EXHIBIT 13
----------
Not just a bank. A bank and
TRUST
SCBT
[LOGO] FINANCIAL
CORPORATION
2004 annual report
SCBT
At a Glance
INVESTMENT HIGHLIGHTS
- -----------------------------------------------------------------
o 5 year Compound Annual Growth Rate (CAGR) of
- Total Assets ........................10.4%
- Deposits ............................11.6%
- Cash Dividends .......................8.4%
o 5 year Total Return ......................102%
2004 HIGHLIGHTS
- -----------------------------------------------------------------
o Loan Growth of 23%
o Low net charge-offs; 15 basis points of average loans
o Noninterest Deposit Growth of 33%
o Deposit Growth of 24%
o Announced 5% stock dividend
o Total return on stock 20.2%
o Opened new banking offices
- Greenville
- Hilton Head
- Summerville
- Fort Mill (Loan Production Office)
o Formed The Mortgage Banc
o Formed The Wealth Management Group
o Announced plans to acquire New Commerce BanCorp
2004 Financial Summary
---------------------------------------------------------------------
2004 2003 % Change
---------------------------------------------------------------------
(Dollars in thousands except per share)
---------------------------------------------------------------------
Loans, Net of
Unearned Discount $ 1,153,230 $ 938,760 22.8 %
---------------------------------------------------------------------
Total Assets $ 1,436,977 $ 1,197,692 20.0 %
---------------------------------------------------------------------
Total Deposits $ 1,171,313 $ 947,399 23.6 %
---------------------------------------------------------------------
Shareholders' Equity $ 118,798 $ 112,349 5.7 %
---------------------------------------------------------------------
Net Income $ 14,016 $ 14,786 (5.2) %
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Diluted EPS $ 1.72 $ 1.82 (5.2) %
---------------------------------------------------------------------
Return on Average Assets 1.05% 1.23% (14.6) %
---------------------------------------------------------------------
Return on Average Equity 12.20% 13.72% (11.1) %
---------------------------------------------------------------------
1
SCBT FINANCIAL / Summary of Operations
Year Ended December 31
- -----------------------------------------------------------------------------------------------------------
(Dollars in thousands,
except per share) 2004 2003 2002 2001 2000
- -----------------------------------------------------------------------------------------------------------
Interest income $ 67,908 $ 64,854 $ 67,324 $ 74,472 $ 73,846
- -----------------------------------------------------------------------------------------------------------
Interest expense 14,643 14,622 18,752 29,972 33,232
- -----------------------------------------------------------------------------------------------------------
Net interest income 53,265 50,232 48,572 44,500 40,614
- -----------------------------------------------------------------------------------------------------------
Provision for loan losses 4,332 2,345 3,227 2,304 1,838
- -----------------------------------------------------------------------------------------------------------
Net interest income after 48,933 47,887 45,345 42,196 38,776
provision for loan losses
- -----------------------------------------------------------------------------------------------------------
Noninterest income 22,651 22,915 17,848 13,680 10,971
- -----------------------------------------------------------------------------------------------------------
Noninterest expense 51,131 48,715 42,567 37,133 34,096
- -----------------------------------------------------------------------------------------------------------
Income before provision 20,453 22,087 20,626 18,743 15,651
for income taxes
- -----------------------------------------------------------------------------------------------------------
Provision for income taxes 6,437 7,301 6,792 6,486 5,118
- -----------------------------------------------------------------------------------------------------------
Net income $ 14,016 $ 14,786 $ 13,834 $ 12,257 $ 10,533
- -----------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------
PER COMMON SHARE
- -----------------------------------------------------------------------------------------------------------
Net income, basic $ 1.74 $ 1.83 $ 1.72 $ 1.51 $ 1.30
- -----------------------------------------------------------------------------------------------------------
Net income, diluted 1.72 1.82 1.71 1.51 1.30
- -----------------------------------------------------------------------------------------------------------
Book value 14.77 13.91 12.85 11.57 10.45
- -----------------------------------------------------------------------------------------------------------
Cash dividends 0.65 0.63 0.54 0.50 0.47
- -----------------------------------------------------------------------------------------------------------
Dividend payout ratio 36.66% 33.98% 33.71% 32.63% 36.09%
- -----------------------------------------------------------------------------------------------------------
2
SCBT FINANCIAL / 2004 Financial Highlights
Year Ended December 31 % Change
- --------------------------------------------------------------------- Increase/
(Dollars in thousands, except per share) 2004 2003 (Decrease)
- ---------------------------------------------------------------------------------------
FOR THE YEAR
- ---------------------------------------------------------------------------------------
Interest income $ 67,908 $ 64,854 4.7%
- ---------------------------------------------------------------------------------------
Interest expense 14,643 14,622 0.1
- ---------------------------------------------------------------------------------------
Net interest income 53,265 50,232 6.0
- ---------------------------------------------------------------------------------------
Provision for loan losses 4,332 2,345 84.7
- ---------------------------------------------------------------------------------------
Noninterest income 22,651 22,915 (1.2)
- ---------------------------------------------------------------------------------------
Noninterest expense 51,131 48,715 5.0
- ---------------------------------------------------------------------------------------
Income before provision
for income taxes 20,453 22,087 (7.4)
- ---------------------------------------------------------------------------------------
Provision for income taxes 6,437 7,301 (11.8)
- ---------------------------------------------------------------------------------------
Net income 14,016 14,786 (5.2)
- ---------------------------------------------------------------------------------------
PER COMMON SHARE
- ---------------------------------------------------------------------------------------
Net income, basic $ 1.738 $ 1.833 (5.2)%
- ---------------------------------------------------------------------------------------
Net income, diluted 1.721 1.815 (5.2)
- ---------------------------------------------------------------------------------------
Cash dividends 0.65 0.63 3.2
- ---------------------------------------------------------------------------------------
Book value 14.77 13.91 6.2
- ---------------------------------------------------------------------------------------
KEY PERFORMANCE MEASURES
- ---------------------------------------------------------------------------------------
Return on average assets 1.05% 1.23% (14.6)%
- ---------------------------------------------------------------------------------------
Return on average equity 12.20% 13.72% (11.1)
- ---------------------------------------------------------------------------------------
Average nonperforming assets
as a percentage of loans & OREO 0.59 0.76 (22.4)
- ---------------------------------------------------------------------------------------
Average shareholders' equity as
a percentage of average assets 8.65 9.00 (3.9)
- ---------------------------------------------------------------------------------------
SELECTED YEAR END BALANCES
- ---------------------------------------------------------------------------------------
Assets $1,436,977 $1,197,692 20.0%
- ---------------------------------------------------------------------------------------
Loans, net of unearned income* 1,153,230 938,760 22.8
- ---------------------------------------------------------------------------------------
Investment securities 165,446 152,009 8.8
- ---------------------------------------------------------------------------------------
Deposits 1,171,313 947,399 23.6
- ---------------------------------------------------------------------------------------
Nondeposit borrowings 141,136 133,017 6.1
- ---------------------------------------------------------------------------------------
Shareholders' equity 118,798 112,349 5.7
- ---------------------------------------------------------------------------------------
Number of common shares outstanding 7,657,094 7,690,186 (0.4)
- ---------------------------------------------------------------------------------------
Per share data have been retroactively adjusted to give effect to a 10% common
stock dividend paid to shareholders of record as of November 22, 2002 and a 5%
common stock dividend paid to shareholders of record as of December 20, 2004.
*Excludes loans held for sale.
For more financial information about the Company, please refer to SCBT
Financial Corporation's 2004 Annual Report on Form 10-K, a copy of which is
included with the package provided to the Company's shareholders in connection
with the Company's 2005 annual meeting of shareholders.
3
[PHOTO]
Robert R. Horger
Chairman of the Board
SCBT Financial Corporation
TO OUR SHAREHOLDERS & CUSTOMERS
The year 2004 marked the 70th anniversary of South Carolina Bank and Trust.
Throughout those 70 years our company has built its well-earned reputation on
relationships and relationship banking. We have found that our style of
relationship banking has been well received as we focus on our goal of becoming
South Carolina's premier community bank.
2004 was a year of transition, challenge and growth for our company. When C.
John Hipp, III resigned in late 2004, Robert R. Hill, Jr. was quickly and
unanimously selected as SCBT Financial's new CEO. Robert's experience and innate
ability to lead will serve our shareholders and customers well in the years to
come, and his dedication and vision for the company are certainly a basis for
optimism at SCBT Financial. Part of John's legacy to the company was to leave a
very talented and prepared management team in place to assist Robert. We would
like to thank John Hipp for his leadership and vision in moving the company
forward towards a statewide presence.
The past year was a challenging one in certain respects. Economic conditions,
including historically low interest rates and a slowly improving economy,
negatively affected our interest rate margins. Additionally, like many
institutions, we experienced reduced mortgage origination fee income. We also
incurred various non-recurring expenses during the year. As a result, earnings
for 2004 do not match the prior year's earnings.
On the positive side of the ledger, we have experienced quite significant loan
and deposit growth during 2004, including noninterest deposit growth of 32.9%.
Our asset quality remains quite good. We launched The Mortgage Banc, which we
believe in the long term can be a healthy contributor to noninterest income. We
have also made great improvements in our Wealth Management division.
During 2004 we continued our strategy of expanding existing markets and entering
new markets. We opened new branches in Greenville, Hilton Head, Fort Mill and
Summerville. In addition, in December we announced plans to acquire New Commerce
BanCorp in the Greenville area. This acquisition will double our presence in the
vibrant upstate of South Carolina. Our management group and brand will certainly
be leveraged in one of the high growth markets in our state.
4
"We have a
cohesive, focused
and experienced
group of bankers
with morale that
has never been
higher."
We continue to look for expansion opportunities with the right partners. We are
interested in those opportunities both in new markets and in markets which we
currently serve. Of course, safety and soundness are the fundamental concerns of
our company. We also seek to attain the right balance of growth and income in
the best interest of our shareholders.
Your board of directors and management team has emphasized appropriate corporate
governance. Frankly, it is my view that our company has been ahead of the curve
in corporate governance and the culture of our board is to make our very good
system of governance even better. Consequently, we remain diligent regarding our
corporate processes and procedures. We will consistently strive to meet
heightened expectations of shareholders and customers.
As we enter our eighth decade of service, I believe that the future at SCBT is
bright. We have many opportunities for growth and development in South Carolina.
We have a very fine management team in place to lead the company and help us
achieve our expectations. We have a cohesive, focused and experienced group of
bankers with morale that has never been higher. Of course, there are always
challenges, but as you can tell I am very optimistic about the prospects of our
company.
We thank you for your support and as always we welcome your comments.
Sincerely,
/s/ Robert R. Horger
-----------------------------
Robert R. Horger
Chairman of the Board
5
[PHOTO]
Robert R. Hill, Jr.
President and CEO
SCBT Financial Corporation
"As we head into the future,
we will continue to
emphasize consistent high
performance, especially
as it relates to soundness,
profitability, and growth."
DEAR SHAREHOLDERS, CUSTOMERS, AND FRIENDS,
Amid the growth and progress of the past year, 2004 was also a year of
transition, as I became your 10th CEO in the history of SCBT Financial
Corporation. It is with a great deal of pride and pleasure that I communicate
with you in my first Shareholders letter. As the new CEO of SCBT, I follow in
the footsteps of an outstanding leader, C. John Hipp, III, who built a strong
strategic platform with great potential. All of us at SCBT thank John for his
years of vision and guidance.
During this year of transition, SCBT acted on many opportunities in our state,
while facing the challenges of tighter net interest margins, slowdowns in
mortgage lending, and an increase in our provision for loan losses as a result
of increased growth and expansion. Despite these challenges, 2004 proved to be a
year in which we laid a solid strategic groundwork for significant progress in
the years to come. In short, the past year provided many highlights for SCBT.
Here are a few:
ORGANIC GROWTH OF MORE THAN 20%: Traditionally, our company's focus has been on
organic growth. 2004 was no different. During the past year, our outstanding
loans increased 22.8%. Deposits increased 23.6%, and growth in noninterest
checking increased 32.9%. In addition, we opened new offices in Greenville,
Hilton Head, Fort Mill and Summerville. One of the more dynamic growth
statistics (and one I am most proud of) concerns new account activity. Last
year, we opened 10,771 new personal checking accounts and 2,512 new business
checking accounts, a 42% increase from 2003. This is a strong vote of confidence
from the people of South Carolina.
ADDITIONAL FOCUS ON NONINTEREST INCOME: One of our goals during 2004 was to
bolster our efforts to increase noninterest income. As a result, John C. Pollok,
our COO, opened The Mortgage Banc, a wholesale banking subsidiary designed to
increase our noninterest income opportunities. Additionally,
6
[GRAPHS APPEAR HERE]
$728 $748 $863 $939 $1,153
00 01 02 03 04
------------------------------------
LOANS
(at year end, excluding loans
held for sale, in millions)
$758 $812 $898 $947 $1,171
00 01 02 03 04
------------------------------------
DEPOSITS
(at year end, in millions)
$1.30 $1.51 $1.71 $1.82 $1.72
00 01 02 03 04
------------------------------------
EARNINGS PER SHARE (diluted)
$0.47 $0.50 $0.54 $0.63 $0.65
00 01 02 03 04
------------------------------------
DIVIDENDS PER SHARE
we expanded our Wealth Management unit and named Todd Harward as our head of
that division. With 18 years of experience at Bank of America, Todd's leadership
will enable us to capitalize on additional noninterest revenue through a variety
of Wealth Management services.
70 YEARS OF SERVICE: In 2004, we marked our 70th year of operations, seven
decades of service to the people of South Carolina. We are proud, and frankly
humbled, that for seventy years men and women have walked through our doors and
trusted us with their financial futures. We have never taken this trust or our
responsibilities for granted. We believe in the relationships we have created
and we work hard to expand and deepen them. In the course of seventy years,
through the loyalty and trust of our customers and shareholders, we have evolved
from a small bank to the 3rd largest S.C. based commercial bank.
ACQUISITION IN FAST GROWING UPSTATE: The Upstate of South Carolina is the
largest banking market in the state, an area we felt would welcome our style of
customer service and relationship banking. We opened two offices in that market
in 2003 - 2004, and have assembled a dynamic team of great bankers. To enhance
our market presence, in December of 2004 we announced a definitive agreement to
acquire New Commerce BanCorp. Upon completion of this acquisition, we will
double our presence in South Carolina's Upstate, with four offices and
approximately $250 million in assets.
A GREAT TEAM: The primary reason for our success in 2004 is the quality of the
people who are on the SCBT team. Throughout the years, we have created a team of
experienced, professional bankers, men and women dedicated to relationships,
performance, and results. Accordingly, we allow our bankers to perform in a
unique, entrepreneurial environment. As our people cultivate relationships, we
empower them to make decisions about their customers, and we give them the
products and services to meet those customers' financial needs.
7
[GRAPHS APPEAR HERE]
$85 $93 $103 $112 $119
00 01 02 03 04
- ------------------------------------
SHAREHOLDERS' EQUITY
(at year end, in millions)
13.14% 13.64% 14.09% 13.72% 12.20%
00 01 02 03 04
- ------------------------------------
RETURN ON AVERAGE EQUITY
1.11% 1.21% 1.28% 1.23% 1.05%
00 01 02 03 04
- ------------------------------------
RETURN ON AVERAGE ASSETS
With the team we have in place, we will make great strides toward our goal of
becoming South Carolina's premier community bank. We have spent seventy years
gaining the trust and respect of the people we know best - the people of South
Carolina, and we look forward to expanding and rounding out existing markets and
entering new markets.
As we head into the future, we will continue to emphasize consistent high
performance, especially as it relates to soundness, profitability, and growth.
Our track record in these areas is very solid. We will continue to invest wisely
for the future.
Finally, I would like to thank our shareholders, customers, and friends for
their trust in and loyal support of SCBT Financial Corporation. Your support is
the reason for our success. We have a great opportunity to become South
Carolina's bank, and we are well on our way.
Sincerely,
/s/ Robert R. Hill, Jr.
---------------------------
Robert R. Hill, Jr.
President and
Chief Executive Officer
8
CELEBRATING 70 YEARS
70 YEARS OF EARNING SOUTH CAROLINA'S TRUST
With the original issuance of First National Bank in Orangeburg stock in 1934,
the typical investor purchased 10 shares. In the last 70 years, the Bank has
declared five stock splits and twenty stock dividends. The equivalent of those
10 shares today would be 1,221 shares of SCBT Financial Corporation stock.
9
CELEBRATING 70 YEARS
"Those were good
folks back in '34,
people you could
trust. And you can
still trust them
today, seventy
years later."
"In the middle of the great depression in 1933, all the banks in Orangeburg were
closing. The banks reopened about a year later - I think it was during the
Roosevelt administration. When they reopened, Mr. Bill Glover approached my dad
and gave him the option to take stock in this new bank they were starting
instead of withdrawing the money from his business account. My dad
T R U S T
from the beginning
trusted Mr. Glover and took the stock. It was a good thing for him then... and I
still have that original stock in my family today. So see, we've owned South
Carolina Bank and Trust stock from the very beginning. And I've never once
considered getting rid of it. Those were good folks back in '34, people you
could trust. And you can still trust them today, seventy years later."
SOL SILVER
Retired Clothing Store Owner
and Original Stockholder
10
[PHOTO]
11
"SCBT made it a
point to find
out who we are
and what we
needed."
"Let me ask you something. Does your banker help you find vendors for your
business? Does your banker recommend a real estate agent to help you relocate
your offices? Well, South Carolina Bank and Trust's Jimmy Lindsey did all of
that for us when we moved the BMW Car Club from Boston to Greenville a few years
ago. He helped make the transition a smooth one, not just with our finances, but
with so many of the details of a
T R U S T
for the transitions
total relocation. SCBT made it a point to find out who we are and what we
needed. And we got to know them. So, we've developed this trust that's more
family-like than business-like. When we call them up, we never hear 'no' for an
answer. Listen, the BMW Car Club has 76,000 members around the world. Our job is
to take care of every one of them, and SCBT helps us do our job better than we
ever imagined."
WYNNE SMITH
Executive Director
BMW Car Club of America
12
[PHOTO]
13
"I didn't realize
that I would be
sitting down with
the president of
the bank. That sort
of thing doesn't
happen at the
mega banks."
"I had decided to start my own business, which is a pretty huge undertaking. Of
course, one of the first steps was to get the capital to begin. I already had
relationships with several large banks, but a friend mentioned the level of
service at South Carolina Bank and Trust, and I thought, 'That's something I
want to experience myself.' So I made an appointment. I didn't realize that I
would be sitting down with the president of the bank.
TRUST
for dreams
That sort of thing doesn't happen at the mega banks. He listened to my story,
heard what I wanted to do with my career, and I guess he saw something in me
that he trusted. When I walked out of his office, I had the financing to start
my own business. But I had more than that. I had a bank that believed in me, a
bank I could count on. It's a relationship that's only getting better."
DEEPAL ELIATAMBY
President
Alliance Consulting Engineers, Inc.
14
[PHOTO]
15
"I'm still an SCBT
customer - I have
never changed
banks in almost
seventy years."
"Sixty-eight years ago, my dad opened a savings account for me at South Carolina
Bank and Trust. He put one dollar in that account. I still have that first
account book at the house. I'm still an SCBT customer - I have never changed
banks in almost seventy years. In fact, I've never had a checking or savings
account with any other bank. The folks at SCBT look after me. I guess that's why
I've been a customer my whole life.
TRUST
for life
They've earned my trust, and I would like to think I've earned theirs. So now,
when I need something, I can ask my friends for help. It just so happens these
friends are my bankers. And around here, friends take care of one another."
COURTLAND RIZER, JR.
Third Generation Ford Dealer
Walterboro Motor Sales Co.
16
[PHOTO]
17
"I've learned that
we do whatever
it takes to get to
know every one of
our customers."
"What have I learned in three and a half years at South Carolina Bank and Trust?
I've learned that we have a certain way of doing things here. I've learned that
we do whatever it takes to get to know every one of our customers. I've learned
how important it is to develop a mutual trust with customers, because really, we
have to be able to rely on each other. Sure, other banks say exactly the same
things, but can they prove it?
TRUST
you can see
We can, because I see the proof every day. I watch the way we treat the
customers who've entrusted us with their financial lives. I've traveled to every
branch in this state, and no matter where I am - big city or small town - I
always see the same thing, the same way... the SCBT way. I'm proud to be a part
of it."
MANDY HARPER
Assistant Vice President
Account Executive
The Mortgage Banc
[GRAPH APPEARS HERE]
35.3% 14.2%
- ----------------
U.S. SCBT
Turnover among non-
exempt employees, the
largest component of our
workforce, was 14.2% as
compared to 35.3%
nationally.
Source: Financial Institutions
Compensation Report, 2004/2005.
Watson Wyatt Data Services.
18
[PHOTO]
19
SERVING SOUTH CAROLINA
S C B T Florence Moncks Corner Summerville
1600 West Palmetto Street 317 North Highway 52 402-D North Main Street
Bamberg Florence, SC 29501 Moncks Corner, SC 29461 Summerville, SC 29483
2770 Main Highway (843) 673-9900 (843) 761-8024 (843) 873-7221
Bamberg, SC 29003
(803) 245-2416 Greenville Norway Walterboro
200 East Broad Street 8403 Savannah Highway 520 North Jefferies
Beaufort Greenville, SC 29601 Norway, SC 29113 Boulevard
1121 Boundary Street (864) 250-4455 (803) 263-4295 Walterboro, SC 29488
Beaufort, SC 29901 (No Drive Thru Available) (No ATM Available) (843) 549-1553
(843) 521-5600
3622 Pelham Road Orangeburg 600 Robertson Boulevard
Bluffton Greenville, SC 29615 950 John C. Calhoun Drive Walterboro, SC 29488
1328 Fording Island Road (864) 254-9460 Orangeburg, SC 29115 (843) 549-1553
Bluffton, SC 29910 (803) 534-2175
(843) 837-2100 Hardeeville S C B T of the Piedmont
21839 Whyte Hardee 2705 Old Edisto Drive
Cayce Boulevard Orangeburg, SC 29115 Fort Mill
1100 Knox Abbott Drive Hardeeville, SC 29927 (803) 531-0540 808 Tom Hall Street
Cayce, SC 29033 (843) 784-3151 (Drive Thru Only) Fort Mill, SC 29715
(803) 739-0276 (803) 548-6292
Harleyville 1255 St. Matthews Road
Columbia 122 West Main Street Orangeburg, SC 29118 Fort Mill West
2010 Clemson Road Harleyville, SC 29448 (803) 531-0520 Loan Production Office
Columbia, SC 29229 (843) 462-7687 2000 Highway 160 West
(803) 788-7845 3025 St. Matthews Road Suite 12
Hilton Head Orangeburg, SC 29115 Fort Mill, SC 29715
520 Gervais Street 81 Main Street (803) 531-0550 (803) 802-5576
Columbia, SC 29201 Hilton Head, SC 29926
(803) 771-2265 (843) 342-2100 Ridgeland Rock Hill
207 Jacob Smart Boulevard 1274 East Main Street
Denmark 5 Park Lane Ridgeland, SC 29936 Rock Hill, SC 29730
18587 Heritage Highway Hilton Head, SC 29928 (843) 726-5596 (803) 329-5100
Denmark, SC 29042 (843) 842-4637
(803) 793-3324 (No ATM or Santee 1127 Ebenezer Road
Drive Thru Available) 657 Bass Drive Rock Hill, SC 29732
Elloree Santee, SC 29142 (803) 329-1222
6512 Old No. 6 Highway Lady's Island (803) 854-2451
Elloree, SC 29047 184 Sea Island Parkway York
(803) 897-2121 Lady's Island, SC 29907 St. George 801 East Liberty Street
(843) 521-5660 5542 Memorial Boulevard York, SC 29745
St. George, SC 29477 (803) 684-5554
Lake City (843) 563-2324
266 West Main Street
Lake City, SC 29560
(843) 394-1417
[LOGO]
Psychologically Healthy
Workplace Award
SCBT was one of only 10 companies to be recognized on the state and national
level as a 2004 Best Practices Honoree for the American Psychological
Association's Psychologically Healthy Workplace Award. The Best Practices Honors
are presented by the American Psychological Association with cooperation from
the Institute for Health and Productivity Management (IHPM). IHPM, www.ihpm.org,
is a non-profit research, development, and education organization. IHPM works
with all who have a stake in employee health: employers, providers, suppliers,
health plans, and workers themselves.
20
South Carolina / Counties
[MAP OF SERVICE AREA]
EXISTING MARKETS BY COUNTY TARGETED EXPANSION MARKETS BY COUNTY
o Bamberg o Anderson
o Beaufort o Charleston
o Berkeley o Georgetown
o Colleton o Horry
o Dorchester o Spartanburg
o Florence
o Greenville
o Jasper
o Lexington
o Orangeburg
o Richland
o York
21
TRUST... FOR GROWTH
Growth indicates a strengthening economy, and South Carolina knows a little
something about growth. By the year 2015, South Carolina will have a population
of more than 4.5 million, and the state's income growth projections for the next
five years outstrip both the regional and national rates. In 2004, capital
investment in South Carolina was more than twice that of the previous year. In
addition, job creation increased 55% during the same period. In the years to
come, South Carolina will continue to be fertile ground for its citizens and
businesses alike. And we want to be the bank South Carolinians trust, both for
their commercial needs and their individual financial futures.
Sources: South Carolina Department of Commerce (including their 2004 Capital
Investment Report)
*MSA's:
Columbia, Charleston
South Carolina North Charleston, Greenville
is the tenth fastest Spartanburg-Anderson,
growing state in Charlotte-Gastonia
the nation, the fifth [GRAPH APPEARS HERE] Rock Hill, Myrtle Beach
fastest in the South.
Source:
Bureau of Labor Statistics,
SNL DataSource and Claritus
8.06% 6.04% 4.84%
--------------------------
5 Key Southeast United
South States
Carolina
Markets*
*MSA's:
Columbia, Charleston
In 2004, North Charleston, Greenville
South Carolina Spartanburg-Anderson,
saw a 55% increase Charlotte-Gastonia
in job creation. [GRAPH APPEARS HERE] Rock Hill, Myrtle Beach
Source:
Bureau of Labor Statistics,
SNL DataSource and Claritus
13.69% 13.23% 13.35%
--------------------------
5 Key Southeast United
South States
Carolina
Markets*
22
TRUST... IN THE FUTURE
Why are we determined to be South Carolina's bank? Because the future is bright
for our state. South Carolina's current population trends outpace projections
for the prosperous Southeast region, as well as national growth rates. The real
estate market is experiencing tremendous growth from the mountains to the coast.
And the state has become a global business hub, a place more than 450
international facilities, representing 26 countries, call home. The years ahead
present a wealth of opportunities for a community bank that truly knows South
Carolina and its citizens. Yes, we want to be South Carolina's premier community
bank... because we want to be part of South Carolina's future.
Sources: Federal Deposit Insurance Corporation State Profile; U.S. Census
Bureau; South Carolina Infrastructure Study (1997) from the S.C. State Budget
and Control Board's Office of Research and Statistics
[PHOTO]
23
SCBT FINANCIAL / Stock Performance & Statistics
The financial information on pages 24 through 27 should be read in conjunction
with Management's Discussion and Analysis of Operations and Financial Condition
and is qualified in its entirety by reference to the more detailed financial
statements and the notes thereto, all of which are contained in SCBT Financial
Corporation's 2004 Annual Report on Form 10-K.
- ----------------------------------------------------------------------------------------------------------------------------
2004 2003 2002 2001 2000
- ----------------------------------------------------------------------------------------------------------------------------
STOCK PERFORMANCE
- ----------------------------------------------------------------------------------------------------------------------------
Dividends per share $ 0.65 $ 0.63 $ 0.54 $ 0.50 $ 0.47
- ----------------------------------------------------------------------------------------------------------------------------
Dividend payout ratio 36.66% 33.98% 33.71% 32.63% 36.09%
- ----------------------------------------------------------------------------------------------------------------------------
Dividend yield
(based on the average of
the high and low for the year) 2.06% 2.47% 2.42% 3.32% 3.12%
- ----------------------------------------------------------------------------------------------------------------------------
Price/earnings ratio (end of year)
(based on year-end stock price
and diluted earnings per share) 19.52x 15.70x 13.45x 11.07x 8.74x
- ----------------------------------------------------------------------------------------------------------------------------
Price/book ratio (end of year) 2.27x 2.05x 1.78x 1.44x 1.09x
- ----------------------------------------------------------------------------------------------------------------------------
COMMON STOCK STATISTICS
- ----------------------------------------------------------------------------------------------------------------------------
Stock price ranges:
- ----------------------------------------------------------------------------------------------------------------------------
High $ 37.61 $ 30.71 $ 27.96 $ 18.83 $ 19.70
- ----------------------------------------------------------------------------------------------------------------------------
Low 25.57 20.38 16.73 11.26 10.45
- ----------------------------------------------------------------------------------------------------------------------------
Close 33.57 28.58 22.86 16.71 11.36
- ----------------------------------------------------------------------------------------------------------------------------
Volume traded on exchanges 1,729,980 1,469,475 1,845,785 769,230 648,795
- ----------------------------------------------------------------------------------------------------------------------------
As a percentage of average
shares outstanding 21.46% 18.22% 22.94% 10.45% 8.78%
- ----------------------------------------------------------------------------------------------------------------------------
Earnings per share, basic $ 1.74 $ 1.83 $ 1.72 $ 1.51 $ 1.30
- ----------------------------------------------------------------------------------------------------------------------------
Earnings per share, diluted 1.72 1.82 1.71 1.51 1.30
- ----------------------------------------------------------------------------------------------------------------------------
Book value per share 14.77 13.91 12.85 11.57 10.45
- ----------------------------------------------------------------------------------------------------------------------------
QUARTERLY COMMON STOCK PRICE RANGES & DIVIDENDS
2004 2003 2002
Quarter High Low Dividend High Low Dividend High Low Dividend
- ------------------------------------------------------------------------------------------------------------
1st $31.733 $28.619 $0.162 $26.667 $20.381 $0.152 $21.943 $16.733 $0.130
- ------------------------------------------------------------------------------------------------------------
2nd $31.895 $25.571 $0.162 $26.752 $22.524 $0.152 $26.457 $21.429 $0.138
- ------------------------------------------------------------------------------------------------------------
3rd $31.038 $25.714 $0.162 $27.941 $23.429 $0.162 $27.962 $20.324 $0.138
- ------------------------------------------------------------------------------------------------------------
4th $37.610 $27.267 $0.162 $30.714 $25.257 $0.162 $26.895 $19.924 $0.138
- ------------------------------------------------------------------------------------------------------------
Per share data have been retroactively adjusted to give effect to a 10% common
stock dividend paid to shareholders of record as of November 22, 2002 and a 5%
common stock dividend paid to shareholders of record as of December 20, 2004.
24
SCBT FINANCIAL / Selected Consolidated Financial Data
At December 31
- ---------------------------------------------------------------------------------------------------------------
(Dollars in thousands, except per
share) 2004 2003 2002 2001 2000
- ---------------------------------------------------------------------------------------------------------------
Assets $1,436,977 $1,197,692 $1,144,948 $1,025,682 $ 969,848
- ---------------------------------------------------------------------------------------------------------------
Loans, net of unearned income* 1,153,230 938,760 863,422 748,080 727,690
- ---------------------------------------------------------------------------------------------------------------
Investment securities 165,446 152,009 164,951 189,933 183,198
- ---------------------------------------------------------------------------------------------------------------
Deposits 1,171,313 947,399 898,163 811,523 757,576
- ---------------------------------------------------------------------------------------------------------------
Nondeposit borrowings 141,136 133,017 138,116 116,117 122,998
- ---------------------------------------------------------------------------------------------------------------
Shareholders' equity 118,798 112,349 103,495 93,065 84,936
- ---------------------------------------------------------------------------------------------------------------
Number of locations 34 32 32 30 30
- ---------------------------------------------------------------------------------------------------------------
Full-time equivalent employees 513 514 480 442 402
- ---------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------
SELECTED RATIOS
- ---------------------------------------------------------------------------------------------------------------
Return on average equity 12.20% 13.72% 14.09% 13.64% 13.14%
- ---------------------------------------------------------------------------------------------------------------
Return on average assets 1.05 1.23 1.28 1.21 1.11
- ---------------------------------------------------------------------------------------------------------------
Average equity as a percentage
of average assets 8.65 9.00 9.05 8.91 8.39
- ---------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------
ASSET QUALITY RATIOS
- ---------------------------------------------------------------------------------------------------------------
Allowance for loan losses to
period end loans 1.25% 1.25% 1.28% 1.28% 1.22%
- ---------------------------------------------------------------------------------------------------------------
Allowance for loan losses to period
end nonperforming loans 442.64 173.30 233.47 203.74 273.14
- ---------------------------------------------------------------------------------------------------------------
Nonperforming assets to period
end loans and OREO 0.43 0.87 0.67 0.74 0.20
- ---------------------------------------------------------------------------------------------------------------
Nonperforming assets to period
end total assets 0.35 0.88 0.51 0.47 0.15
- ---------------------------------------------------------------------------------------------------------------
Net charge-offs to average loans 0.15 0.19 0.25 0.19 0.12
- ---------------------------------------------------------------------------------------------------------------
*Excludes loans held for sale.
[PIE CHART APPEARS HERE] [PIE CHART APPEARS HERE]
CRE & Commercial Time Deposits
Secured by Real Estate 36%
38%
Demand
Commercial & Deposits (NIBL)
Industrial 19%
13%
NOW Accounts
Consumer 19%
9%
Money Market
Consumer 20%
Real Estate
29% Savings
6%
Equity Line
11%
LOAN MIX DEPOSIT MIX
25
SCBT FINANCIAL / Consolidated Balance Sheets
- --------------------------------------------------------------------------------------------------
Year Ended December 31,
(Dollars in thousands, except par value) 2004 2003
ASSETS
Cash and cash equivalents:
Cash and due from banks $ 39,261 $ 38,541
Interest-bearing deposits with banks 14,876 6,637
Federal funds sold 3,000 4,500
------------ ------------
Total cash and cash equivalents 57,137 49,678
------------ ------------
Investment securities:
Securities held-to-maturity
(fair value of $25,046 in 2004 and $30,952 in 2003) 24,604 29,487
Securities available-for-sale, at fair value 135,058 117,247
Other investments 5,784 5,275
------------ ------------
Total investment securities 165,446 152,009
------------ ------------
Loans held for sale 13,837 12,346
------------ ------------
Loans 1,153,407 939,538
Less unearned income (177) (778)
Less allowance for loan losses (14,470) (11,700)
------------ ------------
Loans, net 1,138,760 927,060
------------ ------------
Premises and equipment, net 33,667 32,647
------------ ------------
Other assets 28,130 23,952
------------ ------------
Total assets $ 1,436,977 $ 1,197,692
============ ============
LIABILITIES AND SHAREHOLDERS' EQUITY
Deposits:
Noninterest-bearing $ 224,027 $ 170,313
Interest-bearing 947,286 777,086
------------ ------------
Total deposits 1,171,313 947,399
------------ ------------
Federal funds purchased and securities
sold under agreements to repurchase 89,208 80,967
FHLB advances 51,928 52,050
Other liabilities 5,730 4,927
------------ ------------
Total liabilities 1,318,179 1,085,343
------------ ------------
Shareholders' equity:
Common stock - $2.50 par value; authorized 40,000,000 shares;
issued and outstanding 7,657,094 and 7,690,186 shares 19,143 19,225
Stock dividend distributable 955 -
Surplus 72,079 62,722
Retained earnings 26,486 29,787
Accumulated other comprehensive income 135 615
------------ ------------
Total shareholders' equity 118,798 112,349
------------ ------------
Total liabilities and shareholders' equity $ 1,436,977 $ 1,197,692
============ ============
26
SCBT FINANCIAL / Consolidated Statements of Income
- ------------------------------------------------------------------------------------------------
Year Ended December 31,
(Dollars in thousands, except per share) 2004 2003 2002
Interest income:
Loans, including fees $ 61,267 $ 58,283 $ 57,956
Investment securities:
Taxable 4,856 4,682 7,006
Tax-exempt 1,461 1,679 1,802
Money market funds 11 67 404
Federal funds sold 138 82 107
Deposits with banks 175 61 49
-------- -------- --------
Total interest income 67,908 64,854 67,324
-------- -------- --------
Interest expense:
Deposits 11,243 11,555 15,382
Federal funds purchased and securities
sold under agreements to repurchase 687 545 878
FHLB advances 2,713 2,522 2,492
-------- -------- --------
Total interest expense 14,643 14,622 18,752
-------- -------- --------
Net interest income:
Net interest income 53,265 50,232 48,572
Provision for loan losses 4,332 2,345 3,227
-------- -------- --------
Net interest income after provision for loan losses 48,933 47,887 45,345
-------- -------- --------
Noninterest income:
Service charges on deposit accounts 11,854 11,537 10,899
Other service charges and fees 9,030 11,378 6,949
Gain on sale of assets 1,766 -- --
Realized gains on securities available-for-sale 1 -- --
-------- -------- --------
Total noninterest income 22,651 22,915 17,848
-------- -------- --------
Noninterest expense:
Salaries and employee benefi ts 27,762 28,670 24,136
Net occupancy expense 3,309 2,887 2,319
Furniture and equipment expense 4,447 4,397 3,858
Other expense 15,613 12,761 12,254
-------- -------- --------
Total noninterest expense 51,131 48,715 42,567
-------- -------- --------
Earnings:
Income before provision for income taxes 20,453 22,087 20,626
Provision for income taxes 6,437 7,301 6,792
-------- -------- --------
Net income $ 14,016 $ 14,786 $ 13,834
======== ======== ========
Earnings per share:
Basic $ 1.74 $ 1.83 $ 1.72
======== ======== ========
Diluted $ 1.72 $ 1.82 $ 1.71
======== ======== ========
27
[LOGO]
SCBT
FINANCIAL
CORPORATION SCBT FINANCIAL / Board of Directors
[PHOTO OF BOARD OF DIRECTORS]
SCBT Financial Corporation Board of Directors: (standing, left to right)
Cathy Cox Yeadon, Robert R. Hill Jr., Colden R. Battey, Jr., M. Oswald Fogle,
Robert R. Horger, James W. Roquemore, Luther J. Battiste III, (seated, left to
right) Robert H. Jennings III, Dwight W. Frierson, A. Dewall Waters, Anne H.
Oswald, Harry M. Mims Jr.
Colden R. Battey Jr.* Harry M. Mims Jr.* A. Dewall Waters
Partner and Attorney President Partner/Owner
Harvey & Battey, PA J.F. Cleckley & Company A.D. Waters Enterprises, LLC
Beaufort, SC Orangeburg, SC Orangeburg, SC
Luther J. Battiste III Ralph W. Norman, Jr.+ J.W. Williamson III+
Partner and Attorney President President
Johnson, Toal & Battiste, PA Warren Norman Co., Inc. J.W. Williamson Ginnery, Inc.
Columbia and Orangeburg, SC Rock Hill, SC Denmark, SC
Charles W. Clark*+ Anne H. Oswald Cathy Cox Yeadon
President President Vice President, Human Resources
Santee Shores, Inc. Oswald & Associates Realty, Inc. Cox Industries, Inc.
Santee, SC Walterboro, SC Orangeburg, SC
M. Oswald Fogle James W. Roquemore* Robert H. Jennings III
President and Chief Executive Officer (Chairman Emeritus)
Chief Executive Officer Patten Seed Company, Inc. Orangeburg, SC
Decolam, Inc. General Manager
Orangeburg, SC Super-Sod/Carolina J. Carlisle McAlhany+
Orangeburg, SC (Director Emeritus)
Dwight W. Frierson* St. George, SC
Vice President and Thomas E. Suggs*+
General Manager President and Larry D. Westbury+
Coca-Cola Bottling Company Chief Executive Officer (Chairman Emeritus)
Orangeburg, SC Keenan & Suggs, Inc. Retired President and Chairman
Columbia, SC St. George, SC
Robert R. Hill Jr.*
President and Susie H. VanHuss, Ph.D.+
Chief Executive Officer Executive Director of Foundations
Columbia, SC University of South Carolina
Columbia, SC
Robert R. Horger*
Chairman of the Board *Member, Executive Committee
Attorney +Not Pictured
Horger, Barnwell & Reid
Orangeburg, SC
28
SCBT FINANCIAL / Executive Management Team
E X E C U T I V E
O F F I C E R S
Robert R. Horger Standing, left to right: John C. Pollok
Chairman of the Board Senior Executive
Richard C. Mathis Vice President and
Robert R. Hill Jr. Executive Vice President Chief Operating Officer
President and Chief and Chief Financial Officer
Executive Officer Seated, left to right:
Joe E. Burns
Dwight W. Frierson Executive Vice President John F. Windley
Vice Chairman and Chief Credit Officer Executive Vice President
of the Board and Division Head
Thomas S. Camp Upstate, Midlands and
John C. Pollok President and Beaufort Regions
Senior Executive Chief Executive Officer
Vice President and SCBT of the Piedmont Dane H. Murray
Chief Operating Officer Executive Vice President
Robert R. Hill Jr. and Division Head
Richard C. Mathis President and Chief Lowcountry and
Executive Vice President Executive Officer Orangeburg Regions
and Chief Financial Officer
Joe E. Burns
Executive Vice President
and Chief Credit Officer
[PHOTO OF EXECUTIVE MANAGEMENT TEAM]
James C. Hunter Jr.
Executive Vice President
and Secretary
A. Loran Adams
Senior Vice President
and General Auditor
29
[LOGO]
SCBT
SOUTH CAROLINA
BANK AND TRUST SCBT / Board of Directors
Colden R. Battey Jr.* Robert R. Horger* Susie H. VanHuss, Ph.D.
Partner and Attorney Chairman of the Board Executive Director of Foundations
Harvey & Battey, PA Attorney University of South Carolina
Beaufort, SC Horger, Barnwell & Reid Columbia, SC
Orangeburg, SC
Luther J. Battiste III A. Dewall Waters
Partner and Attorney Harry M. Mims Jr.* Partner/Owner
Johnson, Toal & Battiste, PA President A.D. Waters Enterprises, LLC
Columbia and Orangeburg, SC J.F.Cleckley & Company Orangeburg, SC
Orangeburg, SC
Charles W. Clark* J .W. Williamson III
President Santee Shores, Inc. Anne H. Oswald President
Santee, SC President J.W. Williamson Ginnery, Inc.
Oswald & Associates Realty, Inc. Denmark, SC
M. Oswald Fogle Walterboro, SC
President and Cathy Cox Yeadon
Chief Executive Officer James W. Roquemore* Vice President, Human Resources
Decolam, Inc. Chief Executive Officer Cox Industries, Inc.
Orangeburg, SC Patten Seed Company, Inc. Orangeburg, SC
General Manager
Dwight W. Frierson* Super-Sod/Carolina Directors Emeriti
Vice President and Orangeburg, SC Robert H. Jennings III
General Manager J. Carlisle McAlhany
Coca-Cola Bottling Company Thomas E. Suggs* Larry D. Westbury
Orangeburg, SC President and
Chief Executive Officer *Member, Executive Committee
Robert R. Hill Jr.* Keenan & Suggs, Inc.
President and Columbia, SC
Chief Executive Officer
Columbia, SC
[LOGO]
SCBT
SOUTH CAROLINA
BANK AND TRUST OF THE PIEDMONT SCBT OF THE PIEDMONT / Board of Directors
Bernard N. Ackerman, CPA, PA* R. Wesley Hayes Jr.* Jolene Stepp Setliff
Rock Hill, SC Vice Chairman of the Board Vice President, Sales & Marketing
Attorney Coldwell Banker United, Realtors
Thomas S. Camp* Harrelson and Hayes Rock Hill, SC
President and Rock Hill, SC
Chief Executive Officer Jay K. Shah, MD
Rock Hill, SC Robert R. Hill Jr. Carolina Cardiology Associates
President and Rock Hill, SC
Frank S. Campbell Chief Executive Officer
Board Member SCBT Financial Corporation Jacob D. Smith
AME, Inc. South Carolina Bank and Trust President and
Fort Mill, SC Columbia, SC Chief Executive Officer
Smith Enterprises, Inc.
Dwight W. Frierson Ralph W. Norman Jr.* Rock Hill, SC
Vice President and President
General Manager Warren Norman Co., Inc. Frank M. Wilkerson Jr.*
Coca-Cola Bottling Company Rock Hill, SC Chairman of the Board
Orangeburg, SC President
Wilkerson Fuel Co., Inc.
Rock Hill, SC
*Member, Executive Committee
30
Senior Management Team
[PHOTO OF SENIOR MANAGEMENT TEAM]
Standing, left to right
Dane H. Murray J. Gary Hood
Executive Vice President Executive Vice President and
Division Head Chief Operating Officer
SCBT of the Piedmont
John F. Windley
Executive Vice President Veronica H. Bailey
Division Head Senior Vice President
Manager of Corporate Accounting
J. Alex Shuford III
Executive Vice President
Regional President
Seated, left to right
David J. Charpia
Senior Vice President A. Loran Adams
Regional President Senior Vice President
General Auditor
Frank G. Carter
Senior Vice President F. Gene McConnell Jr.
Director of Marketing Senior Vice President
Regional President
Nathaniel A. Barber
Senior Vice President Rodney W. Overby
Community Development Officer Senior Vice President
Chief Information Officer
Marc J. Bogan
Senior Vice President James B. Brant
Sales Executive Senior Vice President
Manager of Correspondent Banking
P. Hobson Busby
Executive Vice President Not Pictured
Senior Credit Administrator
Allen M. Hay Jr.
Executive Vice President
Support Division
31
[LOGO]
SCBT CORPORATE INFORMATION
FINANCIAL
CORPORATION
GENERAL > SCBT Financial Corporation
OFFICE 520 Gervais Street
Columbia, SC 29201
www.SCBandT.com
ANNUAL > The Annual Meeting of Shareholders will be held at
MEETING 2 p.m. on Tuesday, April 26, 2005 in the Dorchester-
Jasper Room on the 2nd Floor, 520 Gervais Street in
Columbia, South Carolina.
FORM 10 - K > Copies of SCBT Financial Corporation's Annual
& OTHER Report to the Securities and Exchange Commission
INFORMATION on Form 10-K (excluding exhibits thereto), and other
information may be obtained without charge by
written request to:
Veronica H. Bailey
Manager of Corporate Accounting
SCBT Financial Corporation
Post Office Box 1030
Columbia, SC 29202
(803) 765-4620
ANALYST > Richard C. Mathis
CONTACT Chief Financial Officer
SCBT Financial Corporation
Post Office Box 1030
Columbia, SC 29202
(803) 765-4618
STOCK > The Company's Common Stock is listed on
INFORMATION the NASDAQ(R) Stock Market under the trading
symbol SCBT.
WEBSITE > www.SCBandT.com
32
Not just a bank. A bank and . . .
TRUST
SCBT
[LOGO] FINANCIAL
CORPORATION
520 Gervais Street
Columbia, SC 29201
(803) 771-2265