First Federal Acquires Cape Fear Bank's Deposits And Loans

First Federal Savings and Loan Association of Charleston ("First Federal"), a subsidiary of First Financial Holdings, Inc., has entered into an agreement with the Federal Deposit Insurance Corporation ("FDIC") to assume all of the deposits (excluding most brokered deposits) and

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First Federal Savings and Loan Association of Charleston (“First Federal”), a subsidiary of First Financial Holdings, Inc., has entered into an agreement with the Federal Deposit Insurance Corporation (“FDIC”) to assume all of the deposits (excluding most brokered deposits) and certain assets of Cape Fear Bank, a full service community bank headquartered in Wilmington, North Carolina. All Cape Fear Bank offices will be open and serving customers on Monday, April 13, 2009, as branches of First Federal. Cape Fear Bank depositors will automatically become depositors of First Federal, and deposits will continue to be insured by the FDIC. With this acquisition, First Federal will now operate 66 retail banking centers in North and South Carolina.

Over the weekend, depositors of Cape Fear Bank can access their money by writing checks or using ATM or debit cards. Checks drawn on Cape Fear Bank will continue to be processed. Loan customers should continue to make their payments as usual. Customers of both banks should continue to bank as they normally do at their existing branches.

“We are delighted to welcome Cape Fear Bank customers to the First Federal family of financial services companies,” says A. Thomas Hood, president and CEO of First Federal. “Customers can be confident that their deposits are safe and readily accessible. It’s business as usual. First Federal has served customers’ financial needs since 1934 with a deep commitment to building relationships.”

Cape Fear Bank operated eight locations in the Wilmington area. First Federal will be acquiring the assets and deposits of Cape Fear Bank at a discount of $74 million and a premium on deposits of 1%. In this transaction, First Federal will be receiving approximately $300 million of deposits, $380 million in loans and $4 million of other real estate owned (ORE) from Cape Fear Bank. The loans and ORE purchased are covered by a loss share agreement between the FDIC and First Federal. Under such agreement, the FDIC has agreed to cover 80% of the losses on the disposition of the loans and ORE up to $110 million, and 95% of losses that exceed that amount. In addition, First Federal will also be purchasing cash and other marketable securities of Cape Fear Bank.

Customers who have questions about the transaction can call the FDIC Call Center toll free at 1.866.806.6128. The phone number is operational this evening until 9:00 p.m. Eastern Daylight Time; on Saturday from 9:00 a.m. to 6:00 p.m. Eastern Daylight Time; on Sunday from noon to 6:00 p.m. Eastern Daylight Time and thereafter from 8:00 a.m. to 8:00 p.m. Eastern Daylight Time. Information is also available from the FDIC’s website at www.fdic.gov. In addition, they can visit their former Cape Fear Bank branch should they have questions about their banking relationship.

At December 31, 2008, First Financial’s assets were $3 billion. First Financial is publicly traded on the NASDAQ Global Select Market under the ticker symbol “FFCH.”

D.C.

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