First Community Corporation Announces Annual and Fourth Quarter Results and Increased Cash Dividend

Jan 20, 2016, 09:00 ET from First Community Corporation

LEXINGTON, S.C., Jan. 20, 2016 /PRNewswire/ --

Highlights

  • Net income of $ 6.1 million in 2015, a 19.6% increase over 2014 earnings
  • Diluted EPS of $0.91 per common share in 2015, compared to $0.78 in 2014, an increase of 16.7%
  • Increase in cash dividend to $0.08 per common share, the 56th consecutive quarter of cash dividends paid to common shareholders
  • Total shareholder return of 35% in 2015, as compared to the NASDAQ Bank Index growth of 6.6%
  • Total revenue growth of $2.276 million, a 7.1% increase to $34.2 million in total revenue in 2015
  • Strong loan growth of $45.3 million in 2015, an increase of 10.2%
  • Pure deposit growth (including customer cash management accounts) of $62.2 million during the year, an 11.9% increase.
  • Key credit quality metrics were excellent with net charge-offs of 0.14% during the year and non-performing assets of 0.85% at year end.
  • Regulatory capital ratios of 10.19% (Tier 1 Leverage) and 16.21% (Total Capital) along with Tangible Common Equity / Tangible Assets (TCE/TA) ratio of 8.47%

Today, First Community Corporation (Nasdaq:   FCCO), the holding company for First Community Bank, reported net income available to common shareholders for the fourth quarter and year end of 2015.  For the year ended December 31, 2015 net income available to common shareholders was $6.1 million compared to $5.1 million during year ended December 31, 2014.  Diluted earnings per share for 2015 were $0.91 an increase over $0.78 in 2014.  Net income available to common shareholders for the fourth quarter of 2015 was $1.60 million, compared to $1.51 million in the fourth quarter of 2014.  Diluted earnings per common share were $0.24 for the fourth quarter of 2015 as compared to $0.22 for the fourth quarter of 2014.  First Community President and CEO Michael Crapps commented, "We are pleased with our company's financial results during 2015 led by strong organic growth in both loans and pure deposits.  This is built on top of the transformational year of 2014, which included both acquisitions and a denovo banking office." 

Cash Dividend and Capital

The Board of Directors has approved an increase in the cash dividend for the fourth quarter of 2015 to $0.08.  This dividend is payable on February 12, 2016 to shareholders of record of the company's common stock as of February 1, 2016.  Mr. Crapps commented, "The entire board is pleased that our company's strong financial performance enables us to increase the cash dividend.  We are also proud that dividend payments have continued uninterrupted for 56 consecutive quarters." 

Each of the regulatory capital ratios (Leverage, Tier I Risk Based and Total Risk Based) exceeds the well capitalized minimum levels currently required by regulatory statute.  At December 31, 2015, the company's regulatory capital ratios (Leverage, Tier I Risk Based and Total Risk Based) were 10.19%, 15.40%, and 16.21%, respectively.  This compares to the same ratios as of December 31, 2014 of 10.02%, 16.12%, and 16.94%, respectively.  Additionally, the regulatory capital ratios for the company's wholly owned subsidiary, First Community Bank, were 9.73%, 14.72%, and 15.54% respectively as of December 31, 2015.  Further, the company's ratio of tangible common equity to tangible assets indicates a high quality of capital with a ratio of 8.47% as of December 31, 2015.  The common equity tier one ratio for the company and the bank was 12.87% and 14.72%, respectively, at December 31, 2015. 

Asset Quality 

The company's asset quality remains strong and showed continued improvement on a linked quarter and year-over-year comparison.  The non-performing assets ratio declined to 0.85% of total assets at December 31, 2015, as compared to the ratio of 0.88% at the end of the third quarter of 2015 and 1.18% at December 31, 2014.  The nominal level of non-performing assets decreased to $7.297 million at year end 2015 from $7.519 million at the end of the third quarter of 2015 and $9.528 million at the end of 2014.  Trouble debt restructurings, that are still accruing interest, declined slightly during the quarter to $1.632 million from $1.654 million at the end of the third quarter of 2015 and $2.200 million at year end 2014. 

Net loan charge-offs for the quarter were $9 thousand and $642 thousand for the year of 2015.  The ratio of classified loans plus OREO now stands at 14.68% of total bank regulatory risk-based capital as of December 31, 2015. 

Balance Sheet

(Numbers in millions)


Quarter ending 


Quarter ending 


Quarter ending


12 Month 


12 Month  


12/31/15


12/31/14 


 9/30/15 


$ Variance


% Variance

Assets










Investments

$283.8


$282.8


$273.7


$  1.0


.4%

Loans

489.2


443.8


483.9


45.4


10.2%











Liabilities










Total Pure Deposits

$563.1


$504.5


$549.9


$  58.6


11.6%

Certificates of Deposit

153.0


165.1


154.5


(12.1)


(7.3%)

Total Deposits

$716.1


$669.6


$704.4


$46.5


6.9%











Customer Cash Management

21.0


17.4


19.9


3.6


20.7%

FHLB Advances 

24.8


28.8


27.5


(4.0)


(13.9%)











Total Funding

$761.9


$715.8


751.8


46.1


6.4%

Cost of Funds*

0.44%


0.47%


0.45%




 (3 bps)

     (*including demand deposits)










Cost of Deposits

0.25%


0.26%


0.26%




(1 bp)











Mr. Crapps commented, "Deposit and loan growth during 2015 were both strong and we are encouraged as that momentum continues into 2016.  During 2015, our company saw the benefit of a number of previously discussed initiatives focused on increasing loan growth, resulting in loan production of $116 million and net loan growth of $45.3 million.  This will continue to be an area of intense focus for our company.  With our current level of liquidity and continued success in pure deposit growth, we have the funding available to support significant additional loan growth."

Revenue

Net Interest Income/Net Interest Margin

Net interest income increased on a linked quarter basis to $6.348 million for the fourth quarter up from $6.253 million in the third quarter of 2015 and year-over-year increased to $25.253 million at December 31, 2015 from $23.731 million at December 31, 2014.  The net interest margin, on a taxable equivalent basis, decreased slightly to 3.29% for the fourth quarter of 2015 from 3.32% in the third quarter of the year. 

Non-Interest Income

Non-interest income, adjusted for securities gains and loss on the early extinguishment of debt, increased year-over-year to $8.810 million in 2015 from $8.382 million in 2014, although it decreased on a linked quarter basis.  During the quarter, the company repaid $2.75 million in Federal Home Loan Bank (FHLB) advances and experienced a $226 thousand loss on this early extinguishment of debt.  This prepayment of the FHLB advances will enable the bank to save the expense of these borrowings in future periods.  This loss was offset by a gain on the sale of securities of $84 thousand and as well as a gain of $130 thousand on the redemption of $500 thousand in Trust Preferred securities at a discount.

Revenues in the mortgage line of business increased year-over-year to $3.432 million in 2015 from $3.186 million in 2014, but declined as anticipated on a linked quarter basis from $964 thousand in the third quarter to $753 thousand in the fourth quarter of 2015.  Mortgage production year-over-year increased $20.6 million or 22.6%, but declined on a linked quarter basis which was expected due to seasonal fluctuations and the impact of the historic floods which occurred in a major portion of the company's market area early in the fourth quarter.  Revenue in the investment advisory line of business was up slightly year-over-year, $1.287 million in 2015 and $1.268 million in 2014, and was flat on a linked quarter basis, $294 thousand in the fourth quarter of 2015 compared to $290 thousand in the third quarter. 

Non-Interest Expense

Non-interest expenses increased slightly on a linked quarter basis to $6.122 million in the fourth quarter from $6.067 million in the third quarter of 2015.  Occupancy expenses related to flood damage, including an insurance deductible and other small losses not covered by insurance, and marketing expenses associated with an expanded media campaign to support commercial loan growth represented the majority of the expense increase.

First Community Corporation stock trades on the NASDAQ Capital Market under the symbol "FCCO" and is the holding company for First Community Bank, a local community bank based in the midlands of South Carolina.  First Community Bank operates fifteen banking offices located in Lexington, Richland, Newberry, Kershaw, and Aiken counties in South Carolina and Augusta, Georgia, in addition to First Community Financial Consultants, a financial planning/investment advisory division. 

FORWARD-LOOKING STATEMENTS

Certain statements in this news release contain "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, such as statements relating to future plans, goals, projections and expectations, and are thus prospective. Such forward-looking statements are subject to risks, uncertainties, and other factors which could cause actual results to differ materially from future results expressed or implied by such forward-looking statements.  Such risks, uncertainties and other factors, include, among others, the following: (1) competitive pressures among depository and other financial institutions may increase significantly and have an effect on pricing, spending, third-party relationships and revenues; (2) the strength of the United States economy in general and the strength of the local economies in which we conduct operations may be different than expected resulting in, among other things, a deterioration in the credit quality or a reduced demand for credit, including the resultant effect on the company's loan portfolio and allowance for loan losses; (3) the rate of delinquencies and amounts of charge-offs, the level of allowance for loan loss, the rates of loan growth, or adverse changes in asset quality in our loan portfolio, which may result in increased credit risk-related losses and expenses; (4) changes in the U.S. legal and regulatory framework; (5) adverse conditions in the stock market, the public debt markets and other capital markets (including changes in interest rate conditions) could have a negative impact on the company; (6) technology and cybersecurity risks, including potential business disruptions, reputational risks, and financial losses, associated with potential attacks on or failures by our computer systems and computer systems of our vendors and other third parties; (7) we may be unable to comply, or may need to devote more resources than currently expected in order to comply, with the requirements that will be set forth in our final BSA-related Consent Order with the FDIC, and (8) risks, uncertainties and other factors disclosed in our most recent Annual Report on Form 10-K filed with the SEC, or in any of our Quarterly Reports on Form 10-Q or Current Reports on Form 8-K filed with the SEC since the end of the fiscal year covered by our most recently filed Annual Report on Form 10-K, which are available at the SEC's Internet site (http://www.sec.gov).

Although we believe that the assumptions underlying the forward-looking statements are reasonable, any of the assumptions could prove to be inaccurate. We can give no assurance that the results contemplated in the forward-looking statements will be realized. The inclusion of this forward-looking information should not be construed as a representation by our company or any person that the future events, plans, or expectations contemplated by our company will be achieved. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise.

 

FIRST COMMUNITY CORPORATION












BALANCE SHEET DATA;







(Dollars in thousands, except per share data)















At December 31,






2015

2014










  Total Assets



$       862,734

$   812,363



  Other short-term investments (1)


11,968

10,052



  Investment Securities



283,841

282,814



  Loans held for sale



2,962

4,124



  Loans



489,191

443,844



  Allowance for Loan Losses



4,596

4,132



  Total Deposits



716,151

669,583



  Securities Sold Under Agreements to Repurchase

21,033

17,383



  Federal Home Loan Bank Advances


24,788

28,807



  Junior Subordinated Debt



14,964

15,464



  Shareholders' Equity



79,038

74,528










  Book Value Per Common Share 


$          11.81

$       11.18



  Tangible Book Value Per Common Share 


$          10.84

$       10.25



  Tangible Book Value Per Common Share (Excluding AOCI)

$          10.72

$       10.06



  Equity to Assets



9.16%

9.17%



  Tangible common equity to tangible assets


8.47%

8.48%



  Loan (incl loans held for sale) to Deposit Ratio

68.72%

66.90%



  Allowance for Loan Losses/Loans


0.94%

0.93%



  Allowance for Loan Losses plus credit mark/Loans 

1.15%

1.33%










  Regulatory Ratios:







   Leverage Ratio



10.19%

10.02%



   Tier 1 Capital Ratio



15.40%

16.12%



   Total Capital Ratio



16.21%

16.94%



   Common Equity Tier 1



12.87%

N/A



 Tier 1 Regulatory Capital



$        86,682

$     81,431



 Total Regulatory Capital



$        91,278

$     85,563



 Common Equity Tier 1 Capital



$        72,444

N/A



(1) Includes federal funds sold, securities purchased under agreements to resell and interest-bearing deposits








Average Balances:









Three months ended


Year ended



December 31,


December 31, 



2015

2014


2015

2014








  Average Total Assets


$       858,413

$       820,861


$ 835,604

$     780,797

  Average Loans (incl loans held for sale)

487,203

451,334


473,367

439,174

  Average Earning Assets


790,288

751,935


769,604

714,332

  Average Deposits


708,583

676,415


688,573

635,238

  Average Other Borrowings


64,639

64,540


64,072

51,871

  Average Shareholders' Equity


78,797

73,523


77,124

69,760















Asset Quality:


 December 31, 

 September 30, 

June 30,

March 31,

December 31,



2015

2015

2015

2015

2014

Loan Risk Rating by Category (End of Period)






       Special Mention


$          9,869

$        11,688

$     11,806

$   12,314

$       13,817

       Substandard


10,327

10,206

10,905

12,356

13,499

       Doubtful


-

-

-

-

-

       Pass (includes held for sale)

468,995

462,037

451,305

429,631

416,528



$       489,191

$       483,931

$   474,016

$ 454,301

$     443,844








  Nonperforming Assets:







   Non-accrual loans


$          4,839

$          5,067

$       5,349

5,943

$         6,585

   Other real estate owned


2,458

2,450

2,523

2,817

2,943

   Accruing loans past due 90 days or more

-

2

-

-

-

            Total nonperforming assets

$          7,297

$          7,519

$       7,872

$    8,760

$         9,528

Accruing trouble debt restructurings

$          1,632

$          1,654

$       1,674

$    1,954

$         2,200










Three months ended


Year ended



December 31,


December 31, 



2015

2014


2015

2014

Loans charged-off:


$               29

$             273


$       756

$         1,069

Overdrafts charged-off


13

13


50

42

Loan recoveries


(20)

(84)


(114)

(133)

Overdraft recoveries


(2)

-


(18)

(11)

  Net Charge-offs


$               20

$             202


$       674

$            967








Net charge-offs to average loans


0.00%

0.04%


0.14%

0.22%








 

 

FIRST COMMUNITY CORPORATION















INCOME STATEMENT DATA
















(Dollars in thousands, except per share data)

















Three months ended


Three months ended


Three months ended


Three months ended


Year ended



December 31,


September 30,


June 30,


March 31,


December 31,



2015

2014


2015

2014


2015

2014


2015

2014


2015

2014

  Interest Income


$     7,203

$     7,078


$     7,114

$     6,968


$     7,049

$     6,849


$     7,283

$     6,403


$   28,649

$   27,298

  Interest Expense


855

886


861

872


845

902


835

907


3,396

3,567

  Net Interest Income


6,348

6,192


6,253

6,096


6,204

5,947


6,448

5,496


25,253

23,731

  Provision for Loan Losses


148

179


193

152


391

400


406

150


1,138

881

  Net Interest Income After Provision


6,200

6,013


6,060

5,944


5,813

5,547


6,042

5,346


24,115

22,850

  Non-Interest Income:
















    Deposit service charges


386

372


390

400


346

379


347

366


1,469

1,517

    Mortgage banking income


753

849


964

1,016


980

702


735

619


3,432

3,186

    Investment advisory fees and non-deposit commissions

294

546


290

267


407

198


296

257


1,287

1,268

    Gain on sale of securities


84

80


-

16


167

78


104

8


355

182

    Gain (loss) on sale other assets


(16)

(9)


19

10


3

(24)


4

12


8

(11)

    Gain on redemption of subordinated debt (TRUPS)

130

-


-

-


-

-


-

-


130

-

    Loss on early extinguishment of debt


(226)

(284)


-

-


-

(67)


(103)

-


(329)

(351)

    Other


686

585


666

591


662

633


598

613


2,614

2,422

  Total non-interest income


2,091

2,139


2,329

2,300


2,565

1,899


1,981

1,875


8,966

8,213

  Non-interest Expense:
















    Salaries and employee benefits


3,610

3,545


3,595

3,502


3,658

3,272


3,565

3,424


14,428

13,743

    Occupancy


578

515


513

489


500

465


485

413


2,076

1,882

    Equipment


416

377


437

414


394

375


402

339


1,649

1,505

    Marketing and public relations


165

147


129

218


328

212


226

161


848

738

    FDIC assessment


138

128


113

138


138

131


138

124


527

521

    Other real estate expense


90

193


126

105


154

117


154

138


524

553

    Amortization of intangibles


88

111


98

64


98

63


103

42


387

280

    Merger expenses


-

29


-

39


-

15


-

420


-

503

    Other


1,037

1,044


1,056

1,091


1,119

1,135


1,027

965


4,239

4,235

  Total non-interest expense


6,122

6,089


6,067

6,060


6,389

5,785


6,100

6,026


24,678

23,960

  Income before taxes


2,169

2,063


2,322

2,184


1,989

1,661


1,923

1,195


8,403

7,103

  Income tax expense 


568

557


643

632


546

460


519

333


2,276

1,982

  Net Income 


$     1,601

$     1,506


$     1,679

$     1,552


$     1,443

$     1,201


$     1,404

$       862


$     6,127

$     5,121

















  Per share data:
















     Net income, basic 


$      0.24

$       0.23


$      0.26

$       0.23


$      0.22

$      0.18


$      0.22

$      0.14


$      0.93

$      0.78

     Net income, diluted 


$      0.24

$       0.22


$      0.25

$       0.23


$      0.22

$      0.18


$      0.21

$      0.14


$      0.91

$      0.78

















  Average number of shares outstanding - basic

6,569,379

6,662,514


6,559,844

6,658,679


6,539,154

6,654,359


6,522,420

6,168,949


6,558,386

6,537,813

  Average number of shares outstanding - diluted

6,736,615

6,733,513


6,712,026

6,726,849


6,697,620

6,719,110


6,664,654

6,228,512


6,718,553

6,608,487

  Shares outstanding period end


6,690,551

6,664,391


6,684,563

6,660,466


6,679,938

6,656,139


6,683,960

6,652,189


6,690,551

6,664,391

  Return on average assets


0.74%

0.73%


0.81%

0.79%


0.70%

0.61%


0.70%

0.48%


0.73%

0.73%

  Return on average common equity


8.06%

8.13%


8.73%

8.61%


7.53%

6.88%


7.54%

5.49%


7.94%

8.13%

  Return on average common tangible equity

8.79%

8.88%


9.55%

9.32%


8.25%

7.54%


8.23%

5.89%


8.68%

8.88%

  Net Interest Margin (non taxable equivalent)

3.19%

3.27%


3.22%

3.40%


3.25%

3.32%


3.51%

3.32%


3.28%

3.32%

  Net Interest Margin (taxable equivalent)


3.29%

3.36%


3.32%

3.48%


3.34%

3.38%


3.62%

3.40%


3.38%

3.40%

  Efficiency Ratio


71.47%

71.00%


70.69%

71.85%


74.27%

73.64%


73.27%

81.84%


71.25%

74.14%

















 

 

FIRST COMMUNITY CORPORATION


Yields on Average Earning Assets and Rates 


on Average Interest-Bearing Liabilities












































Three Months ended December 31, 2015


Three Months ended December 31, 2014




Average

Interest 

Yield/


Average

Interest 

Yield/




Balance

Earned/Paid

Rate


Balance

Earned/Paid

Rate


Assets










Earning assets










  Loans


$      487,203

$     5,846

4.76%


$     451,334

$       5,638

4.96%


  Securities:


280,804

1,324

1.87%


276,625

1,408

2.02%


  Other funds


22,281

33

0.59%


23,976

32

0.53%


        Total earning assets


790,288

7,203

3.62%


751,935

7,078

3.73%


Cash and due from banks


10,002




10,533




Premises and equipment


31,128




29,619




Intangible assets


6,545




6,255




Other assets


24,999




26,779




Allowance for loan losses


(4,549)




(4,260)




       Total assets


$      858,413




$     820,861














Liabilities










Interest-bearing liabilities










  Interest-bearing transaction accounts


144,177

42

0.12%


135,492

40

0.12%


  Money market accounts


163,314

108

0.26%


151,382

97

0.25%


  Savings deposits


60,458

18

0.12%


53,893

16

0.12%


  Time deposits


182,382

278

0.60%


197,385

285

0.57%


  Other borrowings


64,639

409

2.51%


64,540

449

2.76%


     Total interest-bearing liabilities


614,970

855

0.55%


602,692

887

0.58%


Demand deposits


158,252




138,263




Other liabilities


6,394




6,383




Shareholders' equity


78,797




73,523




   Total liabilities and shareholders' equity

$      858,413




$     820,861














Cost of funds including demand deposits



0.44%




0.47%


Net interest spread 




3.06%




3.15%


Net interest income/margin



$     6,348

3.19%



$       6,191

3.27%












Tax equivalent



$     6,559

3.29%



$       6,360

3.36%












 

FIRST COMMUNITY CORPORATION


Yields on Average Earning Assets and Rates 


on Average Interest-Bearing Liabilities


































Year ended December 31, 2015


Year ended December 31, 2014




Average

Interest 

Yield/


Average

Interest 

Yield/




Balance

Earned/Paid

Rate


Balance

Earned/Paid

Rate


Assets










Earning assets









  Loans


$    473,367

$      23,219

4.91%


$    439,174

$      21,915

4.99%


  Securities:


275,944

5,311

1.92%


256,392

5,277

2.06%


  Other funds 


20,293

119

0.59%


18,766

106

0.56%


        Total earning assets

769,604

28,649

3.72%


714,332

27,298

3.82%


Cash and due from banks

8,070




10,344




Premises and equipment

30,833




28,098




Intangible assets

6,575




5,554




Other assets


24,895




26,623




Allowance for loan losses

(4,373)




(4,154)




       Total assets

$    835,604




$    780,797




Liabilities










Interest-bearing liabilities









  Interest-bearing transaction accounts

137,969

160

0.12%


131,767

167

0.13%


  Money market accounts

158,726

423

0.27%


141,020

336

0.24%


  Savings deposits

57,958

68

0.12%


51,768

60

0.12%


  Time deposits

186,911

1,099

0.59%


179,384

1,147

0.64%


  Other borrowings

64,072

1,646

2.57%


70,083

1,858

2.65%


     Total interest-bearing liabilities

605,636

3,396

0.56%


574,022

3,568

0.62%


Demand deposits

147,009




131,299




Other liabilities

5,835




5,716




Shareholders' equity

77,124




69,760




   Total liabilities and shareholders' equity

$    835,604




$    780,797














Net interest spread 



3.16%




3.20%


Net interest income/margin


$      25,253

3.28%



$      23,730

3.32%












Tax Equivalent


$                  -

$      26,024

3.38%



$      24,287

3.40%












 

Logo - http://photos.prnewswire.com/prnh/20030508/FCCOLOGO

SOURCE First Community Corporation