First Financial earnings dip, but not a lot

2nd-quarter profit down by 9.2% from last year

The largest banking company based in the Charleston area said Thursday its earnings fell during the latest quarter, but at a slower rate than many of its peers.

First Financial Holdings Inc., the parent company of First Federal Savings and Loan Association of Charleston, said its earnings totaled $5.9 million, or 51 cents per share, in the three months ended June 30, down 9.2 percent from a profit of $6.5 million, or 55 cents a share, in the same period last year.

The company was not untouched by the problems that have hit the banking industry nationwide. It increased its provision for loan losses to $4.9 million

from $3.6 million in the first three months of this year and from $1.4 million in the June quarter last year.

Construction and single-family home loans were the main reasons for a rise in problem assets, which include overdue loans and real estate the company has taken possession of.

"In the current economic environment, we are very pleased with our results this quarter," said A. Thomas Hood, First Financial's president and chief executive officer.

Hood noted that while the company's overdue loans and loan charge-offs have increased, the levels they rose from were exceptionally low. And while the company has seen a rise in writedowns of credit card debt and loans for manufactured homes, its charge-offs on commercial and real estate loans declined.

Also on an upbeat note, First Financial said its net interest margin — the difference between the interest a bank pays out on deposits and the rate it receives on loans — rose to 3.56 percent from 3.4 percent in the same quarter in 2007.

And noninterest income climbed to $16.4 million from $13.5 million a year before on increases in insurance commissions, mortgage banking, and service charges and fees on deposit accounts.

Reach Michael Buettner at 937-5553 or mbuettner@postandcourier.com.