FIRST FINANCIAL HOLDINGS INC /DE/ - 10-Q Quarterly Report

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UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

[X]

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Quarterly period ended December 31, 2003

OR

[  ]

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                 to

Commission File Number: 0-17122

FIRST FINANCIAL HOLDINGS, INC.

(Exact name of registrant as specified in its charter)

Delaware

57-0866076

(State or other jurisdiction of incorporation or organization)

(I.R.S. Employer Identification No.)

34 Broad Street, Charleston, South Carolina

29401

(Address of principal executive offices)

(Zip Code)

Registrant's telephone number, including area code

(843) 529-5933

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. YES   X   NO

Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act).

YES   X   NO

APPLICABLE ONLY TO CORPORATE ISSUERS: Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date.

Class

Outstanding Shares at

Common Stock

January 31, 2004

$.01 Par Value

12,570,740

FIRST FINANCIAL HOLDINGS, INC.

INDEX

PART I - CONSOLIDATED FINANCIAL INFORMATION

PAGE NO.

Item

1.

Consolidated Financial Statements

Consolidated Statements of Financial Condition

1

at December 31, 2003 and September 30, 2003

Consolidated Statements of Income for the Three
2

Months Ended December 31, 2003 and 2002

Consolidated Statements of Stockholders' Equity and

3

Comprehensive Income at December 31, 2003 and 2002

Consolidated Statements of Cash Flows for the

4

Three months Ended December 31, 2003 and 2002

Notes to Consolidated Financial Statements

5-12

2.

Management's Discussion and Analysis of Financial

13-27

Condition and Results of Operations

3.
Quantitative and Qualitative Disclosures About Market Risk

28

4.
Controls and Procedures

28

PART II - OTHER INFORMATION

Item

1. Legal Proceedings
29

6.

Exhibits and Report on Form 8-K

29-31

SIGNATURES

32

EXHIBIT 3 - AMENDMENT TO REGISTRANT'S BYLAWS

33

EXHIBIT 31 - CERTIFICATIONS

34-35

EXHIBIT 32 - CERTIFICATION OF CHIEF EXECUTIVE OFFICER AND

36

CHIEF FINANCIAL OFFICER

SCHEDULES OMITTED

All schedules other than those indicated above are omitted because of the absence of the conditions under which they are required or because the information is included in the Financial Statements and related notes.

FIRST FINANCIAL HOLDINGS, INC.

CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION

December 31, September 30,

2003 2003

(Amounts in thousands)

(Unaudited)

ASSETS

Cash and cash equivalents
$
83,478 $ 85,523

Investments available for sale, at fair value 24,626 13,787

Investment in capital stock of FHLB, at cost 34,300 29,900

Loans receivable, net of allowance of $14,809 and $14,957 1,789,990 1,781,881

Loans held for sale 11,682 20,051

Mortgage-backed securities available for sale, at fair value 402,489 303,470

Accrued interest receivable 9,339 8,823

Office properties and equipment, net 36,503 37,199

Real estate and other assets acquired in settlement of loans 3,606 4,009

Intangible assets 16,255 16,351

Other assets 21,813 21,888

Total assets
$
2,434,081 $ 2,322,882

LIABILITIES AND STOCKHOLDERS' EQUITY

Liabilities:

   Deposit accounts $ 1,428,440 $ 1,481,651

Advances from Federal Home Loan Bank 664,000 598,000

Other short-term borrowings 139,202 24,075

Advances by borrowers for taxes and insurance 1,303 5,904

Outstanding checks 14,822 21,719

Accounts payable and other liabilities 21,504 28,527

Total liabilities 2,269,271 2,159,876

Stockholders' equity:

Serial preferred stock, authorized 3,000,000 shares--none issued

Common stock, $.01 par value, authorized 24,000,000 shares,

issued and outstanding 15,943,298 and 15,870,130 shares

at December 31, 2003 and September 30, 2003, respectively 159 159

Additional paid-in capital 42,394 41,106

Retained income, substantially restricted 178,614 176,111

Accumulated other comprehensive (loss) income, net of income taxes (693
)
672

Treasury stock at cost, 3,368,364 and 3,348,029 shares at December 31,

2003 and September 30, 2003, respectively (55,664
)
(55,042
)

Total stockholders' equity 164,810 163,006

Total liabilities and stockholders' equity $ 2,434,081 $ 2,322,882

The accompanying notes are an integral part of the statements.

1

FIRST FINANCIAL HOLDINGS, INC.

CONSOLIDATED STATEMENTS OF INCOME



Three Months Ended

December 31,

2003 2002

(Amounts in thousands,

except per share amounts)

(Unaudited)

INTEREST INCOME

Interest and fees on loans $ 28,208 $ 33,820

Interest on mortgage-backed securities 3,108 1,614

Interest and dividends on investments 427 441

Other 17 43

Total interest income 31,760 35,918

INTEREST EXPENSE

Interest on deposits 5,759 8,082

Interest on borrowed money 6,862 7,451

Total interest expense 12,621 15,533

NET INTEREST INCOME 19,139 20,385

Provision for loan losses 1,425 1,485

Net interest income after provision for loan losses 17,714 18,900

OTHER INCOME

Net gain on sale of loans 210 2,012

Net gain on sale of investment and mortgage-backed securities 436 326

Brokerage fees 494 395

Commissions on insurance 2,846 2,384

Other agency income 262 252

Service charges and fees on deposit accounts 2,757 2,677

Loan servicing operations, net 415 71

Real estate operations, net (185
)
(157
)

Other 1,230 1,245

Total other income 8,465 9,205

NON-INTEREST EXPENSE

Salaries and employee benefits 11,301 11,103

Occupancy costs 1,282 1,324

Marketing 350 414

Depreciation, amortization, rental and maintenance of equipment 1,432 1,376

FDIC insurance premiums 57 62

Other 3,583 3,393

Total non-interest expense 18,005 17,672

Income before income taxes 8,174 10,433

Income tax expense 2,920 3,725

NET INCOME $ 5,254 $ 6,708

NET INCOME PER COMMON SHARE BASIC $ 0.42 $ 0.51

NET INCOME PER COMMON SHARE DILUTED $ 0.41 $ 0.50

The accompanying notes are an integral part of the statements.

2

FIRST FINANCIAL HOLDINGS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY AND COMPREHENSIVE INCOME

(amounts in thousands)

(unaudited)

Accumulated

Additional

Other

Common Stock

Paid-in

Retained

Comprehensive

Treasury Stock

Amount

Capital

Income

Income (Loss)

Amount

Total

Balance at September 30, 2002

15,733

157

38,656

158,680

2,226

2,538

(34,071

) $

165,648

Net income

6,708

Other comprehensive loss:

Unrealized net loss on securities

available for sale,

net of income tax

UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q

[X]		QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


For the Quarterly period ended December 31, 2003

OR

[ ]	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number: 0-17122


FIRST FINANCIAL HOLDINGS, INC.
(Exact name of registrant as specified in its charter)

Delaware				57-0866076
(State or other jurisdiction of incorporation or organization)				(I.R.S. Employer Identification No.)

34 Broad Street, Charleston, South Carolina				29401
(Address of principal executive offices)				(Zip Code)

Registrant's telephone number, including area code				(843) 529-5933

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. YES X NO

Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act). YES X NO

APPLICABLE ONLY TO CORPORATE ISSUERS: Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date.

Class			Outstanding Shares at
Common Stock			January 31, 2004

$.01 Par Value			12,570,740

PART I - CONSOLIDATED FINANCIAL INFORMATION					PAGE NO.

Item
1.	Consolidated Financial Statements
				Consolidated Statements of Financial Condition	1
				at December 31, 2003 and September 30, 2003

				Consolidated Statements of Income for the Three	2
				Months Ended December 31, 2003 and 2002

				Consolidated Statements of Stockholders' Equity and	3
				Comprehensive Income at December 31, 2003 and 2002

				Consolidated Statements of Cash Flows for the	4
				Three months Ended December 31, 2003 and 2002

				Notes to Consolidated Financial Statements	5-12

2.		Management's Discussion and Analysis of Financial			13-27
			Condition and Results of Operations

3.		Quantitative and Qualitative Disclosures About Market Risk			28

4.		Controls and Procedures			28


PART II - OTHER INFORMATION

Item
1.		Legal Proceedings			29

6.		Exhibits and Report on Form 8-K			29-31

SIGNATURES					32

EXHIBIT 3 - AMENDMENT TO REGISTRANT'S BYLAWS					33

EXHIBIT 31 - CERTIFICATIONS					34-35

EXHIBIT 32 - CERTIFICATION OF CHIEF EXECUTIVE OFFICER AND					36
		CHIEF FINANCIAL OFFICER

SCHEDULES OMITTED

All schedules other than those indicated above are omitted because of the absence of the conditions under which they are required or because the information is included in the Financial Statements and related notes.

FIRST FINANCIAL HOLDINGS, INC.
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION

			December 31,		September 30,

			2003		2003

			(Amounts in thousands)
			(Unaudited)
ASSETS
Cash and cash equivalents			$	83,478	$	85,523
Investments available for sale, at fair value				24,626		13,787
Investment in capital stock of FHLB, at cost				34,300		29,900
Loans receivable, net of allowance of $14,809 and $14,957				1,789,990		1,781,881
Loans held for sale				11,682		20,051
Mortgage-backed securities available for sale, at fair value				402,489		303,470
Accrued interest receivable				9,339		8,823
Office properties and equipment, net				36,503		37,199
Real estate and other assets acquired in settlement of loans				3,606		4,009
Intangible assets				16,255		16,351
Other assets				21,813		21,888

Total assets			$	2,434,081	$	2,322,882




LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
	Deposit accounts		$	1,428,440	$	1,481,651
	Advances from Federal Home Loan Bank			664,000		598,000
	Other short-term borrowings			139,202		24,075
	Advances by borrowers for taxes and insurance			1,303		5,904
	Outstanding checks			14,822		21,719
	Accounts payable and other liabilities			21,504		28,527

Total liabilities				2,269,271		2,159,876


Stockholders' equity:
	Serial preferred stock, authorized 3,000,000 shares--none issued
	Common stock, $.01 par value, authorized 24,000,000 shares,
		issued and outstanding 15,943,298 and 15,870,130 shares
		at December 31, 2003 and September 30, 2003, respectively		159		159
	Additional paid-in capital			42,394		41,106
	Retained income, substantially restricted			178,614		176,111
	Accumulated other comprehensive (loss) income, net of income taxes			(693	)	672
	Treasury stock at cost, 3,368,364 and 3,348,029 shares at December 31,
		2003 and September 30, 2003, respectively		(55,664	)	(55,042	)

Total stockholders' equity				164,810		163,006

Total liabilities and stockholders' equity			$	2,434,081	$	2,322,882




The accompanying notes are an integral part of the statements.

FIRST FINANCIAL HOLDINGS, INC.
CONSOLIDATED STATEMENTS OF INCOME

		Three Months Ended
		December 31,

		2003		2002

			(Amounts in thousands,
			except per share amounts)
			(Unaudited)
INTEREST INCOME
	Interest and fees on loans	$	28,208	$	33,820
	Interest on mortgage-backed securities		3,108		1,614
	Interest and dividends on investments		427		441
	Other		17		43

Total interest income			31,760		35,918

INTEREST EXPENSE
	Interest on deposits		5,759		8,082
	Interest on borrowed money		6,862		7,451

Total interest expense			12,621		15,533

NET INTEREST INCOME			19,139		20,385
Provision for loan losses			1,425		1,485

Net interest income after provision for loan losses			17,714		18,900

OTHER INCOME
	Net gain on sale of loans		210		2,012
	Net gain on sale of investment and mortgage-backed securities		436		326
	Brokerage fees		494		395
	Commissions on insurance		2,846		2,384
	Other agency income		262		252
	Service charges and fees on deposit accounts		2,757		2,677
	Loan servicing operations, net		415		71
	Real estate operations, net		(185	)	(157	)
	Other		1,230		1,245

Total other income			8,465		9,205

NON-INTEREST EXPENSE
	Salaries and employee benefits		11,301		11,103
	Occupancy costs		1,282		1,324
	Marketing		350		414
	Depreciation, amortization, rental and maintenance of equipment		1,432		1,376
	FDIC insurance premiums		57		62
	Other		3,583		3,393

Total non-interest expense			18,005		17,672

Income before income taxes			8,174		10,433
Income tax expense			2,920		3,725

NET INCOME		$	5,254	$	6,708



NET INCOME PER COMMON SHARE BASIC		$	0.42	$	0.51



NET INCOME PER COMMON SHARE DILUTED		$	0.41	$	0.50




The accompanying notes are an integral part of the statements.