First Financial in S.C. Sees Profit, Costs Soar After M&A Deal

First Financial Holdings (SCBT) in Columbia, S.C., reported a 26% rise in quarterly profit after completing a transformative M&A deal.

The $8 billion-asset company reported earnings of $11.5 million in the third quarter, up from $9.1 million in the same period of 2012, it announced Tuesday. Earnings per share of 85 cents were 1 cent above the average estimate of analysts polled by Bloomberg.

In July, SCBT paid $447 million for First Financial Holdings and adopted its name. First Financial recorded $18.7 million in additional operational costs related to the merger, a $2.4 million increase in compensation costs and $9.5 million in merger-related expenses in the quarter. Those costs contributed to a near doubling of noninterest expense, to $75.4 million.

First Financial's net interest income rose by 70%, to $79.7 million, as the deal helped expand its loan book by 89%, to $5.8 million. Its net interest margin widened by 8 basis points, to 5.11%.

The company made a $659,000 provision for loan losses, down from $4 million, and its net chargeoffs dropped by 43%, to $3 million.

First Financial's noninterest income grew by 67%, to $15.3 million, as service charges rose by 45%, to $9 million, and card income rose by 82%, to $6.5 million. However, mortgage banking income fell by 62%, to $1.3 million.