First Financial Holdings, Inc. Reports Record Third Quarter 2013 Operating Income of $18.8 Million

Declares Quarterly Cash Dividend

Business Wire

COLUMBIA, S.C.--(BUSINESS WIRE)--

First Financial Holdings, Inc. (SCBT) today released its unaudited results of operations and other financial information for the three-month and nine-month periods ended September 30, 2013. Highlights of the third quarter 2013 include the following:

  • Net income of $11.5 million, or $0.52 diluted EPS in 3Q 2013 compared to $12.5 million, or $0.74 diluted EPS in 2Q 2013 and $9.1 million, or $0.60 diluted EPS in 3Q 2012;
  • Operating earnings of $18.8 million, which exclude merger expense and include preferred stock dividends, or $0.85 diluted EPS in 3Q 2013 compared to $13.1 million, or $0.77 diluted EPS in 2Q 2013 and $9.4 million, or $0.63 diluted EPS in 3Q 2012;
  • On July 26, 2013, closed the merger transaction between SCBT Financial Corporation and the former First Financial Holding, Inc. (FFCH);
  • Return on average assets was 0.66% annualized in 3Q 2013 compared to 0.99% in 2Q 2013 and 0.83% in 3Q 2012; Operating return on average assets was 1.07% annualized in 3Q 2013 compared to 1.04% in 2Q 2013 and 0.87% in 3Q 2012;
  • Net charge-offs of non-acquired loans increased to 0.45% annualized in 3Q 2013, compared to 0.40% annualized in 2Q 2013 and decreased from 0.85% annualized in 3Q 2012;
  • Non-acquired non-performing assets (NPAs): 2.40% of total non-acquired loans and repossessed assets for 3Q 2013 compared to 2.56% for 2Q 2013 and 3.22% for 3Q 2012; and
  • Legacy loan growth was $75.6 million or 11.3% annualized during 3Q 2013.

Quarterly Cash Dividend

The Board of Directors of First Financial Holdings, Inc. has declared a quarterly cash dividend of $0.19 per share payable on its common stock, and is 11.8% higher than the dividend paid in the third quarter of 2012. This per share amount is the same as the dividend paid in the immediately preceding quarter and will be payable on November 22, 2013 to shareholders of record as of November 15, 2013.

Third Quarter 2013 Financial Performance

Please refer to the accompanying tables for detailed comparative data on results of operations and financial results.

The Company reported consolidated net income of $11.5 million, or $0.52 per diluted share for the three months ended September 30, 2013 down from $12.5 million, or $0.74 per diluted share for the three months ended June 30, 2013. Driving this decrease from the second quarter was the following:

  • a significant increase in noninterest expense (due to merger cost and FFCH operating cost for 66 days of the quarter);
  • an increase in our effective tax rate from 33.0% to 36.1% driven by certain nondeductible merger related expenses; partially offset by
  • an increase in noninterest income (FFCH since closing); and
  • an increase in net interest income (FFCH since closing).

“We are pleased to report record operating earnings in the first quarter of combined operations following a major acquisition,” said Robert R Hill, Jr, CEO of First Financial Holdings, Inc. “Our company experienced solid organic growth and continued to add talented bankers to our team. We are also pleased with the strength of our capital position, the pace of integration, and the opportunities to further improve EPS in the coming quarters. This quarter demonstrates the strength of our recent merger both financially and strategically.”

Asset Quality

During the third quarter of 2013, SCBT continued to see improvement in asset quality with non-acquired nonperforming assets (NPAs) falling to 2.40% of total non-acquired loans and repossessed assets, as non-acquired NPAs declined by $2.5 million, compared to the second quarter of 2013 when the ratio was 2.56%. In addition, classified assets declined by $12.2 million to $111.4 million and 30-89 day past due loans declined by $2.4 million during the third quarter of 2013 as compared to the second quarter of 2013, which excludes any of the acquisitions.

At September 30, 2013, the allowance for non-acquired loan losses was $36.1 million or 1.32% of non-acquired period-end loans. The current allowance for loan losses provides 0.73 times coverage of period-end non-acquired nonperforming loans, which was equal to the same result at the end of the second quarter of 2013. Net charge-offs within the non-acquired portfolio were $3.0 million for the quarter or 0.45% annualized, up slightly from the second quarter of 2013 of $2.6 million or 0.40% annualized and down from the third quarter of 2012 of $5.3 million or 0.85% annualized. OREO costs increased to $3.5 million during the quarter, up from the second quarter amount of $2.8 million. This increase was the result of additional cost related to the 90 properties of OREO added from the FFCH merger. During the quarter, there were two properties with write-downs totaling $738,000 of the total write downs of $1.2 million. An additional 20 properties had write downs totaling $443,000.

Net Interest Income and Margin

Non-taxable equivalent net interest income was $79.7 million for the third quarter of 2013, a $24.4 million increase from the second quarter, resulting from the following:

  1. Interest income increased by approximately $26.2 million primarily from the addition of FFCH’s average interest-earning assets of approximately $1.7 billion;
  2. Offset by additional funding cost of $1.8 million, for deposits and other borrowings acquired in the FFCH merger. Interest-bearing liabilities increased by approximately $1.5 billion;

Tax-equivalent net interest margin increased 8 basis points from the third quarter of 2012 and 10 basis point from the second quarter of 2013 to 5.11%. The Company’s average yield on interest-earning assets increased 18 basis points while the average rate on interest-bearing liabilities increased 6 basis points from the second quarter of 2013. During the third quarter of 2013, the Company’s average total assets increased to approximately $7.2 billion and average earning assets increased to $6.3 billion. The growth in average earning assets was supported by growth in average interest-bearing liabilities of more than $1.5 billion.

Noninterest Income and Expense

Noninterest income was $15.3 million in the third quarter of 2013, up $6.8 million from the second quarter of 2013 and up $6.1 million from third quarter of 2012. Customer-oriented noninterest income (includes service charges, bankcard services, and trust and investment services) saw a significant $6.5 million increase due to the merger with FFCH during the quarter. The increases were partially offset by lower mortgage banking income due to the decline in the mortgage pipeline and reduced gains from loans sold in the secondary market, and a decline in the fair value of the hedges related to mortgage banking activity. In addition the negative accretion on the FDIC indemnification asset in the third quarter was $7.6 million, $315,000 more than the second quarter of 2013 and $1.0 million more than the third quarter of 2012. The increases in negative accretion were the result of the reduction of expected cash flows from the indemnification asset related to certain pools of acquired loans which had improved estimated cash flows. Other noninterest income increased from the second quarter of 2013 by $1.1 million, due primarily to an increase in recoveries from acquired assets and from the contribution related to the FFCH merger (including increases in cash surrender value of bank owned life insurance, rental income, and credit card fees).

Noninterest expense was $75.4 million in the third quarter of 2013, up from $30.5 million from the second quarter. This increase from the second quarter of 2013 was primarily due to $18.7 million of operational cost from the FFCH merger, $9.5 million in merger-related expense, and $2.4 million increase in salaries and employee benefits. The efficiency ratio for the quarter was 78.7%, up from 69.5% in the second quarter. Our operational efficiency ratio, which excludes merger expenses and OREO related expenses, was 64.3% compared to 63.8% in the second quarter.

FFCH Merger

On July 26, 2013, SCBT Financial Corporation acquired First Financial Holdings, Inc. and changed its name to First Financial Holdings, Inc. Below is a summary:

  • The total purchase price paid was $447.0 million. 7,018,274 common shares of SCBT were issued at a price of $54.34 per share and SCBT assumed the preferred stock outstanding of $65.0 million.
  • These shares were outstanding approximately 71.7% of the days in the quarter and increased the weighted average shares outstanding by approximately 5.1 million shares.
  • Total goodwill has been preliminarily determined to be $217.9 million, and other amortizing intangibles totaled $40.8 million.
  • Total fair value of assets acquired equaled $3.086 billion and total fair value of liabilities assumed equaled $2.857 billion.
  • At closing, all Federal Home Loan Bank (FHLB) advances assumed and totaling $255.9 million, which included a $21.8 million prepayment fee and unpaid interest of $1.1 million, were repaid to the FHLB. The prepayment fee was treated as a fair value adjustment in the acquisition of FFCH.
  • During the quarter, more than $175.3 million in securities were sold that were acquired from FFCH. These included Private Label CMOs, Agency MBS, Municipal Bonds, and Trust Preferred CDOs. No gain or loss was recorded on the disposition of these securities.

Balance Sheet and Capital

At the end of the third quarter of 2013, SCBT’s total assets were $8.0 billion, up from $5.0 billion at June 30, 2013, related primarily to the acquisition of FFCH. Since September 30, 2012, the company’s balance sheet has grown by more than $3.7 billion, or 85.6%, due primarily to the fourth quarter 2012 closing of the Savannah acquisition and the current quarter acquisition of FFCH. The asset growth was spread among all asset categories, except FDIC receivable from loss share agreements and loans held for sale. The asset growth was supported primarily by $1.749 billion increase in core deposit growth, $46.5 million in increased trust preferred borrowings, and $446.4 million in additional capital from the acquisition of FFCH.

Book value per share increased to $40.31 compared to $30.33 at June 30, 2013, while tangible common equity per share declined to $21.76 from $23.09 at June 30, 2013. The increase in book value was the result of the merger with FFCH and the closing price of $54.34 per share. The decline in tangible common equity per share was the result of the fair value adjustments recorded for assets and liabilities in the acquisition of FFCH. In addition, tangible common equity to tangible assets equaled 6.85% at third quarter end down from 7.99% at the end of the second quarter.

The company’s Tier 1 leverage ratio is estimated to increase from 9.2% to slightly more than 10.0% at September 30, 2013. This is the result of an increased capital base relative to the average asset base from FFCH being included for approximately 70% of the quarter. The Company’s capital position remains “well-capitalized” by all measures at September 30, 2013.

“We are very pleased with the combination of SCBT and FFCH, and the actions taken during the quarter to reposition our balance sheet. Paying off FHLB advances, rebalancing the investment securities portfolio, continuing to reduce certificate of deposit balances, and establishing a $30.0 million line of credit at the bank holding company, which closed on Monday, positions our balance sheet for the future,” said John C. Pollok, COO and CFO. “Our loan portfolio continues to improve as our exposure declines in certain risky assets, as evident by the continued decline in commercial real estate lending and in classified assets.”

SCBT Financial Corporation will hold a conference call on October 29th at 11 a.m. ET during which management will review earnings and performance trends. Callers wishing to participate may call toll-free by dialing 877-317-6016. The number for international participants is 412-317-6016. The conference ID number is 10034564. Participants can also listen to the live audio webcast through the Investor Relations section of www.SCBTonline.com. A replay will be available beginning October 29th by 2:00 p.m. ET until 9:00 a.m. on November 15th. To listen to the replay, dial 877-344-7529 or 412-317-0088. The pass code is 10034564.

First Financial Holdings, Inc., (SCBT) Columbia, South Carolina is a registered bank holding company incorporated under the laws of South Carolina. The Company consists of SCBT, the Bank and the following divisions: NCBT, Community Bank & Trust, The Savannah Bank, and First Federal. The Bank also operates Minis & Co., Inc. and First Southeast 401k Fiduciaries, both wholly owned registered investment advisors; and First Southeast Investor Services, a wholly owned broker dealer. Providing financial services for over 79 years, First Financial Holdings, Inc. operates 146 locations in 19 South Carolina counties, 12 Georgia counties, and 4 North Carolina counties. First Financial Holdings, Inc. has assets of approximately $8.0 billion and its stock is traded under the symbol SCBT in the NASDAQ Global Select Market. More information can be found at www.SCBTonline.com.

Non-GAAP Measures

Statements included in this press release include non-GAAP measures and should be read along with the accompanying tables which provide a reconciliation of non-GAAP measures to GAAP measures. Management believes that these non-GAAP measures provide additional useful information. Non-GAAP measures should not be considered as an alternative to any measure of performance or financial condition as promulgated under GAAP, and investors should consider the company’s performance and financial condition as reported under GAAP and all other relevant information when assessing the performance or financial condition of the company. Non-GAAP measures have limitations as analytical tools, and investors should not consider them in isolation or as a substitute for analysis of the company’s results or financial condition as reported under GAAP.

Cautionary Statement Regarding Forward Looking Statements

Statements included in this report which are not historical in nature are intended to be, and are hereby identified as, forward looking statements for purposes of the safe harbor provided by Section 21E of the Securities Exchange Act of 1934. Forward looking statements generally include words such as “expects,” “projects,” “anticipates,” “believes,” “intends,” “estimates,” “strategy,” “plan,” “potential,” “possible” and other similar expressions. The Company cautions readers that forward looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from anticipated results. Such risks and uncertainties, include, among others, the following possibilities: (1) the outcome of any legal proceedings instituted against the Company; (2) credit risks associated with an obligor’s failure to meet the terms of any contract with the bank or otherwise fail to perform as agreed under the terms of any loan-related document; (3) interest risk involving the effect of a change in interest rates on the bank’s earnings, the market value of the bank’s loan and securities portfolios, and the market value of the Company’s equity; (4) liquidity risk affecting the bank’s ability to meet its obligations when they come due; (5) risks associated with an anticipated increase in the Company’s investment securities portfolio, including risks associated with acquiring and holding investment securities or potentially determining that the amount of investment securities the Company desires to acquire are not available on terms acceptable to the Company; (6) price risk focusing on changes in market factors that may affect the value of traded instruments in “mark-to-market” portfolios; (7) transaction risk arising from problems with service or product delivery; (8) compliance risk involving risk to earnings or capital resulting from violations of or nonconformance with laws, rules, regulations, prescribed practices, or ethical standards; (9) regulatory change risk resulting from new laws, rules, regulations, accounting principles, proscribed practices or ethical standards, including, without limitation, increased capital requirements (including, without limitation, the impact of the capital rules adopted to implement Basel III), Consumer Financial Protection Bureau rules and regulations, and potential changes in accounting principles relating to loan loss recognition; (10) strategic risk resulting from adverse business decisions or improper implementation of business decisions; (11) reputation risk that adversely affects earnings or capital arising from negative public opinion; (12) terrorist activities risk that results in loss of consumer confidence and economic disruptions; (13) cybersecurity risk related to our dependence on internal computer systems and the technology of outside service providers, as well as the potential impacts of third-party security breaches, subjects the company to potential business disruptions or financial losses resulting from deliberate attacks or unintentional events; (14) economic downturn risk potentially resulting in deterioration in the credit markets, greater than expected non-interest expenses, excessive loan losses and other negative consequences, which risks could be exacerbated by potential negative economic developments resulting from federal spending cuts and/or one or more federal budget-related impasses or actions; (15) greater than expected noninterest expenses; (16) excessive loan losses; (17) failure to realize synergies and other financial benefits from, and to limit liabilities associates with, mergers and acquisitions, including, without limitation, mergers with The Savannah Bancorp, Inc. (“Savannah”) and First Financial Holdings, Inc. (“FFCH”), within the expected time frame; (18) potential deposit attrition, higher than expected costs, customer loss and business disruption associated with merger and acquisition integration, including, without limitation, with respect to Savannah and FFCH, and including, without limitation, potential difficulties in maintaining relationships with key personnel and other integration related-matters; (19) the risks of fluctuations in market prices for Company common stock that may or may not reflect economic condition or performance of the Company; (20) the payment of dividends on Company common stock is subject to regulatory supervision as well as the discretion of the board of directors of the Company, the Company’s performance and other factors; and (21) other risks and uncertainties disclosed in the Company’s most recent Annual Report on Form 10-K filed with the SEC or disclosed in documents filed or furnished by the Company with or to the SEC after the filing of such Annual report on Form 10-K, any of which could cause actual results to differ materially from future results expressed, implied or otherwise anticipated by such forward looking statements. The Company undertakes no obligation to update or otherwise revise any forward-looking statements, whether as a result of new information, future events, or otherwise.

 
 
 
 
 
SCBT Financial Corporation
(Unaudited)
(Dollars in thousands, except per share data)
                 
Third
Three Months Ended Quarter Nine Months Ended YTD
September 30, June 30, March 31, December 31, September 30, 2013 - 2012 September 30, 2013 - 2012
EARNINGS SUMMARY (non tax equivalent) 2013 2013 2013 2012 2012 % Change 2013 2012 % Change
Interest income $ 83,700 $ 57,530 $ 56,169 $ 50,263 $ 49,535 69.0 % $ 197,399 $ 137,225 43.9 %
Interest expense   4,029     2,246     2,368     2,351     2,625   53.5 %   8,643       8,743   -1.1 %
Net interest income 79,671 55,284 53,801 47,912 46,910 69.8 % 188,756 128,482 46.9 %
Provision for loan losses (1) 659 179 1,060 2,211 4,044 -83.7 % 1,898 11,408 -83.4 %
Noninterest income 15,265 8,485 9,523 10,900 9,166 66.5 % 33,273 30,383 9.5 %
Noninterest expense   75,419     44,885     46,441     48,139     38,031   98.3 %   166,745       110,760   50.5 %
Income before provision for income taxes 18,858 18,705 15,823 8,462 14,001 34.7 % 53,386 36,697 45.5 %
Provision for income taxes   6,804     6,173     5,174     2,552     4,938   37.8 %   18,151       12,576   44.3 %
Net income 12,054 12,532 10,649 5,910 9,063 33.0 % 35,235 24,121 46.1 %
Preferred stock dividends   542     --     --     --     --     542     --  
Net income available to common shareholders (GAAP) $ 11,512   $ 12,532   $ 10,649   $ 5,910   $ 9,063   27.0 % $ 34,693   $ 24,121   43.8 %
 
Effective tax rate 36.08 % 33.00 % 32.70 % 30.16 % 35.27 % 34.00 % 34.27 %
 
Basic weighted-average common shares 21,893,528 16,790,167 16,787,487 15,320,472 14,920,423 46.7 % 18,517,610 14,484,214 27.8 %
Diluted weighted-average common shares 22,127,979 16,989,818 16,954,039 15,446,778 15,043,067 47.1 % 18,717,181 14,573,097 28.4 %
 
Earnings per common share - Basic $ 0.53 $ 0.75 $ 0.63 $ 0.39 $ 0.61 -13.1 % $ 1.87 $ 1.67 12.0 %
Earnings per common share - Diluted 0.52 0.74 0.63 0.38 0.60 -13.3 % 1.85 1.66 11.4 %
 
Cash dividends declared per common share $ 0.19 $ 0.18 $ 0.18 $ 0.18 $ 0.17 11.8 % $ 0.55 $ 0.51 7.8 %
Dividend payout ratio (2) 39.71 % 24.46 % 28.75 % 46.06 % 28.33 % 40.2 % 30.84 % 31.18 % -1.1 %
 
Operating Earnings (non-GAAP) (3)
Net income (GAAP) $ 12,054 $ 12,532 $ 10,649 $ 5,910 $ 9,063 33.0 % $ 35,235 $ 24,121 46.1 %
Securities (gains) losses, net of tax -- -- -- (89 ) -- -- --
Merger and conversion related expense, net of tax   7,326     576     1,321     5,274     357   1954.1 %   9,224     1,744  
Net operating earnings (loss) (non-GAAP) 19,380 13,108 11,970 11,095 9,420 105.7 % 44,459 25,865 71.9 %
Preferred stock dividends   542     --     --     --     --     542     --  
Net operating earnings (loss) available to common shareholders (non-GAAP) $ 18,838   $ 13,108   $ 11,970   $ 11,095   $ 9,420   100.0 % $ 43,917   $ 25,865   69.8 %
 
Operating earnings (loss) per common share - Basic $ 0.86 $ 0.78 $ 0.71 $ 0.72 $ 0.63 36.5 % $ 2.37 $ 1.79 32.4 %
Operating earnings (loss) per common share - Diluted 0.85 0.77 0.71 0.72 0.63 34.9 % 2.35 1.77 32.8 %
 
 
 
Third
AVERAGE for Quarter Ended Quarter AVERAGE for Nine Months YTD
September 30, June 30, March 31, December 31, September 30, 2013 - 2012 September 30, September 30, 2013 - 2012
BALANCE SHEET HIGHLIGHTS 2013 2013 2013 2012 2012 % Change 2013 2012 % Change
Loans held for sale $ 53,204 $ 40,040 $ 51,216 $ 60,183 $ 56,300 -5.5 % $ 48,161 $ 40,052 20.2 %
Acquired loans, net of allowance for acquired loan losses 2,427,583 927,520 997,010 582,726 501,214 384.3 % 1,457,036 447,851 225.3 %
Non-acquired loans 2,698,580 2,629,897 2,576,545 2,528,753 2,497,478 8.1 % 2,634,362 2,469,977 6.7 %
Total loans (1) 5,126,163 3,557,417 3,573,555 3,111,479 2,998,692 70.9 % 4,091,398 2,917,828 40.2 %
FDIC receivable for loss share agreements 116,849 114,724 139,172 162,580 194,116 -39.8 % 123,500 219,858 -43.8 %
Total investment securities 656,658 527,926 553,214 510,434 501,817 30.9 % 579,646 431,799 34.2 %
Intangible assets 308,730 123,881 125,257 87,372 79,708 287.3 % 186,628 77,621 140.4 %
Earning assets 6,254,128 4,496,341 4,489,187 3,972,280 3,766,889 66.0 % 5,086,351 3,614,606 40.7 %
Total assets 7,214,418 5,069,993 5,117,003 4,517,076 4,331,436 66.6 % 5,808,156 4,195,406 38.4 %
Noninterest-bearing deposits 1,359,137 1,023,668 969,400 886,240 813,394 67.1 % 1,115,407 770,059 44.8 %
Interest-bearing deposits 4,626,023 3,150,909 3,236,610 2,853,253 2,800,446 65.2 % 3,679,676 2,726,912 34.9 %
Total deposits 5,985,160 4,174,577 4,206,010 3,739,493 3,613,840 65.6 % 4,795,083 3,496,971 37.1 %
Federal funds purchased and repurchase agreements 251,551 297,025 319,602 247,970 223,844 12.4 % 289,143 222,877 29.7 %
Other borrowings 93,849 54,461 54,713 47,555 45,908 104.4 % 67,818 46,196 46.8 %
Shareholders' common equity (excludes preferred stock) 790,554 517,141 511,392 450,446 429,183 84.2 % 607,385 409,576 48.3 %
Shareholders' equity 837,185 517,141 511,392 450,446 429,183 95.1 % 623,099 409,576 52.1 %
 
 
 
 
 
 
SCBT Financial Corporation
(Unaudited)
(Dollars in thousands)
 
            Third
ENDING Balance Quarter
September 30, June 30, March 31, December 31, September 30, 2013 - 2012
BALANCE SHEET HIGHLIGHTS 2013 2013 2013 2012 2012 % Change
Loans held for sale $ 52,467 $ 47,980 $ 50,449 $ 65,279 $ 71,585 -26.7 %
Acquired loans 3,013,103 921,840 995,255 1,074,742 520,991 478.3 %
Non-acquired loans 2,741,242 2,665,595 2,604,298 2,571,003 2,517,352 8.9 %
Total loans (1) 5,754,345 3,587,435 3,599,553 3,645,745 3,038,343 89.4 %
FDIC receivable for loss share agreements 115,773 104,048 124,340 146,171 174,321 -33.6 %
Total investment securities 652,610 531,579 533,255 560,091 500,587 30.4 %
Intangible assets 381,375 123,352 124,668 125,801 79,391 380.4 %
Allowance for acquired loan losses (31,141 ) (31,597 ) (31,277 ) (32,132 ) (31,138 ) 0.0 %
Allowance for non-acquired loan losses (1) (36,145 ) (38,625 ) (41,669 ) (44,378 ) (46,439 ) -22.2 %
Premises and equipment 184,959 109,794 110,792 115,583 105,579 75.2 %
Total assets 8,028,441 5,043,078 5,141,929 5,136,446 4,325,232 85.6 %
Noninterest-bearing deposits 1,481,791 1,046,537 1,002,662 981,963 818,633 81.0 %
Interest-bearing deposits 5,181,315 3,136,432 3,216,694 3,316,397 2,770,665 87.0 %
Total deposits 6,663,106 4,182,969 4,219,356 4,298,360 3,589,298 85.6 %
Federal funds purchased and repurchase agreements 233,792 262,447 328,701 238,621 226,330 3.3 %
Other borrowings 101,347 54,372 54,638 54,897 45,807 121.2 %
Total liabilities 7,058,415 4,526,486 4,627,718 4,628,897 3,891,308 81.4 %
Shareholders' common equity (excludes preferred stock) 905,026 516,592 514,211 507,549 433,924 108.6 %
Shareholders' equity 970,026 516,592 514,211 507,549 433,924 123.5 %
 
Common shares issued and outstanding 24,066,545 17,032,061 17,017,904 16,937,464 15,114,185 59.2 %
 
 
 
Third
ENDING Balance Quarter
September 30, June 30, March 31, December 31, September 30, 2013 - 2012
NONPERFORMING ASSETS (ENDING BALANCE) (7) 2013 2013 2013 2012 2012 % Change
Non-acquired
Non-acquired nonaccrual loans $ 38,631 $ 40,854 $ 42,945 $ 48,387 $ 46,295 -16.6 %
Restructured loans 10,837 11,689 13,636 13,151 12,882 -15.9 %
Non-acquired other real estate owned ("OREO") 16,555 15,950 19,680 19,069 22,424 -26.2 %
Accruing loans past due 90 days or more 122 198 121 500 156 -21.8 %
Other nonperforming assets   --     --     --     --     --  
Total non-acquired nonperforming assets   66,145     68,691     76,382     81,107     81,757   -19.1 %
ASC Topic 310-20 Acquired Loans
Acquired nonaccrual loans -- -- -- -- --
Acquired accruing loans past due 90 days or more   --     --     --     --     --  
Total ASC Topic 310-20 acquired loans   --     --     --     --     --  
Acquired OREO and other nonperforming assets
OREO covered under FDIC loss share agreements 40,543 35,142 34,244 34,257 47,063 -13.9 %
OREO not covered under FDIC loss share agreements 18,775 17,536 16,766 13,179 5,059 271.1 %
Other nonperforming assets   718     -     26     44     57  
Total acquired Acquired OREO and other nonperforming assets   60,036     52,678     51,036     47,480     52,179   15.1 %
Total acquired nonperforming assets   60,036     52,678     51,036     47,480     52,179   15.1 %
Total nonperforming assets $ 126,181   $ 121,369   $ 127,418   $ 128,587   $ 133,936   -5.8 %
 
Excluding Acquired Assets
NPLs as a percentage of period end non-acquired loans   1.81 %   1.98 %   2.18 %   2.41 %   2.36 %

Total nonperforming assets as a percentage of total non-acquired loans and repossessed assets (1)(4)

  2.40 %   2.56 %   2.91 %   3.13 %   3.22 %

Total nonperforming assets as a percentage of total assets (5)

  0.82 %   1.36 %   1.49 %   1.58 %   1.89 %
Including ASC Topic 310-20 Acquired Loans and Acquired OREO
NPLs as a percentage of period end loans   1.81 %   1.98 %   2.18 %   2.41 %   2.36 %

Total nonperforming assets as a percentage of total loans and repossessed assets (1)(4)

  3.08 %   3.19 %   3.53 %   3.62 %   3.41 %

Total nonperforming assets as a percentage of total assets

  1.07 %   1.71 %   1.81 %   1.84 %   2.01 %
Including All Acquired Assets
NPLs as a percentage of period end loans   0.86 %   1.47 %   1.58 %   1.70 %   1.95 %

Total nonperforming assets as a percentage of total loans and repossessed assets (1)(4)

  2.16 %   3.32 %   3.47 %   3.46 %   4.31 %

Total nonperforming assets as a percentage of total assets

  1.57 %   2.41 %   2.48 %   2.50 %   3.10 %
 
 
 
 
 
 
SCBT Financial Corporation
(Unaudited)
(Dollars in thousands)
 
            Third      
ENDING Balance Quarter
September 30, June 30, March 31, December 31, September 30, 2013 - 2012
OTHER ASSET QUALITY INFORMATION 2013 2013 2013 2012 2012 % Change
Classified Assets (Ending Balance) (11)
Classified loans $ 94,820 $ 107,671 $ 121,222 $ 124,133 $ 135,095 -29.8 %
OREO and other nonperforming assets   16,555     15,950     19,680     19,069     22,424   -26.2 %
Total classified assets $ 111,375   $ 123,621   $ 140,902   $ 143,202   $ 157,519   -29.3 %
 
Tier 1 capital and non-acquired allowance for loan losses $ 725,471   $ 494,562   $ 484,744   $ 477,686   $ 444,200   63.3 %

Classified assets as a percentage of Tier 1 capital and non-acquired allowance for loan losses

  15.35 %   25.00 %   29.07 %   29.98 %   35.46 %
 
Non-acquired Loans 30-89 Day Past Due $ 8,543   $ 10,957   $ 7,199   $ 7,189   $ 9,270   -7.8 %
 
 
Third
Quarter Ended Quarter Nine Months Ended YTD
September 30, June 30, March 31, December 31, September 30, 2013 - 2012 September 30, September 30, 2013 - 2012
ALLOWANCE FOR LOAN LOSSES (1) 2013 2013 2013 2012 2012 % Change 2013 2012 % Change
Non-acquired Loans:
Balance at beginning of period $ 38,625 $ 41,669 $ 44,378 $ 46,439 $ 47,269 -18.3 % $ 44,378 $ 49,367 -10.1 %
Loans charged off (3,815 ) (2,827 ) (4,148 ) (4,291 ) (5,506 ) -30.7 % (10,790 ) (15,965 ) -32.4 %
Overdrafts charged off (479 ) (393 ) (459 ) (446 ) (434 ) 10.4 % (1,331 ) (1,228 ) 8.4 %
Loan recoveries 1,095 436 826 550 481 127.7 % 2,357 2,605 -9.5 %
Overdraft recoveries   154     140     219     131     129   19.4 %   513     470   9.1 %
Net charge-offs (3,045 ) (2,644 ) (3,562 ) (4,056 ) (5,330 ) -42.9 % (9,251 ) (14,118 ) -34.5 %
Provision for loan losses on non-acquired loans   565     (400 )   853     1,995     4,500   -87.4 %   1,018     11,190   -90.9 %
Balance at end of period, non-acquired loans   36,145     38,625     41,669     44,378     46,439   -22.2 %   36,145     46,439   -22.2 %
ASC Topic 310-30 acquired Loans:
Balance at beginning of period 31,597 31,277 32,132 31,138 35,812 32,132 31,620
Loans charged off -- -- -- -- -- -- --
Loan recoveries   --     --     --     --     --     --     --  
Net charge-offs -- -- -- -- -- -- --
Provision for loan losses on acquired loans:

Provision for loan losses before benefit attributable to FDIC loss share agreements

(456 ) 320 (855 ) 994 (4,674 ) (991 ) (482 )
Benefit attributable to FDIC loss share agreements   550     259     1,062     (778 )   4,218     1,871     700  
Net provision for loan losses on acquired loans   94     579     207     216     (456 )   880     218  

Provision for loan losses recorded through the FDIC loss share receivable

  (550 )   (259 )   (1,062 )   778     (4,218 )   (1,871 )   (700 )
Balance at end of period, ASC Topic 310-30 acquired loans   31,141     31,597     31,277     32,132     31,138     31,141     31,138  
Balance at end of period, total allowance for loan losses $ 67,286   $ 70,222   $ 72,946   $ 76,510   $ 77,577   -13.3 % $ 67,286   $ 77,577   -13.3 %
 
Total provision for loan losses charged to operations $ 659   $ 179   $ 1,060   $ 2,211   $ 4,044   $ 1,898   $ 11,408  

Allowance for non-acquired loan losses as a percentage of non-acquired loans (1)

  1.32 %   1.45 %   1.60 %   1.73 %   1.84 %   1.32 %   1.84 %

Allowance for loan losses as a percentage of total loans (1)

  1.17 %   1.96 %   2.03 %   2.10 %   2.55 %   1.17 %   2.55 %

Allowance for non-acquired loan losses as a percentage of non-acquired nonperforming loans

  72.89 %   73.23 %   73.49 %   71.53 %   78.27 %   72.89 %   78.27 %

Net charge-offs on non-acquired loans as a percentage of average non-acquired loans (annualized) (1)

  0.45 %   0.40 %   0.56 %   0.64 %   0.85 %   0.47 %   0.76 %
 
 
 
 
 
 
SCBT Financial Corporation
(Unaudited)
(Dollars in thousands, except per share data)
            Third    
ENDING Balance Quarter
September 30, June 30, March 31, December 31, September 30, 2013 - 2012
LOAN PORTFOLIO (ENDING balance) (1) 2013 2013 2013 2012 2012 % Change
Acquired loans 3,013,103 921,840 995,255 1,074,742 520,991 478.3 %
Non-acquired loans:
Commercial non-owner occupied real estate:
Construction and land development 288,199 285,370 273,488 273,420 273,606 5.3 %
Commercial non-owner occupied   282,678     298,769     298,707     290,071     278,935   1.3 %
Total commercial non-owner occupied real estate 570,877 584,139 572,195 563,491 552,541 3.3 %
Consumer real estate:
Consumer owner occupied 498,734 460,434 443,134 434,503 430,825 15.8 %
Home equity loans   255,291     250,988     249,356     255,284     255,677   -0.2 %
Total consumer real estate 754,025 711,422 692,490 689,787 686,502 9.8 %
Commercial owner occupied real estate 814,259 802,125 796,139 784,152 787,623 3.4 %
Commercial and industrial 301,845 294,580 291,308 279,763 245,285 23.1 %
Other income producing property 140,024 136,957 131,776 133,713 131,832 6.2 %
Consumer non real estate 116,312 104,239 93,997 86,934 86,729 34.1 %
Other   43,900     32,133     26,393     33,163     26,840   63.6 %
Total non-acquired loans   2,741,242     2,665,595     2,604,298     2,571,003     2,517,352   8.9 %
Total loans (net of unearned income) (1) $ 5,754,345   $ 3,587,435   $ 3,599,553   $ 3,645,745   $ 3,038,343   89.4 %
 
Loans held for sale $ 52,467   $ 47,980   $ 50,449   $ 65,279   $ ... 71,585   -26.7 %
 
 
Quarter Ended Nine Months Ended
September 30, June 30, March 31, December 31, September 30, September 30, September 30,
SELECTED RATIOS 2013 2013 2013 2012 2012 2013 2012
 
Return on average assets (annualized)   0.66 %   0.99 %   0.84 %   0.52 %   0.83 % 0.81 % 0.77 %
 
Operating return on average assets (annualized) (non-GAAP) (3)   1.07 %   1.04 %   0.95 %   0.98 %   0.87 % 1.02 % 0.82 %
 
Return on average common equity (annualized)   5.78 %   9.72 %   8.45 %   5.22 %   8.40 % 7.64 % 7.87 %
 
Return on average equity (annualized)   5.71 %   9.72 %   8.45 %   5.22 %   8.40 % 7.56 % 7.87 %
 
Operating return on average common equity (annualized) (non-GAAP) (3)   9.45 %   10.17 %   9.49 %   9.80 %   8.73 % 9.67 % 8.44 %
 
Operating return on average equity (annualized) (non-GAAP) (3)   9.18 %   10.17 %   9.49 %   9.80 %   8.73 % 9.54 % 8.44 %
 
Return on average common tangible equity (annualized) (non-GAAP) (10)   10.39 %   13.48 %   11.92 %   6.91 %   10.74 % 11.82 % 10.13 %
 
Operating return on average tangible common equity (annualized) (non-GAAP) (10)   16.43 %   14.07 %   13.30 %   12.59 %   11.26 % 14.75 % 10.83 %
 
Return on average tangible equity (annualized) (non-GAAP) (10)   9.88 %   13.48 %   11.92 %   6.91 %   10.74 % 11.56 % 10.13 %
 
Net interest margin (tax equivalent)   5.11 %   5.01 %   4.94 %   4.88 %   5.03 % 5.03 % 4.79 %
 
Efficiency ratio (tax equivalent)   78.74 %   69.49 %   72.37 %   80.95 %   66.91 % 74.26 % 68.95 %
 
Operating efficiency ratio excluding OREO expense   64.27 %   63.79 %   64.47 %   62.84 %   58.96 % 64.19 % 61.83 %
 
Book value per common share $ 40.31   $ 30.33   $ 30.22   $ 29.97   $ 28.71  
 
Tangible common equity per common share (non-GAAP) (10) $ 21.76   $ 23.09   $ 22.89   $ 22.54   $ 23.46  
 
Common shares issued and outstanding   24,066,545     17,032,061     17,017,904     16,937,464     15,114,185  
 
Common equity-to-assets   11.27 %   10.24 %   10.00 %   9.88 %   10.03 %
 
Equity-to-assets   12.08 %   10.24 %   10.00 %   9.88 %   10.03 %
 
Tangible common equity-to-tangible assets (non-GAAP) (10)   6.85 %   7.99 %   7.76 %   7.62 %   8.35 %
 
Tangible equity-to-tangible assets (non-GAAP) (10)   7.70 %   7.99 %   7.76 %   7.62 %   8.35 %
 
Tier 1 leverage (9)   10.0 %   9.2 %   8.8 %   9.8 %   9.3 %
 
 
 
 
 
 
SCBT Financial Corporation
(Unaudited)
(Dollars in thousands, except per share data)
                 
Quarter Ended Nine Months Ended
September 30, June 30, March 31, December 31, September 30, September 30, September 30,
RECONCILIATION OF NON-GAAP TO GAAP 2013 2013 2013 2012 2012 2013 2012
 
Pre-tax, Pre-provision Operating Earnings (6)
Net income (GAAP) $ 12,054 $ 12,532 $ 10,649 $ 5,910 $ 9,063 33.0 % $ 35,235 $ 24,121 46.1 %
Provision for loan losses (1) 659 179 1,060 2,211 4,044 -83.7 % 1,898 11,408 -83.4 %
Provision for income taxes   6,804     6,173     5,174     2,552     4,938   37.8 %   18,151       12,576   44.3 %
Pre-tax, pre-provision income 19,517 18,884 16,883 10,673 18,045 8.2 % 55,284 48,105 14.9 %
Securities gains -- -- -- (128 ) -- -- (61 )
Merger and conversion related expense   10,397     860     1,963     7,552     568     13,220     2,662  
Pre-tax, pre-provision operating earnings (non-GAAP) $ 29,914   $ 19,744   $ 18,846   $ 18,097   $ 18,613   60.7 % $ 68,504   $ 50,706   35.1 %
 
Operating Return of Average Assets (3)
Operating return on average assets (non-GAAP) 1.07 % 1.04 % 0.95 % 0.98 % 0.87 % 1.02 % 0.82 %
Effect to adjust for securities gains (losses) 0.00 % 0.00 % 0.00 % 0.01 % 0.00 % 0.00 % 0.00 %
Effect to adjust for merger and conversion related expenses   -0.41 %   -0.05 %   -0.11 %   -0.47 %   -0.04 %   -0.21 %   -0.05 %
Return on average assets (GAAP)   0.66 %   0.99 %   0.84 %   0.52 %   0.83 %   0.81 %   0.77 %
 
Operating Return of Average Common Equity (3)
Operating return on average equity (non-GAAP) 9.45 % 10.17 % 9.49 % 9.80 % 8.73 % 9.67 % 8.44 %
Effect to adjust for securities gains (losses) 0.00 % 0.00 % 0.00 % 0.08 % 0.00 % 0.00 % 0.00 %
Effect to adjust for merger and conversion related expenses   -3.67 %   -0.45 %   -1.04 %   -4.66 %   -0.33 %   -2.03 %   -0.57 %
Return on average common equity (GAAP)   5.78 %   9.72 %   8.45 %   5.22 %   8.40 %   7.64 %   7.87 %
 
Operating Return of Average Equity (3)
Operating return on average equity (non-GAAP) 9.18 % 10.17 % 9.49 % 9.80 % 8.73 % 9.54 % 8.44 %
Effect to adjust for securities gains (losses) 0.00 % 0.00 % 0.00 % 0.08 % 0.00 % 0.00 % 0.00 %
Effect to adjust for merger and conversion related expenses   -3.47 %   -0.45 %   -1.04 %   -4.66 %   -0.33 %   -1.98 %   -0.57 %
Return on average equity (GAAP)   5.71 %   9.72 %   8.45 %   5.22 %   8.40 %   7.56 %   7.87 %
 
Return on Average Common Tangible Equity
Return on average common tangible equity (non-GAAP) 10.39 % 13.48 % 11.92 % 6.91 % 10.74 % 11.82 % 10.13 %
Effect to adjust for tangible assets   -4.61 %   -3.76 %   -3.47 %   -1.69 %   -2.34 %   -4.18 %   -2.26 %
Return on average common equity (GAAP)   5.78 %   9.72 %   8.45 %   5.22 %   8.40 %   7.64 %   7.87 %
 
Operating Return on Average Common Tangible Equity
Operating return on average common tangible equity (non-GAAP) 16.43 % 14.07 % 13.30 % 12.59 % 11.26 % 14.75 % 10.83 %
Effect to adjust for securities gains (losses) 0.00 % 0.00 % 0.00 % 0.08 % 0.00 % 0.00 % 0.00 %
Effect to adjust for merger and conversion related expenses -3.68 % -0.45 % -1.05 % -4.66 % -0.33 % -2.03 % -0.57 %
Effect to adjust for tangible assets   -6.97 %   -3.90 %   -3.80 %   -2.79 %   -2.53 %   -5.08 %   -2.39 %
Return on average common equity (GAAP)   5.78 %   9.72 %   8.45 %   5.22 %   8.40 %   7.64 %   7.87 %
 
Return on Average Tangible Equity (10)
Return on average tangible equity (non-GAAP) 9.88 % 13.48 % 11.92 % 6.91 % 10.74 % 11.56 % 10.13 %
Effect to adjust for intangible assets   -4.17 %   -3.76 %   -3.47 %   -1.69 %   -2.34 %   -4.00 %   -2.26 %
Return on average equity (GAAP)   5.71 %   9.72 %   8.45 %   5.22 %   8.40 %   7.56 %   7.87 %
 
Operating efficiency ratio excluding OREO expense
Operating efficiency ratio excluding OREO expense 64.27 % 63.79 % 64.47 % 62.84 % 58.96 % 64.19 % 61.83 %
Effect to adjust for OREO and loan related expense 3.68 % 4.37 % 4.84 % 5.41 % 6.95 % 4.21 % 5.47 %
Effect to adjust for merger and conversion expenses   11.05 %   1.33 %   3.06 %   12.70 %   1.00 %   5.93 %   1.65 %
Efficiency ratio (Tax Equivalent)   78.74 %   69.49 %   72.37 %   80.95 %   66.91 %   74.26 %   68.95 %
 
Tangible Book Value Per Common Share (10)
Tangible book value per common share (non-GAAP) $ 21.76 $ 23.09 $ 22.89 $ 22.54 $ 23.46
Effect to adjust for intangible assets   18.55     7.24     7.33     7.43     5.25  
Book value per common share (GAAP) $ 40.31   $ 30.33   $ 30.22   $ 29.97   $ 28.71  
 
Tangible Common Equity-to-Tangible Assets
Tangible common equity-to-tangible assets (non-GAAP) 6.85 % 7.99 % 7.76 % 7.62 % 8.35 %
Effect to adjust for tangible assets   4.42 %   2.25 %   2.24 %   2.26 %   1.68 %
Common equity-to-assets (GAAP)   11.27 %   10.24 %   10.00 %   9.88 %   10.03 %
 
Tangible Equity-to-Tangible Assets (10)
Tangible equity-to-tangible assets (non-GAAP) 7.70 % 7.99 % 7.76 % 7.62 % 8.35 %
Effect to adjust for intangible assets   4.38 %   2.25 %   2.24 %   2.26 %   1.68 %
Equity-to-assets (GAAP)   12.08 %   10.24 %   10.00 %   9.88 %   10.03 %
 
 
 
 
 
 
SCBT Financial Corporation
(Unaudited)
(Dollars in thousands)
           
Three Months Ended
September 30, 2013 September 30, 2012
Average Interest Average Average Interest Average
YIELD ANALYSIS Balance Earned/Paid Yield/Rate Balance Earned/Paid Yield/Rate
 
Interest-Earning Assets:
Federal funds sold, reverse repo, and time deposits $ 418,104 $ 505 0.48 % 210,080 $ 282 0.53 %
Investment securities (taxable) 507,575 3,315 2.59 % 345,693 1,902 2.19 %
Investment securities (tax-exempt) 149,083 1,202 3.20 % 156,124 1,172 2.99 %
Loans held for sale 53,204 543 4.05 % 56,300 492 3.48 %
Acquired loans, net of allowance for acquired loan losses 2,427,583 48,462 7.92 % 501,214 16,004 12.70 %
Non-acquired loans (1)   2,698,580     29,673 4.36 %   2,497,478     29,683 4.73 %
Total interest-earning assets 6,254,129 83,700 5.31 % 3,766,889 49,535 5.23 %
 
Noninterest-Earning Assets:
Cash and due from banks 125,038 80,332
Other assets 873,835 531,469
Allowance for non-acquired loan losses   (38,584 )   (47,254 )
Total noninterest-earning assets   960,289     564,547  
Total Assets $ 7,214,418   $ 4,331,436  
 
Interest-Bearing Liabilities:
Transaction and money market accounts $ 2,560,685 $ 832 0.13 % $ 1,548,673 $ 712 0.18 %
Savings deposits 561,773 115 0.08 % 307,087 115 0.15 %
Certificates and other time deposits 1,503,519 1,752 0.46 % 944,709 1,143 0.48 %
Federal funds purchased and repurchase agreements 251,551 92 0.15 % 223,844 105 0.19 %
Other borrowings   93,849     1,239 5.24 %   45,908     551 4.77 %
Total interest-bearing liabilities 4,971,377 4,030 0.32 % 3,070,221 2,626 0.34 %
 
Noninterest-Bearing Liabilities:
Demand deposits 1,359,137 813,372
Other liabilities   46,719     18,660  
Total noninterest-bearing liabilities ("Non-IBL") 1,405,856 832,032
Shareholders' equity   837,185     429,183  
Total Non-IBL and shareholders' equity   2,243,041     1,261,215  
Total liabilities and shareholders' equity $ 7,214,418   $ 4,331,436  
   
Net interest income and margin (NON-TAX EQUIV.) $ 79,670 5.05 % $ 46,909 4.95 %
Net interest margin (TAX EQUIVALENT) 5.11 % 5.02 %
 
 
 
 
 
 
SCBT Financial Corporation
(Unaudited)
(Dollars in thousands)
           
Nine Months Ended
September 30, 2013 September 30, 2012
Average Interest Average Average Interest Average
YIELD ANALYSIS Balance Earned/Paid Yield/Rate Balance Earned/Paid Yield/Rate
 
Interest-Earning Assets:
Federal funds sold, reverse repo, and time deposits $ 367,146 $ 1,366 0.50 % $ 224,930 $ 773 0.46 %
Investment securities (taxable) 427,386 7,572 2.37 % 315,559 5,630 2.38 %
Investment securities (tax-exempt) 152,260 3,582 3.15 % 116,240 2,746 3.16 %
Loans held for sale 48,161 1,262 3.50 % 40,052 1,089 3.63 %
Acquired loans, net of allowance for acquired loan losses 1,457,036 96,324 8.84 % 447,851 36,983 11.03 %
Non-acquired loans (1)   2,634,362     87,293 4.43 %   2,469,977     90,004 4.87 %
Total interest-earning assets 5,086,351 197,399 5.19 % 3,614,609 137,225 5.07 %
 
Noninterest-Earning Assets:
Cash and due from banks 113,744 88,935
Other assets 649,527 539,954
Allowance for non-acquired loan losses   (41,466 )   (48,092 )
Total noninterest-earning assets   721,805     580,797  
Total Assets $ 5,808,156   $ 4,195,406  
 
Interest-Bearing Liabilities:
Transaction and money market accounts $ 2,084,504 $ 2,007 0.13 % $ 1,509,350 $ 2,559 0.23 %
Savings deposits 422,548 277 0.09 % 290,679 389 0.18 %
Certificates and other time deposits 1,172,625 3,437 0.39 % 926,908 3,786 0.55 %
Federal funds purchased and repurchase agreements 289,143 343 0.16 % 222,877 341 0.20 %
Other borrowings   67,818     2,579 5.08 %   46,196     1,666 4.82 %
Total interest-bearing liabilities 4,036,638 8,643 0.29 % 2,996,010 8,741 0.39 %
 
Noninterest-Bearing Liabilities:
Demand deposits 1,115,407 770,037
Other liabilities   33,012     19,783  
Total noninterest-bearing liabilities ("Non-IBL") 1,148,419 789,820
Shareholders' equity   623,099     409,576  
Total Non-IBL and shareholders' equity   1,771,518     1,199,396  
Total liabilities and shareholders' equity $ 5,808,156   $ 4,195,406  
   
Net interest income and margin (NON-TAX EQUIV.) $ 188,756 4.96 % $ 128,484 4.75 %
Net interest margin (TAX EQUIVALENT) 5.03 % 4.79 %
 
 
 
 
 
 
SCBT Financial Corporation
(Unaudited)
(Dollars in thousands)
 
            Third      
Three Months Ended Quarter Nine Months Ended YTD
September 30, June 30, March 31, December 31, September 30, 2013 - 2012 September 30, 2013 - 2012
NONINTEREST INCOME & EXPENSE 2013 2013 2013 2012 2012 % Change 2013 2012 % Change
Noninterest income:
Service charges on deposit accounts $ 8,966 $ 5,736 $ 5,761 $ 6,313 $ 6,169 45.3 % 20,463 17,501 16.9 %
Bankcard services income 6,493 4,245 3,893 3,665 3,570 81.9 % 14,631 10,508 39.2 %
Mortgage banking income 1,342 1,922 3,355 4,196 3,496 -61.6 % 6,619 8,365 -20.9 %
Trust and investment services income 3,593 2,438 2,314 1,744 1,577 127.8 % 8,345 4,617 80.7 %
Securities gains, net (8) -- -- -- 128 -- -- 61 -100.0 %
Amortization of FDIC indemnification asset (7,625 ) (7,310 ) (7,171 ) (6,547 ) (6,623 ) -15.1 % (22,106 ) (14,226 ) 55.4 %
Other   2,496     1,454     1,371     1,401     977   155.5 %   5,321     3,557   49.6 %
Total noninterest income $ 15,265   $ 8,485   $ 9,523   $ 10,900   $ 9,166   66.5 % $ 33,273   $ 30,383   9.5 %
 
Noninterest expense:
Salaries and employee benefits $ 34,464 $ 23,746 $ 23,252 $ 21,351 $ 18,647 84.8 % $ 81,462 $ 54,957 48.2 %
Information services expense 3,827 2,992 3,192 3,060 2,662 43.8 % 10,011 8,031 24.7 %
OREO expense and loan related 3,461 2,820 3,102 3,221 3,951 -12.4 % 9,383 8,782 6.8 %
Net occupancy expense 5,046 3,272 3,345 2,949 2,981 69.3 % 11,663 8,660 34.7 %
Furniture and equipment expense 3,523 2,266 2,517 2,340 2,165 62.7 % 8,306 6,774 22.6 %
Merger and conversion related expense 10,397 860 1,963 7,552 568 1730.5 % 13,220 2,662 396.6 %
Business development and staff related 1,186 1,276 1,228 1,017 878 35.1 % 3,690 2,319 59.1 %
FDIC assessment and other regulatory charges 1,521 1,096 1,224 887 878 73.2 % 3,841 2,988 28.5 %
Bankcard expense 1,752 1,236 1,164 985 1,057 65.8 % 4,152 3,077 34.9 %
Amortization of intangibles 1,738 1,022 1,034 566 566 207.1 % 3,794 1,606 136.2 %
Professional fees 1,377 760 691 673 643 114.2 % 2,828 2,008 40.8 %
Advertising and marketing 1,150 648 842 689 736 56.3 % 2,640 2,046 29.0 %
Other   5,977     2,891     2,887     2,849     2,299   160.0 %   11,755     6,850   71.6 %
Total noninterest expense $ 75,419   $ 44,885   $ 46,441   $ 48,139   $ 38,031   98.3 % $ 166,745   $ 110,760   50.5 %
 
 
Notes:
(1) Loan data excludes mortgage loans held for sale.
(2) The dividend payout ratio is calculated by dividing total dividends paid during the period by the total net income for the same period.
(3) Operating earnings, operating return on average assets, and operating return on average equity are non-GAAP measures and exclude the after-tax effect of gains on acquisitions, gains or losses on sales of securities, OTTI, and merger and conversion related expense. Management believes that non-GAAP operating measures provide additional useful information that allows readers to evaluate the ongoing performance of the company. Non-GAAP measures should not be considered as an alternative to any measure of performance or financial condition as promulgated under GAAP, and investors should consider the company's performance and financial condition as reported under GAAP and all other relevant information when assessing the performance or financial condition of the company. Non-GAAP measures have limitations as analytical tools, and investors should not consider them in isolation or as a substitute for analysis of the company's results or financial condition as reported under GAAP. Operating earnings and the related operating return measures (non-GAAP) exclude the following from net income (GAAP) on an after-tax basis: (a) pre-tax merger and conversion related expense of $10,397,000, $860,000, $1,963,000, $7,552,000, and $568,000, for the quarters ended September 30, 2013, June 30, 2013, March 31, 2013, December 31, 2012, and September 30, 2012, respectively; and (b) pre-tax securities gains of $128,000 for the quarter ended December 31, 2012.
(4) Repossessed assets includes OREO and other nonperforming assets.
(5) Calculated by dividing total non-acquired NPAs by total assets.
(6) Pre-tax, pre-provision operating earnings is a non-GAAP measure and excludes the effect of the provision for loan losses, the provision for income taxes, the gains on acquisitions, gains or losses on sales of securities, OTTI, and merger and conversion related expense. Management believes that non-GAAP pre-tax, pre-provision operating earnings provides additional useful information that allows readers to evaluate the ongoing performance of the company. Non-GAAP measures should not be considered as an alternative to any measure of performance or financial condition as promulgated under GAAP, and investors should consider the company's performance and financial condition as reported under GAAP and all other relevant information when assessing the performance or financial condition of the company. Non-GAAP measures have limitations as analytical tools, and investors should not consider them in isolation or as a substitute for analysis of the company's results or financial condition as reported under GAAP.
(7) ASC Topic 310-30 acquired loans are not included in non-performing assets because the accretion method is being used for these acquired loan pools.
(8) If an other-than-temporary impairment charge was recorded during the quarter, the amount would be reflected in the "securities gains (losses), net" line item.
(9) September 30, 2013 ratios are estimated and may be subject to change pending the final filing of the FR Y-9C; all other periods are presented as filed. All ratios are rounded down to one decimal point.
(10) The tangible measures are non-GAAP measures and exclude the effect of period end or average balance of intangible assets. The tangible returns on equity and common equity measures also add back the after-tax amortization of intangibles to GAAP basis net income. Management believes that these non-GAAP tangible measures provide additional useful information, particularly since these measures are widely used by industry analysts for companies with prior merger and acquisition activities. Non-GAAP measures should not be considered as an alternative to any measure of performance or financial condition as promulgated under GAAP, and investors should consider the company's performance and financial condition as reported under GAAP and all other relevant information when assessing the performance or financial condition of the company. Non-GAAP measures have limitations as analytical tools, and investors should not consider them in isolation or as a substitute for analysis of the company's results or financial condition as reported under GAAP. The sections titled "Reconciliation of Non-GAAP to GAAP" provide tables that reconcile non-GAAP measures to GAAP.
(11) Classified asset data excludes acquired assets.
 
 
 

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Contact:
First Financial Holdings, Inc.
Media Contact:
Donna Pullen, 803-765-4558
or
Analyst Contact:
John C. Pollok, 803-765-4628

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