8-K/A

UNITED STATES
SECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549

FORM 8-K/A

Current Report
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): April 27, 2012

FIRST FINANCIAL HOLDINGS, INC.

(Exact name of Registrant as specified in its charter)

Delaware	000-17122	57-0866076
(State or other jurisdiction of incorporation)	(Commission File Number)	(I.R.S. Employer Identification No.)

2440 Mall Drive, Charleston, South Carolina	29406
(Address of principal executive offices)	(Zip Code)

(843) 529-5933

Registrant’s telephone number, including area code

Not Applicable

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4c))

EXPLANATORY NOTE

          On April 27, 2012, First Financial Holdings, Inc. (“First Financial”) filed a Current Report on Form 8-K (the “Original Report”) to report that First Federal Bank (“First Federal”), a South Carolina-chartered commercial bank and wholly owned subsidiary of First Financial, assumed all deposits and substantially all assets and certain other liabilities of Plantation Federal Bank (“Plantation”), a full-service community bank headquartered in Pawleys Island, South Carolina, from the Federal Deposit Insurance Corporation (“FDIC”), as receiver for Plantation (the “Transaction”). The Transaction was made pursuant to a purchase and assumption agreement, in the FDIC’s customary form, entered into by First Federal and the FDIC as of April 27, 2012 (the “P&A Agreement”).

          This Current Report on Form 8-K/A (this “Amendment”) amends and supplements the disclosure provided in the Original Report and is being filed to supplement and update the disclosures in Items 1.01 and 2.01 and the financial information required by Item 9.01. Except as otherwise provided herein, the other disclosures made in the Original Report remain unchanged. All financial and other numeric measures for Plantation as described in this Amendment are based on information as of April 27, 2012, and may be subject to change. In addition, the fair values of the acquired loans and the FDIC indemnification asset remain subject to finalization and revision by First Federal in accordance with accounting guidance on business acquisitions.

          Statements in this release that are not statements of historical fact, including without limitation, statements that include terms such as “believes,” “expects,” “anticipates,” “estimates,” “forecasts,” “intends,” “plans,” “targets,” “potentially,” “probably,” “projects,” “outlook,” or similar expressions or future conditional verbs such as “may,” “will,” “should,” “would,” or “could” constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements regarding First Financial’s future financial and operating results, plans, objectives, expectations and intentions involve risks and uncertainties, many of which are beyond First Financial’s control or are subject to change. No forward-looking statement is a guarantee of future performance and actual results could differ materially from those anticipated by the forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, the general business environment, general economic conditions nationally and in the States of North and South Carolina; interest rates; the North and South Carolina real estate markets; the demand for mortgage loans; the credit risk of lending activities, including changes in the level and trend of delinquent and nonperforming loans and charge-offs; changes in First Federal’s allowance for loan losses and provision for loan losses that may be affected by deterioration in the housing and real estate markets; results of examinations by banking regulators, including the possibility that any such regulatory authority may, among other things, require First Federal to increase its allowance for loan losses, write-down assets, change First Federal’s regulatory capital position or affect its ability to borrow funds or maintain or increase deposits, which could adversely affect liquidity and earnings; First Financial’s ability to control operating costs and expenses; First Financial’s ability to successfully integrate any assets, liabilities, customers, systems, and management personnel acquired or may in the future acquire into its operations and its ability to realize related revenue synergies and cost savings within expected time frames and any goodwill charges related thereto; competitive conditions between banks and non-bank financial services providers; and regulatory changes including the Dodd-Frank Wall Street Reform and Consumer Protection Act. Other risks are also detailed in First Financial’s Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and current reports on Form 8-K filings with the Securities and Exchange Commission (“SEC”), which are available at the SEC’s website www.sec.gov. Other factors not currently anticipated may also materially and adversely affect First Financial’s results of operations, financial position, and cash flows. There can be no assurance that future results will meet expectations. While First Financial believes that the forward-looking statements in this release are reasonable, the reader should not place undue reliance on any forward-looking statement. In addition, these statements speak only as of the date made. First Financial does not undertake, and expressly disclaims any obligation to update or alter any statements, whether as a result of new information, future events or otherwise, except as required by applicable law.

Item 1.01 Entry into a Material Definitive Agreement.

          The information disclosed under Item 2.01 is incorporated by reference into this Item 1.01.

Item 2.01 Completion of Acquisition or Disposition of Assets.

          The following discussion of assets acquired and liabilities assumed is presented at estimated fair value on the date of the P&A Agreement. The fair values of the assets acquired and liabilities assumed were determined as described in Note 2 to First Financial’s statement of assets acquired and liabilities assumed, dated April 27, 2012, and the accompanying

notes thereto, which is attached hereto as Exhibit 99.1 and incorporated herein by reference. These fair value estimates are based on the information currently available, and are subject to change for up to one year after the closing date of the acquisition as additional information relative to closing date fair values becomes available. First Federal and the FDIC are engaged in ongoing discussions that may impact the assets acquired and liabilities assumed and/or the purchase price. In addition, the tax treatment of FDIC assisted acquisitions is complex and subject to interpretations that may result in future adjustments to deferred taxes as of the acquisition date. The disclosure set forth in this Item 2.01 reflects the status of these items to the best of management’s knowledge as of July 11, 2012.

          In the Transaction, First Federal acquired assets with a fair value of $421.0 million, which included $278.7 million of loans, $10.7 million of other real estate owned (“OREO”), $14.1 million of investment securities, $80.2 million of cash and cash equivalents (excluding the $46.0 million cash payment received from the FDIC pursuant to the terms of the P&A Agreement), and $1.3 million of other assets. Liabilities with a fair value of $457.9 million were assumed, including $419.9 million of deposits, $28.4 million of FHLB advances, and $9.6 million of other liabilities. In connection with the Transaction, the FDIC made a closing payment to First Federal of $46.0 million, which is subject to customary post-closing adjustments based on the final closing date balance sheet for Plantation. Additionally, First Federal established an FDIC indemnification asset with a fair value of $34.3 million and a core deposit intangible of $1.7 million.

          The P&A Agreement includes a customary loss sharing agreement with the FDIC covering $216.2 million of Plantation’s assets. First Federal will share in the losses on the asset pools (including commercial loans and OREO) covered under the loss sharing agreement, but the FDIC is obligated to reimburse First Federal for 80% of all eligible losses with respect to covered assets, beginning with the first dollar of loss incurred through $55 million in losses. First Federal absorbs losses greater than $55 million up to $65 million. The FDIC will reimburse First Federal for 60% of all eligible losses in excess of $65 million. First Federal has a corresponding obligation to reimburse the FDIC according to the same arrangement for eligible recoveries with respect to covered assets. After the fifth anniversary of the Transaction (or earlier in certain circumstances), the FDIC has a right to recover a portion of its shared-loss reimbursements if losses on the covered assets are less than currently anticipated, as measured by a formula set forth in the P&A Agreement. The P&A Agreement generally provides for additional recovery sharing for an additional three years.

          The FDIC has certain rights to withhold loss sharing payments if First Federal does not perform its obligations under the loss sharing agreement in accordance with its terms and to withdraw the loss share protection if certain significant transactions are effected without FDIC consent, some of which may be beyond First Financial’s control, including certain business combination transactions and sales of shares by First Financial’s shareholders that would result in a change in control under the Change in Bank Control Act.

          The loss sharing agreement is subject to the servicing procedures as specified in the agreement with the FDIC. The expected reimbursements under the loss sharing agreement were recorded as an indemnification asset at their estimated fair value of $34.3 million on the Transaction date. Based on the acquisition date fair values of the net assets acquired, no goodwill was recorded. The transaction resulted in a pre-tax gain of $14.7 million, which will be included in noninterest income in First Financial’s June 30, 2012, Consolidated Statement of Operations. Due to the difference in tax bases of the assets acquired and liabilities assumed, First Financial will record a deferred tax liability of $5.6 million, resulting in an after-tax gain of $9.1 million.

          The foregoing summary of the P&A Agreement (including the associated loss sharing agreement) is not complete and is qualified in its entirety by reference to the full text of the P&A Agreement, a copy of which was previously filed as Exhibit 2.1 to the Quarterly Report on Form 10-Q at March 31, 2012 and is incorporated by reference into this Amendment. In addition, a copy of the press release announcing the transaction described above was previously filed as Exhibit 99.1 to the Original Report and is incorporated by reference into this Amendment.

          An analysis of the anticipated short-term and long-term effects of the loss sharing agreement on First Financial’s cash flows and reported results is included in Item 9.01(a) below.

Item 9.01 Financial Statements and Exhibits

          (a) Financial Statements of Businesses Acquired

Discussion

          As set forth in Item 2.01 above, on April 27, 2012, First Federal acquired certain assets and assumed certain liabilities relating to six former branch offices of Plantation pursuant to the P&A Agreement. A narrative description of the

anticipated effects of the Transaction on First Financial’s financial condition, results of operations, liquidity, and capital resources is presented below. This discussion should be read in conjunction with the historical financial statements and the related notes of First Financial, which have been filed with the SEC and the audited statement of assets acquired and liabilities assumed, which is included below.

          The determination of the initial fair value of the loans acquired in the Transaction and the related FDIC indemnification asset involve a high degree of judgment and complexity. As such, the carrying value of these assets reflects management’s best estimate of their fair value as of the Transaction date. First Financial determined the fair value of the assets acquired and liabilities assumed in accordance with the Financial Accounting Standards Board Accounting Standards Codification (“FASB ASC”) 805, Business Combinations. However, the amount that First Financial ultimately realizes on these assets could differ materially from the carrying value reflected in these financial statements, based on the timing and amount of collections on the acquired loans in future periods. To the extent the actual values realized for the acquired loans are different from the estimate, the indemnification asset will generally be impacted in an offsetting manner due to the loss sharing support from the FDIC.

Financial Condition

          The following table displays earning assets acquired at fair value, including the respective average months to maturity and weighted average contractual rate.

Schedule of Earning Assets Acquired April 27, 2012
(in thousands)	Plantation Federal Book Value		Fair Value Adjustments			Fair Value		Average Months to Maturity		Weighted Average Contractual Rate
Earning Assets
Interest bearing deposits with banks	$	8,690	$	—		$	8,690		—		0.03	%
Investment securities		14,131		—			14,131		195		2.75
Loans
Non-impaired loans
Residential loans		39,892		(1,120	)		38,772		151		4.19
Commercial loans		66,287		420			66,707		25		5.61
Consumer loans		36,988		(3,627	)		33,361		70		4.64
Total non-impaired loans		143,167		(4,327	)		138,840		76		4.97
Impaired loans1
Residential loans		26,895		(6,652	)		20,243		140		4.08
Commercial loans		142,408		(34,110	)		108,298		26		4.93
Consumer loans		14,088		(2,818	)		11,270		55		4.79
Total impaired loans		183,391		(43,580	)		139,811		56		4.80
Total loans		326,558		(47,907	)		278,651		70		4.87
Total earning assets	$	349,379	$	(47,907	)	$	301,472

¹ See the discussion of ASC 310-30 Loans and Debt Securities Acquired with Deteriorated Credit Quality under “Results of Operations”.

          As part of the Transaction, First Federal also acquired $80.2 million in cash and cash equivalents and assumed deposits with a fair value of $419.9 million. The deposits assumed represent 13.5% of First Financial’s total deposits at April 27, 2012. Checking, savings, and money market deposits make up $187.8 million of the assumed deposits. First Federal also assumed $28.4 million in FHLB advances, at fair value.

Results of Operations

          First Financial’s management is occasionally presented with acquisition opportunities, which they review for strategic fit and financial performance. The Plantation Transaction was attractive for various reasons, including the following:

• Entry to the Greenville, SC market, which provides geographic diversity;

• Expand First Financial’s presence in the Myrtle Beach and Pawleys Island, SC markets;

• Acquire low-cost deposits;

• Acquire loans with limited credit-risk due to the loss share agreement;

• Improve financial performance due to recording a bargain purchase gain, which is accretive to earnings per share and tangible book value;

• Create ongoing opportunities for operating efficiencies by consolidating duplicate activities; and

• Improved shareholder value, as no external capital was required to complete the Transaction.

          Based on these and other factors, including the level of FDIC support related to certain acquired commercial loans and OREO, First Financial believes the Transaction will produce positive earnings once various operational functions have been consolidated. First Financial believes the transaction will improve First Federal’s net interest income, as a result of acquiring additional investment securities and loans, as well as assuming a low-cost deposit base. Based on the acquisition date fair values of the net assets acquired, no goodwill was recorded. The transaction resulted in a pre-tax gain of $14.7 million, which will be included in noninterest income in the June 30, 2012, Consolidated Statement of Operations in First Financial’s Quarterly Report on Form 10-Q.

          On the Transaction date the contractually required payments receivable for all non-ASC 310-30 loans acquired in the Transaction were $143.2 million and the estimated fair value of those loans totaled $138.8 million. It is likely that there will be loans that will experience deterioration in future payment performance or will be determined to have inadequate collateral values to repay the loans in accordance with agreed upon terms. It is First Federal’s policy to place such loans on nonaccrual status when they become 90 days delinquent or sooner if individual circumstances warrant.

          FASB ASC 310-30, Loans and Debt Securities Acquired with Deteriorated Credit Quality, applies to a loan with evidence of deterioration in its credit quality since origination, including that the investor will be unable to collect all contractually required payments receivable. On the Transaction date, the contractually required payments receivable for all ASC 310-30 loans acquired in the acquisition were $183.4 million and the estimated fair value of the loans totaled $139.8 million. These amounts were determined based on the estimated remaining life of the underlying loans, which include the effects of estimated prepayments. At April 27, 2012, a majority of these loans were valued based on the liquidation value of the underlying collateral because the future cash flows are primarily based on the liquidation of underlying collateral. Consistent with the provisions of FASB ASC 310-30, there was no allowance for credit losses established related to these loans.

          If any of the FASB ASC 310-30 loans are covered under the loss sharing agreement, First Federal may submit a claim to the FDIC once it has exhausted its best efforts to collect on the loan and results in a loss. The loss sharing agreement covers a 5-year period on commercial loans and OREO. As such, changing economic conditions will likely affect the timing of future charge-offs and the resulting reimbursements from the FDIC. First Federal believes that any recapture of interest income and recognition of cash flows from the borrowers or received from the FDIC (as part of the FDIC indemnification asset) may be recognized unevenly over this period, as First Federal exhausts its collection efforts under its normal practices. In addition, First Federal recorded substantial discounts related to the purchase of these covered assets. A portion of these discounts will be accretable to income over the term of the loss sharing agreement and will depend on the timing and success of First Federal’s collection efforts on the covered assets.

Liquidity and Capital Resources

          First Financial believes that its liquidity position will improve as a result of this transaction. First Financial acquired $80.2 million in cash and cash equivalents as well as $14.1 million of investment securities. The cash acquired was used during May 2012 to pay down FHLB advances. The investment securities provide monthly cash flows in the form of principal and interest payments and are readily marketable. These additions to First Financial’s balance sheet represent additional alternatives for First Financial’s liquidity needs.

          Deposits in the amount of $419.9 million were also assumed as a part of the Transaction. Of this amount, $187.8 million were in the form of highly liquid noninterest-bearing and interest-bearing checking, savings, and money market accounts. Time deposits comprised $232.1 million, or 55.3% of Plantation’s total deposits at April 27, 2012. Based on contractual terms, 63.6% of the time certificates mature before December 31, 2012.

          As evidenced by the capital ratios below, First Financial was “well-capitalized” based on relevant regulatory guidance at March 31, 2012. First Financial remains “well-capitalized” after taking into consideration the results of the Transaction.

Leverage capital ratio	10.22	%
Tier 1 risk based capital ratio	14.81	%
Total risk based capital ratio	16.08	%
Total equity / total assets	8.84	%

Financial Statements

          The following financial statements are attached hereto as Exhibit 99.1 and incorporated by reference into Item 9.01(a) of this Amendment:

                    Report of Independent Registered Public Accounting Firm

                    Statement of Assets Acquired and Liabilities Assumed at April 27, 2012

                    Notes to Statement of Assets Acquired and Liabilities Assumed

          (b) Pro Forma Financial Information

          First Financial has omitted certain financial information for Plantation required by Rule 3-05 of Regulation S-X and the related pro forma financial information under Article 11 of Regulation S-X in accordance with a request for relief submitted to the SEC based on guidance provided in SEC Staff Accounting Bulletin 1:K, Financial Statements of Acquired Troubled Financial Institutions (“SAB 1:K”). SAB 1:K provides relief from the requirements of Rule 3-05 in certain instances, such as the Transaction, where a registrant engages in an acquisition of a significant amount of assets of a troubled financial institution that involves pervasive federal assistance and audited financial statements of the troubled financial institution that are not reasonably available.

SIGNATURES

Pursuant to the requirements of the Securities and Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	FIRST FINANCIAL HOLDINGS, INC.
Date: July 11, 2012	By:	/s/ Blaise B. Bettendorf
		Blaise B. Bettendorf
	Its:	Executive Vice President and Chief Financial Officer

Exhibit No.	Description
Exhibit 23.1	Consent of Grant Thornton LLP
Exhibit 99.1	Report of Independent Registered Public Accounting Firm
	Statement of Assets Acquired and Liabilities Assumed at April 27, 2012
	Notes to Statement of Assets Acquired and Liabilities Assumed

EX-23.1

EXHIBIT 23.1

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We have issued our report dated July 11, 2012, with respect to the statement of assets acquired and liabilities assumed by First Federal Bank (a wholly owned subsidiary of First Financial Holdings, Inc.) pursuant to the Purchase and Assumption Agreement dated April 27, 2012, included in this Current Report on Form 8-K/A. We hereby consent to the incorporation by reference of said report in the Registration Statements of First Financial Holdings, Inc. on Forms S-8 (File No. 333-57855, No. 333-67387, No. 333-60038, No. 333-119289, and No. 333-143011) and on Forms S-3 (File No. 333-154722, No. 333-156503, and No. 333-171283).

/s/ GRANT THORNTON LLP

Charlotte, North Carolina
July 11, 2012

EX-99.1

EXHIBIT 99.1

INDEX OF FINANCIAL STATEMENTS

Description	Page Number
Report of Independent Registered Public Accounting Firm	1
Statement of Assets Acquired and Liabilities Assumed at April 27, 2012	2
Notes to Statement of Assets Acquired and Liabilities Assumed	3-9

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

Board of Directors and Shareholders
of First Financial Holdings, Inc.

We have audited the accompanying statement of assets acquired and liabilities assumed by First Federal Bank (a wholly owned subsidiary of First Financial Holdings, Inc.) pursuant to the Purchase and Assumption Agreement dated April 27, 2012. This financial statement is the responsibility of the First Financial’s management. Our responsibility is to express an opinion on this financial statement based on our audit.

We conducted our audit in accordance with auditing standards generally accepted in the United States of America established by the American Institute of Certified Public Accountants. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statement is free of material misstatement. An audit includes consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of First Financial’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statement. An audit also includes assessing the accounting principles used and significant estimates made by management and evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

In our opinion, the accompanying statement of assets acquired and liabilities assumed by First Federal Bank pursuant to the Purchase and Assumption Agreement dated April 27, 2012, is fairly presented, in all material respects, on the basis of accounting described in Note 2.

/s/ GRANT THORNTON LLP
Charlotte, North Carolina
July 11, 2012

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Statement of Assets Acquired and Liabilities Assumed
As of April 27, 2012
(in thousands)
	Fair Value
ASSETS
Cash and due from banks	$	71,535
Interest-bearing deposits with banks		8,690
Total cash and cash equivalents		80,225
Investment securities
Securities available for sale, at fair value		10,824
Nonmarketable securities		3,307
Total investment securities		14,131
Loans		278,651
FDIC indemnification asset, net		34,300
Other real estate owned		10,736
Other intangible assets, net		1,710
Other assets		1,263
Total assets acquired	$	421,016
LIABILITIES
Deposits
Noninterest-bearing checking	$	25,942
Interest-bearing checking		34,806
Savings and money market		127,043
Retail time deposits		231,487
Wholesale time deposits		651
Total deposits		419,929
Advances from FHLB		28,355
Deferred tax liability		5,583
Other liabilities		4,033
Total liabilities assumed		457,900
Excess of liabilities assumed over assets acquired	$	(36,884	)

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First Financial Holdings, Inc.
Notes to Statement of Assets Acquired and Liabilities Assumed

Note 1 — FDIC-Assisted Acquisition of Certain Assets and Liabilities of Plantation Federal Bank

          On April 27, 2012, First Federal Bank (“First Federal”) a South Carolina-chartered commercial bank and wholly owned subsidiary of First Financial Holdings, Inc. (“First Financial”) assumed all deposits as well as substantially all assets and certain other liabilities of Plantation Federal Bank (“Plantation”), a full-service community bank headquartered in Pawleys Island, South Carolina, from the Federal Deposit Insurance Corporation (the “FDIC”), as receiver for Plantation (the “Transaction”). Plantation operated three branches along the coast of South Carolina under the name of Plantation Federal and three branches in the Greenville, South Carolina market under the name of First Savers Bank.

          The Transaction was made pursuant to a purchase and assumption agreement, in the FDIC’s customary form, entered into by First Federal and the FDIC as of April 27, 2012 (the “P&A Agreement”). The Transaction included all six branch offices of Plantation, which now operate as branches of First Federal.

          In connection with the Transaction, the FDIC made a cash payment to First Federal of $46.0 million, subject to customary post-closing adjustments based upon the final closing date balance sheet for Plantation.

          The P&A Agreement includes a customary loss sharing agreement with the FDIC covering approximately $216.2 million of Plantation’s assets. First Federal will share in the losses on the asset pools (including commercial loans and other real estate owned (“OREO”)) covered under the loss sharing agreement, but the FDIC is obligated to reimburse First Federal for 80% of all eligible losses with respect to covered assets, beginning with the first dollar of loss incurred through $55 million in losses. First Federal absorbs losses greater than $55 million up to $65 million. The FDIC will reimburse First Federal for 60% of all eligible losses in excess of $65 million. First Federal has a corresponding obligation to reimburse the FDIC according to the same arrangement for eligible recoveries with respect to covered assets. After the fifth anniversary of the Transaction (or earlier in certain circumstances), the FDIC has a right to recover a portion of its shared-loss reimbursements if losses on the covered assets are less than currently anticipated, as measured by a formula set forth in the P&A Agreement. The P&A Agreement generally provides for additional recovery sharing for an additional three years.

          The FDIC has certain rights to withhold loss sharing payments if First Federal does not perform its obligations under the loss sharing agreement in accordance with its terms and to withdraw the loss share protection if certain significant transactions are effected without FDIC consent, some of which may be beyond First Financial’s control, including certain business combination transactions and sales of shares by First Financial’s shareholders that would result in a change in control under the Change in Bank Control Act.

          Under the P&A Agreement, First Federal has options, exercisable for various defined periods, to acquire at fair market value any bank premises and equipment that were owned by, or assume any leases relating to bank premises leased by, Plantation and to assume or reject service provider contracts. First Federal has indicated its intention to purchase Plantation’s Pawleys Island location for $2.8 million as well as the equipment associated with this location, and the closing is expected to occur during the third calendar quarter of 2012. First Federal is considering its options on the remaining leased facilities and equipment, as well as other vendor contracts.

Note 2 — Basis of Presentation

          The accompanying Statement of Assets Acquired and Liabilities Assumed as of April 27, 2012 has been prepared for inclusion in a Current Report on Form 8-K to be filed by First Financial and is not intended to be a complete presentation of Plantation’s assets, liabilities, revenues and expenses.

          In accordance with the relief granted in a letter dated May 21, 2012 from the staff of the Division of Corporate Finance of the Securities and Exchange Commission (“SEC”) to First Financial and the guidance provided in Staff Accounting Bulletin Topic 1:K, Financial Statements of Acquired Troubled Financial Institutions (“SAB 1:K”), First Financial has omitted certain financial information of Plantation required by Rule 3-05 of Regulation S-X. SAB 1:K provides relief from the requirements of Rule 3-05 of Regulation S-X under certain circumstances, including the Transaction, in which the

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registrant engages in an acquisition of a troubled financial institution for which historical financial statements are not reasonably available and in which federal assistance is an essential and significant part of the transaction. Instead, as permitted by the relief letter, First Financial has provided a Statement of Assets Acquired and Liabilities Assumed pursuant to the Transaction.

          First Federal has determined that the acquisition of the net assets of Plantation constitutes a business acquisition as defined by Financial Accounting Standards Board Accounting Standards Codification (“FASB ASC”) 805, Business Combinations. Accordingly, the assets acquired and liabilities assumed are presented at their fair values as required by that statement. Fair values are determined based on the requirements of FASB ASC 820, Fair Value Measurements and Disclosures. In many cases the determination of these fair values requires management to make estimates about discount rates; future expected cash flows, market conditions and other future events that are highly subjective in nature and subject to change.

          In accordance with the framework established by FASB ASC 820 First Financial records assets and liabilities at fair value according to a fair value hierarchy comprised of three levels. The levels are based on the markets in which the assets and liabilities are traded and the reliability of the assumptions used to determine fair value. A brief description of each level follows:

• Level 1 – Valuation is based on quoted prices for identical instruments in active markets.

• Level 2 – Valuation is based on quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-based valuation techniques for which all significant assumptions are observable in the market.

• Level 3 – Valuation is generated from model-based techniques that use at least one significant assumption not observable in the market. These unobservable assumptions reflect estimates that market participants would use in pricing the asset or liability. Valuation techniques include the use of discounted cash flow models and similar techniques.

          Following is a description of the methods used to determine the fair values of significant assets and liabilities.

Cash and due from banks

          These items are very liquid and short-term in nature. The contractual amount of these assets approximates their fair values and, as such, they are classified as Level 1.

Investment securities

          Fair values of investment securities may be based on quoted market prices in an active market when available, or through a combination of prices determined by an income valuation technique using fair value models and quoted prices. When market observable data is not available, which generally occurs due to the lack of liquidity for certain investment securities, the valuation of the security is subjective and may involve substantial judgment. Plantation’s investment securities are classified as Level 2.

Nonmarketable securities

          The carrying amount of FHLB stock is used to approximate the fair value of these securities as these securities are not readily marketable, are recorded at cost (par value), and are evaluated for impairment based on the ultimate recoverability of the par value. First Financial considers positive and negative evidence, including the profitability and asset quality of the issuer, dividend payment history and recent redemption experience, when determining the ultimate recoverability of the par value. First Financial believes its investment in FHLB stock is ultimately recoverable at par. Plantation’s FHLB stock is classified as Level 3.

Loans

          The residential mortgage loan portfolio consists primarily of long-term loans secured by first mortgages on single-family residences, homes in the construction phase, and land. The commercial loan portfolio is comprised of loans that are secured by various types of real estate (including owner occupied, non-owner occupied buildings in the construction phase and raw land) as well as loans used for general business purposes (which may be secured by working capital, equipment financing, other business assets, or unsecured). Consumer loans include home equity lines of credit, auto loans, credit card receivables and loans on various other types of consumer products. The fair value of loans is estimated

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based on discounted cash flows, which take into consideration current portfolio interest rates and repricing characteristics as well as assumptions related to prepayment speeds. The discount rates take into consideration the current market interest rate environment and a credit risk component based on the credit characteristics of each loan pool. Plantation’s loans are classified as Level 3.

          ASC 310-30 Accounting for Certain Loans or Debt Securities Acquired in a Transfer applies to a loan with evidence of deterioration in credit quality since its origination, and for which it is probable, at acquisition, that the investor will be unable to collect all contractually required payments receivable. For loans accounted for under ASC 310-30, First Federal’s management determines the value of the loan portfolio based, in part, on work provided by an appraiser. Factors considered in the valuation are projected cash flows for the loans, type of loan and related collateral, classification status and current discount rates. Loans are grouped together according to similar characteristics and are treated in the aggregate when applying various valuation techniques. Management also estimates the amount of credit losses that are expected to be realized for the loan portfolio primarily by estimating the liquidation value of collateral securing loans on nonaccrual status or classified as substandard or doubtful. Certain amounts related to these loans were estimates and highly subjective.

FDIC Indemnification Asset

          Certain commercial loans and OREO purchased under the P&A Agreement are covered by a loss share agreement between the FDIC and First Federal, which affords First Federal significant protection. This Agreement covers realized losses on loans and OREO purchased from the FDIC for the time period specified in the agreement. Realized losses covered by the loss share agreement include loan contractual balances (and related unfunded commitments that were acquired), accrued interest on loans for up to 90 days, the book value of OREO acquired, and certain direct costs, less cash or other consideration received by First Federal. This agreement extends for five years with an additional three year cost recovery period for FDIC shared-loss reimbursements. First Federal cannot submit claims of loss until certain events occur, as defined under the Agreement.

          The determination of the initial fair value of loans and OREO acquired, and the initial fair value of the related FDIC indemnification asset involve a high degree of judgment and complexity. Fair value was estimated using projected cash flows related to the loss sharing agreement based on the expected reimbursement for losses and the applicable loss sharing percentages for each loss tranche. The expected reimbursements do not include reimbursable amounts related to future covered expenditures. The expected cash flows were discounted to reflect the uncertainty of the timing and receipt of the loss sharing reimbursement from the FDIC. The FDIC indemnification asset established in relation to the Transaction is classified as Level 3. The amount that First Federal realizes on these assets could differ materially from the carrying value reflected in these financial statements, based on the timing and amount of collections on the acquired loans in future periods. To the extent the actual values realized for the acquired loans are different from the estimate; the indemnification asset will generally be affected in an offsetting manner due to the loss share support from the FDIC.

Other Real Estate Owned

          OREO properties acquired in settlement of loans are recorded at the lower of the principal balance of the loan or fair value of the property less estimated selling costs. Certain assumptions and unobservable inputs are currently being used by appraisers. Plantation’s OREO is classified as Level 3.

Deposits

          The fair values used for core deposits, which are comprised of checking, savings, and money market deposits, are, by definition, equal to the amount payable at the reporting date. The fair values for certificates of deposit are estimated using a discounted cash flow calculation that applies interest rates currently being offered on certificates to a schedule of aggregated contractual maturities on such time deposits. Plantation’s deposits are classified as Level 3.

Advances from FHLB

          The fair values for FHLB advances are estimated using observable market prices as well as recent prepayments on such advances. Plantation’s advances from the FHLB are classified as Level 1.

Income Taxes

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          Deferred taxes relate to the differences between the financial statement and tax bases for assets acquired and liabilities assumed in the Transaction. Deferred taxes are computed using the asset and liability approach as prescribed in ASC 740, Income Taxes. Under this method, a deferred tax asset or liability is determined based on the currently enacted tax rates applicable to the period in which the differences between the financial statement carrying amounts and tax bases of existing assets and liabilities are expected to be reported in First Financial’s income tax returns. The effect on deferred taxes of a change in tax rates is recognized in income in the period that includes the enactment date. The deferred tax liability established as part of the Transaction was based on the $14.7 million gain recorded through the statement of operations and is classified as Level 3.

Note 3 — Investment Securities

          The following table presents fair value and tax-equivalent yield on the investment securities acquired.

	As of April 27, 2012
(in thousands)	Fair Value		Tax- equivalent yield
Mortgage-backed securities	$	10,824		2.14	%
Federal Home Loan Bank stock		3,307		1.47
Total	$	14,131		1.98	%

          The estimated fair value of debt securities at April 27, 2012 are shown below by contractual maturity. Expected maturities will differ from contractual maturities because issuers may have the right to call or prepay obligations with or without call or prepayment penalties. Mortgage-backed securities and collateralized mortgage obligations are shown in the “securities not due on a single maturity date” caption as they generally have monthly payments of principal and interest which vary depending on the payments made on the underlying collateral for these securities.

	As of April 27, 2012
(in thousands)	Fair Value
Due after one through five years	$	—
Due after five through ten years		181
Due after ten years		10,643
Other securities with no stated maturity		3,307
Total	$	14,131

Note 4 — Loans

          The following table presents loans acquired by major category.

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	As of April 27, 2012
(in thousands)	AcquiredValue			Weighted Average Contractual Interest Rate
Residential loans	$	66,787			4.14	%
Commercial loans		208,695			5.15
Consumer loans		51,076			4.68
Contractual balance of loans acquired		326,558			4.87	%
Fair value discount on loans purchased		(34,888	)
Accretable yield		(13,019	)
Total	$	278,651

          Of the contractual balance of total loans acquired, $143.2 million will be accounted for under normal loan accounting; and $183.4 million will be accounted for under the provisions of FASB ASC 310-30.

Note 5 — Deposits

          The following table presents deposits assumed by major category.

	As of April 27, 2012
(in thousands)	Acquired Value		Weighted Average Contractual Interest Rate
Noninterest-bearing checking	$	25,942		—	%
Interest-bearing checking		34,806		0.37
Savings and money market		127,043		0.62
Retail time deposits		229,313		1.44
Wholesale time deposits		651		0.00
Acquired balance of deposits		417,755		1.01	%
Fair value adjustment		2,174
Total	$	419,929

          The following table presents scheduled maturities of time deposits.

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Period	Maturity Value (in thousands)
2012		146,239
2013		73,381
2014		3,579
2015		3,194
2016		2,846
Thereafter		725
Total	$	229,964

Note 6 — Advances from FHLB

          As of April 27, 2012, Plantation had $28.0 million in borrowings outstanding from the FHLB. The borrowings were secured by a blanket lien on eligible loans plus securities. Most of the advances mature in less than one year and are at fixed interest rates. Therefore, the advances were recorded at their estimated fair value, which was derived using a discounted cash flow calculation that applies interest rates currently being offered on similar advances to the scheduled contractual maturities on the outstanding advances.

          The following table presents the composition of FHLB advances assumed.

	As of April 27, 2012
(in thousands)	Acquired Value		Weighted Average Contractual Interest Rate
Advances due in:
2012	$	23,000		4.41	%
2013		5,000		4.75
Total assumed		28,000		4.47	%
Fair Value Adjustment		355
Total advances from FHLB	$	28,355

          First Financial allowed $18 million in FHLB advances to mature during April and May of 2012, and incurred a $355 thousand prepayment penalty in May as the result of prepaying an additional $10 million.

Note 7 — Deferred Income Taxes

          A deferred tax liability of $5.6 million was recorded, which is related to the differences between the financial statement and tax bases of assets acquired and liabilities assumed in this transaction. For income tax purposes, the transaction will be accounted for as an asset purchase and the tax bases of assets acquired will be allocated based on fair values in accordance with the Internal Revenue Code and Regulations. First Federal acquired none of the tax attributes of Plantation’s assets and liabilities.

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Note 8 — Net Assets Acquired

          Under the terms of the P&A Agreement, the FDIC agreed to transfer net assets to First Federal at a discount to compensate First Federal for losses not covered by the loss sharing agreement. Details related to the transfer at April 27, 2012, are as follows:

(in thousands)	As of April 27, 2012
Net assets per Purchase and Assumption Agreement	$	1,149
Purchase accounting adjustments
Loans		(47,907	)
FDIC indemnification asset, net		34,300
Other real estate owned		(14,524	)
Other intangible assets, net		1,710
Deposits		2,174
Advances from FHLB		355
Deferred tax liability		5,583
Other liabilities		3,500
Net assets acquired	$	(36,884	)

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