First Financial Holdings Inc. (FFCH, Financial) filed Quarterly Report for the period ended 2009-06-30.
FIRST FINANCIAL HOLDINGS INC. acts as a financial intermediary by attracting deposits from the general public and using such funds together with borrowings and other funds to originate first mortgage loans on residential properties located in its primary market areas. First Financial Holdings Inc. has a market cap of $198.6 million; its shares were traded at around $16.98 with a P/E ratio of 28.8 and P/S ratio of 0.7. The dividend yield of First Financial Holdings Inc. stocks is 1.1%. First Financial Holdings Inc. had an annual average earning growth of 4.4% over the past 10 years.
On December 5, 2008, pursuant to the Capital Purchase Program (the “CPP”) established by the United States Department of the Treasury (the “Treasury”), First Financial issued and sold to the Treasury for an aggregate purchase price of $65.0 million in cash (i) 65,000 shares of its Fixed Rate Cumulative Perpetual Preferred Stock, Series A, par value $.01 per share, having a liquidation preference of $1,000 per share (the “Series A Preferred Stock”), and (ii) a ten-year warrant to purchase up to 483,391 shares of common stock, par value $.01 per share, of First Financial (“Common Stock”), at an initial exercise price of $20.17 per share, subject to certain anti-dilution and other adjustments (the “Warrant”).
The Corporation s chief source of liquidity is the assets it possesses, which can either be pledged as collateral for secured borrowings or sold outright. At June 30, 2009, $53.7 million of the Corporation s investment portfolio was immediately saleable. As an alternative to asset sales, the Corporation has the ability to pledge assets to raise secured borrowings. At June 30, 2009, $837.0 million of secured borrowings were employed with sufficient collateral available to raise additional secured borrowings of over $119.2 million. The Corporation also employs unsecured funding sources such as fed funds and brokered certificates of deposit. At June 30, 2009, the Corporation had $226.6 million of brokered certificates of deposit outstanding.
First Federal s use of FHLB advances is limited by the policies of the FHLB. At June 30, 2009, First Federal estimates that an additional $119.2 million of funding is available based on the current level of advances, asset size, and available collateral under the FHLB programs. Effective May 1, 2008, the FHLB of Atlanta increased the discount it applies to residential first mortgage collateral, resulting in a Lendable Collateral Value of 75% of the unpaid principal balance. Effective June 1, 2009, Lendable Collateral Value will be 70% of the unpaid principal balance. Other sources, such as unpledged investments and mortgage-backed securities are available should deposit cash flows and other funding be reduced in any given period. Should First Federal so desire, it may request additional availability at the FHLB, subject to standard lending policies in effect at the FHLB. Certain of the advances are subject to calls at the option of the FHLB of Atlanta, as follows: $328 million callable in fiscal 2009, with a weighted average rate of 3.93%; $64 million callable in fiscal 2010, with a weighted average rate of 5.94%; $100 million callable in fiscal 2011, with a weighted average rate of 3.43%. Call provisions are more likely to be exercised by the FHLB when market interest rates rise.
In April 2007 we entered into a loan agreement with another bank for a $25 million line of credit. The rate on the funding line is based on the three month LIBOR. In April 2008, the Board approved expanding the line from $25 million to $35 million, changing the interest rate from 100 basis points to 150 basis points over the three month LIBOR and extending the maturity from April 2009 to June 2010. At June 30, 2009, the balance on this line was $28 million. The line of credit note indicates affirmative covenants to which the Corporation should comply. We monitor these covenants on a quarterly basis. As of June 30, 2009, the Corporation is in compliance with stated affirmative covenants except the consolidated non-performing assets plus other real estate owned ratio, which should not exceed two percent of total gross loans plus other real estate owned. The Corporation s ratio, calculated based on credit facility terms as non-performing assets plus other real estate owned divided by total gross loans plus other real estate owned, is currently at 2.89% and as a result is in technical default on the line of credit. Although the terms of the credit facility do indicate that the line could be called due to this default, the Corporation is in process of renegotiating the existing credit facility. The main items to be addressed will be the term, interest rate, and new threshold for the affirmative covenant ratio noted above. In the event these negotiations fail, the Corporation does have the resources at the holding company level to repay the line of credit.
During the nine months ended June 30, 2009, we experienced a net cash outflow from investing activities of $524.0 million. The total outflow consisted principally of an increase in loans of $350.0 million, purchases of investments and mortgage-backed securities available for sale of $284.7 million, purchases of FHLB stock of $4.3 million, and purchases of office properties and equipment of $6.8 million. The total outflow was offset by repayments of mortgage-backed securities of $98.5 million, proceeds from sales of MBS and investment securities available for sale of $16.7 million, and proceeds from the sale of real estate owned of $6.8 million. We experienced a cash outflow of $14.7 million from operating activities and a cash inflow of $567.8 million from financing activities. Financing activities consisted principally of a net increase of $490.0 million in deposits, a net increase in other borrowings of $345.0 million, the issuance of preferred stock and warrants of $65.0 million and proceeds from exercise of stock options and tax benefit resulting from stock options of $282 thousand offset by decreases in advances by borrowers for taxes and insurance of $836 thousand, repayment of FHLB advances of $325.0 million and dividends paid of $6.3 million during the nine months ended June 30, 2009.
Read the The complete ReportFFCH is in the portfolios of Bruce Sherman of Private Capital Management.
FIRST FINANCIAL HOLDINGS INC. acts as a financial intermediary by attracting deposits from the general public and using such funds together with borrowings and other funds to originate first mortgage loans on residential properties located in its primary market areas. First Financial Holdings Inc. has a market cap of $198.6 million; its shares were traded at around $16.98 with a P/E ratio of 28.8 and P/S ratio of 0.7. The dividend yield of First Financial Holdings Inc. stocks is 1.1%. First Financial Holdings Inc. had an annual average earning growth of 4.4% over the past 10 years.
Highlight of Business Operations:
At June 30, 2009, total assets had increased $633 million or 21.29% and total liabilities had increased $524 million or 18.76% when compared to September 30, 2008. Shareholders equity increased $110 million, a 59.71% increase over September 30, 2008. This increase was driven primarily by the Corporation s participation in the U.S. Treasury s Troubled Asset Relief Program (“TARP”) for which the Corporation received $65 million; and the acquisition of Cape Fear Bank as total assets acquired were $413 million and liabilities assumed of $384 million resulted in net assets acquired of $29 million. The Corporation increased its total risk-based capital ratio, which was considered “well capitalized” for regulatory purposes in the third quarter of fiscal year 2009 when compared to September 30, 2008. At June 30, 2009, total assets were $3.6 billion, while total portfolio loans and deposits were $2.6 billion and $2.3 billion, respectively.On December 5, 2008, pursuant to the Capital Purchase Program (the “CPP”) established by the United States Department of the Treasury (the “Treasury”), First Financial issued and sold to the Treasury for an aggregate purchase price of $65.0 million in cash (i) 65,000 shares of its Fixed Rate Cumulative Perpetual Preferred Stock, Series A, par value $.01 per share, having a liquidation preference of $1,000 per share (the “Series A Preferred Stock”), and (ii) a ten-year warrant to purchase up to 483,391 shares of common stock, par value $.01 per share, of First Financial (“Common Stock”), at an initial exercise price of $20.17 per share, subject to certain anti-dilution and other adjustments (the “Warrant”).
The Corporation s chief source of liquidity is the assets it possesses, which can either be pledged as collateral for secured borrowings or sold outright. At June 30, 2009, $53.7 million of the Corporation s investment portfolio was immediately saleable. As an alternative to asset sales, the Corporation has the ability to pledge assets to raise secured borrowings. At June 30, 2009, $837.0 million of secured borrowings were employed with sufficient collateral available to raise additional secured borrowings of over $119.2 million. The Corporation also employs unsecured funding sources such as fed funds and brokered certificates of deposit. At June 30, 2009, the Corporation had $226.6 million of brokered certificates of deposit outstanding.
First Federal s use of FHLB advances is limited by the policies of the FHLB. At June 30, 2009, First Federal estimates that an additional $119.2 million of funding is available based on the current level of advances, asset size, and available collateral under the FHLB programs. Effective May 1, 2008, the FHLB of Atlanta increased the discount it applies to residential first mortgage collateral, resulting in a Lendable Collateral Value of 75% of the unpaid principal balance. Effective June 1, 2009, Lendable Collateral Value will be 70% of the unpaid principal balance. Other sources, such as unpledged investments and mortgage-backed securities are available should deposit cash flows and other funding be reduced in any given period. Should First Federal so desire, it may request additional availability at the FHLB, subject to standard lending policies in effect at the FHLB. Certain of the advances are subject to calls at the option of the FHLB of Atlanta, as follows: $328 million callable in fiscal 2009, with a weighted average rate of 3.93%; $64 million callable in fiscal 2010, with a weighted average rate of 5.94%; $100 million callable in fiscal 2011, with a weighted average rate of 3.43%. Call provisions are more likely to be exercised by the FHLB when market interest rates rise.
In April 2007 we entered into a loan agreement with another bank for a $25 million line of credit. The rate on the funding line is based on the three month LIBOR. In April 2008, the Board approved expanding the line from $25 million to $35 million, changing the interest rate from 100 basis points to 150 basis points over the three month LIBOR and extending the maturity from April 2009 to June 2010. At June 30, 2009, the balance on this line was $28 million. The line of credit note indicates affirmative covenants to which the Corporation should comply. We monitor these covenants on a quarterly basis. As of June 30, 2009, the Corporation is in compliance with stated affirmative covenants except the consolidated non-performing assets plus other real estate owned ratio, which should not exceed two percent of total gross loans plus other real estate owned. The Corporation s ratio, calculated based on credit facility terms as non-performing assets plus other real estate owned divided by total gross loans plus other real estate owned, is currently at 2.89% and as a result is in technical default on the line of credit. Although the terms of the credit facility do indicate that the line could be called due to this default, the Corporation is in process of renegotiating the existing credit facility. The main items to be addressed will be the term, interest rate, and new threshold for the affirmative covenant ratio noted above. In the event these negotiations fail, the Corporation does have the resources at the holding company level to repay the line of credit.
During the nine months ended June 30, 2009, we experienced a net cash outflow from investing activities of $524.0 million. The total outflow consisted principally of an increase in loans of $350.0 million, purchases of investments and mortgage-backed securities available for sale of $284.7 million, purchases of FHLB stock of $4.3 million, and purchases of office properties and equipment of $6.8 million. The total outflow was offset by repayments of mortgage-backed securities of $98.5 million, proceeds from sales of MBS and investment securities available for sale of $16.7 million, and proceeds from the sale of real estate owned of $6.8 million. We experienced a cash outflow of $14.7 million from operating activities and a cash inflow of $567.8 million from financing activities. Financing activities consisted principally of a net increase of $490.0 million in deposits, a net increase in other borrowings of $345.0 million, the issuance of preferred stock and warrants of $65.0 million and proceeds from exercise of stock options and tax benefit resulting from stock options of $282 thousand offset by decreases in advances by borrowers for taxes and insurance of $836 thousand, repayment of FHLB advances of $325.0 million and dividends paid of $6.3 million during the nine months ended June 30, 2009.
Read the The complete ReportFFCH is in the portfolios of Bruce Sherman of Private Capital Management.
