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UNITED STATES |
SECURITIES AND EXCHANGE COMMISSION |
Washington, D.C. 20549 |
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FORM 8-K |
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Current Report |
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 |
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Date of Report (Date of earliest event reported): May 21, 2012 |
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FIRST FINANCIAL HOLDINGS, INC. |
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(Exact name of Registrant as specified in its charter) |
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Delaware |
000-17122 |
57-0866076 |
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(State or other jurisdiction |
(Commission |
(I.R.S. Employer |
of incorporation) |
File Number) |
Identification No.) |
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2440 Mall Drive, Charleston, South Carolina |
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29406 |
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(Address of principal executive offices) |
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(Zip Code) |
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(843) 529-5933 |
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Registrants telephone number, including area code |
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Not Applicable |
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(Former name or former address, if changed since last report) |
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4c)) |
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Item 7.01 |
Regulation FD Disclosure. |
First Financial is furnishing managements presentation materials, which will be used from time to time during visits with investors, analysts, and other interested parties. The full text of the presentation is attached hereto as Exhibit 99.1 and is incorporated herein by reference. The presentation is also available on First Financials website under the Investor Relations section at www.firstfinancialholdings.com.
The information furnished in this Item 7.01 shall not be deemed filed for purposes of Section 18 of the Securities and Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that Section, nor shall such information be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended.
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Item 9.01 |
Financial Statements and Exhibits. |
(d) Exhibits
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Exhibit 99.1 |
Presentation, dated March 31, 2012 |
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
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FIRST FINANCIAL HOLDINGS, INC. |
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Date: May 21, 2012 |
By: |
/s/ Blaise B. Bettendorf |
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Blaise B. Bettendorf |
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Its: |
Executive Vice President and Chief Financial Officer |
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Exhibit No. |
Description |
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Exhibit 99.1 |
Presentation, dated March 31, 2012 |
2
Exhibit 99.1
First Financial Holdings, Inc.
Nasdaq: FFCH
March 31, 2012
Forward-looking Statements
Discussions and statements in this presentation that are not statements of historical fact and statements regarding First Financial Holdings Inc.s (First Financial) future financial and operating results, plans, objectives, expectations and intentions, are forward-looking statements that involve risks and uncertainties. No forward-looking statement is a guarantee of future performance and actual results could differ materially. Factors that could cause or contribute to such differences include, without limitation, risks and uncertainties detailed from time to time in First Financials filings with the Securities and Exchange Commission.
Other factors not currently anticipated may also materially and adversely affect First Financials results of operations, cash flows, and financial position. There can be no assurance that future results will meet expectations. While First Financial believes that the forward-looking statements in this presentation are reasonable, you should not place undue reliance on any forward-looking statement. In addition, these statements speak only as of the date made. First Financial does not undertake, and expressly disclaims any obligation to update or alter any statements, whether as a result of new information, future events or otherwise, except as required by applicable law.
First Financial Holdings, Inc.
2
Overview
First Financial Holdings, Inc.
3
Corporate Profile
Carolinas-based financial institution
Largest publicly traded bank headquartered in Charleston, SC
Serving customers banking needs since 1934
Primary markets located in the Coastal Carolinas, Florence and Greenville, SC
Total of 73 financial centers with approximately 25% in-store locations
Convenient seven-day-a-week banking
Diversified business mix
Business Banking team delivers cash management and small business advisory services
Mortgage origination services available through financial centers and third-party channels
Total servicing portfolio of $2.5 billion including $1.5 billion serviced for others
Wealth management group offers personal relationship banking, trust, brokerage, and
401(k) administration services
Strategic advantages
Strong asset quality
Solid capital levels
Growth markets and strong distribution channels
Experienced management team and associates
First Financial Holdings, Inc.
4
First Financial Footprint
Note: FDIC deposit data as of June 30, 2011
Data Source: SNL Financial
* Proforma includes branches acquired from Liberty and Plantation Federal
First Financial Holdings, Inc.
5
Management Team
Years of
Financial
Services
Relevant
Name
Position
Age
Experience
Experience
R. Wayne Hall President and Chief Executive Officer
Blaise B. Bettendorf Executive Vice President - Chief Financial Officer
J. Dale Hall Executive Vice President - Chief Banking Officer
Joseph W. Amy Executive Vice President - Chief Credit Officer
Richard A. Arthur Executive Vice President - Retail Banking
Susan A. Bagwell Executive Vice President - Human Resources
Robert L. Davis Executive Vice President - Corporate Counsel
John N. Golding Executive Vice President - Commercial Banking
Kellee S. McGahey Executive Vice President - Marketing
Eartha C. Morris Executive Vice President - Support Services
Daniel S. Vroon Executive Vice President - Wealth Management
61 36 EVP / CRO at Provident Bank
49 28 SVP / CFO at Carolina Commerce Bank,
and Summit National Bank; Previously
Audit Manager with PricewaterhouseCoopers
64 42 SVP / Commercial Market Executive
at Bank of America
62 38 Credit positions at Mellon and U.S. Bank
39 16 SVP at Bank of America
48 27 VP Human Resources at First Federal
59 30 Managing Director and General Counsel at
Provident Bankshares Corporation/Provident
Bank
44 22 SVP at Wachovia/Wells Fargo
33 2 Assistant Director at College of
Charleston/Lowcountry Graduate Center
55 34 EVP / COO at Congressional Bank
EVP / Head of Bank Operations at PNC Bank
(formerly Riggs National Bank)
44 15 SVP Bank of America
First Financial Holdings, Inc.
6
Strategic Acquisition
Plantation Federal Bank
FDIC-assisted transaction
Purchased substantially all assets and assumed deposits and
certain other liabilities of Plantation Federal Bank on April 27, 2012
Branches opened for business as First Federal financial centers on
Monday, April 30th
Locations include Grand Strand coastal market and Upstate SC
Initial entry into the demographically attractive Greenville market,
providing geographic diversification
Expanded market share in existing Myrtle Beach and Pawleys
Island markets
Financially attractive
Immediately accretive to EPS and tangible book value
No external capital needed to complete transaction
Considerable opportunity for operating efficiencies
Credit risk mitigated through loss-sharing agreement
First Financial Holdings, Inc.
7
Transaction Overview
Plantation Federal Bank
Transaction Summary1
Loan Loss Summary
($ in thousands)
($ in thousands)
Total assets
$ 486,400
Covered assets, including
Total loans, before fair value marks
348,649
commercial loans and OREO2
$ 221,700
Residential 1-4 mortgages
38.3%
Commercial
61.0%
Loss coverage -
Consumer
0.7%
Tranch 1: Up to $55 million
80.0%
Total deposits
440,511
Tranch 2: > $55 million,
Transaction accounts
12.7%
up to $65 million
0.0%
Savings & money market
29.9%
Tranch 3: > $65 million
60.0%
Time deposiuts
57.4%
True up provision -
Asset discount bid
47,000
If losses are less than Intrinsic Loss
Initial cash settlement from FDIC
46,000
estimate, upside shared with FDIC
1 Based on reported book values as of December 31, 2011, excluding fair
2 Based on FDIC Bid Valuation Date as of February 2, 2012,
value adjustments
excluding fair value adjustments
First Financial Holdings, Inc.
8
Market Share Analysis
Plantation Federal Bank
Pro Forma after Acquisition
Total
Deposit
# of New
Deposits
Market
Market
Market
Branches
(000s)
Share (%)
Share Rank
Pawleys Island/Georgetown, SC
1
$211,713
20.33%
1
Myrtle Beach/No. Myrtle Beach, SC
2
391,592
7.21%
6
Greenville, SC
3
238,923
1.85%
12
Source - SNL Financial; FDIC deposit data as of June 30, 2011
Plantation Federal Bank Overview:
Founded in 1986 in Pawleys Island, SC
Leading market share in Pawleys Island
Established First Savers Bank in Greenville, SC as separate de novo
charter in 1996
Combined Plantation and First Savers charters in 2008
Attractive deposit mix with solid core deposits in excess of 40%
First Financial Holdings, Inc.
9
First Financial Holdings, Inc.
Strategic Expansion
Liberty Savings Bank Branches
On April 20, 2012, consummated
the acquisition of five branches
from Liberty Savings Bank, FSB
in Hilton Head market
Moved to 7th
from 12th in market
share and doubled deposit base
Consolidated 3 locations and
added 2 new financial centers
Attractive deposit mix with solid
core deposits in excess of 75%
and low cost of funds
Loans acquired were all
performing and in-market
Transaction Summary1
($ in thousands)
Assets acquired:
Total loans, before fair value marks
Residential 1-4 mortgages $ 5,664
Commercial 2,522
Consumer 12,568
$ 20,754
Liabilities assumed:
Total deposits
Transaction accounts $ 59,800
Savings & money market 25,106
Time deposiuts 28,135
$113,041
1 Based on book values as of April 20, 2012 closing, excluding
fair value adjustments
10
First Financial Holdings, Inc.
Strategic Priorities
Profitability enhancements
Explore specialty financing opportunities
Expand mortgage correspondent and retail lending channels
Expand Wealth Management presence and territory for broker-
dealer and 401k administration division
Enhance operating efficiencies through process improvement
initiatives
Position the franchise for the future
Fully integrate acquisitions and achieve efficiencies
Launch the brand in the new Greenville market
Consider financially and strategically attractive non-dilutive growth
opportunities
11
First Financial Holdings, Inc.
FINANCIAL REVIEW
12
March 2012 Quarter Highlights
Core net income of $3.8 million, representing the fourth consecutive
quarter of increases
Strong net interest margin of 3.84%
Stable charge-off levels and third consecutive quarter of reduced
provision for loan losses
Allowance for loan losses of 2.16% and 1.48x coverage for non-
covered nonperforming loans
Strong capital measures, which increased over the prior quarter
Tangible common equity ratio of 6.70%
Tier 1 leverage capital ratio of 10.22%
Total risk-based capital ratio of 16.08%
First Financial Holdings, Inc.
13
Operating Results Highlights
For the Quarter Ended
March 31,
June 30,
September 30,
December 31,
March 31,
($ in thousands)
2011
2011
2011
2011
2012
Core operating (loss) income1
$
(1,365)
$
(131)
$
1,720
$
2,866
$
3,848
Net income (loss)
(430)
(43,000)
1,077
15,572
1,739
Net interest income
29,287
29,416
29,064
28,899
28,252
Provision for loan losses2
12,675
77,803
8,940
7,445
6,745
Noninterest income
11,255
11,422
14,238
32,770
13,182
Noninterest expense
30,145
28,599
29,588
28,886
28,709
State NOL DTA write-off
---
---
---
---
2,111
(Loss) income from continuing
operations
(1,365)
(40,276)
2,881
15,572
1,739
Income (loss) from discontinued
operations (net of income taxes)3
935
(2,724)
(1,804)
---
---
EPS - continuing operations
(0.14)
(2.50)
0.12
0.88
0.05
EPS - common
(0.08)
(2.66)
0.01
0.88
0.05
Pretax preprovision earnings from
continuing operations3
10,397
12,239
13,714
32,783
12,725
Net interest margin
3.83%
3.83%
3.87%
3.91%
3.84%
1 Excludes the after-tax effect of: the loan reclassification to held for sale for June 30, 2011 of $(42.9) million, gains on loans
sold for
September 30, 2011 of $1.2 million and for December 31, 2011 of $12.7 million and DTA write-off for March 31, 2012 $(2.1)
million
2 June 30, 2011 and September 30, 2011 include $65.7 million and $1.4 million, respectively in additional net provision due to the
reclassification of loans to loans held for sale
3 Sale of First Southeast Insurance was completed on June 1, 2011 and the sale of Kimbrell was completed on September 30, 2011
First Financial Holdings, Inc.
14
Net Interest Margin Analysis
For the Quarter Ended
March 31, 2011
March 31, 2012
Change in
Average
Average
Average
Average
Average
Basis
($ in thousands)
Balance
Interest
Rate
Balance
Interest
Rate
Balance
Interest
Points
Earning assets:
Interest-bearing deposits
$
7,294
$
2
0.11%
$
8,484
$
1
0.05%
$
1,190
$
(1)
(6)
Investment securities1
435,568
4,774
4.52
490,356
3,867
3.31
54,788
(907)
(121)
Loans2
2,607,161
34,844
5.42
2,420,000
32,476
5.39
(187,161)
(2,368)
(3)
FDIC indemnification asset
65,686
564
3.48
48,774
15
0.12
(16,912)
(549)
(336)
Total earning assets
3,115,709
40,184
5.25
2,967,614
36,359
4.94
(148,095)
(3,825)
(31)
Interest-bearing liabilities:
Deposits
2,172,657
6,879
1.28
1,946,317
3,951
0.82
(226,340)
(2,928)
(46)
Borrowings
555,630
4,018
2.93
609,665
4,156
2.73
54,035
138
(20)
Total interest-bearing liabilities
2,728,287
10,897
1.62
2,555,982
8,107
1.28
(172,305)
(2,790)
(34)
Net interest income
$29,287
$28,252
$(1,035)
Net interest margin
3.83%
3.84%
1
1
Interest income used in the average rate calculation includes the tax equivalent adjustment of $144 thousand and $182 thousand for the quarter ended March 31, 2011 and March 31, 2012,
respectively, calculated based on a federal tax rate of 35%.
2 Average loans include loans held for sale and nonaccrual loans. Loan fees, which are not material for any of the periods, have been included in loan interest income for the rate calculation.
First Financial Holdings, Inc.
15
Noninterest Income
For the Quarter Ended
March 31,
June 30,
September 30, December 31,
March 31,
($ in thousands)
2011
2011
2011
2011
2012
Service charges and fees on deposit accounts
$
6,381
$
6,982
$
7,196
$
7,099
$
7,302
Mortgage and other loan income
1,124
2,051
2,743
2,681
3,435
Trust, plan administration and brokerage fees
1,778
1,773
1,921
1,724
1,745
Other
675
670
647
650
769
Other-than-temporary-impairment
(122)
(54)
(169)
(180)
(69)
Total core noninterest income
9,836
11,422
12,338
11,974
13,182
Gain on sold loan pool, net
---
---
1,900
20,796
---
Gain on sale of security
1,419
---
---
---
---
Total noninterest income
$
11,255
$
11,422
$
14,238
$
32,770
$
13,182
First Financial Holdings, Inc.
16
Noninterest Expense
For the Quarter ended
March 31,
June 30,
September 30,
December 31,
March 31,
($ in thousands)
2011
2011
2011
2011
2012
Salaries and employee benefits
$
15,614
$
15,373
$
14,672
$
14,511
$
15,142
Occupancy costs
2,208
2,116
2,188
2,144
2,267
Furniture and equipment
1,825
1,769
1,725
1,870
1,809
Other real estate expenses, net
(133)
800
3,115
1,541
530
FDIC insurance and regulatory fees
1,484
850
576
830
986
Professional services
1,326
1,094
1,521
1,019
1,431
Advertising and marketing
993
810
868
792
656
Other loan expense
925
1,099
990
1,043
1,351
Intangible asset amortization
82
82
79
90
90
Other expense
4,039
3,976
3,854
5,046
4,447
Total core noninterest expense
$
28,363
$
27,969
$
29,588
$
28,886
$
28,709
Compensation agreements
1,782
---
---
---
---
Goodwill impairment
---
630
---
---
---
Total noninterest expense
$
30,145
$
28,599
$
29,588
$
28,886
$
28,709
First Financial Holdings, Inc.
17
Balance Sheet Summary
As of
March 31,
June 30,
September 30, December 31,
March 31,
($ in thousands)
2011
2011
2011
2011
2012
Total assets
$
3,302,012
$
3,221,544
$
3,206,310
$
3,146,964
$
3,145,538
Investment securities
446,464
478,570
469,561
457,730
500,331
Loans
2,559,845
2,372,069
2,355,280
2,385,457
2,355,567
Allowance for loan losses
85,138
55,491
54,333
53,524
50,776
Net loans
2,474,707
2,316,578
2,300,947
2,331,933
2,304,791
Deposits
2,344,780
2,315,745
2,302,857
2,239,138
2,264,489
Borrowings
608,710
604,704
605,204
608,204
580,204
Shareholders' Equity
311,527
266,564
268,506
277,178
278,043
Loan/deposit ratio
109.17%
102.43%
102.28%
106.53%
104.02%
Allowance for loan losses/total loans
3.33%
2.34%
2.31%
2.24%
2.16%
First Financial Holdings, Inc.
18
Capital Position
As of
March 31,
June 30,
September 30,
December 31,
March 31,
2011
2011
2011
2011
2012
First Financial (FFCH)
Equity to assets
9.43%
8.27%
8.37%
8.81%
8.84%
Tangible common equity to tangible assets1
6.40
6.08
6.27
6.67
6.70
Book value per common share
$ 14.92
$ 12.20
$ 12.31
$ 12.84
$ 12.89
Tangible common book value per share1
12.65
11.83
12.16
12.69
12.75
Dividends paid per common share, authorized
0.05
0.05
0.05
0.05
0.05
Common shares outstanding, end of period (000s)
16,527
16,527
16,527
16,527
16,527
Tier 1 leverage capital ratio2
10.22%
Tier 1 risk-based capital ratio2
14.81
Total risk-based capital ratio2
16.08
First Federal (FFB)3
Tier 1 leverage capital ratio
8.58%
7.48%
8.26%
8.92%
9.00%
Tier 1 risk-based capital ratio
11.51
10.07
11.26
12.35
13.05
Total risk-based capital ratio
12.78
11.33
12.53
13.61
14.32
1 Non-GAAP
2 The quarter ended March 31, 2012
represents the first period bank holding company ratios are required to be filed with the
Federal Reserve Bank included within FR Y-9C,
Consolidated Financial Statements for Bank Holding Companies.
3 Capital ratios for the quarter ended
March 31, 2012 for First Federal Bank are based on reporting requirements for financial
institutions filing FFIEC 041, FDIC Consolidated Reports
of Condition and Income
(the Call Report). Prior period ratios are reported based on superseded
regulatory requirements previously issued by the Office of Thrift Supervision.
First Financial Holdings, Inc.
19
First Financial Holdings, Inc.
Investment Portfolio
49% fixed/ 51% variable
Average portfolio yield: 3.23%
Modified duration: 3.2 years
Private label/CMO: mostly 2003-2005 vintages
All but 3 securities are in super senior or senior tranches (3 are in mezzanine)
Part of at least one support tranche exists on all CMOs
Bank trust preferred CDOs: <$1 million individually; all are in mezzanine tranche
As of
March 31, 2011
March 31, 2012
Amortized
Estimated
Amortized
Estimated
($ in thousands)
Cost
Fair Value
Cost
Fair Value
Securities available for sale
Obligations of the U.S. Government agencies
and corporations
$
1,890
$
1,897
$
1,755
$
1,784
State and municipal obligations
450
457
450
481
Collateralized debt obligations
7,434
3,494
6,941
3,515
Mortgage-backed securities
68,781
72,071
139,057
142,794
Collateralized mortgage obligations
297,664
300,263
290,458
287,797
Other securities
5,181
5,047
5,797
6,160
Total securities available for sale
$
381,400
$
383,229
$ 444,458
$ 442,531
Securities held to maturity
State and municipal obligations
$
21,055
$
22,300
$
19,327
$
22,045
Certificates of deposit
907
907
508
508
Total securities held to maturity
$
21,962
$
23,207
$
19,835
$
22,553
20
First Financial Holdings, Inc.
Loan Composition
March 31, 2012
March 31, 2011
March 31, 2012
4%
Avg
Avg
11%
($ in thousands)
Balance
Yield
Balance
Yield
Residential loans
15%
3%
19%
4%
41%
3%
Residential 1-4 family
Residential construction
Residential land
Total residential loans
Commercial loans
Commercial business
Commercial real estate
Commercial construction
Commercial land
Total commercial loans
Consumer loans
Home equity
Manufactured housing
Marine
Other consumer
$ 916,146
20,311
48,955
985,412 4.24%
91,005
570,300
22,269
119,326
802,900 5.45%
387,957
270,694
59,428
53,454
$ 972,881
15,501
40,794
1,029,176 4.10%
88,411
446,982
16,289
54,786
606,468 5.81%
347,825
275,845
50,458
45,795
Residential 1-4 family Residential construction and land
Commercial business Commercial real estate
Commercial construction and land Home equity
Manufactured housing Marine and other consumer
Total consumer loans 771,533 6.76% 719,923 6.92%
Total loans $ 2,559,845 5.37% $ 2,355,567 5.40%
Covered loans1 $ 173,673 $ 141,386
1 Covered loans were acquired in the Cape Fear Bank FDIC-assisted transaction and are
subject to a loss share agreement
21
First Financial Holdings, Inc.
Loan Trends
($ in millions)
$3,000
$2,000
$1,000
$0
$2,560
$2,372 $2,355
$772
$765 $753
5.50%
5.40% 5.39%
$803
$649 $635
$985 $958 $967
Mar-11 Jun-11 Sep-11
Residential Commercial Consumer
$2,385 $2,356
$720
$735
5.52%
5.42%
$618 $607
$1,032 $1,029
Dec-11 Mar-12
Weighted Average Yield for Quarter
6.00%
5.80%
5.60%
5.40%
5.20%
5.00%
22
Deposit Mix
March 31, 2012
5%
3% 14%
15%
19%
19%
10%
15%
Noninterest-bearing
Interest-bearing
Savings
Money market
Retail CDs < $100,000
Retail CDs > $100,000
($ in thousands)
Noninterest-bearing
Interest-bearing
Savings
Money market
Total core deposits
Certificates of deposit:
Retail CDs < $100,000
Retail CDs > $100,000
Total retail CDs
CDARs
Brokered CDs
Total wholesale CDs
Total deposits
March 31, 2011
Avg
Balance Rate
$ 233,197 ---
437,113 0.35 %
183,137 0.26
318,787 0.45
1,172,234
499,053 1.90
394,011 2.13
893,064
84,406 0.82
195,076 1.43
279,482
$ 2,344,780 1.06 %
March 31, 2012
Avg
Balance Rate
$ 308,007 ---
435,063 0.12 %
225,289 0.15
338,055 0.35
1,306,414
421,910 1.38
331,571 1.73
753,481
79,988 0.50
124,606 1.11
204,594
$ 2,264,489 0.68 %
CDARs
Brokered CDs
First Financial Holdings, Inc.
23
Deposit Trends
First Financial Holdings, Inc.
24
First Financial Holdings, Inc.
Liquidity Sources
March 31, 2012
Primary Source Availability
Total Available = $794 million
$181
Stable core deposit base
Multiple funding sources
Consistent cash flows from
$212
securities portfolio
$40
$361
FRB
Fed Funds
FHLB
Unpledged Securities
Capacity to obtain additional Brokered and
Jumbo CDs
Key Liquidity Ratios:
03/31/11
03/31/12
Funding Availability/Assets 16.07% 25.28%
Total Deposits/Total Funding 80.88% 81.17%
Brokered Deposits/Total Funding 9.51% 7.22%
Unpledged Securities/Total Assets 4.66% 5.87%
25
First Financial Holdings, Inc.
Credit Quality
26
Credit Trends
As of and for the Quarter ended
March 31,
June 30,
September 30,
December 31,
March 31,
($ in millions)
2011
2011
2011
2011
2012
Credit Metrics
(1)
(1)
Total nonperforming assets ("NPA")
$
182.3
$ 70.4
$ 67.2
$ 68.2
$ 71.7
(1)
(1)
NPAs/assets
5.52%
2.18%
2.10%
2.17%
2.28%
(2)
(2)
Net charge-offs ("NCO")
15.9%
12.4
7.9
8.3
9.5
NCOs/average loans
2.45%
1.96%
(2)
1.33%
(2)
1.39%
1.60%
Criticized loans (3)
$
82.3
$
67.3
$
62.4
$
66.4
$
59.8
Classified assets (3)
273.7
149.3
132.7
135.1
136.2
Classified assets/Bank tier 1 capital +
allowance for loan losses ("ALL")
75.40%
50.58%
41.76%
40.53%
40.83%
Classified assets/FFCH tier 1 capital + ALL (4)
67.79%
41.57%
36.77%
36.12%
36.56%
Credit Metrics Excluding Covered Assets
Total nonperforming assets
$
159.9
$ 46.2
$ 39.5
$ 43.1
$ 44.7
NPAs/assets
4.84%
1.43%
1.23%
1.35%
1.42%
Criticized loans (3)
$
67.7
$
56.2
$
54.3
$
59.5
$
55.0
Classified assets (3)
236.8
101.0
89.9
94.1
95.1
Classified assets/Bank tier 1 capital + ALL
65.23%
34.21%
28.29%
28.21%
28.51%
Classified assets/FFCH tier 1 capital + ALL (4)
58.64%
28.12%
24.91%
25.15%
25.53%
(1)
Excludes nonperforming assets held for sale of $42.7 million and $41.3 million at June 30, 2011 and September 30, 2011, respectively.
(2)
Excludes charge-offs of $95.0 million and $2.2 million from loans reclassified to held for sale for the quarters ending June 30, 2011 and September 30, 2011, respectively.
(3)
Criticized loans and classified assets (consisting of classified loans and OREO) are based on regulatory guidance.
(4)
FFCH began reporting regulatory capital information at March 31, 2011. All prior periods are pro forma calculations.
First Financial Holdings, Inc.
27
Delinquent Loans
First Financial Holdings, Inc.
28
Nonperforming Loans
Note: Nonperforming loans include loans past due 90+ days still accruing interest and restructured loans still accruing interest.
Nonperforming loans held for sale of $43 million and $39 million were excluded from the graph, for the quarters ended
June 30, 2011 and September 30, 2011 respectively.
First Financial Holdings, Inc.
29
Other Repossessed Assets
Note: Other reposessed assets excludes $1.9 million of non-covered other
real estate owned that was included in assets
held for bulk sale at
September 30, 2011.
First Financial Holdings, Inc.
30
Net Charge-offs and Provision
( in millions)
$20.0
$18.0
$16.0
$14.0
$12.0
$10.0
$8.0
$6.0
$4.0
$2.0
$-
$12.7
$12.1
$7.4
$7.5
$6.7
$16
$12
$9
$8
$8
Mar-11 Jun-11 Sep-11 Dec-11 Mar-12
Net Charge-offs $ Provision $
Note: Excludes charge-offs of $95 million and $2.2 million and provision of $65.7 million and $1.4 million from loans
reclassified as held for sale for the quarters ending June 30, 2011 and September 30, 2011, respectively.
First Financial Holdings, Inc.
31
Investment Opportunity
Well positioned balance sheet
Substantially reduced level of problem assets during 2011
Stable core deposit base and ample sources of liquidity
Strong capital position
Continued core earnings enhancement opportunities
Diversified income sources and initiatives for additional revenue enhancement
Effective management of interest-rate risk
Improving business processes and cost control for operating efficiency gains
Anticipate credit cost reductions related to improved credit quality
Experienced senior management team
Diverse backgrounds include national, regional and community banks
Demographically attractive banking markets
Economic development initiatives in existing markets
Carolinas markets considered highly attractive locations for new businesses and growth
opportunities
First Financial Holdings, Inc.
32
APPENDIX
First Financial Holdings, Inc.
33
Highly Attractive Markets
2011-2016 Projected Household Growth Rate
14.0%
12.0%
10.0%
9.28%
8.0%
6.0%
3.62%
US Average
4.0%
2.0%
0.0%
Charleston
MSA
Population 676,751
Projected Population Growth 8.58%
Median Household Income (HHI) $44,910
Projected Median HHI Growth 10.12%
Unemployment Rates 12/31/11* 7.70%
Unemployment Rates 03/31/12* 7.10%
* Not seasonally adjusted
Data Source: SNL Financial as of June 30, 2011
9.54% 9.28%
4.12%
Wilmington Myrtle Beach Georgetown
MSA MSA MSA
368,176 275,035 60,440
9.01% 9.22% 2.88%
$40,649 $40,390 $38,486
11.73% 10.81% 4.67%
10.90%
12.00%
10.40%
9.90% 10.30% 9.50%
11.71%
3.65%
Florence Hilton Head/
MSA Beaufort
MSA
207,064 189,493
3.14% 10.41%
$36,246 $51,129
5.65% 9.96%
10.40% 7.80%
9.60% 7.30%
6.25%
6.57%
Greenville SC
MSA
645,404 4,682,632
6.15% 6.04%
$44,251 $41,607
8.33% 8.43%
7.60% 9.50%
7.10% 8.70%
6.78%
NC
9,658,876
6.57%
$42,941
8.99%
10.20%
9.60%
First Financial Holdings, Inc.
34
Economic Updates
Charleston Market Targeted Industries
Aerospace/Aviation
Boeing plant completed and Dreamliner production in process
First 787 rolled out from the assembly line in April 2012 with final delivery to Air India expected by
end of 2nd quarter
Anticipate 3,800 direct jobs; opportunity to double with suppliers
For 2011 year-to-date, in excess of $66 million in investment and over 700 jobs in
the aerospace-related sector announced for SC
TIGHITCO, an industry leader in the design, fabrication and repair of engineered
components and integrated systems for aerospace, locating a new $30 million
manufacturing facility in Charleston, creating 350 jobs in 2012
Alternative Energy
Clemson University Restoration Institute (CURI), created a 97-acre campus in Charleston
for experts and researchers in design, planning and construction to advance global
restoration methods and technologies
Worlds largest, and one of only three, wind turbine drivetrain test facility; fully
operational by end of 2012, offering simultaneous testing of 7.5 and 15 megawatt power
train components
Potential for 20,000 jobs statewide with manufacturing contract
First Financial Holdings, Inc.
35
Economic Updates
Charleston Market Targeted Industries
Biomedical
Medical University of SC, nationally recognized research center and teaching hospital,
awards 800+ degrees each year, employs more than 11,000, and annually contributes over
$2.3 billion to the local economy
In excess of $243 million in research funding granted in 2011
MUSC opening drug discovery and bioengineering research buildings in next year
Bioscience activity in area includes 35 pharmaceutical and medical device manufacturers
and more than 50 research laboratories and development companies
Advanced Security and IT
Nearly every U.S. Department of Defense and Department of Homeland Security agency
engaged in next-generation security systems and monitoring technology are housed in the
region with more than 18,000 ex-military and government employees in the area
Hundreds of defense contractors are located in Charleston, including SAIC, SRC and BAE, with an estimated $8 billion in contracts completed since 2000
Space & Naval Warfare Systems Center Atlantic (SPAWAR) will soon open a new
consolidated engineering laboratory to focus on IT innovations
First Financial Holdings, Inc.
36
Economic Updates
SC Port Authority - Charleston
Eighth largest U.S. container port by cargo value
Over $62.4 billion in goods move through the port annually
Deepest harbor and shipping channels in the South Atlantic
Regularly hosts post-Panamax vessels at high tide
Approval for study to deepen harbor 3 5 feet to accommodate larger ships at any tide
Offers global connections to 150 countries around the world
Fiscal 2011 year ended with container volume up 8.3%
Incremental 1.4 million twenty-foot equivalent units TEU
Breakbulk pier tonnage increased 21.5% during the first six months of fiscal 2012
New three-berth, 280-acre container terminal scheduled to open in 2013
Other Market Updates
Continental Tires building a Sumter, SC plant starting in mid-2012, total investment
expected to be $500 million and will bring 1,700 new jobs by 2020
2012 PGA Championship to be held at Kiawah Island will make a projected economic
impact of $193 million to SC
PeopleMatter, a human resource technology firm locating in downtown Charleston,
will invest $18.8 million and create 265 new jobs during the next 5 years
First Financial Holdings, Inc.
37
First Financial Holdings, Inc.
Economic Updates
Upstate Market Developments
BMW plans additional investments of nearly $900 million and 300 new jobs in 2012
Clemson University trustees approved the addition of a $6.5 million research and education center in conjunction with Clemson University/Greenwood Genetic Center
Greenville-based Michelin North America to hire 500 people and invest $750 million in Anderson and Lexington counties to meet growing demand for the massive tires used on earth-moving equipment
JTEKT Automotive South Carolina Inc. to invest $102 million and add 80 jobs to its location in Piedmont, SC during 2012
Amazon plans to open a one million square foot distribution center by fall 2012 in Spartanburg, creating 390 jobs
38
Residential Mortgage Loans
Residential Mortgage Loan Portfolio
As of March 31, 2012
Nonperforming Loans
Delinquent Loans
Net Charge-Offs
* Excludes $15 million from loans reclassified as held for sale.
First Financial Holdings, Inc.
39
Residential Mortgage Credit Quality Trends
As of and for the Quarter ended
March 31, 2011
June 30, 2011
September 30, 2011
December 31, 2011
March 31, 2012
% of
% of
% of
% of
% of
(dollars in thousands)
$
Portfolio
$
Portfolio
$
Portfolio
$
Portfolio
$
Portfolio
Delinquent Loans(1)
Residential 1-4 family
$
3,050
0.33%
$
1,404
0.16%
$
1,722
0.19%
$
2,986
0.31%
$
1,889
0.19%
Residential land
1,398
2.86
325
0.76
65
0.16
561
1.35
123
0.30
Total delinquent residential loans
$
4,448
0.45%
$
1,729
0.18%
$
1,787
0.18%
$
3,547
0.34%
$
2,012
0.20%
Nonperforming Loans
Residential 1-4 family
$23,663
2.58%
$
1,242
0.14%
$
1,595
0.18%
$
4,977
0.51%
$
6,649
0.68%
Residential land
3,604
7.36
451
1.05
1,140
2.80
1,448
3.48
1,398
3.43
Total residential nonaccruing loans
27,267
2.77%
1,693
0.18%
2,735
0.28%
6,425
0.62%
8,047
0.78%
Restructured loans still accruing
732
733
734
734
734
Total nonperforming residential loans
$27,999
$
2,426
$
3,469
$
7,159
$
8,781
Net Charge-Offs
$22,685
(2)
Residential 1-4 family
$
976
0.43%
$
461
0.21%
$
414
0.18%
$
391
0.16%
$
507
0.21%
(2)
Residential land
620
4.83
1,237
11.57
165
1.58
532
5.31
701
6.75
Total residential net charge-offs
$
1,596
0.65%
$
1,698
0.72%
$
579
0.24%
$
923
0.37%
$
1,208
0.47%
(1) Includes loans past due 30-89 days.
(2) Excludes $11,716 and $2,862 from loans reclassified as held for sale
First Financial Holdings, Inc.
40
Residential Mortgage Loan Details
Analysis of Portfolio Loans
Origination Profile
As of March 2012
As of March 2012
% of
Avg
Retail
CLD (2)
Portfolio
Yld
30-year Fixed Rate
13%
4.95%
Source
48%
52%
30-year Jumbos
7%
5.21%
Avg. FICO
763
763
15-year Fixed Rate
25%
3.82%
Avg. LTV
67%
71%
Hybrid ARMs
10%
2.41%
Fixed rate locks
85%
99%
Adjustable Rate
Mortgages (1)
42% 3.23%
Purchase
percentage
31% 24%
Other
3% 6.41%
Refinance
100%
3.74%
percentage
69%
76%
(1) - Generally up to 30 year terms and annual rate adjustment after being
(2) - Correspondent Lending Division
fixed for a period of 3, 5, 7 or 10 years in accordance with a designated
index. Either a 1%, 2% or 5% cap on the rate adjustment after the initial
repricing period, a 1% or 2% annual cap and a 4%, 5% or 6% life cap.
First Financial Holdings, Inc.
41
Commercial Loans
Commercial Loan Portfolio
As of March 31, 2012
12% 14%
Commercial business
Commercial real estate
Commercial construction and land
74%
Note: 37% of CRE consists of owner occupied property
Nonperforming Loans
Delinquent Loans
($ in thousands)
$10,000
$8,000
$6,000
$4,000
$2,000
$-
Mar-11 Jun-11 Sep-11 Dec-11 Mar-12
Commercial business Commercial real estate
Commercial construction and land
($ in thousands) Net Charge-Offs
($ in thousands)
$70,000
$60,000
$50,000
$40,000
$30,000
$20,000
$10,000
$-
Mar-11 Jun-11
Commercial construction and land
Commercial business
Sep-11 Dec-11 Mar-12
Commercial real estate
$6,000
$5,000
$4,000
$3,000
$2,000
$1,000
$-
Mar-11 Jun - 11*
Commercial business
Commercial construction and land
Sep-11 Dec-11 Mar-12
Commercial real estate
* Excludes $78 million from loans reclassified as held for sale
First Financial Holdings, Inc.
42
Commercial Credit Quality Trends
As of and for the Quarter ended
March 31, 2011
June 30, 2011
September 30, 2011
December 31, 2011
March 31, 2012
% of
% of
% of
% of
% of
(dollars in thousands)
$
Portfolio
$
Portfolio
$
Portfolio
$
Portfolio
$
Portfolio
Delinquent Loans(1)
Commercial business
$ 1,618
1.78%
$ 2,387
2.96%
$
868
1.07%
$
908
1.08%
$ 1,677
1.90%
Commercial real estate
9,322
1.63
2,703
0.56
3,394
0.72
3,514
0.77
3,065
0.69
Commercial construction
---
---
---
---
595
3.95
---
---
---
---
Commercial land
4,220
3.54
821
1.16
537
0.80
1,185
1.94
2,271
4.15
Total commercial delinquent loans
$ 15,160
1.89%
$ 5,911
0.91%
$ 5,394
0.85%
$ 5,607
0.91%
$ 7,013
1.16%
Nonperforming Loans
Commercial business
$ 9,151
10.06%
$ 3,664
4.55%
$ 4,322
5.34%
$ 3,665
4.37%
$ 1,931
2.19%
Commercial real estate
60,256
10.57
16,396
3.40
18,400
3.90
17,160
3.76
18,474
4.13
Commercial construction
4,074
18.29
1,451
9.05
266
1.77
573
3.48
261
1.60
Commercial land
40,740
34.14
5,411
7.67
6,310
9.36
5,232
8.54
5,240
9.56
Total commercial nonaccrual loans
114,221
14.23%
26,922
4.15%
29,298
4.62%
26,630
4.31%
25,906
4.27%
Restructured loans still accruing
818
802
---
1,677
2,229
Total commercial nonperforming
$ 115,039
$ 27,724
$ 29,298
$ 28,307
$ 228,135
Net Charge-Offs
(2)
Commercial business
$ 1,829
8.00%
$
982
4.88%
$
136
0.69%
$
640
3.22%
$
825
3.73%
(2)
Commercial real estate
2,195
1.51
2,233
1.85
433
0.36
1,417
1.22
1,462
1.31
(2)
Commercial construction
(3)
(0.05)
56
1.40
635
16.12
(3)
(0.07)
(2)
(0.04)
Commercial land
4,824
14.94
3,251
(2)
18.43
2,052
12.15
804
4.94
1,439
10.51
Total net commercial charge-offs
$ 8,845
4.28%
$ 6,522
4.02%
$ 3,256
2.04%
$ 2,858
1.83%
$ 3,724
2.46%
(1)
Includes loans past due 30-89 days.
(2)
Excludes $5,844 in Commercial business, $38,789 in Commercial real estate, $3,011 in Commercial construction and $30,744 in Commercial Land reclassified as loans held for sale
First Financial Holdings, Inc.
43
Consumer Loans
Consumer Loan Portfolio
As of March 31, 2012
Nonperforming Loans
Delinquent Loans
Net Charge-Offs
* Excludes $2 million from loans reclassified as held for sale
First Financial Holdings, Inc.
44
First Financial Holdings, Inc.
Consumer Credit Quality Trends
As of and for the Quarter ended
March 31, 2011
June 30, 2011
September 30, 2011
December 31, 2011
March 31, 2012
% of
% of
% of
% of
% of
(dollars in thousands)
$
Portfolio
$
Portfolio
$
Portfolio
$
Portfolio
$
Portfolio
Delinquent Loans (1)
Home equity
3,550
0.92%
3,266
0.86%
3,408
0.92%
4,525
1.27%
3,315
0.95%
Manufactured housing
2,491
0.92
2,298
0.84
2,600
0.94
3,267
1.19
1,502
0.54
Marine
296
0.50
264
0.46
980
1.77
597
1.14
358
0.71
Other consumer
592
1.11
589
1.09
629
1.19
831
1.66
445
0.97
Total delinquent loans
$ 6,929
0.90%
$ 6,417
0.84%
$ 7,617
1.01%
$ 9,220
1.25%
$ 5,620
0.78%
Nonperforming Loans
(2)
Home equity
Manufactured housing
Marine
Other consumer
Total consumer nonaccrual loans
Loans 90+ days still accruing
Restructured loans still accruing
Total consumer nonperforming loans
9,379 2.42% 9,165
3,517 1.30 2,953
42 0.07 94
181
0.34
129
127
13,119
1.70%
12,341
109
76
171
121
---
---
---
---
$ 13,228 $ 12,417
2.42% 6,871 1.86%
1.08 2,922 1.06
0.16 47 0.09
246
0.24 0.24
224
1.61% 9,967 1.32%
12,123
$ 10,138
8,192 2.29%
3,461 1.26
0.47
0.45
131
1.65%
12,621
$ 12,244
9,779 2.81%
2,648 1.96
63 0.12
0.29
1.75%
51
314
$12,986
Net Charge-Offs
(3)
Home equity
$ 3,368
3.43%
$ 2,686
2.83%
$ 4,910
5.28%
$ 2,955
3.26%
$ 2,264
2.57%
Manufactured housing
1,172
1.74
1,049
1.54
978
1.42
845
1.23
1,467
2.13
Marine
258
1.69
44
0.30
158
1.12
142
1.05
361
2.83
Other consumer
647
4.66
446
3.28
217
1.61
531
4.09
469
3.90
Total consumer net charge-offs
$ 5,445
2.80%
$ 4,225
2.21%
$ 6,263
3.31%
$ 4,473
2.41%
$ 4,561
2.51%
(1) Includes loans past due 30-89 days.
(2) Of the $9,779 of nonperforming equity loans, $3,501 are in first position, $2,367 are in second position where First Federal holds the first and
$3,911 are in second position where another bank holds the first
45
Home Equity Composition
Annual review of collateral values and quarterly reviews of credit score
94% of lines are interest only
22% of lines are fully drawn as of March 31, 2012
19% of lines are frozen as result of reviews which identified material changes in financial
circumstances
8%
16%
30%
13%
36%
34%
1st Position
2nd Position to First Federal 1st Position
2nd Position to Third party 1st Position
26% 37%
800 + beacon 750 -799 beacon
700 - 749 beacon 660 -699 beacon
Based on portfolio review conducted as of December 31, 2011
First Financial Holdings, Inc.
46
Non-GAAP Reconciliation
As of and For the Quarter Ended
March 31,
June 30,
September 30,
December 31,
March 31,
(dollars in thousands, except per share data)
2011
2011
2011
2011
2012
Tangible assets and tangible common equity
Total assets
$
3,302,012
$
3,221,544
$
3,206,310
$
3,146,964
$
3,145,538
Goodwill 1
(28,260)
(3,250)
---
---
---
Other intangible assets, net 2
(9,278)
(2,776)
(2,491)
(2,401)
(2,310)
Tangible assets (non-GAAP)
$
3,264,474
$
3,215,518
$
3,203,819
$
3,144,563
$
3,143,228
Total shareholders equity
$
311,527
$
266,564
$
268,506
$
277,178
$
278,043
Preferred stock
(65,000)
(65,000)
(65,000)
(65,000)
(65,000)
Goodwill 1
(28,260)
(3,250)
---
---
---
Other intangible assets, net 2
(9,278)
(2,776)
(2,491)
(2,401)
(2,310)
Tangible common equity (non-GAAP)
$
208,989
$
195,538
$
201,015
$
209,777
$
210,733
Shares outstanding, end of period (000s)
16,527
16,527
16,527
16,527
16,527
Tangible common equity to tangible assets
6.40%
6.08%
6.27%
6.67%
6.70%
Tangible common book value per share
$
12.65
$
11.83
$
12.16
$
12.69
$
12.75
Pre-tax pre-provision earnings from
continuing operations
(Loss) income before income taxes
$
(2,278)
$
(65,564)
$
4,774
$
25,338
$
5,980
Provision for loan losses
12,675
77,803
8,940
7,445
6,745
Pre-tax pre-provision earnings (non-GAAP)
$
10,397
$
12,239
$
13,714
$
32,783
$
12,725
1 Goodwill represents goodwill for continuing operations and for discontinued operations.
2 Other intangible assets, net represents intangible assets for continuing operations and discontinued operations.
First Financial Holdings, Inc.
47
First Financial Holdings, Inc.
Nasdaq: FFCH
www.firstfinancialholdings.com
R. Wayne Hall
Blaise B. Bettendorf
President & CEO
EVP & Chief Financial Officer
whall@firstfederal.com
bbettendorf@firstfederal.com
843.529.5907
843.529.5456
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