First Financial Holdings, Inc. Announces Agreement to Sell First Southeast Insurance Services, Inc. to Hub International Limited
May 30, 2011
Positions Balance Sheet For Future Opportunities
CHARLESTON, SC – May 26, 2011 – First Financial Holdings, Inc. (Nasdaq: FFCH) (“First Financial”) today announced that it has agreed to sell its insurance agency subsidiary, First Southeast Insurance Services, Inc. (“First Southeast”), to Hub International Limited (“Hub”) for approximately $38 million in cash at closing, subject to certain post-closing adjustments for working capital. The closing of this transaction is expected to occur by the end of the second calendar quarter and is subject to customary closing conditions.
The sale of our insurance agency offers a unique opportunity for us to focus on our core business while enhancing our overall capital position,” said R. Wayne Hall, president and chief executive officer of First Financial. “This transaction accomplishes one of our strategic objectives of increasing our tangible equity and regulatory capital and therefore allowing us to be opportunistic in exploring strategies to better position the company for the future”.
“Hub is an excellent partner for the clients and employees of First Southeast,” Mr. Hall continued. “We expect to continue to have a mutually beneficial relationship with Hub after their acquisition of First Southeast so that First Financial’s customers can continue to receive outstanding products and services in banking, investments and insurance.”
As the result of this transaction, First Financial expects to recognize a pre-tax gain of approximately $6.9 million on the sale of First Southeast. First Financial anticipates that the redeployment of capital to its existing bank and wealth management businesses, including strategically attractive expansion opportunities, will offset the foregone earnings associated with the insurance business and ultimately will result in a greater return to shareholders.
Based on March 31, 2011 reported results, goodwill and intangible assets of $28.9 million will be eliminated as a part of this transaction.
First Southeast offers an extensive group of personal and business insurance products for individuals and businesses, group employee benefit plans and individual life, health and long term care products. The insurance operations of First Financial are among the largest in the Carolinas. It operates 10 offices in North Carolina and South Carolina under brand names Kinghorn Insurance Services, Associated Insurors, Johnson Insurance Associates, Peoples Insurance, Employers Benefit Strategies, Somers-Pardue Insurance Services and Benefit Administrators. First Southeast generates approximately $21 million in annual revenue.
Headquartered in Chicago, Illinois, Hub International Limited is a leading North American insurance brokerage that provides a broad array of property and casualty, reinsurance, life and health, employee benefits, and risk management products and services through offices located in the United States and Canada.
Sandler O’Neill + Partners, L.P. acted as financial advisor and Kilpatrick Townsend & Stockton LLP acted as legal advisor to First Financial.
About First Financial
First Financial Holdings, Inc. (First Financial) (Nasdaq: FFCH) is a premier financial services provider offering integrated financial solutions, including personal, business, wealth management, and insurance. First Financial serves individuals and businesses throughout coastal South Carolina, as well as the Florence, Columbia, and upstate regions of South Carolina and Wilmington, North Carolina. First Financial subsidiaries include: First Federal Savings and Loan Association of Charleston (First Federal); Kimbrell Insurance Group, Inc., a managing general insurance agency; First Southeast 401(k) Fiduciaries, Inc., a registered investment advisor; and First Southeast Investor Services, Inc., a registered broker-dealer. First Federal is the largest financial institution headquartered in the Charleston, South Carolina metropolitan area and the third largest financial institution headquartered in South Carolina, based on asset size. Additional information about First Financial is available at www.firstfinancialholdings.com.
