-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Bs1U7YTQv9jCX4MMacPvYy7rclex+Bva19WvzjdYlw0bEgsBYSAJQFBEOTlvR5in D+8D18Ji1UW5bofV72Evmg== 0000898733-00-000863.txt : 20001211 0000898733-00-000863.hdr.sgml : 20001211 ACCESSION NUMBER: 0000898733-00-000863 CONFORMED SUBMISSION TYPE: N-30D PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20000930 FILED AS OF DATE: 20001208 FILER: COMPANY DATA: COMPANY CONFORMED NAME: FIRST FINANCIAL FUND INC CENTRAL INDEX KEY: 0000790202 STANDARD INDUSTRIAL CLASSIFICATION: UNKNOWN SIC - 0000 [0000] IRS NUMBER: 133341573 STATE OF INCORPORATION: MD FISCAL YEAR END: 0331 FILING VALUES: FORM TYPE: N-30D SEC ACT: SEC FILE NUMBER: 811-04605 FILM NUMBER: 785384 BUSINESS ADDRESS: STREET 1: GATEWAY ENTER THREE 100 MULBERRY ST CITY: NEWARK STATE: NJ ZIP: 07102-4077 BUSINESS PHONE: 2013677530 MAIL ADDRESS: STREET 1: GATEWAY CENTER THREE 100 MULBERRY STREET CITY: NEWARK STATE: NJ ZIP: 07102-4077 FORMER COMPANY: FORMER CONFORMED NAME: FIRST SAVINGS & BANKING INSTITUTIONS FUND INC DATE OF NAME CHANGE: 19860402 N-30D 1 0001.txt FIRST FINANCIAL FUND, INC. First Financial Fund SEMI ANNUAL REPORT September 30, 2000 Letter To Shareholders October 19, 2000 Dear Fellow Shareholder: Patience paid a dividend this quarter. A less hawkish Federal Reserve, prognostications of a soft landing and some eyebrow raising merger activity brought the financial service sector back into investment vogue. Conversely, technology, media and telecommunications (TMT) came under investment pressure as earnings slowdowns and high valuations caused some stocks to fall precipitously. Next to TMT, financials seemed relatively healthy, safe and benign. Concern over higher interest rates has now been supplanted by credit quality fears. Such worry is not without substance given the rapid commercial loan growth of the last several years - especially the nationally syndicated credits (these are more like securities in that the participating banks have no tie to the borrower other than the loan: hence, no opportunities for either fee income or, the most valuable item in banking, demand deposits.) Both business and the consumer are in debt, but fierce competition and the strong dollar have helped the latter at the expense of the former. As a result, commercial credit quality deterioration will accelerate this quarter and, most likely, for the next several. Super regional banks are the most vulnerable but so also the money center banks as capital markets activity should cool with the economy. TOTAL RETURN For The Periods Ended 9/30/00
6 Mos. 1 Year 3 Years 5 Years First Financial Fund's NAV 24.0% 17.8% -6.5% 11.2% S&P 500 -3.6 13.3 16.4 21.7 NASDAQ Composite* -19.7 33.7 29.6 28.6 NASDAQ Banks* 16.2 5.7 -2.1 12.9 SNL All Daily Thrift* 31.6 17.9 -0.9 14.7 SNL MBS REITS 16.7 4.1 -19.0 4.9 SNL Mortgage Banks* 19.2 -10.7 -26.7 -8.9
1 Source: Prudential Investments Fund Management. The Fund total return represents the change in net asset value from the beginning of the period noted through September 30, 2000 and assumes the reinvestment of dividends and distributions. Past performance is no guarantee of future results. * Principal only. Note: Returns for periods greater than one year are annualized. It remains a stock pickers market. The stock valuation gaps between the financial "haves" and "have nots" is widening. While the strong will certainly get stronger, the valuation gaps are wide enough to encourage acquisitions of the walking wounded. Witness Citicorp and Associates, Chase and JP Morgan, Fleet and Summit and most recently, Firstar and U.S. Bancorp. However, this acquisition cycle may differ from the last. Fewer 1 qualified acquirers should mean less premium for the acquiree. Ironically, we may see better deals struck as acquirees focus less on getting top dollar and more on finding the right partner. While less exciting initially, intelligent, synergistic low premium deals would be a major positive relative to the growth -- at -- any -- cost practices of the past. We see continued choppy markets. Against this outlook, the Fund sees excellent buying opportunities in banks, thrifts and financial intermediaries with superior management and strong balance sheets to weather this environment. We look forward with confidence to this environment and remain dedicated to producing superior returns. Sincerely, Nicholas C. Adams Portfolio Manager Senior Vice President Wellington Management Company, LLP Portfolio of Investments as of September 30, 2000 (Unaudited) FIRST FINANCIAL FUND, INC. - -------------------------------------------------------------------------- - --------------------------------------------------------------------------
Shares Description Value (Note 1) - ------------------------------------------------------------ LONG-TERM INVESTMENTS--102.6% COMMON STOCKS--102.2% - ------------------------------------------------------------ Banks & Thrifts--75.0% 12,800 Abington Bancorp, Inc. $ 129,600 34,600 Algiers Bancorp, Inc. 272,475 1,303,600 American Financial Holdings, Inc.* 22,975,950 101,000 Astoria Financial Corp. 3,901,125 243,730 Berkshire Hills Bancorp, Inc. 3,503,619 150,000 Bostonfed Bancorp, Inc. 3,196,875 89,640 Broadway Financial Corp. 795,555 148,500 Cameron Financial Corp. 2,635,875 225,500 Capital Crossing Bank* 1,987,219 226,500 Catskill Financial Corp. 5,124,562 86,600 CBES Bancorp, Inc. 779,400 142,538 CCF Holding Co. 1,407,563 60,300 Centura Banks, Inc. 2,310,244 118,000 Commercial Bank New York 1,593,000 60,000 Community Bank San Jose California(a) 1,677,000 155,500 Community Financial Corp. 1,457,812 474,900 Connecticut Bancshares, Inc.* 8,993,419 18,500 Dime Bancorp, Inc. 398,906 154,000 Downey Financial Corp. 6,083,000 380,000 East West Bancorp, Inc. 7,433,750 25,000 Eldorado Bancshares, Inc. 184,375 202,900 Fidelity Federal Bancorp 431,163 24,000 First Financial Corp. 285,000 372,700 FirstFed America Bancorp, Inc. 5,264,387 252,000 FirstFed Bancorp, Inc. 1,575,000 356,800 FirstFed Financial Corp. 8,206,400 152,000 Golden State Bancorp, Inc. 3,591,001 68,300 Hallmark Capital Corp. 729,956 170,000 Hawthorne Financial Corp.* 2,018,750 19,999 HFB Financial Corp. 239,988 134,200 Highland Bancorp, Inc.* 3,388,550 67,000 ITLA Capital Corp.* 992,437 41,600 Lincoln Bancorp Indiana 496,600 97,500 MetroCorp Bancshares, Inc. 914,063 335,000 Northeast Pennsylvania Financial Corp. 3,852,500 63,100 Oregon Trail Financial Corp. 733,538 532,200 Pacific Century Financial Corp.* 9,113,925 64,900 Pacific Crest Capital, Inc. $ 912,656 140,000 People's Bank 2,948,750 34,600 Peoples Financial Corp. 185,975 165,930 Perpetual Federal Savings Bank 2,426,726 715,800 Port Financial Corp.* 12,705,450 94,900 PrivateBankcorp, Inc.* 1,310,806 89,000 Progress Financial Corp. 1,001,251 317,300 Provident Financial Holdings, Inc.* 6,008,869 40,650 Redwood Financial, Inc.* 248,981 45,000 River Valley Bancorp 635,625 47,800 Rowan Bancorp, Inc.* 717,000 140,000 Southwest Bancorp, Inc., Oklahoma* 2,082,500 32,500 St. Landry Financial Corp.* 373,750 23,900 Team Financial, Inc. 173,275 238,200 Thistle Group Holdings Co.* 1,846,050 7,276 Tri-County Bancorp, Inc. 68,213 598,500 Troy Financial Corp.* 7,032,375 350,800 UCBH Holdings, Inc. 12,563,025 1,001,700 UnionBanCal Corp. 23,352,131 196,450 WSFS Financial Corp. 2,148,672 ------------ 197,416,662 - ------------------------------------------------------------ Other Financial Intermediaries--27.2% 321,000 American Cap. Strategies Ltd.* 7,603,687 511,800 Anthracite Capital, Inc. 4,190,363 301,200 Central Financial Acceptance Corp.* 1,073,025 58,000 Chase Manhattan Corp. 2,678,875 227,875 First Mortgage Corp.* 655,141 155,504 Fortress Investment Corp.(a) 2,004,447 255,984 Hanmi Financial Corp.* 3,551,778 272,590 Healthcare Financial Partners, Inc.(a) 4,165,175 128,016 Inco Homes Corp.* 6,001 296,000 LASER Mortgage Management, Inc. 906,500 840,000 LNR Property Corp. 18,585,000 900,000 Ocwen Financial Corp.* 5,287,500 243,600 Pacific Union Bank* 2,283,750
- -------------------------------------------------------------------------------- See Notes to Financial Statements. 3 Portfolio of Investments as of September 30, 2000 (Unaudited) FIRST FINANCIAL FUND, INC. - -------------------------------------------------------------------------- - --------------------------------------------------------------------------
Shares Description Value (Note 1) - ------------------------------------------------------------ Other Financial Intermediaries (cont'd.) 300,000 Prime Capital Corp., Inc.* $ 6,000 1,808,000 Resource America, Inc. 15,368,000 545,300 Sundance Homes, Inc.* 85,203 265,700 Ugly Duckling Corp.* 1,544,381 100,000 Vista Bancorp, Inc. 1,512,500 ------------ 71,507,326 ------------ Total common stocks (cost $251,776,572) 268,923,988 ------------ - ------------------------------------------------------------ Convertible Bonds--0.4% 1,000 Online Resources & Communications Zero Coupon, 9/30/05 (cost $1,000,000) 1,000,000 ------------ - ------------------------------------------------------------ Warrants* 109,036 Healthcare Financial Partners, Inc. expiring December '01 (cost $0) 0 ------------ Total long-term investments (cost $252,776,572) 269,923,988 ------------ SHORT-TERM INVESTMENTS--14.7% - ------------------------------------------------------------ Repurchase Agreement--14.7% $38,558 Paribas Corp., 6.53%, dated 9/29/00, due 10/2/00 in the amount of $38,578,982 (cost $38,558,000; collateralized by $37,113,000 U.S. Treasury Notes, 6.75%, due 5/15/05, value of collateral including interest $39,326,732) $ 38,558,000 ------------ - ------------------------------------------------------------ Certificates of Deposit 1 Brookline Savings, 6.00%, 11/26/00 1,462 22 First Federal Savings Bank, 4.00%, 10/13/00 21,590 21 Naugatuck Valley Savings & Loan Assoc., 3.00%, 10/25/00 21,198 ------------ Total certificates of deposit (cost $44,250) 44,250 ------------ Total short-term investments (cost $38,602,250) 38,602,250 ------------ - ------------------------------------------------------------ Total Investments--117.3% (cost $291,378,822; Note 3) 308,526,238 Liabilities in excess of other assets--(17.3%) (45,492,608) ------------ Net Assets--100% $263,033,630 ------------ ------------
- --------------- * Non-income-producing security. (a) Indicates a fair valued security. - -------------------------------------------------------------------------------- See Notes to Financial Statements. 4 Statement of Assets and Liabilities (Unaudited) FIRST FINANCIAL FUND, INC. - --------------------------------------------------------------------------------
Assets September 30, 2000 Investments, at value (cost $252,820,822)............................................................... $269,968,238 Repurchase agreement (cost $38,558,000)................................................................. 38,558,000 Cash.................................................................................................... 821 Dividends and interest receivable....................................................................... 665,404 Receivable for investments sold......................................................................... 231,080 Other assets............................................................................................ 115,141 ------------------ Total assets......................................................................................... 309,538,684 ------------------ Liabilities Loan payable (Note 4)................................................................................... 45,000,000 Accrued expenses........................................................................................ 526,972 Advisory fee payable.................................................................................... 387,565 Loan interest payable (Note 4).......................................................................... 237,970 Payable for investments purchased....................................................................... 236,596 Administration fee payable.............................................................................. 89,266 Deferred directors' fees................................................................................ 26,685 ------------------ Total liabilities.................................................................................... 46,505,054 ------------------ Net Assets.............................................................................................. $263,033,630 ------------------ ------------------ Net assets were comprised of: Common stock, at par; 25,064,981 shares issued....................................................... $ 25,065 Paid-in capital in excess of par..................................................................... 278,076,064 Cost of 436,200 shares held in treasury.............................................................. (3,617,561) ------------------ 274,483,568 Undistributed net investment income.................................................................. 2,193,887 Accumulated net realized losses...................................................................... (30,791,241) Net unrealized appreciation on investments........................................................... 17,147,416 ------------------ Net assets, September 30, 2000....................................................................... $263,033,630 ------------------ ------------------ Net asset value per share ($263,033,630 /24,628,781 shares of common stock outstanding)................. $10.68 ------------------ ------------------
- -------------------------------------------------------------------------------- See Notes to Financial Statements. 5 FIRST FINANCIAL FUND, INC. Statement of Operations (Unaudited) - ------------------------------------------------------------
Six Months Ended Net Investment Income September 30, 2000 Income Dividends............................. $ 3,147,507 Interest.............................. 1,072,279 ------------------ Total income....................... 4,219,786 ------------------ Expenses Investment advisory fee............... 746,212 Administration fee.................... 171,591 Legal fees and expenses............... 300,000 Reports to shareholders............... 165,000 Custodian's fees and expenses......... 43,000 Listing fees.......................... 35,000 Insurance expense..................... 28,000 Transfer agent's fees and expenses.... 21,000 Audit fee and expenses................ 11,000 Directors fees........................ 10,000 Miscellaneous......................... 15,639 ------------------ Total operating expenses........... 1,546,442 Loan interest (Note 4)................ 1,568,657 ------------------ Total expenses..................... 3,115,099 ------------------ Net investment income.................... 1,104,687 ------------------ Realized and Unrealized Gain (Loss) on Investments Net realized loss on investment transactions.......................... (15,008,921) Net change in unrealized appreciation of investments........................... 62,276,143 ------------------ Net gain on investments.................. 47,267,222 ------------------ Net Increase in Net Assets Resulting from Operations................ $ 48,371,909 ------------------ ------------------
FIRST FINANCIAL FUND, INC. Statement of Cash Flows (Unaudited) - ------------------------------------------------------------
Six Months Ended Increase (Decrease) in Cash September 30, 2000 Cash flows provided from operating activities Dividends and interest received........ $ 3,836,902 Operating expenses paid................ (1,029,200) Loan interest paid..................... (1,569,188) Purchases of short-term portfolio investments, net.................... (18,822,844) Purchases of long-term portfolio investments......................... (70,036,126) Proceeds from disposition of long-term portfolio investments............... 87,620,920 Other assets........................... 229 ------------------ Net cash provided from operating activities.......................... 693 ------------------ Net increase in cash................... 693 Cash at beginning of period............ 128 ------------------ Cash at end of period.................. $ 821 ------------------ ------------------ Reconciliation of Net Increase in Net Assets to Net Cash Provided from Operating Activities Net increase in net assets resulting from operations............................. $ 48,371,909 ------------------ Increase in investments................... (2,837,087) Net realized loss on investment transactions........................... 15,008,921 Net increase in unrealized appreciation (depreciation) of investments.......... (62,276,143) Decrease in receivable for investments sold................................... 2,086,517 Increase in dividends and interest receivable............................. (382,884) Decrease in other assets.................. 229 Decrease in payable for investments purchased.............................. (487,480) Increase in accrued expenses and other liabilities............................ 516,711 ------------------ Total adjustments................... (48,371,216) ------------------ Net cash provided from operating activities............................. $ 693 ------------------ ------------------
- -------------------------------------------------------------------------------- See Notes to Financial Statements. 6 FIRST FINANCIAL FUND, INC. Statement of Changes in Net Assets (Unaudited) - ------------------------------------------------------------
Six Months Ended September Year Ended Increase (Decrease) 30, March 31, in Net Assets 2000 2000 ------------ ------------- Operations Net investment income...... $ 1,104,687 $ 3,059,502 Net realized gain (loss) on investment transactions............ (15,008,921) (7,515,804) Net change in unrealized appreciation (depreciation) of investments............. 62,276,143 2,825,134 ------------ ------------- Net increase (decrease) in net assets resulting from operations......... 48,371,909 (1,631,168) ------------ ------------- Dividends and distributions (Note 1) Dividends from net investment income....... -- (1,970,302) Cost of Fund shares reacquired.................... -- (3,617,561) ------------ ------------- Total increase (decrease)..... 48,371,909 (7,219,031) Net Assets Beginning of period........... 214,661,721 221,880,752 ------------ ------------- End of period(a).............. $263,033,630 $ 214,661,721 ------------ ------------- ------------ ------------- - --------------- (a) Includes undistributed net investment income of.......... $ 2,193,887 $ 1,089,200 ------------ -------------
FIRST FINANCIAL FUND, INC. Notes to Financial Statements (Unaudited) - ------------------------------------------------------------ First Financial Fund, Inc. (the 'Fund') was incorporated in Maryland on March 3, 1986, as a closed-end, diversified investment company. The Fund's primary investment objective is to achieve long-term capital appreciation with the secondary objective of current income by investing in securities issued by savings and banking institutions, mortgage banking institutions and their holding companies. The ability of issuers of debt securities held by the Fund to meet their obligations may be affected by economic developments in a specific industry or region. - ------------------------------------------------------------ Note 1. Accounting Policies The following is a summary of significant accounting policies followed by the Fund in the preparation of its financial statements. Securities Valuation: Securities for which market quotations are readily available--including securities listed on national securities exchanges and those traded over-the-counter--are valued at the last quoted sales price on the valuation date on which the security is traded. If such securities were not traded on the valuation date, but market quotations are readily available, they are valued at the most recently quoted bid price provided by an independent pricing service or by principal market makers. Securities for which market quotations are not readily available will be valued at fair value as determined in good faith according to pricing procedures developed by the Investment Adviser and approved by the Board of Directors. Short-term securities which mature in more than 60 days are valued at current market quotations. Short-term securities which mature in 60 days or less are valued at amortized cost. In connection with repurchase agreement transactions with financial institutions, it is the Fund's policy that its custodian take possession of the underlying collateral securities, the value of which exceeds the principal amount of the repurchase transaction, including accrued interest. If the seller defaults, and the value of the collateral declines or if bankruptcy proceedings are commenced with respect to the seller of the security, realization of the collateral by the Fund may be delayed or limited. Cash Flow Information: The Fund invests in securities and pays dividends from net investment income and distributions from net realized gains which are paid in cash or are reinvested at the discretion of shareholders. These activities are reported in the Statement of Changes in Net Assets and additional information on cash receipts and cash payments is - -------------------------------------------------------------------------------- 7 Notes to Financial Statements (Unaudited) FIRST FINANCIAL FUND, INC. - -------------------------------------------------------------------------------- presented in the Statement of Cash Flows. Accounting practices that do not affect reporting activities on a cash basis include carrying investments at value and amortizing discounts on debt obligations. Securities Transactions and Net Investment Income: Securities transactions are recorded on the trade date. Realized gains or losses on sales of securities are calculated on the identified cost basis. Dividend income is recorded on the ex-dividend date; interest income is recorded on the accrual basis. Expenses are recorded on the accrual basis which may require the use of certain estimates by management. Federal Income Taxes: It is the Fund's intention to continue to meet the requirements of the Internal Revenue Code applicable to regulated investment companies and to distribute all of its taxable income to shareholders. Therefore, no federal income tax provision is required. Withholding taxes on foreign dividends are provided in accordance with the Fund's understanding of the applicable country's tax rules and rates. Dividends and Distributions: The Fund expects to declare and pay, at least annually, dividends from net investment income and any net capital gains. Dividends and distributions are recorded on the ex-dividend date. Income distributions and capital gain distributions are determined in accordance with income tax regulations which may differ from generally accepted accounting principles. These differences are primarily due to differing treatments for wash sales. - ------------------------------------------------------------ Note 2. Agreements The Fund has agreements with Wellington Management Company, LLP (the 'Investment Adviser') and with Prudential Investments Fund Management LLC (the 'Administrator'). The Investment Adviser makes investment decisions on behalf of the Fund; the Administrator provides occupancy and certain clerical and accounting services to the Fund. The Fund bears all other costs and expenses. The investment advisory agreement provides for the Investment Adviser to receive a fee, computed monthly and payable quarterly, at the following annual rates: .75% of the Fund's average month-end net assets up to and including $50 million, and .625% of such assets in excess of $50 million. The administration agreement provides for the Administrator to receive a fee, computed monthly and payable quarterly, at the annual rate of .15% of the Fund's average month-end net assets. Note 3. Portfolio Securities Purchases and sales of investment securities, other than short-term investments, for the six months ended September 30, 2000 were $69,548,646 and $100,543,323, respectively. The cost basis of the Fund's investments for federal income tax purposes, including short-term investments, at September 30, 2000 was $291,726,574; and, accordingly, net unrealized appreciation for federal income tax purposes was $16,799,664 (gross unrealized appreciation--$54,706,932; gross unrealized depreciation--$37,907,268). For federal income tax purposes, the Fund has a capital loss carryforward as of March 31, 2000 of approximately $6,483,800 which expires in 2008. Accordingly, no capital gains distributions are expected to be paid to shareholders until net gains have been realized in excess of such carryforward. The Fund will elect to treat net capital losses of approximately $6,703,000 incurred in the five month period ended March 31, 2000 as having occurred in the current fiscal year. - ------------------------------------------------------------ Note 4. Borrowings The Fund has a credit agreement (the 'Agreement') with an unaffiliated lender. The maximum commitment under the Agreement is $45,000,000. These borrowings may be set to any desired maturity at a rate of interest determined by the lender at the time of borrowing. The current borrowings are due on October 2, 2000. However, the Fund intends to renew the loan on a daily basis through use of the credit agreement discussed above. The credit agreement expires on April 30, 2001. While outstanding, the borrowings will bear interest, payable monthly. The average daily balance outstanding for the six months ended September 30, 2000 was $45,000,000 at a weighted average interest rate of 6.89%. The highest face amount of borrowing outstanding at any month-end during the six months ended September 30, 2000 was $45,000,000 (as of September 30, 2000). The current borrowings are $45,000,000 (at an interest rate of 7.25%). - ------------------------------------------------------------ Note 5. Capital There are 50 million shares of $.001 par value common stock authorized. Of the 25,064,981 shares issued as of September 30, 2000, the Investment Adviser owned 10,994 shares. During the year ended March 31, 2000, the Fund repurchased 436,200 of its own shares at a weighted average discount of 15.81%. - -------------------------------------------------------------------------------- 8 Notes to Financial Statements (Unaudited) FIRST FINANCIAL FUND, INC. - -------------------------------------------------------------------------------- Note 6. Dividends On November 14, 2000 the Board of Directors of the Fund declared dividends of $.10 per share from ordinary income payable on December 8, 2000 to shareholders of record as of November 30, 2000. - -------------------------------------------------------------------------------- 9 Financial Highlights (Unaudited) FIRST FINANCIAL FUND, INC. - --------------------------------------------------------------------------------
Six Months Ended Year Ended March 31, September 30, ----------------------------------------------- 2000 2000 1999 1998 1997 ------- -------- -------- -------- -------- PER SHARE OPERATING PERFORMANCE: Net asset value, beginning of period......................... $ 8.72 $ 8.85 $ 18.94 $ 15.26 $ 13.71 ------- -------- -------- -------- -------- Income from investment operations Net investment income........................................ .04 .12 .11 .14 .22 Net realized and unrealized gain (loss) on investments....... 1.92 (.20) (7.20) 6.84 4.84 ------- -------- -------- -------- -------- Total from investment operations.......................... 1.96 (.08) (7.09) 6.98 5.06 ------- -------- -------- -------- -------- Less dividends and distributions Dividends from net investment income......................... -- (.08) (.05) (.14) (.21) Distributions from net realized gains........................ -- -- (2.59) (2.68) (3.36) Distributions in excess of net realized gains................ -- -- (.45) (.63) -- ------- -------- -------- -------- -------- Total dividends and distributions......................... -- (.08) (3.09) (3.45) (3.57) ------- -------- -------- -------- -------- Increase resulting from Fund share repurchase................ -- .03 -- -- .06 Net change resulting from the issuance of Fund shares........ -- -- .09 .15 -- ------- -------- -------- -------- -------- Net asset value, end of period(a)............................ $ 10.68 $ 8.72 $ 8.85 $ 18.94 $ 15.26 ------- -------- -------- -------- -------- ------- -------- -------- -------- -------- Market price per share, end of period(a)..................... $ 9.6875 $ 7.8125 $ 7.3125 $ 20.813 $ 14.500 ------- -------- -------- -------- -------- ------- -------- -------- -------- -------- TOTAL INVESTMENT RETURN(b):.................................. 24.00% 7.93% (53.65)% 72.59% 42.10% RATIOS/SUPPLEMENTAL DATA: Net assets, end of period (000).............................. $263,034 $214,662 $221,881 $387,852 $270,496 Average net assets (000)..................................... $228,788 $230,163 $296,740 $320,484 $238,967 Ratios to average net assets: Expenses, before loan interest, commitment fees and nonrecurring expenses.................................. 1.35%(c) 1.06% .94% .91% 1.03% Total expenses............................................ 2.72%(c) 2.20% 1.61% 1.25% 1.56% Net investment income..................................... .96%(c) 1.33% .91% .82% 1.43% Portfolio turnover rate...................................... 28% 63% 65% 43% 70% Total debt outstanding at end of period (000 omitted)........ $ 45,000 $ 45,000 $ 45,000 $ 20,000 $ 18,400 Asset coverage per $1,000 of debt outstanding................ $ 6,845 $ 5,768 $ 5,931 $ 20,393 $ 15,701 1996 -------- PER SHARE OPERATING PERFORMANCE: Net asset value, beginning of period......................... $ 11.05 -------- Income from investment operations Net investment income........................................ .13 Net realized and unrealized gain (loss) on investments....... 4.99 -------- Total from investment operations.......................... 5.12 -------- Less dividends and distributions Dividends from net investment income......................... (.15) Distributions from net realized gains........................ (2.31) Distributions in excess of net realized gains................ -- -------- Total dividends and distributions......................... (2.46) -------- Increase resulting from Fund share repurchase................ -- Net change resulting from the issuance of Fund shares........ -- -------- Net asset value, end of period(a)............................ $ 13.71 -------- -------- Market price per share, end of period(a)..................... $ 12.625 -------- -------- TOTAL INVESTMENT RETURN(b):.................................. 35.46% RATIOS/SUPPLEMENTAL DATA: Net assets, end of period (000).............................. $214,130 Average net assets (000)..................................... $195,421 Ratios to average net assets: Expenses, before loan interest, commitment fees and nonrecurring expenses.................................. 1.00% Total expenses............................................ 1.23% Net investment income..................................... .97% Portfolio turnover rate...................................... 82% Total debt outstanding at end of period (000 omitted)........ $ 9,700 Asset coverage per $1,000 of debt outstanding................ $ 23,075
- --------------- (a) NAV and market value are published in The Wall Street Journal each Monday. (b) Total investment return is calculated assuming a purchase of common stock at the current market value on the first day and a sale at the current market value on the last day of each period reported. Dividends and distributions are assumed for purposes of this calculation to be reinvested at prices obtained under the dividend reinvestment plan. This calculation does not reflect brokerage commissions. (c) Annualized. Contained above is selected data for a share of common stock outstanding, total investment return, ratios to average net assets and other supplemental data for the period indicated. This information has been determined based upon information provided in the financial statements and market price data for the Fund's shares. - -------------------------------------------------------------------------------- See Notes to Financial Statements. 10 Supplemental Proxy Information (Unaudited) FIRST FINANCIAL FUND, INC. - -------------------------------------------------------------------------------- The annual meeting of shareholders of First Financial Fund, Inc. was held on August 24, 2000 at the offices of Prudential Investments Fund Management LLC, 100 Mulberry Street, Newark, New Jersey. The meeting was held for the following purposes:
(1) To elect the following directors to serve as follows: Director Class Term Expiring ------------------------------- ------ ------------------------- --------- Robert E. LaBlanc I 2 years--From 2000-2002 2002 Thomas T. Mooney II 3 years--From 2000-2003 2003 Clay T. Whitehead II 3 years--From 2000-2003 2003 Directors whose term of office continued beyond this meeting are Eugene C. Dorsey and Douglas H. McCorkindale. (2) To ratify the selection of PricewaterhouseCoopers LLP as independent public accountants for the year ending March 31, 2001.
The results of the proxy solicitation on the above matters were as follows:
Director/Auditor Votes For Votes Against Votes Withheld Abstentions ---------------------------------- ----------- -------------- --------------- ------------ (1) Robert E. LaBlanc 21,787,311 -- 1,081,619 -- Thomas T. Mooney 21,884,335 -- 984,595 -- Clay T. Whitehead 21,790,664 -- 1,078,266 -- (2) PricewaterhouseCoopers LLP 22,320,105 348,534 -- 200,291
- -------------------------------------------------------------------------------- 11 Directors Eugene C. Dorsey Robert E. LaBlanc Douglas H. McCorkindale Thomas T. Mooney Clay T. Whitehead Investment Adviser Wellington Management Company, LLP 75 State Street Boston, MA 02109 Administrator Prudential Investments Fund Management LLC Gateway Center Three 100 Mulberry Street Newark, NJ 07102-4077 Custodian and Transfer Agent State Street Bank and Trust Company One Heritage Drive North Quincy, MA 02171 Independent Accountants PricewaterhouseCoopers LLP 1177 Avenue of the Americas New York, NY 10036 Legal Counsel Kirkpatrick & Lockhart LLP 1800 Massachusetts Avenue, N.W. Washington, D.C. 20036 Notice is hereby given in accordance with Section 23(c) of the Investment Company Act of 1940 that the Fund may purchase, from time to time, shares of its common stock at market prices. The views expressed in this report and the information about the Fund's portfolio holdings are for the period covered by this report and are subject to change thereafter. This report is for stockholder information. This is not a prospectus intended for use in the purchase or sale of Fund shares. First Financial Fund, Inc. Gateway Center Three 100 Mulberry Street Newark, NJ 07102-4077 For information call toll-free (800) 451-6788 320228109 -----END PRIVACY-ENHANCED MESSAGE-----