First Financial Holdings Inc. in Charleston, S.C., is looking to unload $155 million of mostly troubled real estate loans by the end of 2011.
The $3.3 billion-asset thrift company said late Monday that it has reclassified the loans as "held for sale" and, that as a result, expects to increase its provision for loan losses by $73 million. While that would be a large hit to earnings in the short-term, R. Wayne Hall, its president and chief executive officer, said in a statement that selling the loans would "result in a substantial reduction in our nonperforming assets and accelerate the return to core operating earnings."
First Financial lost $1.4 million in the quarter that ended March 31 and lost $36.9 million in its 2010 fiscal year, which ended Sept. 30. The company said that a loan sale would reduce its ratio of nonperforming assets to total assets from nearly 5% to roughly 1.4%.
Nearly $111 million of the loans are nonperforming and about $38 million are classified as "substandard performing." The other $6 million are performing loans related to those in the pool held for sale. Roughly $116 million of the loans are either commercial real estate or construction loans.
