# U.S. SECURITIES AND EXCHANGE COMMISSION 
Washington, D.C. 20549

# FORM 10-QSB

|[X] | Quarterly report under Section 13 or 15(d) of the Securities Exchange Act of 1934
|--- | ---------------------------------------------------------------------------------
|    | For the quarter ended June 30, 2004                                              

|[   ] | Transition report under Section 13 or 15(d) of the Securities Exchange Act of 1934
|----- | ----------------------------------------------------------------------------------
|      | For the transition period from ___________ to _____________                       

Commission file number
000-22503

BEACH FIRST NATIONAL BANCSHARES, INC.(Exact name of registrant as specified in its charter)

|South Carolina           |  | 57-1030117                          
|------------------------ |  | ------------------------------------
|(State of Incorporation) |  | (I.R.S. Employer Identification No.)

1550 Oak Street, Myrtle Beach, South Carolina 29577
(Address of principal executive offices)   (Zip Code)

(843) 626-2265(Issuer's telephone number)

Not Applicable(Former Name, Former Address and Former Fiscal Year, if Changed Since Last Report)

State the number of shares  outstanding  of each of the  issuer's  classes of common  equity,  as of the latest
practicable  date:

On August 12, 2004, 2,013,008 shares of the issuer's common stock,  par value $1.00 per share,  were issued and outstanding.

Transitional Small Business Disclosure
Format (check one):   Yes    NoX

---

|                                                         | June 30, | December 31,
|-------------------------------------------------------- | -------- | ------------
|
|
|ASSETS                                                   |          |             
|Cash and due from banks                                  |          |             
|Federal funds sold and short term investments            |          |             
|Investment securities available for sale                 |          |             
|Loans, net                                               |          |             
|Federal Reserve Bank stock                               |          |             
|Federal Home Loan Bank stock                             |          |             
|Premises and equipment, net                              |          |             
|Cash value life insurance                                |          |             
|Investment in BFNB Trust                                 |          |             
|Other assets                                             |          |             
|                                                         |          |             
|Total assets                                             |          |             
|                                                         |          |             
|LIABILITIES AND SHAREHOLDERS' EQUITY                     |          |             
|LIABILITIES:                                             |          |             
|Deposits                                                 |          |             
|Noninterest bearing deposits                             |          |             
|Interest bearing deposits                                |          |             
|                                                         |          |             
|Total deposits                                           |          |             
|Advances from Federal Home Loan Bank                     |          |             
|Debt associated with Trust Preferred Securities          |          |             
|Other liabilities                                        |          |             
|                                                         |          |             
|Total liabilities                                        |          |             
|                                                         |          |             
|SHAREHOLDERS' EQUITY:                                    |          |             
|Common stock, $1 par value; 10,000,000 shares            |          |             
|authorized; shares issued and outstanding - 2,013,008 at |          |             
|June 30, 2004, 1,318,368 at June 30, 2003 and 1,323,768  |          |             
|at December 31, 2003                                     |          |             
|Paid-in capital                                          |          |             
|Retained earnings                                        |          |             
|Accumulated other comprehensive income (loss)            |          |             
|                                                         |          |             
|Total shareholders' equity                               |          |             
|                                                         |          |             
|Total liabilities and shareholders' equity               |          |             
|                                                         |          |             

The
accompanying notes are an integral part of these consolidated financial statements.

2

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# Beach First National
Bancshares, Inc. and SubsidiariesMyrtle Beach, South Carolina Consolidated
Statements of Income(Unaudited)

|                                             | Six Months Ended | Three Months Ended |   |          
|-------------------------------------------- | ---------------- | ------------------ | - | ---------
|
|
|INTEREST INCOME                              |                  |                    |   |          
|Interest and fees on loans                   |                  |                    | $ | 4,595,944
|Investment securities                        |                  |                    |   | 386,430  
|Fed funds sold &short term investments       |                  |                    |   | 28,915   
|Dividends on long-term investments           |                  |                    |   | 584      
|                                             |                  |                    |   |          
|Total interest income                        |                  |                    |   | 5,011,873
|INTEREST EXPENSE                             |                  |                   
|Deposits                                     |                  |                    |   | 1,143,362
|Short-term borrowings                        |                  |                    |   | 182,281  
|Long-term borrowings                         |                  |                    |   | 19,436   
|                                             |                  |                    |   |          
|Total interest expense                       |                  |                    |   | 1,345,079
|Net interest income                          |                  |                    |   | 3,666,794
|PROVISION FOR POSSIBLE LOAN                  |                  |                   
|LOSSES                                       |                  |                    |   | 508,000  
|                                             |                  |                    |   |          
|Net interest income after provision          |                  |                   
|for possible loan losses                     |                  |                    |   | 3,158,794
|                                             |                  |                    |   |          
|NONINTEREST INCOME                           |                  |                   
|Service fees on deposit accounts             |                  |                    |   | 263,937  
|Gain (Loss) on sale of investment securities |                  |                    |   | (5       
|Income from cash value life insurance        |                  |                    |   | 80,772   
|Other income                                 |                  |                    |   | 129,848  
|                                             |                  |                    |   |          
|Total noninterest income                     |                  |                    |   | 474,552  
|                                             |                  |                    |   |          
|NONINTEREST EXPENSES                         |                  |                   
|Salaries and wages                           |                  |                    |   | 1,169,128
|Employee benefits                            |                  |                    |   | 237,469  
|Supplies and printing                        |                  |                    |   | 36,573   
|Advertising and public relations             |                  |                    |   | 116,064  
|Legal and Professional fees                  |                  |                    |   | 92,933   
|Depreciation and amortization                |                  |                    |   | 217,123  
|Occupancy                                    |                  |                    |   | 210,608  
|Data processing fees                         |                  |                    |   | 168,094  
|Other operating expenses                     |                  |                    |   | 364,799  
|                                             |                  |                    |   |          
|Total noninterest expenses                   |                  |                    |   | 2,612,791
|                                             |                  |                    |   |          
|Income before income taxes                   |                  |                    |   | 1,020,555
|INCOME TAX                                   |                  |                    |   | 382,323  
|                                             |                  |                    |   |          
|EXPENSE                                      |                  |                   
|Net income                                   |                  |                    | $ | 638,232  
|                                             |                  |                    |   |          
|BASIC NET INCOME PER COMMON                  |                  |                   
|SHARE                                        |                  |                    | $ | .32      
|                                             |                  |                    |   |          
|DILUTED NET INCOME PER COMMON                |                  |                   
|SHARE                                        |                  |                    | $ | .31      
|                                             |                  |                    |   |          

The accompanying notes are an integral part of these consolidated financial statements.

3

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# Beach First National
Bancshares, Inc. and Subsidiary Consolidated
Statements of Changes in Shareholders Equity (Unaudited)

|                                             |  |  |  |           | Accumulated |  
|-------------------------------------------- |  |  |  | --------- | ----------- | -
|
|
|
|BALANCE, DECEMBER 31, 2002                   |  |  |  | 1,318,368 |             | $
|Net income                                   |  |  |  | -         |             |  
|Other comprehensive income, net of taxes:    |  | 
|Unrealized loss on investment securities     |  |  |  | -         |             |  
|Less reclassification adjustments for losses |  | 
|included in net income                       |  |  |  | -         |             |  
|                                             |  |  |  |           |             |  
|Comprehensive income                         |  | 
|                                             |  |  |  | -         |             |  
|                                             |  |  |  |           |             |  
|BALANCE, JUNE 30, 2003                       |  |  |  | 1,318,368 |             | $
|                                             |  |  |  |           |             |  

|                                             |  |  |  |           | Accumulated |  
|-------------------------------------------- |  |  |  | --------- | ----------- | -
|
|
|
|BALANCE, DECEMBER 31, 2003                   |  |  |  | 1,323,768 |             | $
|Net income                                   |  |  |  | -         |             |  
|Other comprehensive income, net of taxes:    |  | 
|Unrealized loss on investment securities     |  |  |  | -         |             |  
|Less reclassification adjustments for losses |  | 
|included in net income                       |  |  |  | -         |             |  
|                                             |  |  |  |           |             |  
|Comprehensive income (loss)                  |  | 
|                                             |  |  |  | -         |             |  
|Exercise of stock options                    |  | 
|                                             |  |  |  | 18,250    |             |  
|                                             |  |  |  |           |             |  
|Stock Split                                  |  | 
|                                             |  |  |  | 670,990   |             |  
|                                             |  |  |  |           |             |  
|BALANCE JUNE 30, 2004                        |  | 
|                                             |  |  |  | 2,013,008 |             | $
|                                             |  |  |  |           |             |  

The
accompanying notes are an integral part of these consolidated financial statements.

4

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# Beach First National
Bancshares, Inc. and SubsidiaryMyrtle Beach, South Carolina Consolidated
Statements of Cash Flows(Unaudited)

|                                                                    | Six Months Ended | 
|------------------------------------------------------------------- | ---------------- | 
|
|
|OPERATING ACTIVITIES                                                |                  | 
|Net income                                                          |                  | 
|Adjustments to reconcile net income to                              |                  | 
|net cash provided by operating activities:                          |                  | 
|Deferred income taxes                                               |                  | 
|Provisions for loan losses                                          |                  | 
|Accretion of deferred loan fees                                     |                  | 
|Depreciation and amortization                                       |                  | 
|Gain on sale of investment securities                               |                  | 
|Discount accretion and premium amortization                         |                  | 
|Increase (decrease) in other assets                                 |                  | 
|Increase (decrease) in other liabilities                            |                  | 
|                                                                    |                  | 
|Net cash provided by operating activities                           |                  | 
|                                                                    |                  | 
|INVESTING ACTIVITIES                                                |                  | 
|Purchase of investment securities                                   |                  | 
|Purchase of Federal Home Loan Bank stock                            |                  | 
|Proceeds from sale or call of investment securities                 |                  | 
|Purchase of BFNB Trust Stock                                        |                  | 
|Decrease (increase) in Federal funds sold  & short term investments |                  | 
|Increase in loans, net                                              |                  | 
|Purchase of premises and equipment                                  |                  | 
|Purchase of life insurance contracts                                |                  | 
|                                                                    |                  | 
|Net cash used in investing activities                               |                  | 
|                                                                    |                  | 
|FINANCING ACTIVITIES                                                |                  | 
|Advances from Federal Home Loan Bank                                |                  | 
|Investment in BFNB Trust                                            |                  | 
|Net increase in deposits                                            |                  | 
|Exercise of stock options                                           |                  | 
|                                                                    |                  | 
|                                                                    |                  | 
|Net cash provided by financing activities                           |                  | 
|                                                                    |                  | 
|Net increase (decrease) in cash and cash equivalents                |                  | 
|CASH AND CASH EQUIVALENTS, BEGINNING                                |                  | 
|OF PERIOD                                                           |                  | 
|                                                                    |                  | 
|CASH AND CASH EQUIVALENTS, END OF                                   |                  | 
|PERIOD                                                              |                  | 
|                                                                    |                  | 
|CASH PAID FOR                                                       |                  | 
|Income taxes                                                        |                  | 
|                                                                    |                  | 
|Interest                                                            |                  | 
|                                                                    |                  | 

The
accompanying notes are an integral part of these consolidated financial statements.

5

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# Beach First National
Bancshares, Inc. Notes to Consolidated Financial Statements (Unaudited)

# 1.  Basis of Presentation

| | The
accompanying unaudited consolidated financial statements for Beach First National
Bancshares, Inc. (Company) were prepared in accordance with instructions for
Form 10-QSB and, therefore, do not include all disclosures necessary for a complete
presentation of financial condition, results of operations, and cash flows in conformity
with generally accepted accounting principles. All adjustments, consisting only of normal
recurring accruals, which are, in the opinion of management, necessary for fair
presentation of the interim consolidated financial statements have been included. The
results of operations for the six month period ended June 30, 2004 are not necessarily
indicative of the results that may be expected for the entire year. These consolidated
financial statements do not include all disclosures required by generally accepted
accounting principles and should be read in conjunction with the Companys audited
consolidated financial statements and related notes for the year ended December 31, 2003.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

# 2.  Principles of
Consolidation

| | The
accompanying unaudited consolidated financial statements include the accounts of the
Company and its subsidiary, Beach First National Bank. All significant intercompany items
and transactions have been eliminated in consolidation.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

# 3.  Earnings Per Share

| | The
Company calculates earnings per share in accordance with SFAS No. 128, Earnings Per
Share. SFAS No. 128 specifies the computation, presentation and disclosure
requirements for earnings per share (EPS) for entities with publicly held common stock or
potential common stock such as options, warrants, convertible securities or contingent
stock agreements if those securities trade in a public market.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | This
standard specifies computation and presentation requirements for both basic EPS and, for
entities with complex capital structures, diluted EPS. Basic earnings per share are
computed by dividing net income by the weighted average common shares outstanding. Diluted
earnings per share is similar to the computation of basic earnings per share except that
the denominator is increased to include the number of additional common shares that would
have been outstanding if the dilutive potential common shares had been issued. The
dilutive effect of options outstanding under the Companys stock option plan is
reflected in diluted earnings per share by application of the treasury stock method.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

6

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# RECONCILIATION OF THE
NUMERATORS AND DENOMINATORS OF THE BASIC AND DILUTED EPS COMPUTATIONS:

# For the Six Months
EndedJune 30, 2004

|                              | Income | Shares | Per Share
|----------------------------- | ------ | ------ | ---------
|
|Basic EPS                     |        |        | $        
|Effect of Diluted Securities: |        |       
|Stock options                 |        |       
|                              |        |        |          
|                              |        |        |          
|Diluted EPS                   |        |        | $        

# For the Six Months EndedJune
30, 2003

|                              | Income | Shares | Per Share
|----------------------------- | ------ | ------ | ---------
|
|Basic EPS                     |        |        | $        
|Effect of Diluted Securities: |        |       
|Stock options                 |        |       
|                              |        |        |          
|                              |        |        |          
|Diluted EPS                   |        |        | $        

# For the Three Months
EndedJune 30, 2004

|                              | Income | Shares | Per Share
|----------------------------- | ------ | ------ | ---------
|
|Basic EPS                     |        |        | $        
|Effect of Diluted Securities: |        |       
|Stock options                 |        |        |          
|                              |        |        |          
|Diluted EPS                   |        |        | $        

# For the Three Months EndedJune
30, 2003

|                              | Income | Shares | Per Share
|----------------------------- | ------ | ------ | ---------
|
|Basic EPS                     |        |        | $        
|Effect of Diluted Securities: |        |       
|Stock options                 |        |        |          
|                              |        |        |          
|Diluted EPS                   |        |        | $        

4.    
          Stock-Based Compensation - Our stock-based
          employee compensation plan is accounted for under the recognition and
          measurement principles of Accounting Principles Board (APB) Opinion
          No. 25, Accounting for Stock Issued to Employees, and related
          Interpretations. No compensation cost is reflected in net income, as all and
          options granted under this plan had an exercise price equal to the market value
          of the underlying common stock on the date of grant. The following table
          illustrates the effect on net income and earnings per share if the fair value
          recognition provisions of Financial Accounting Standards Board
          (FASB) Statement of Financial Accounting Standards
          (SFAS) No. 123, Accounting for Stock-Based Compensation, had
          been applied to the option plan.

7

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|                                    | Six Months Ended June 30, | 
|----------------------------------- | ------------------------- | 
|
|Net Income, as reported             |                           | 
|Deduct:  Total stock-based employee |                           | 
|compensation expense determined     |                           | 
|under fair value based method for   |                           | 
|all awards, net of related tax      |                           | 
|effects                             |                           | 
|                                    |                           | 
|Pro forma net income                |                           | 
|                                    |                           | 
|Earnings per share:                 |                           | 
|Basic - as reported                 |                           | 
|                                    |                           | 
|Basic - pro forma                   |                           | 
|                                    |                           | 
|Diluted - as reported               |                           | 
|                                    |                           | 
|Diluted - pro forma                 |                           | 
|                                    |                           | 

|                                    | Three Months Ended June 30, | 
|----------------------------------- | --------------------------- | 
|
|Net Income, as reported             |                             | 
|Deduct:  Total stock-based employee |                             | 
|compensation expense determined     |                             | 
|under fair value based method for   |                             | 
|all awards, net of related tax      |                             | 
|effects                             |                             | 
|Pro forma net income                |                             | 
|                                    |                             | 
|Earnings per share:                 |                             | 
|Basic - as reported                 |                             | 
|                                    |                             | 
|Basic - pro forma                   |                             | 
|                                    |                             | 
|Diluted - as reported               |                             | 
|                                    |                             | 
|Diluted - pro forma                 |                             | 
|                                    |                             | 

# 5.  Stock Split

In
April 2004, we announced a 3-for-2 stock split on our common stock in the form of a 50%
stock dividend. On June 2, 2004, shareholders of record as of May 12, 2004 received one
additional share of stock for every two shares of stock owned prior to the 3-for-2 stock
split. All factional shares were paid in cash. The earnings per share amounts for all
periods shown have been adjusted to reflect the 3-for-2 split.

8

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# Item 2.
Managements Discussion and Analysis or Plan of Operation.

The
following is our discussion and analysis of certain significant factors that have affected
our financial position and operating results and those of our subsidiary, Beach First
National Bank, during the periods included in the accompanying financial statements. This
commentary should be read in conjunction with the financial statements and the related
notes and the other statistical information included in this report.

This
report contains forward-looking statements relating to, without limitation,
future economic performance, plans and objectives of management for future operations, and
projections of revenues and other financial items that are based on the beliefs of
management, as well as assumptions made by and information currently available to
management. The words may, will, anticipate,
should, would, believe, contemplate,
expect, estimate, continue, may, and
intend, as well as other similar words and expressions of the future, are
intended to identify forward-looking statements. Our actual results may differ materially
from the results discussed in the forward-looking statements, and our operating
performance each quarter is subject to various risks and uncertainties that are discussed
in detail in our filings with the Securities and Exchange Commission, including, without
limitation:

| | o | significant increases in competitive pressure in the banking and financial services industries;
| | - | -----------------------------------------------------------------------------------------------

| | o | changes in the interest rate environment which could reduce anticipated or actual margins;
| | - | ------------------------------------------------------------------------------------------

| | o | changes in political conditions or the legislative or regulatory environment;
| | - | -----------------------------------------------------------------------------

| | o | general economic conditions, either nationally or regionally and especially in our primary
service area, becoming less favorable than expected resulting in, among other things, a
deterioration in credit quality;
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | o | changes occurring in business conditions and inflation;
| | - | -------------------------------------------------------

| | o | changes in technology;
| | - | ----------------------

| | o | the level of allowance for loan loss;
| | - | -------------------------------------

| | o | the rate of delinquencies and amounts of charge-offs;
| | - | -----------------------------------------------------

| | o | the rates of loan growth;
| | - | -------------------------

| | o | adverse changes in asset quality and resulting credit risk-related losses and expenses;
| | - | ---------------------------------------------------------------------------------------

| | o | changes in monetary and tax policies;
| | - | -------------------------------------

| | o | loss of consumer confidence and economic disruptions resulting from terrorist activities;
| | - | -----------------------------------------------------------------------------------------

| | o | changes in the securities markets; and
| | - | --------------------------------------

| | o | other risks and uncertainties
detailed from time to time in our filings with the Securities and Exchange Commission.
| | - | --------------------------------------------------------------------------------------------------------------------

# Overview

The
following discussion describes our results of operations for the quarter ended June 30,
2004 as compared to the quarter ended June 30, 2003 as well as results for the six months
ended June 30, 2004 and 2003, and also analyzes our financial condition as of June 30,
2004 as compared to December 31, 2003. Like most community banks, we derive most of our
income from interest we receive on our loans and investments. Our primary source of funds
for making these loans and investments is our deposits, on which we pay interest.
Consequently, one of the key measures of our success is our amount of net interest income,
or the difference between the income on our interest-earning assets, such as

9

---

loans and
investments, and the expense on our interest-bearing liabilities, such as deposits.
Another key measure is the spread between the yield we earn on these interest-earning
assets and the rate we pay on our interest-bearing liabilities.

Of course, there are risks inherent
in all loans, so we maintain an allowance for loan losses to absorb probable losses on
existing loans that may become uncollectible. We establish and maintain this allowance by
charging a provision for loan losses against our operating earnings. In the following
section we have included a detailed discussion of this process.

In
addition to earning interest on our loans and investments, we earn income through fees and
other expenses we charge to our customers. We describe the various components of this
non-interest income, as well as our non-interest expense, in the following discussion.

The
following discussion and analysis also identifies significant factors that have affected
our financial position and operating results during the periods included in the
accompanying financial statements. We encourage you to read this discussion and analysis
in conjunction with the financial statements and the related notes and the other
statistical information also included in this report.

# Results of Operations EARNINGS REVIEW

Our net income was $638,232, or $.32
per common share, for the six months ended June 30, 2004 as compared to a net income of
$413,484, or $.21 per common share, for the six months ended June 30, 2003. Our net income
was $330,584, or $.16 per common share, for the three months ended June 30, 2004 as
compared to net income of $210,456, or $.11 per common share, for the same period of 2003.
The increase in net income reflects the banks continued growth, as average earning
assets increased to $169.3 million during the first six months of 2004 from $120.1 million
during the same period of 2003. The return on average assets for the six month period
ended June 30 was .71% in 2004 compared to .63% in 2003. The return on average equity was
8.29% in 2004 versus 5.89% in 2003.

# Net Interest Income

During the first half of 2004, net
interest income increased to $3,666,794, from $2,651,836 in the same period of 2003. The
growth in net interest income resulted from an increase of $1,102,639 in interest income,
offset by an increase in interest expense of $87,681. For the three months ended June 30,
2004, net interest income increased to $1,935,335 from $1,409,501 during the comparable
period of 2003. The net interest spread was 4.11% in the first six months of 2004 compared
to 4.02% during the same period of 2003. The net interest margin was 4.41% for the six
month period ended June 30, 2004 compared to 4.43% for the same period of 2003.

# Provision for Loan Losses

The provision for loan losses was
$508,000 for the six months of 2004 and $291,000 for the same period of 2003. The
provision for loan losses was $293,000 for the three months ending June 30, 2004 and
$223,000 for the same period in 2003. The increase was the result of our assessment of the
adequacy of the reserve for possible loan losses given the size, mix and quality of the
current loan portfolio. See also Allowance for Possible Loan Losses below.

# Noninterest Income

Noninterest income was $474,552 for
the first six months of 2004 compared to $581,410 in the same period of 2003. For the
three months ended June 30, 2004, noninterest income was $246,782 as compared to $299,046
in 2003. Service fees on deposit accounts, the largest component of noninterest income,
increased from $246,897 for the first six months of 2003 to $263,937 during the same
period of 2004. This category of noninterest income increased due to growth in the number
of deposit accounts as well as increased fee-related activities of customers. Income from
cash value life insurance was $80,772 for the first six months of 2004 and 2003 and
$40,386 for the three months ending June 30, 2004 and 2003. Other income increased to
$129,848 for the first six months of 2004 compared to $118,930 for the same period of
2003. For the three months ended June 30, 2004, other income was $73,552 compared to
$71,682 in 2003. We recorded a loss of $5 on sale of investment securities for the first
six months of 2004 compared to a gain of $134,811 for 2003. For the three months ending
June 30 2004 we recorded a loss of $2 compared to a gain of $61,463 for the same period in
2003.

10

---

# Noninterest Expense

Total noninterest expense increased
from $2,286,114 for the six months ended June 30, 2003 to $2,612,790 for the same period
of 2004, or 14.3%, and from $1,151,624 for the three months ended June 30, 2003 to
$1,356,895 in the same period of 2004, or 17.8%. Salaries and wages and employee benefits
increased $225,572 for the six months ended June 30, 2004 compared to the same period in
2003, and $129,984 for the quarter ended June 30, 2004 compared to the same period in
2003. The increase was due primarily to the addition of eight full-time equivalent
employees, four in the Litchfield office that opened in July 2004, two in the Hilton Head
office, and two tellers at the main office. Advertising increased $38,749 for the six
months ended June 30, 2004 compared to the same period in 2003, and $31,189 for the three
months ended June 30, 2004 compared to the same period in 2003. This increase was due
primarily to the new Litchfield office and special promotions in all markets. Legal and
professional expenses increased $31,798 for the six months ended June 30, 2004 compared to
the same period in 2003, and $24,498 for the three months ended June 30, 2004 compared to
the same period in 2003. The primary reason for the increase was the escalating cost of
accounting and auditing services in addition to regulatory fees. Occupancy expense also
increased by $38,326 during the six month period ended June 30, 2004 compared to the same
period in 2003, and by $17,752 for the three months ended June 30, 2004 compared to the
same period in 2003. Occupancy increases were due to increases on lease payments for most
locations. Overall, we are satisfied with the control of our noninterest expenses during
the expansion of our company.

# BALANCE SHEET REVIEW

# Loans

At June 30, 2004, net loans (total
loans less the allowance for loan losses) totaled $153.3 million, an increase of $36.7
million from June 30, 2003. Average gross loans increased from $104.8 million, with a
yield of 6.99%,in the first six months of 2003 to $144.4 million, with a yield of
6.48%,during the same in 2004. The interest rates charged on loans vary with the degree of
risk and the maturity and amount of the loan. Competitive pressures, money market rates,
availability of funds and government regulations also influence interest rates.

Because loans typically provide
higher yields than other types of earning assets, one of our goals is for loans to
represent the largest category of earning assets. At June 30, 2004, loans were 85.0% of
earning assets, versus 87.0% at June 30, 2003.

The
following table shows the composition of the loan portfolio by category at June 30, 2004
and 2003.

# Composition of Loan
Portfolio

|                                   | June 30, 2004 | June 30, 2003 |  
|---------------------------------- | ------------- | ------------- | -
|
|
|Commercial                         |               |               | $
|Real estate - construction         |               |               |  
|Real estate - mortgage             |               |               |  
|Consumer                           |               |               |  
|                                   |               |               |  
|Loans, gross                       |               |               |  
|                                   |               |               |  
|Unearned income                    |               |               |  
|Allowance for possible loan losses |               |               |  
|                                   |               |               |  
|Loans, net                         |               |               | $
|                                   |               |               |  

The principal component of our loan
portfolio at June 30, 2004 and 2003 was mortgage loans, which represented 69.9% and 49.1%
of the portfolio, respectively. In the context of this discussion, a real estate
mortgage loan is defined as any loan, other than loans for construction purposes,
secured by real estate, regardless of the purpose of the loan. We follow the common
practice of financial institutions in our market area of obtaining a security interest in
real estate whenever possible, in addition to any other available collateral. The
collateral is taken to reinforce the likelihood of the ultimate repayment of the loan and
tends to increase the magnitude of the real estate loan portfolio component.

11

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Generally, we
limit the loan-to-value ratio to 80%. Because of our relatively small size and the short
period of time our loan portfolio has existed, the current portfolio mix may not be
indicative of the on-going mix. We will attempt to maintain a relatively diversified loan
portfolio to help reduce the risk inherent in concentrations of collateral.

# Off Balance Sheet Risk

Through the operations of our bank,
we have made contractual commitments to extend credit in the ordinary course of our
business activities. These commitments are legally binding agreements to lend money to our
customers at predetermined interest rates for a specified period of time. We evaluate each
customers credit worthiness on a case-by-case basis. The amount of collateral
obtained, if deemed necessary by us upon extension of credit, is based on our credit
evaluation of the borrower. Collateral varies but may include accounts receivable,
inventory, property, plant and equipment, commercial and residential real estate. We
manage the credit risk on these commitments by subjecting them to normal underwriting and
risk management processes.

At June 30, 2004, the bank had issued
commitments to extend credit of $6.2 million through various types of lending
arrangements. The commitments expire over the next 36 months. Past experience indicates
that many of these commitments to extend credit will expire unused. We believe that we
have adequate sources of liquidity to fund commitments that are drawn upon by the
borrower.

In addition to commitments to extend
credit, we also issue standby letters of credit which are assurances to a third party that
they will not suffer a loss if our customer fails to meet its contractual obligation to
the third party. Standby letters of credit totaled $5.4 million at June 30, 2004. Past
experience indicates that many of these standby letters of credit will expire unused.
However, through our various sources of liquidity, we believe that we will have the
necessary resources to meet these obligations should the need arise.

# Allowance for Possible
Loan Losses

There are risks inherent in making
all loans, including risks with respect to the period of time over which loans may be
repaid, risks resulting from changes in economic and industry conditions, risks inherent
in dealing with individual borrowers, and, in the case of a collateralized loan, risks
resulting from uncertainties about the future value of the collateral. To address these
risks, we have developed policies and procedures to evaluate the overall quality of our
credit portfolio and the timely identification of potential problem loans. We maintain an
allowance for possible loan losses which we establish through charges in the form of a
provision for loan losses. We charge loan losses and credit recoveries directly to this
allowance.

We attempt to maintain the allowance
at a level that will be adequate to provide for potential losses in our loan portfolio. To
maintain the allowance at an adequate level, we periodically make additions to the
allowance by charging an expense to the provision for loan losses on our statement of
income. We evaluate the allowance for loan losses on an overall portfolio basis, as well
as allocating the allowance to loan categories. We consider a number of factors in
determining the level of this allowance, including our total amount of outstanding loans,
our amount of past due loans, our historic loan loss experience, general economic
conditions, and our assessment of potential losses, classified and criticized loans,
concentrations of credit and internal credit risk ratings. Due to the rapid growth of our
bank over the past several years and our short operating history, a large portion of the
loans in our loan portfolio and of our lending relationships are of relatively recent
origin. In general, loans do not begin to show signs of credit deterioration or default
until they have been outstanding for some period of time, a process we refer to as
seasoning. As a result, a portfolio of older loans will usually behave more
predictably than a newer portfolio. Because our loan portfolio is relatively new, the
current level of delinquencies and defaults may not be representative of the level that
will prevail when the portfolio becomes more seasoned, which may be higher than current
levels. If delinquencies and defaults increase, we may be required to increase our
provision for loan losses, which would adversely affect our results of operations and
financial condition. Our evaluation of the allowance for loan losses is inherently
subjective as it requires estimates that are susceptible to significant change. In
addition, regulatory agencies periodically review our allowance for loan losses as part of
their examination process, and they may require us to record additions to the allowance
based on their judgment about information available to them at the time of their
examinations. Our losses will undoubtedly vary from our estimates, and there is a
possibility that charge-offs in future periods will exceed the allowance for loan losses
as estimated at any point in time.

12

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At June 30, 2004, the allowance for
possible loan losses was $2,087,171, or 1.34% of outstanding loans, compared to an
allowance for possible loan losses of $1,525,453 or 1.29% of outstanding loans, at June
30, 2003. In the first six months of 2004 we had net charge-offs totaling $181,310, and in
2003 we had net charge-off totaling $41,325. We had non-performing loans totaling $495,801
at June 30, 2004 and $308,253 at June 30, 2003. While there can be no assurances, we do
not expect significant losses relating to these non-performing loans.

The following table sets forth
certain information with respect to our allowance for loan losses and the composition of
charge-offs and recoveries for the six months ended June 30, 2004 and 2003.

# Allowance for Loan
Losses

|                                       | Six months ending June 30, | 
|-------------------------------------- | -------------------------- | 
|
|Average total loans outstanding        |                            | 
|Total loans outstanding at period end  |                            | 
|Total nonperforming loans              |                            | 
|Beginning balance of allowance         |                            | 
|Loans charged off                      |                            | 
|Total recoveries                       |                            | 
|                                       |                            | 
|Net loans charged off                  |                            | 
|Provision for loan losses              |                            | 
|                                       |                            | 
|Balance at period end                  |                            | 
|                                       |                            | 
|Net charge-offs to average total loans |                            | 
|Allowance as a percent of total loans  |                            | 
|Nonperforming loans as a               |                            | 
|percentage of total loans              |                            | 
|Nonperforming loans as a               |                            | 
|percentage of allowance                |                            | 

The following table sets forth the
breakdown of the allowance for loan losses by loan category and the percentage of loans in
each category to total loans for the periods indicated. We believe that the allowance can
be allocated by category only on an approximate basis. The allocation of the allowance to
each category is not necessarily indicative of further losses and does not restrict the
use of the allowance to absorb losses in any category.

# Allocation of the
Allowance for Loan Losses

|                        | As of June 30, 2004 | 
|----------------------- | ------------------- | 
|Residential real estate |                     | 
|Commercial construction |                     | 
|Commercial real estate  |                     | 
|Commercial              |                     | 
|Consumer                |                     | 
|Other                   |                     | 
|Unallocated             |                     | 
|Special Allocated       |                     | 
|                        |                     | 
|Total allowance for     |                     | 
|Loan losses             |                     | 
|                        |                     | 

13

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# Investment Securities

Total securities averaged $19.0
million in the first six months of 2004 and totaled $27.0 million at June 30, 2004. In the
same period of 2003, total securities averaged $11.3 million and totaled $12.8 million at
June 30, 2003. At June 30, 2004, our total investment securities portfolio had a book
value of $28.8 million and a market value of $28.1 million for an unrealized net loss of
$748,967. We primarily invest in U.S. Government Agency and Mortgage- backed securities.

At June 30, 2004, short-term
investments totaled $2.2 million compared to $7.0 million as of June 30, 2003. These funds
are one source of our liquidity and are generally invested in an earning capacity on an
overnight or short-term basis.

# Deposits and Other
Interest-Bearing Liabilities

Average total deposits were $147.4
million and average interest-bearing deposits were $123.8 million in the first half of
2004. Average total deposits were $110.5 million and average interest-bearing deposits
were $94.5 million in the same period of 2003. The following table sets forth our deposits
by category as of June 30, 2004 and June 30, 2003.

|                                   | Deposits
|---------------------------------- | --------
|
|
|
|Demand deposit accounts            |         
|Interest bearing checking accounts |         
|Money market accounts              |         
|Savings accounts                   |         
|Time deposits less than $100,000   |         
|Time deposits of $100,000 or over  |         
|                                   |         
|Total deposits                     |         
|                                   |         

Internal growth, resulting primarily
from special promotions and increased advertising, generated the new deposits.

Core deposits, which exclude
certificates of deposit of $100,000 or more and brokered deposits, provide a relatively
stable funding source for our loan portfolio and other earning assets. Our core deposits
were $117.0 million at June 30, 2004 compared to $91.4 million at June 30, 2003, and our
brokered deposits at these dates were $4.0 million and $4.0 million, respectively. A
stable base of deposits is expected to be our primary source of funding to meet both our
short-term and long-term liquidity needs in the future. Core deposits as a percentage of
total deposits were approximately 73.1% at June 30, 2004 and 70.9% at June 30, 2003. Our
loan-to-deposit ratio was 95.4% at June 30, 2004 versus 94.7% at June 30, 2003. The
average loan-to-deposit ratio was 95.3% during the first six months of 2004 and 92.6%
during the same period of 2003.

In addition to deposits, we obtained
funds from the Federal Home Loan Bank to help fund our loan growth. Average borrowings
from the Federal Home Loan Bank were $15.5 million during the first six months of 2004 and
totaled $16.5 million at June 30, 2004. The following table reflects the current borrowing
terms as of June 30, 2004.

|FHLB Description  | Balance | Current Rate | Maturity Date |           
|----------------- | ------- | ------------ | ------------- | ----------
|CIP/EDP           |         |              | $             | 4,000,000 
|CIP/EDP           |         |              |               | 2,500,000 
|Fixed Rate Credit |         |              |               | 3,500,000 
|Fixed Rate Credit |         |              |               | 1,500,000 
|Convertible       |         |              |               | 5,000,000 
|                  |         |              |               |           
|                  |         |              | $             | 16,500,000
|                  |         |              |               |           

14

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# CAPITAL

Under the capital guidelines of the
Office of the Comptroller of the Currency and the Federal Reserve, we are required to
maintain a minimum total risk-based capital ratio of 8%, with at least 4% being Tier 1
capital, at both the bank and holding company levels.To be considered
well-capitalized, we must meet regulatory standards of 10% for total
risk-based capital and 6% for Tier 1 capital. Tier 1 capital consists of common
shareholders equity, qualifying perpetual preferred stock, and minority interest in
equity accounts of consolidated subsidiaries, less goodwill. In addition, we must maintain
a minimum Tier 1 leverage ratio (Tier 1 capital to total average assets) of at least 4%.
The well-capitalized standard for the Tier 1 leverage ratio is 5%. At June 30,
2004, our total shareholders equity was $15.2 million ($14.7 million at the bank
level). We were considered to be well capitalized at both the holding company
and bank level for regulatory purposes at June 30, 2004, as our Tier 1 capital ratio was
9.9%(9.6% at the bank level), our total risk-based capital ratio was 12.8% (10.8% at the
bank level), and our Tier 1 leverage ratio was 8.8% (8.2% at the bank level).

On May 27, 2004, BFNB Trust (the
Capital Trusts), wholly-owned subsidiaries of the Company, issued and sold
floating rate capital securities of the trust (the Capital Securities), which
are reported on the consolidated balance sheet as trust preferred debt, generating
proceeds of $5.0 million. The Capital Trusts loaned these proceeds to the Company to use
for general corporate purposes. The trust preferred debt qualifies as Tier 1 capital under
Federal Reserve Board guidelines.

Debt issuance costs, net of
accumulated amortization, from trust preferred debt totaled $24,792 at June 30, 2004 and
is included in other assets on the consolidated balance sheet. Amortization of debt
issuance costs from trust preferred debt totaled $208 for the month ended June 30, 2004
and is reported in other noninterest expense on the consolidated statement of income.

The Capital Securities in the
transaction accrue and pay distributions annually at a rate per annum equal to the
three-month LIBOR plus 270 basis points, which was 3.878% at June 30, 2004. The
distribution rate payable on the Capital Securities is cumulative and payable quarterly in
arrears. The Company has the right, subject to events of default, to defer payments of
interest on the Capital Securities for a period not to exceed 20 consecutive quarterly
periods, provided that no extension period may extend beyond the maturity date of May 27,
2034.

The Company has no current intention
to exercise its right to defer payments of interest on the Capital Securities.

The Capital Securities mature or are mandatorily
redeemable upon maturity on May 27, 2034 and or upon earlier optional redemption as
provided in the indenture. The Company has the right to redeem the Capital Securities in
whole or in part, on or after May 27, 2009.

The
Company may also redeem the capital securities prior to such dates upon occurrence of
specified conditions and the payment of a redemption premium.

# LIQUIDITY AND INTEREST
RATE SENSITIVITY

Our primary sources of liquidity are
core deposits, scheduled repayments on our loans, advances from the Federal Home Loan Bank
and interest on, pay downs and maturities of our investments. All of our securities have
been classified as available for sale. Occasionally, we might sell investment securities
in connection with the management of our interest sensitivity gap or to manage cash
availability. We may also utilize our cash and due from banks, security repurchase
agreements and federal funds sold to meet liquidity requirements as needed. In addition,
we have the ability, on a short-term basis, to purchase federal funds from other financial
institutions. Presently, we have made arrangements with commercial banks for short-term
unsecured advances of up to $9.5 million. We also have a line of credit with the Federal
Home Loan Bank to borrow up to 75% of our 1 to 4 family loans, resulting in an
availability of funds of $4.6 million at June 30, 2004. FHLB has approved borrowings up to
15% of the banks total assets less advances outstanding. The borrowings are
available by pledging and purchasing additional collateral and FHLB stock. At June 30,
2004, we had borrowed $16.5 million on this line. We believe that its liquidity and
ability to manage assets will be sufficient to meet its cash requirements over the near
term.

15

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# IMPACT OF INFLATION

Unlike most industrial companies, the
assets and liabilities of financial institutions such as the company and the bank are
primarily monetary in nature. Therefore, interest rates have a more significant impact on
our performance than do the effects of changes in the general rate of inflation and
changes in prices. In addition, interest rates do not necessarily move in the same
magnitude as the prices of goods and services. As discussed previously, management seeks
to manage the relationships between interest sensitive assets and liabilities in order to
protect against wide rate fluctuations, including those resulting from inflation.

# CRITICAL ACCOUNTING
POLICIES

We have adopted various accounting
policies which govern the application of accounting principles generally accepted in the
United States in the preparation of our financial statements. Our significant accounting
policies are described in the footnotes to the consolidated financial statements at
December 31, 2003 as filed on our annual report on Form 10-KSB. Certain accounting
policies involve significant judgments and assumptions by us which have a material impact
on the carrying value of certain assets and liabilities. We consider these accounting
policies to be critical accounting policies. The judgments and assumptions we use are
based on historical experience and other factors, which we believe to be reasonable under
the circumstances. Because of the nature of the judgments and assumptions we make, actual
results could differ from these judgments and estimates which could have a material impact
on our carrying values of assets and liabilities and our results of operations.

We believe the allowance for loan
losses is a critical accounting policy that requires the most significant judgments and
estimates used in preparation of our consolidated financial statements. Refer to the
portion of this discussion that addresses our allowance for loan losses for a description
of our processes and methodology for determining our allowance for loan losses.

# RECENTLY ISSUED
ACCOUNTING STANDARDS

The following is a summary of recent
authoritative pronouncements that affect accounting, reporting, and disclosure of
financial information by the Company:

In April 2003, the FASB issued SFAS
No. 149, Amendment of Statement 133 on Derivative Instruments and Hedging
Activities, which amends and clarifies accounting and reporting for derivative
instruments, including certain derivative instruments embedded in other contracts
(collectively referred to as derivatives) and loan commitments that relate to the
origination of mortgage loans held for sale, and for hedging activities under SFAS No.
133, Accounting for Derivative Instruments and Hedging Activities. SFAS No.
149 clarifies under what circumstances a contract with an initial net investment meets the
characteristics of a derivative, clarifies when a derivative contains a financing
component, amends the definition of an underlying to conform it to language used in FIN
45, and amends certain other existing pronouncements. The pronouncement was generally
effective for contracts entered into or modified after June 30, 2003. The adoption of SFAS
No. 149 did not have any impact on the financial condition or operating results of the
Company.

In May 2003, the FASB issued SFAS No.
150, Accounting for Certain Financial Instruments with Characteristics of both
Liabilities and Equity, which establishes standards for how an issuer classifies and
measures certain financial instruments with characteristics of both liabilities and
equity. SFAS 150 requires an issuer to classify certain financial instruments that include
certain obligations, such as mandatory redemption, repurchase of the issuers equity,
or settlement by issuing equity, previously classified as equity, as liabilities or assets
in come circumstances. SFAS No. 150 was generally effective for financial instruments
entered into or modified after May 31, 2003, and otherwise was effective at the beginning
of the first interim period beginning after June 15, 2003. The adoption of SFAS No. 150
did not have any impact on the financial condition or operating results of the Company.

In November 2002, the FASB issued
FASB Interpretation No. 45 (FIN 45), Guarantors Accounting and
Disclosure Requirements for Guarantees, Including Indirect Guarantees of Indebtedness of
Others. FIN 45 elaborates on the disclosure to be made by a guarantor in its interim
and annual financial statements about its obligations under certain guarantees and
warranties that it has issued. FIN 45 requires a company, at the time it issues a
guarantee, to recognize an initial liability for the fair value of obligations assumed
under the guarantee. The initial recognition requirements of FIN 45 were effective for
guarantees issued or modified after December 31, 2002.

16

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The disclosure requirements were effective
for financial statements for periods ending after December 15, 2002. The
adoption of FIN 45 did not have any impact on the Companys financial position or
results of operations.

In January 2003, the FASB issued FIN
No. 46, Consolidation of Variable Interest Entities. FIN No. 46 requires
a variable interest entity to be consolidated by a company if that company is subject to a
majority of the risk of loss from the variable interest entitys activities or
entitled to receive a majority of the entitys residual returns, or both. FIN No. 46
also requires disclosures about variable interest entities that a company is not required
to consolidate, but in which it has a significant variable interest. FIN No. 46 provides
guidance for determining whether an entity qualifies as a variable interest entity by
considering, among other considerations, whether the entity lacks sufficient equity or its
equity holders lack adequate decision-making ability. The consolidation requirements of
FIN No. 46 apply immediately to variable interest entities created after January 31,
2003. The consolidation requirements apply to existing entities in the first fiscal year
or interim period beginning after June 15, 2003. Certain of the disclosure
requirements applied in all financial statements issued after January 31, 2003,
regardless of when the variable interest entity was established. The adoption of FIN No.
46 did not have any effect on the Companys financial position or results of
operations.

In March 2004, the FASB issued an
exposure draft on Share-Based Payment. The proposed Statement addresses the
accounting for transactions in which an enterprise receives employee services in exchange
for a) equity instruments of the enterprise or b) liabilities that are based on the fair
value of the enterprises equity instruments or that may be settled by the issuance
of such equity instruments. This proposed Statement would eliminate the ability to account
for share-based compensation transactions using APB Opinion No. 25, Accounting for
Stock Issued to Employees, and generally would require instead that such
transactions be accounted for using a fair-value-based method. This Statement, if
approved, will be effective for awards that are granted, modified, or settled in fiscal
years beginning after a) December 15, 2004 for public entities and nonpublic entities that
used the fair-value-based method of accounting under the original provisions of Statement
123 for recognition or pro forma disclosure purposes and b) December 15, 2005 for all
other nonpublic entities. Earlier application is encouraged provided that financial
statements for those earlier years have not yet been issued. Retrospective application of
this Statement is not permitted. The adoption of this Statement, if approved, it could
have any impact on the Companys financial position or results of operations.

Other accounting standards that have
been issued or proposed by the FASB or other standards-setting bodies that do not require
adoption until a future date are not expected to have a material impact on the
consolidated financial statements upon adoption.

# Item 3.  Controls and
Procedures

As of the end of the period covered
by this report, we carried out an evaluation, under the supervision and with the
participation of our management, including our Chief Executive Officer and Chief Financial
Officer, of the effectiveness of our disclosure controls and procedures as defined in
Exchange Act Rule 13a-15(e). Based upon that evaluation, our Chief Executive Officer and
Chief Financial Officer have concluded that our current disclosure controls and procedures
are effective as of June 30, 2004. There have been no significant changes in our internal
controls over financial reporting during the fiscal quarter ended June 30, 2004 that have
materially affected, or are reasonably likely to materially affect, our internal controls
over financial reporting.

The design of any system of controls
and procedures is based in part upon certain assumptions about the likelihood of future
events. There can be no assurance that any design will succeed in achieving its stated
goals under all potential future conditions, regardless of how remote.

17

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# PART II  OTHER
INFORMATION

# Item 1.  Legal
Proceedings.

There
are no material legal proceedings to which we are a party or of which any of our property
is the subject.

# Item 2.  Changes in
Securities.

Not applicable.

# Item 3.  Defaults Upon
Senior Securities.

Not applicable.

# Item 4.   Submission of
Matters to a Vote of Security Holders.

The election of five members of the
board of directors as Class III directors for a three-year term was the only matter
submitted to a vote of security holders during the three months ended June 30, 2004 at the
companys annual meeting of shareholders held on April 21, 2004: . The following
paragraph describes and sets forth the number of votes cast for, against or withheld and
the number of abstentions as to each such matter (except as provided below, there were no
broker non-votes).

Our board of directors is divided
into three classes with each class to be as nearly equal in number as possible. The three
classes of directors have staggered terms, so that the terms of only approximately
one-third of the board members will expire at each annual meeting of shareholders. The
current Class III directors are James C. Yahnis, Samuel Robert Spann, Jr., B. Larkin
Spivey, Jr., Leigh Ammons Meese and E. Thomas Fulmer. The current Class I directors are
Raymond E. Cleary, III, Joe N. Jarrett, Jr., Richard E. Lester and Don J. Smith. The
current Class II directors are Michael Bert Anderson, O. Bartlett Buie, Michael D.
Harrington, Rick H. Seagroves and Walter E. Standish, III. The Class III directors were up
for reelection at this years annual meeting held April 21, 2004. Each of the
existing Class III directors were re-elected at the annual meeting. For Mr. Yahnis,
1,083,152 votes were cast in favor of his reelection as director, 300 votes were withheld.
For Mr. Spann, 1,083,452 votes were cast in favor of his reelection as director. For Mr.
Spivey, 1,083,452 votes were cast in favor of his reelection as director. For Ms. Meese,
1,083,452 votes were cast in favor of his reelection as director. For Mr. Fulmer,
1,083,452 votes were cast in favor of his reelection as director. The terms of the Class I
directors will expire at the 2005 annual shareholders meeting, and the terms of the Class
II directors will expire at the 2006 annual shareholders meeting.

There were no other matters voted on
by the companys shareholders at our annual meeting held on April 21, 2004.

# Item 5. Other Information

Not applicable.

# Item 6. Exhibits and
Reports on Form 8-K.

(a)    
          Exhibits:

31.1    Rule 13a-14(a) Certification of the Chief Executive Officer.

31.2    Rule 13a-14(a) Certification of the Chief Financial Officer.

32      Section 1350
Certifications.

(b)    
          Reports on Form 8-K. The following reports were filed on Form 8-K during the
          quarter ended June 30, 2004.

The
Company filed a Form 8-K on April 1, 2004 to disclose a press release announcing the
opening of a new office in the Litchfield-Pawleys Island area.

18

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The
Company filed a Form 8-K on April 20, 2004 to announce the earnings for the first quarter
ending March 31, 2004.

The
Company filed a Form 8-K on April 21, 2004 to disclose a press release announcing the
declaration of a three-for-two a stock split.

19

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# SIGNATURES

In
accordance with Section 13 or 15(d) of the Securities Exchange Act of 1934 (the
Exchange Act), the registrant caused this report to be signed on its behalf by
the undersigned, thereunto duly authorized.

| |  | BEACH FIRST NATIONAL BANCSHARES, INC.
| |  | -------------------------------------

|Date:  August 12, 2004 |  | By:  /s/ Walter E. Standish, III
        Walter E. Standish, III        
President/Chief Executive Officer
|---------------------- |  | ----------------------------------------------------------------------------------------------------------

| |  | By:  /s/ Richard N. Burch
        Richard N. Burch       
Chief Financial and Principal Accounting Officer
| |  | ----------------------------------------------------------------------------------------------------------

20

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INDEX TO EXHIBITS

ExhibitNumber           Description

31.1       Rule 13a-14(a) Certification of the
Chief Executive Officer.

31.2       Rule 13a-14(a) Certification of the
Chief Financial Officer.

32          Section 1350
Certifications.

21