FORM 11-K
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
ANNUAL REPORT
PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1996
A. Full title of the plan and the address of the plan, if different from
that of the issuer named below:
The First Financial Holdings, Inc. Sharing Thrift Plan
B. Name of issuer of the securities held pursuant to the plan and the
address of its principal executive office:
First Financial Holdings, Inc.
34 Broad Street
Charleston, SC 29401
THE PLAN IS SUBJECT TO THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974,
AS AMENDED ("ERISA"). IN ACCORDANCE WITH ITEM NO. 4 OF REQUIRED
INFORMATION, THE PLAN FINANCIAL STATEMENTS AND SCHEDULES ATTACHED HERETO
WERE PREPARED IN ACCORDANCE WITH THE FINANCIAL REPORTING REQUIREMENTS OF
ERISA.
FIRST FINANCIAL HOLDINGS, INC.
SHARING THRIFT PLAN
Financial Statements
December 31, 1996 and 1995
(With Independent Auditors' Report Thereon)
CONTENTS
Independent Auditors' Report 1
Financial Statements for 1996 and 1995
Statements of Net Assets Available for Plan Benefits, With Fund
Information 2
Statement of Changes in Net Assets Available for Benefits,
With Fund Information 3-4
Notes to Financial Statements 5-10
Schedules Supporting 1996 Financial Statements
Schedule I - Assets Held for Investment Purposes - Item 27a 11
Schedule II - Summary of Reportable Transactions - Item 27d 12
Signature 13
Independent Auditors Consent 14
INDEPENDENT AUDITORS' REPORT
The Plan Trustees
First Financial Holdings, Inc. Sharing Thrift Plan
We have audited the accompanying statements of net assets available for
plan benefits, with fund information, of the First Financial Holdings, Inc.
Sharing Thrift Plan (the "Plan") as of December 31, 1996 and 1995 and the
related statement of changes in net assets available for plan benefits for
the years then ended. These financial statements are the responsibility of
the Trustees of the Plan. Our responsibility is to express an opinion on
these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audits to
obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles
used and significant estimates made by management, as well as evaluating
the overall financial statement presentation. We believe that our audits
provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the net assets available for plan benefits as of
December 31, 1996 and 1995, and the changes in net assets available for
plan benefits for the years then ended in conformity with generally
accepted accounting principles.
Our audit for the year ended December 31, 1996 was made for the purpose of
forming an opinion on the basic financial statements taken as a whole. The
supplementary information included in Schedules I and II is presented for
purposes of additional analysis and is not a required part of the basic
financial statements, but is supplementary information required by the
Department of Labor's Rules and Regulations for Reporting and Disclosure
under the Employee Retirement Income Security Act of 1974. The Fund
information in the statements of net assets available for benefits is
presented for purposes of additional analysis rather than to present the
net assets available for benefits and changes in net assets available for
benefits of each fund. The supplemental schedules and Fund information
have been subjected to the auditing procedures applied in the audit of the
basic financial statements and, in our opinion, are fairly stated in all
material respects in relation to the basic financial statements taken as a
whole.
MCLAIN, MOISE & ASSOCIATES, PC
June 23, 1997
FIRST FINANCIAL HOLDINGS, INC.
SHARING THRIFT PLAN
Statements of Net Assets Available for Plan Benefits, With Fund Information
December 31, 1996 and 1995
December 31, 1996
Equity Fixed Stock Growth Bond Loans
Fund Fund Fund Fund Fund Fund Total
- ---------------------------------------------------------------------------------------------------
Assets:
Investments, at
fair value $ 5,746,952 $ 3,358,579 $ 8,341,630 $ 3,085,512 $ 325,526 $ - $20,858,199
Employer
contributions
receivable 55,291 31,767 157,800 45,896 8,030 - 298,784
Due(to)from
other funds - - - - - - -
Loans receivable
from
participants - - - - - 224,166 224,166
-------------------------------------------------------------------------------
Net assets
available for
benefits $ 5,802,243 $ 3,390,346 $ 8,499,430 $ 3,131,408 $ 333,556 $224,166 $21,381,149
===============================================================================
December 31, 1995
Equity Fixed Stock Growth Bond Loans
Fund Fund Fund Fund Fund Fund Total
- ---------------------------------------------------------------------------------------------------
Assets:
Investments, at
fair value $ 5,183,969 $ 3,277,179 $ 7,116,482 $ 2,252,317 $312,887 $ - $18,142,834
Employer
contributions
receivable 91,054 66,821 249,202 57,239 14,463 - 478,779
Due(to)from other
funds (371,185) 348,583 70,198 (33,592) (14,004) - -
Loans receivable
from
participants - - - - - 210,421 210,421
Liabilities:
Accounts payable (4,298) (3,184) (6,644) (1,838) (249) - (16,213)
-------------------------------------------------------------------------------
Net assets
available for
plan benefits $ 4,899,540 $ 3,689,399 $ 7,429,238 $ 2,274,126 $ 313,097 $210,421 $18,815,821
===============================================================================
See accompanying notes to financial statements
FIRST FINANCIAL HOLDINGS, INC.
SHARING THRIFT PLAN
Statement of Changes in Net Assets Available for Plan Benefits, With Fund Information
December 31, 1996
Loans
Equity Fixed Stock Growth Bond to
Fund Fund Fund Fund Fund Participants Total
- -----------------------------------------------------------------------------------------------------------------------
Additions to net assets attributable to:
Investment income:
Net appreciation (depreciation)
in fair value of investments $ 573,606 $ - $1,186,807 $ 235,091 $ - $ - $ 1,995,504
Interest - 204,970 6,887 - 10,839 24,289 246,985
Dividends 190,409 - 241,293 173,930 - - 605,632
Total investment income 764,015 204,970 1,434,987 409,021 10,839 24,289 2,848,121
Contributions
Participants 321,546 174,920 193,902 232,995 33,205 - 956,568
Cafeteria credits - 45,111 - - - - 45,111
Employer match - - 462,436 - - - 462,436
Employer profit sharing 214,558 135,988 129,137 159,528 32,521 - 671,732
Total contribution 536,104 356,019 785,475 392,523 65,726 - 2,135,847
Total additions 1,300,119 560,989 2,220,462 801,544 76,565 24,289 4,983,968
Deductions from net assets
attributable to:
Benefits and withdrawals paid to
participants 479,492 570,181 1,163,086 123,701 21,766 - 2,358,226
Administrative fees 21,496 15,226 19,214 10,447 1,335 - 67,718
Total deductions 500,988 585,407 1,182,300 134,148 23,101 - 2,425,944
Net increase (decrease) prior to
transfers 799,131 (24,418) 1,038,162 667,396 53,464 24,289 2,558,024
Transfers:
Rollover contributions 4,383 - - 2,921 - - 7,304
Interfund transfers 99,189 (274,635) 32,030 186,965 (33,005) (10,544) -
Total transfers 103,572 (274,635) 32,030 189,886 (33,005) (10,544) 7,304
-
Net increase (decrease) 902,703 (299,053) 1,070,192 857,282 20,459 13,745 2,565,328
Net assets available for plan benefits,
Beginning of year 4,899,540 3,689,399 7,429,238 2,274,126 313,097 210,421 18,815,821
----------------------------------------------------------------------------------
End of year $5,802,243 $3,390,346 $8,499,430 $3,131,408 $ 333,556 $ 224,166 $ 21,381,149
==================================================================================
See accompanying notes to financial statements
FIRST FINANCIAL HOLDINGS, INC.
SHARING THRIFT PLAN
Statement of Changes in Net Assets Available for Plan Benefits, With Fund Information
December 31, 1995
Equity Fixed Stock Growth Bond Loans to
Fund Fund Fund Fund Fund Participants Total
- -----------------------------------------------------------------------------------------------------------------------
Additions to net assets attributable to:
Investment income:
Net appreciation
(depreciation) in fair
value of investments $ 775,673 $ - $ 800,172 $ 445,960 $ 17,861 $ - $ 2,039,666
Interest - 218,572 6,973 - 17,552 19,489 262,586
Dividends 145,143 - 209,212 20,971 - - 375,326
Total investment income 920,816 218,572 1,016,357 466,931 35,413 19,489 2,677,578
Contributions
Participants 292,012 185,577 207,988 183,318 33,681 - 902,576
Cafeteria credits - 64,283 - - - - 64,283
Employer match - - 355,904 - - - 355,904
Employer profit sharing 169,340 126,167 101,477 105,566 28,004 - 530,554
Total contribution 461,352 376,027 665,369 288,884 61,685 - 1,853,317
Total additions 1,382,168 594,599 1,681,726 755,815 97,098 19,489 4,530,895
Deductions from net assets attributable to:
Benefits and withdrawals paid to
participants 553,423 504,004 316,559 143,919 17,502 - 1,535,407
Administrative fees 16,279 13,394 15,170 5,267 895 - 51,005
Total deductions 569,702 517,398 331,729 149,186 18,397 - 1,586,412
Net increase (decrease) prior to
transfers 812,466 77,201 1,349,997 606,629 78,701 19,489 2,944,483
Transfers
Rollover contributions - - - - - - -
Interfund transfers (21,834) (285,333) 226,639 67,416 (26,748) 39,860 -
Total Transfers (21,834) (285,333) 226,639 67,416 (26,748) 39,860 -
Net increase (decrease) 790,632 (208,132) 1,576,636 674,045 51,953 59,349 2,944,483
Net assets available for plan benefits,
Beginning of year 4,108,908 3,897,531 5,852,602 1,600,081 261,144 151,072 15,871,338
-----------------------------------------------------------------------------------
End of year $ 4,899,540 $ 3,689,399 $7,429,238 $ 2,274,126 $ 313,097 $ 210,421 $ 18,815,821
===================================================================================
See accompanying notes to financial statements
FIRST FINANCIAL HOLDINGS, INC.
SHARING THRIFT PLAN
Notes to Financial Statements
December 31, 1996 and 1995
1. Description of Plan
The following description of First Financial Holdings, Inc. (the
"Company") Sharing Thrift Plan (the "Plan") provides only general
information. Participants should refer to the Plan agreement for a more
complete description of the Plan's provisions. The Company is the
holding company for First Federal Savings and Loan Association of
Charleston, South Carolina and subsidiaries ("First Federal") and
Peoples Federal Savings and Loan Association in Conway, South Carolina
and subsidiaries ("Peoples Federal") (together the "Thrifts").
A. General
The Plan is a defined contribution plan consisting of both a
tax-deferred 401(k) program and a tax-deferred profit sharing
program. The Plan covers all eligible hourly and salaried employees
of the Company and its subsidiaries. Employees who have completed
six months of service and who are expected to complete a year of
service are eligible to make tax-deferred contributions. Employees,
21 years of age and older, who have completed a year of service are
eligible to receive profit sharing contributions. The Plan is
subject to the provisions of the Employee Retirement Income Security
Act of 1974 (ERISA).
B. Contributions
The Plan permits eligible participants to contribute 2% to 15% of
their annual compensation (as defined and not to exceed limitations
prescribed by law).
The Company matches part or all of the participant s tax-deferred
contributions up to 5% of the participant's base compensation and
makes profit sharing contribution up to 6% of the participant's base
compensation. The percentage for the Company's matching contribution
and profit sharing contribution is determined for each of the Thrifts
based on the individual Thrift's annualized return on equity for each
quarter as follows:
Match and
Profit Sharing
Return on Equity Percentages
----------------------------------------------------------
Less than 4% 0%
4% to less than 8% 25%
8% to less than 12% 50%
12% to less than 16% 75%
16% or more 100%
C. Participant Accounts
Each participant's account is credited with the participant's
contribution and allocations of (a) the Company's contribution and,
(b) Plan earnings, and charged with an allocation of administrative
expenses. Allocations are based on participant earnings or account
balances, as defined. Forfeited balances of terminated participants'
nonvested accounts are in addition to Company contributions. The
benefit to which a participant is entitled is the benefit that can be
provided from the participant's vested account.
D. Vesting
The participant contributions and Company-match contributions are
immediately vested. The participants vest in the profit sharing
contributions at 10% per year for the first four years, and at 20%
per year thereafter, until fully vested at seven years.
E. Investment Options
Upon enrollment in the Plan, participating employees may elect for
their contributions and allocated employer profit sharing
contributions to be invested in any of five investment funds as
follows:
Participant-directed funds:
- The Equity Fund is an unsegregated diversified managed fund
invested in equity investments selected by the Trustees.
Effective January 3, 1995, all equity fund investments were
transferred to the Fidelity Puritan fund.
- The Fixed Fund consists of investments in certificates of deposit
and/or interest-bearing deposit accounts of the Thrifts.
- The Stock Fund invests in common stock of First Financial
Holdings, Inc.
- The Growth Fund is an unsegregated diversified managed balanced
fund that seeks to provide long-term growth of capital. Effective
January 3, 1995 all Growth Fund investments were transferred to
the Fidelity Value fund.
- The Bond Fund is an unsegregated diversified managed fixed income
fund that invests primarily in investment grade bonds and seeks to
provide a high level of current income consistent with the
maintenance of principal and liquidity. Effective January 3,
1995, all Bond Fund investments were transferred to the Fidelity
Intermediate Bond fund.
Investments in the Stock Fund are generally not available for transfer
to other investment options. (Refer to page 10; 7. Amendments to the
Plan.)
Nonparticipant-directed funds: The Company's matching contributions
are invested in common stock of First Financial Holdings, Inc.
Information is not available to report the participant-directed and
nonparticipant-directed stock investments separately.
During 1996 and 1995, participants could change their investment
options quarterly.
F. Loans Receivable from Participants
Participants may borrow from the Plan after one year of
participation. A participant must borrow at least $2,500 with the
maximum amount being the lesser of (1) $50,000 less any outstanding
balance on Plan loans over the last 12 months, or (2) the greater of
$10,000 or one-half of the participant's Plan account balance.
Generally, Plan loans are limited to one-half of the participant's
Plan account balance. In addition, the amounts invested in the First
Financial Stock Fund are not available for borrowing.
G. Payment of Benefits
On termination of service due to death, disability or retirement, a
participant will receive the value of the participant's vested
interest in his or her account. A participant is no longer eligible
to participate in the Plan after retirement or termination.
A participant may also receive a hardship distribution upon meeting
certain immediate financial need requirements and receiving
management approval.
2. Summary of Accounting Policies
A. Basis of Accounting
The financial statements of the Plan are prepared under the accrual
method of accounting.
B. Investment Valuation and Income Recognition
The Plan's investments are stated at fair value. Shares of
registered investment companies are valued at quoted market prices
which represent the net asset value of shares held by the Plan at
year end. The First Financial Holdings, Inc. common stock in the
Stock Fund is valued at the average of the bid and asked quoted
market price. Loans receivable from participants are valued at cost
which approximates fair value.
Purchases and sales of securities are recorded on a trade-date basis.
Interest income is recorded on the accrual basis. Dividends are
recorded on the ex-dividend date.
C. Payment of Benefits and Withdrawals
Benefits are recorded when paid. Benefits attributable to terminated
employees at December 31, 1996 and 1995, which were paid in the
subsequent year were $175,831 and $89,123, respectively.
Amounts allocated to withdrawing participants may be recorded on the
Form 5500 for benefit claims that have been processed and approved
for payment prior to December 31 but not yet paid as of that date.
D. Use of Estimates
In conforming to generally accepted accounting principles,
preparation of the financial statements requires the use of estimates
made by management.
3. Investments
Plan assets are held in a trust established pursuant to an agreement
between the Company and the Trustees, who are officers of the Company or
Thrifts. The Trustees direct the investment activities of the trust and
have full discretionary authority for the purchase and sale of
investments, subject to the participants' investment elections and
certain other specified limitations. The fair values of the investments
of the trust at December 31, 1996 and 1995, were as follows:
1996 1995
--------------------------
Cash demand deposits held by:
First Financial Holdings, Inc. $ 63,687 $ 198,323
Mutual Funds:
Fidelity Puritan Fund 5,746,952 5,183,969
Fidelity Intermediate Bond Fund 325,526 312,887
Fidelity Value Fund 3,085,512 2,252,317
Certificates of deposit accounts:
First Federal or Peoples Federal 3,314,222 3,217,624
Equity securities:
First Financial Holdings, Inc.
common stock 8,322,300 6,977,714
--------------------------
Total investments $ 20,858,199 $ 18,142,834
==========================
Certificates of deposit at December 31, 1996 consisted of the amount on
deposit with the Thrifts with interest rates ranging from 4.00% to 8.35%
and maturities of three months to five years. During 1996 and 1995, the
Plan's mutual funds appreciated in value in the amounts of $808,697 and
$1,239,494, respectively. During 1996 and 1995, the Plan's equity
securities appreciated in value in the amounts of $1,186,807 and
$800,172, respectively. These amounts represent the total of the net
realized gain or loss from investment transactions and the net
unrealized appreciation or depreciation of investments. The method used
in calculating realized gains and losses is based on average net cost.
The investments of the Stock Fund on the Statements of Net Assets
Available for Benefits include certain invested cash to be used for
future purchases of equity securities.
4. Contributions and Contributions Receivable
The Thrift's quarterly return on equity resulted in the following
estimated average employer matching contributions (for those
participants contributing at least 5%) and employer profit sharing
contributions.
1996 1995
------------------
Employer matching contributions:
First Federal 3.75% 2.81%
Peoples Federal 3.75% 3.75%
Employer profit sharing contributions:
First Federal 4.50% 3.38%
Peoples Federal 4.50% 4.50%
These estimates represent the multiplication of the average return on
equity percentages (in accordance with the schedule in Note 1.B.) times
the 5% maximum matching percentage and 6% profit sharing percentage,
respectively.
Contributions receivable include the following:
December 31
1996 1995
---------------------
Profit sharing:
Third quarter $ - 259,714
Fourth quarter 298,784 219,065
Total 298,784 478,779
5. Related Party Transactions
The Plan is administered by a committee consisting of three or more
persons who are officers of the Company or the Thrifts. Members are
appointed by the Company's Board of Directors.
Expenses incurred in connection with the administration of the Plan are
paid by the Plan. Administrative expenses paid by the Plan during 1996
and 1995 amounted to $67,718 and $51,005, respectively.
6. Tax Status
The Internal Revenue Service has previously informed the Plan's
administrators that the Plan is qualified under Sections 401(a) and
401(k) of the Internal Revenue Code, and of the exempt status of the
trust under Section 501(a) of the Code.
The Plan obtained its latest determination letter on May 20, 1996, in
which the IRS stated that the Plan, as then designed, was in compliance
with the applicable requirements of the Internal Revenue Code. Further,
the continued qualification of the Plan is dependent on its effect in
operations. The plan administrator and the Plan's legal counsel believe
that the Plan is currently designed and being operated in compliance
with the applicable requirements of the Internal Revenue Code.
Therefore, they believe that the Plan was qualified and that the related
trust was tax exempt as of the financial statement date.
7. Amendments to the Plan
The Plan was amended during 1993 through 1997 for certain technical
requirements of the Unemployment Compensation Amendment Act of 1992,
Omnibus Budget Reconciliation Act of 1993 and Tax Reform Act of 1986, as
well as resolutions of the Trustees.
Effective July 1, 1997, any participant, who has attained 10 years of
service and 50 years of age, may make a one-time transfer of amounts
held in their Stock Fund to other investment funds. In the event of
this transfer, a 12 month waiting period will be in effect for further
investments in the Stock Fund.
Also effective July 1, 1997, special eligibility provisions permitted
certain part-time employees to participate in the Plan.
8. Plan Termination
Although it has not expressed any intent to do so, the Company has the
right under the Plan to discontinue its contributions at any time and to
terminate the Plan subject to the provisions of ERISA. In the event of
Plan termination, participants will become 100 percent vested in their
accounts.
FIRST FINANCIAL HOLDINGS, INC.
SHARING THRIFT PLAN
Schedule I
Assets Held for Investment Purposes - Item 27a
December 31, 1996
Identity of Issue, Borrower,
Lessor or Similar Party Description of Investment Cost Current Value
- ------------------------------------------------------------------------------------------------
Cash on deposit with
First Federal or Peoples Federal* Interest-bearing deposits $ 63,687 $ 63,687
Mutual Funds
Fidelity Puritan Fund 5,746,952 5,746,952
Fidelity Intermediate Bond Fund 325,526 325,526
Fidelity Value Fund 3,085,512 3,085,512
Certificates of deposit:
First Federal or Peoples Federal* Maturing 1997-2000 3,314,222 3,314,222
Common Stock:
First Financial Holdings, Inc.* Shares of common stock 4,724,177 8,322,300
Total investments on balance sheet 17,260,076 20,858,199
Loans due from participants Bearing various interest
rates and maturities 224,166 224,166
- ------------------------------------------------------------------------------------------------
Total investments and loans $ 17,484,242 $ 21,082,365
================================================================================================
*Parties-in-interest to the Plan.
See accompanying independent auditors report
FIRST FINANCIAL HOLDINGS, INC.
SHARING THRIFT PLAN
Schedule II
Schedule of Reportable Transaction - Item 27d
Year Ended December 31, 1996
Sales
----------------------------------
Identity of Party Net Gain
Involved Description of Assets Purchases Proceeds Cost (Loss)
- -----------------------------------------------------------------------------------------------
First Federal or Peoples Certificates of
Federal* deposit $2,950,645 $2,854,645 $2,854,645 $ -
First Financial
Holdings* Common Stock $1,310,290 $1,152,511 $ 646,739 $ 505,772
*Parties-in-interest
See accompanying independent auditors report
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Tustees (or other persons who administer the employee benefit plan)
have duly caused this annual report to be signed on its behalf by the
undersigned hereunto duly authorized.
First Financial Holdings, Inc.
Sharing Thrift Plan
Date: June 27, 1997 By: A. Thomas Hood
A. Thomas Hood
Member of The First Financial
Holdings, Inc. Sharing Thrift
Plan Committee
MCLAIN, MOISE & ASSOCIATES, PC
Certified Public Accountants Maritime Bldg.
Suite 101
215 East Bay Street
Charleston, S.C. 29401
Tel: (803) 577-0414
Fax: (803) 577-0428
INDEPENDENT AUDITORS' CONSENT
The Board of Directors
First Financial Holdings, Inc.
We consent to the inclusion of our report dated June 23, 1997, with respect
to the Statement of Net Assets Available for Benefits, With Fund
Information as of December 31, 1996 and 1995, and the related Statement of
Changes in Net Assets for Benefits, With Fund Information for the years
ended December 31, 1996 and 1995, which report appears in the Form 11-K of
First Financial Holdings, Inc. dated June 23, 1997.
MCLAIN, MOISE & ASSOCIATES, PC
Charleston, South Carolina
June 23, 1997