<PAGE>
First
Financial
Fund
SEMI
ANNUAL
REPORT
September 30, 2000
<PAGE>
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
<TABLE>
<CAPTION>
6 Mos. 1 Year 3 Years 5 Years
<S> <C> <C> <C> <C>
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
</TABLE>
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
<PAGE>
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
<PAGE>
Portfolio of Investments as of
September 30, 2000 (Unaudited) FIRST FINANCIAL FUND, INC.
--------------------------------------------------------------------------
--------------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares Description Value (Note 1)
<C> <S> <C>
------------------------------------------------------------
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
</TABLE>
--------------------------------------------------------------------------------
See Notes to Financial Statements. 3
<PAGE>
Portfolio of Investments as of
September 30, 2000 (Unaudited) FIRST FINANCIAL FUND, INC.
--------------------------------------------------------------------------
--------------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares Description Value (Note 1)
<C> <S> <C>
------------------------------------------------------------
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
------------
------------
</TABLE>
---------------
* Non-income-producing security.
(a) Indicates a fair valued security.
--------------------------------------------------------------------------------
See Notes to Financial Statements. 4
<PAGE>
Statement of Assets and Liabilities (Unaudited) FIRST FINANCIAL FUND, INC.
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Assets September 30, 2000
<S> <C>
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
------------------
------------------
</TABLE>
--------------------------------------------------------------------------------
See Notes to Financial Statements. 5
<PAGE>
FIRST FINANCIAL FUND, INC.
Statement of Operations (Unaudited)
------------------------------------------------------------
<TABLE>
<CAPTION>
Six Months
Ended
Net Investment Income September 30, 2000
<S> <C>
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
------------------
------------------
</TABLE>
FIRST FINANCIAL FUND, INC.
Statement of Cash Flows (Unaudited)
------------------------------------------------------------
<TABLE>
<CAPTION>
Six Months
Ended
Increase (Decrease) in Cash September 30, 2000
<S> <C>
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
------------------
------------------
</TABLE>
--------------------------------------------------------------------------------
See Notes to Financial Statements. 6
<PAGE>
FIRST FINANCIAL FUND, INC.
Statement of Changes in Net Assets (Unaudited)
------------------------------------------------------------
<TABLE>
<CAPTION>
Six Months
Ended
September Year Ended
Increase (Decrease) 30, March 31,
in Net Assets 2000 2000
------------ -------------
<S> <C> <C>
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
------------ -------------
</TABLE>
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
<PAGE>
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
<PAGE>
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
<PAGE>
Financial Highlights (Unaudited) FIRST FINANCIAL FUND, INC.
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Six Months
Ended Year Ended March 31,
September 30, -----------------------------------------------
2000 2000 1999 1998 1997
<S> <C> <C> <C> <C> <C>
------- -------- -------- -------- --------
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
<CAPTION>
1996
<S> <C>
--------
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
</TABLE>
---------------
(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
<PAGE>
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:
<TABLE>
<CAPTION>
(1) To elect the following directors to serve as follows:
Director Class Term Expiring
------------------------------- ------ ------------------------- ---------
Robert E. LaBlanc I 2 years--From 2000-2002 2002
<S> <C> <C> <C> <C> <C>
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.
</TABLE>
The results of the proxy solicitation on the above matters were as follows:
<TABLE>
<CAPTION>
Director/Auditor Votes For Votes Against Votes Withheld Abstentions
---------------------------------- ----------- -------------- --------------- ------------
<S> <C> <C> <C> <C> <C> <C>
(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
</TABLE>
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11
<PAGE>
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
