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
June 30, 2004OR
[ ]
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 NOAPPLICABLE 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
July 30, 2004
$.01 Par Value
12,369,935
FIRST FINANCIAL HOLDINGS, INC.
INDEX
PART I -- CONSOLIDATED FINANCIAL INFORMATION
PAGE NO.
Item
1.
Consolidated Financial Statements
Consolidated Statements of Financial Condition
1
at June 30, 2004 and September 30, 2003
Consolidated Statements of Income for the Three
Months Ended June 30, 2004 and 2003
2
Consolidated Statements of Income for the Nine
Months Ended June 30, 2004 and 2003
3
Consolidated Statements of Stockholders' Equity and
Comprehensive Income at June 30, 2004 and 2003
4
Consolidated Statements of Cash Flows for the
Nine months Ended June 30, 2004 and 2003
5
Notes to Consolidated Financial Statements
6-16
2.
Management's Discussion and Analysis of Financial
17-37
Condition and Results of Operations
3.
Quantitative and Qualitative Disclosures About Market Risk
37
4.
Controls and Procedures
38
PART II -- OTHER INFORMATION
Item
1.
Legal Proceedings
39
2.
Changes in Securities, Use of Proceeds and Issuer Purchases of Equity Securities
40
6.
Exhibits and Report on Form 8-K
41-42
SIGNATURES
43
EXHIBIT 31 -- CERTIFICATIONS
44-45
EXHIBIT 32 -- CERTIFICATION OF CHIEF EXECUTIVE OFFICER AND
CHIEF FINANCIAL OFFICER
46
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 June 30, September 30, 2004 2003 (Amounts in thousands) (Unaudited) ASSETS Cash and cash equivalents $ 94,386 $ 85,523 Investments available for sale, at fair value 30,951 13,787 Investment in capital stock of FHLB, at cost 37,600 29,900 Loans receivable, net of allowance of $14,780 and $14,957 1,805,170 1,781,881 Loans held for sale 7,292 20,051 Mortgage-backed securities available for sale, at fair value 361,409 303,470 Accrued interest receivable 9,045 8,823 Office properties and equipment, net 51,704 37,199 Real estate and other assets acquired in settlement of loans 4,325 4,009 Intangible assets 22,621 16,351 Other assets 27,369 21,888 Total assets $ 2,451,872 $ 2,322,882 LIABILITIES AND STOCKHOLDERS' EQUITY Liabilities: Deposit accounts $ 1,468,169 $ 1,481,651 Advances from Federal Home Loan Bank 722,000 598,000 Other short-term borrowings 1,103 24,075 Long-term debt 46,392 Advances by borrowers for taxes and insurance 5,333 5,904 Outstanding checks 17,525 21,719 Accounts payable and other liabilities 28,125 28,527 Total liabilities 2,288,647 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 16,051,576 and 15,870,130 shares at June 30, 2004 and September 30, 2003, respectively 161 159 Additional paid-in capital 43,775 41,106 Retained income, substantially restricted 186,183 176,111 Accumulated other comprehensive (loss) income, net of income taxes (2,383 )
672 Treasury stock at cost, 3,669,168 and 3,348,029 shares at June 30, 2004 and September 30, 2003, respectively (64,511 )
(55,042 )
Total stockholders' equity 163,225 163,006 Total liabilities and stockholders' equity $ 2,451,872 $ 2,322,882 The accompanying notes are an integral part of the consolidated financial statements. 1
FIRST FINANCIAL HOLDINGS, INC. CONSOLIDATED STATEMENTS OF INCOME Three Months Ended June 30, 2004 2003 (Amounts in thousands, except per share amounts) (Unaudited) INTEREST INCOME Interest and fees on loans $ 27,386 $ 30,583 Interest on mortgage-backed securities 3,704 2,046 Interest and dividends on investments 436 344 Other 19 25 Total interest income 31,545 32,998 INTEREST EXPENSE Interest on deposits 5,344 6,595 Interest on borrowed money 7,048 6,836 Total interest expense 12,392 13,431 NET INTEREST INCOME 19,153 19,567 Provision for loan losses 1,125 1,450 Net interest income after provision for loan losses 18,028 18,117 OTHER INCOME Net gain on sale of loans 390 2,749 Net gain on sale of investment and mortgage-backed securities 659 523 Brokerage fees 635 432 Commissions on insurance 4,140 3,085 Other agency income 373 256 Service charges and fees on deposit accounts 2,931 2,680 Loan servicing operations, net 2,122 (1,303 ) Real estate operations, net (197 )
(161 ) Other 1,273 1,019 Total other income 12,326 9,280 NON-INTEREST EXPENSE Salaries and employee benefits 11,302 10,770 Occupancy costs 1,261 1,314 Marketing 558 549 Depreciation, amortization, rental and maintenance of equipment 1,016 1,276 Prepayment penalties on FHLB advances 1,548 Other 4,117 3,389 Total non-interest expense 19,802 17,298 Income before income taxes 10,552 10,099 Income tax expense 3,850 3,614 NET INCOME $ 6,702 $ 6,485 NET INCOME PER COMMON SHARE BASIC $ 0.54 $ 0.51 NET INCOME PER COMMON SHARE DILUTED $ 0.52 $ 0.50 The accompanying notes are an integral part of the consolidated financial statements. 2
FIRST FINANCIAL HOLDINGS, INC. CONSOLIDATED STATEMENTS OF INCOME Nine Months Ended June 30, 2004 2003 (Amounts in thousands, except per share amounts) (Unaudited) INTEREST INCOME Interest and fees on loans $ 83,337 $ 96,110 Interest on mortgage-backed securities 10,676 5,375 Interest and dividends on investments 1,276 1,167 Other 53 98 Total interest income 95,342 102,750 INTEREST EXPENSE Interest on deposits 16,609 21,811 Interest on borrowed money 20,832 21,297 Total interest expense 37,441 43,108 NET INTEREST INCOME 57,901 59,642 Provision for loan losses 4,375 4,585 Net interest income after provision for loan losses 53,526 55,057 OTHER INCOME Net gain on sale of loans 1,344 7,311 Net gain on sale of investment and mortgage-backed securities 2,053 1,709 Brokerage fees 1,779 1,456 Commissions on insurance 12,007 9,354 Other agency income 1,065 765 Service charges and fees on deposit accounts 8,521 7,863 Loan servicing operations, net 1,387 (2,299 )
Real estate operations, net (656 )
(519 )
Other 3,716 3,333 Total other income 31,216 28,973 NON-INTEREST EXPENSE Salaries and employee benefits 33,841 32,764 Occupancy costs 3,900 3,901 Marketing 1,299 1,349 Depreciation, amortization, rental and maintenance of equipment 3,779 3,981 Prepayment penalties on FHLB advances 1,548 Other 11,745 10,306 Total non-interest expense 56,112 52,301 Income before income taxes 28,630 31,729 Income tax expense 10,284 11,367 NET INCOME $ 18,346 $ 20,362 NET INCOME PER COMMON SHARE BASIC $ 1.46 $ 1.58 NET INCOME PER COMMON SHARE DILUTED $ 1.42 $ 1.54 The accompanying notes are an integral part of the consolidated financial statements. 3
FIRST FINANCIAL HOLDINGS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY AND COMPREHENSIVE INCOME (Amounts in Thousands) (Unaudited)