0.13      74       0.38      (19)     (0.11)     146      0.88      82       0.60 Other consumer 104      1.02      170      1.64      295      2.51      269      2.22      428      3.48 Total          1,602    0.83      2,609    1.34      2,518    1.31      2,318    1.20      3,756    1.98 consumerloans Total net      $6,061  0.99%       $6,063  0.98%       $6,333  0.99%       $6,981  1.07%       $6,673  1.04% charge-offs  ^1 Represents an annualized rate ^2 Includes SOP charge-offs in excess of nonaccretable yield of $275 thousand at June 30, 2013. ^3 Includes SOP charge-offs in excess of nonaccretable yield of $758 thousand at June 30, 2013.   FIRST FINANCIAL HOLDINGS, INC. NON-GAAP RECONCILIATION (Unaudited)                                                                                    As of and for the Quarters Ended (dollars in         June 30,    March 31,   December    September   June 30, thousands, except   2013        2013        31,         30,         2012 per share data)                             2012        2012 Efficiency Ratio                                                 Net interest income $32,148  $33,138  $35,089  $33,197  $31,713 (A) Taxable equivalent  127       158       168       184       226 adjustment (B) Noninterest income  14,703    15,837    16,173    14,548    32,530 (C) (Loss) gain on      ---       ---       (661)      ---       14,550 acquisition (D) Net securities      (69)       (268)      (144)      189       3,398 (losses) gains (E) FDIC true-up liability release   ---       1,321     ---       ---       --- (F) Noninterest expense 34,086    35,120    35,357    33,029    39,250 (G) FHLB prepayment termination charge  ---         ---       ---       ---       8,525 (H) Efficiency Ratio: (G-H)/(A+B+C-D-E-F) 72.45%      73.04%      67.69%      69.19%      66.05% (non-GAAP)                                                                 Tangible Assets and Tangible Common                                                  Equity Total assets        $          $          $          $          $                     3,170,290  3,216,647  3,215,558  3,245,487  3,304,174 Other intangible    (7,165)    (7,573)    (8,025)    (8,478)    (8,931) assets Tangible assets     $          $          $          $          $ (non-GAAP)          3,163,125  3,209,074  3,207,533  3,237,009  3,295,243                                                                 Total shareholders' $308,034 $304,689 $299,641 $292,500 $287,264 equity Preferred stock     (65,000)   (65,000)   (65,000)   (65,000)   (65,000) Other intangible    (7,165)    (7,573)    (8,025)    (8,478)    (8,931) assets Tangible common     $235,869 $232,116 $226,616 $219,022 $213,333 equity (non-GAAP)                                                                 Shares outstanding, end of period       16,558    16,533    16,527    16,527    16,527 (000s)                                                                 Tangible common equity to tangible  7.46%       7.23%       7.07%       6.77%       6.47% assets (non-GAAP) Book value per      $14.68   $14.50   $14.20   $13.77   $13.45 common share Tangible book value per common share    14.25     14.04     13.71     13.25     12.91 (non-GAAP)                                                                 Pre-tax Pre-provision                                                    Earnings Income before       $11,943  $7,883   $11,744  $10,183  $20,296 income taxes Provision for loan  822       5,972     4,161     4,533     4,697 losses Pre-tax pre-provision       $12,765  $13,855  $15,905  $14,716  $24,993 earnings (non-GAAP)                                                                 Impact of Improved Performance of Cape                                              Fear Loan Pool Net interest income $32,148  $33,138  $35,089  $33,197  $31,713 Tax equivalent      127       158       168       184       226 adjustment Net interest income on taxable          32,275    33,296    35,257    33,381    31,939 equivalent basis (A) Effect of Cape Fear incremental         (3,574)    (3,849)    (4,048)    (472)      --- accretion Net interest income, adjusted    $28,701  $29,447  $31,209  $32,909  $31,939 (B) (non-GAAP)                                                                 Average earning     $          $          $          $          $ assets (C)          2,957,052  2,976,617  2,994,982  3,061,432  3,142,597 Net interest margin 4.37%       4.51%       4.69%       4.35%       4.08% (A)/(C)^1 Net interest margin, adjusted    3.89%       3.99%       4.15%       4.29%       4.08% (B)/(C) (non-GAAP)^1  ^1 Represents an annualized rate; calculation is approximate due to differences in industry standards for annualizing underlying average earning assets.  CONTACT: First Financial Holdings, Inc.          Investor Relations          (843) 529-5931          investorrelations@firstfinancialholdings.com