First Community Corporation Announces Second Quarter Results and Cash Dividend

LEXINGTON, S.C., July 16, 2014 /PRNewswire/ --

Highlights

  • Core net income (excluding securities gains/losses, merger expenses, and loss on early extinguishment of debt) estimated to be $1,206,000 as compared to $1,166,000 in the prior quarter
  • Post-merger regulatory capital ratios remain strong at 10.10% (Tier 1 Leverage) and 16.61% (Total Capital) along with Tangible Common Equity / Tangible Assets (TCE/TA) ratio of 8.39%
  • Non-performing assets (NPAs) stable at 1.41%
  • Cash dividend of $0.06 per common share, which is the 50th consecutive quarter of cash dividends paid to common shareholders
  • Announced Purchase and Assumption Agreement of approximately $43 million in deposits and $9 million in loans in downtown Columbia

Today, First Community Corporation (Nasdaq:  FCCO), the holding company for First Community Bank, reported net income for the second quarter of 2014.  Net income for the second quarter of 2014 was $1.201 million as compared to $1.203 million in the second quarter of 2013.  Diluted earnings per common share were $0.18 for the second quarter of 2014 as compared to $0.23 for the second quarter of 2013.

Year-to-date 2014 net income was $2.063 million compared to $2.241 million during the first six months of 2013.  Diluted earnings per share for the first half of 2014 were $0.32, compared to $0.42 during the same time period in 2013.  The six month results for 2014 include merger and acquisition related expenses of $435 thousand

As previously announced on June 9, 2014, the company opened an office in downtown Columbia located at 1213 Lady Street, near Main Street.  In addition to the banking office on the first floor, the bank's financial planning team, First Community Financial Consultants, has relocated to the second floor of this building. 

Additionally, on June 23, 2014, the company announced the signing of a Purchase and Assumption Agreement to acquire approximately $43 million in deposits and $9 million in loans from First South Bank.  This represents all of the deposits and a portion of the loans at First South's Columbia banking office located at 1333 Main Street.  The company is paying a premium of $800,000; which may be adjusted based on actual account balances at closing date.

Mike Crapps, First Community President and CEO, commented, "The acquired deposits and loans will be serviced in our new downtown Columbia location, which will be extremely convenient for our new customers.  Additionally, this accelerates profitability for our new office from the typical two to three year period of time to being profitable immediately upon closing.  We look forward to completing this transaction in the late third quarter." 

Cash Dividend and Capital

The Board of Directors has approved a cash dividend for the second quarter of 2014.  The company will pay a $0.06 per share dividend to holders of the company's common stock.  This dividend is payable August 8, 2014 to shareholders of record as of July 28, 2014.  Mr. Crapps commented, "Our entire board is pleased that our performance enables the company to continue its cash dividend for the 50th consecutive quarter." 

Each of the regulatory capital ratios (Leverage, Tier I Risk Based and Total Risk Based) exceed the well capitalized minimum levels currently required by regulatory statute.  At June 30, 2014, the company's regulatory capital ratios (Leverage, Tier I Risk Based and Total Risk Based) were 10.10%, 15.79%, and 16.61%, respectively.  This compares to the same ratios as of June 30, 2013, of 10.61%, 17.51%, and 18.68%, respectively.  Additionally, the regulatory capital ratios for the company's wholly owned subsidiary, First Community Bank, were 9.56%, 14.97%, and 15.79% respectively as of June 30, 2014.  Further, the company's ratio of tangible common equity to tangible assets was 8.39% as of June 30, 2014.

Asset Quality

The non-performing assets ratio remained relatively stable at 1.41% of total assets, as compared to the prior quarter ratio of 1.40%.  The nominal level of non-performing assets decreased slightly to $11.109 million from $11.137 million at the end of the prior quarter.

Trouble debt restructurings, that are still accruing interest, declined slightly during the quarter to $560 thousand from $568 thousand.  Loans past due 30-89 days were $2.3 million (0.53% of loans) this quarter.   

Net loan charge-offs for the quarter were $495 thousand (0.44% annualized ratio) as compared to the 2014 first quarter total of $208 thousand (0.20% annualized ratio).  The increase in net loan charge-offs is due to the write down of a $2.3 million loan placed on non-accrual in the first quarter of this year.  This write down was in the amount of $502 thousand and was based on an updated appraisal received during the second quarter.  Mr. Crapps commented, "While we continue to receive payments, this is appropriate recognition of the current status of this particular loan.  Absent this one event, we would have experienced a net recovery this quarter."

The ratio of classified loans plus OREO now stands at 24.33% of total regulatory risk-based capital as of June 30, 2014. 

 

Balance Sheet






(Numbers in millions)







Quarter ending

Quarter ending

Quarter ending

3 Month

 3 Month


6/30/14

3/31/14

12/31/13

$ Variance

% Variance

Assets






Investments  

$250.8

$255.5

$227.0

($4.7)

(1.8%)

Loans   

444.7

443.9

347.6

0.8

0.2%







Liabilities






Total Pure Deposits   

$496.2

$505.7

$363.2

($9.5)

(1.9%)

Certificates of Deposit  

143.9

148.8

133.9

(4.9)

(3.3%)

Total Deposits     

$640.1

$654.5

$497.1

($14.4)

(2.2%)







Customer Cash Management    

$16.4

$19.5

$18.6

($3.1)

(15.9%)

FHLB Advances    

37.9

34.3

43.3

3.6

10.5%







Total Funding    

$694.4

$708.3

$559.0

($13.9)

(2.0%)

Cost of Funds*      

0.51%

0.55%

0.60%


(4 bps)

    (*including demand deposits)






Cost of Deposits   

0.28%

0.30%

0.31%


(2 bps)

 

Mr. Crapps commented, "We experienced some anticipated decrease in our pure deposit base, as our customers utilized their cash to fund certain projects.  We were pleased with the continued reduction in our cost of deposits to 0.28% for this quarter.  The loan portfolio was relatively flat.  Actual loan production was higher than the first quarter, but not sufficient to overcome the loan payments and loan payoff headwind." 

Revenue

Net Interest Income/Net Interest Margin

The net interest margin, on a non-tax equivalent basis, was unchanged from the prior quarter at 3.32%.  Due to certain portfolio adjustments, the tax equivalent net interest margin declined 2 basis points to 3.38% in the second quarter.  Net interest income increased significantly on a linked quarter basis due to the effect of the full quarter impact of the merger with Savannah River Financial Corporation, which closed on February 1, 2014.

Non-Interest Income

Non-interest income, adjusted for securities gains and losses, was relatively stable on a linked quarter basis.  The mortgage line of business improved slightly with production of $21.0 million, as compared to $19.3 million in the prior quarter.  This increase in production along with higher yields (3.34% in the second quarter as compared to 3.21% in the first quarter) resulted in revenues increasing by 13.4% on a linked quarter basis to $702 thousand.  Mr. Crapps commented, "We are focused on even greater success in this important line of business.  Under the leadership of our new Director of Mortgage Banking, Jan Hadder-Jones, we are consolidating our two mortgage banking units into one brand, First Community Bank Mortgage.  As we move to accomplish this on September 1, 2014, we are making all of the decisions based on the goals of being customer centric, continuing the appropriate risk management and compliance practices, and optimizing the efficiency of our processes.  We are now positioned to build out this line of business with experienced and highly productive mortgage bankers.  In fact, recently an additional mortgage banker joined our team in the Augusta market." 

Non-Interest Expense

Non-interest expense decreased by $241 thousand on a linked quarter basis to $5.785 million.  This decrease is primarily the result of a decrease in merger expenses, partially offset by miscellaneous expenses impacted by the effect of the full quarter impact of the merger with Savannah River Financial Corporation, which closed on February 1, 2014. 

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 fourteen banking offices located in the Midlands, Aiken, and Augusta, Georgia in addition to First Community Financial Consultants, a financial planning/investment advisory division and Palmetto South Mortgage, a separate mortgage 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. 

Although we believe that the assumptions underlying the forward-looking statements are reasonable, any of the assumptions could prove to be inaccurate.  Therefore, 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)








June 30

December 31,

June 30





2014

2013

2013









  Total Assets



$    786,687

$       633,309

$     633,185


  Other short-term investments (1)



14,741

5,927

14,560


  Investment Securities



250,775

227,029

225,915


  Loans held for sale



2,990

3,790

5,789


  Loans



444,670

347,597

341,089


  Allowance for Loan Losses



4,066

4,219

4,439


  Goodwill



4,390

571

571


  Other Intangibles



1,077

-

65


  Total Deposits



640,057

497,071

509,619


  Securities Sold Under Agreements to Repurchase

16,374

18,634

15,650


  Federal Home Loan Bank Advances


37,916

43,325

34,335


  Junior Subordinated Debt



15,464

15,464

15,464


  Shareholders' equity



70,992

52,671

52,828









  Book Value Per Common Share



$       10.67

$            9.93

$          9.98


  Tangible Book Value Per Common Share 


$         9.84

$            9.83

$          9.86


  Tangible Book Value per common share  (excluding AOCI)

$         9.79

$          10.30

$        10.03


  Equity to Assets



9.02%

8.32%

8.34%


  Tangible common equity to tangible assets


8.39%

8.23%

8.25%


  Loan to Deposit Ratio



69.94%

70.69%

69.46%


  Allowance for Loan Losses/Loans



0.91%

1.21%

1.30%


  Allowance for Loan Losses plus credit mark/Loans

1.31%

1.21%

1.30%


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


  Regulatory Ratios:



June 30,

December 31,

June 30,





2014

2013

2013









   Leverage Ratio



10.10%

10.77%

10.61%


   Tier 1 Capital Ratio



15.79%

17.60%

17.51%


   Total Capital Ratio



16.61%

18.68%

18.68%


   Tier 1 Regulatory Capital



$     78,825

$        68,756

$       66,130


   Total Regulatory Capital



$     82,891

$        72,975

$       70,569









Average Balances:


Three months ended


Six months ended



June 30,


June 30,



2014

2013


2014

2013








  Average Total Assets


$  787,066

$    628,330


$     760,048

$     617,273

  Average Loans


444,060

344,009


430,000

340,983

  Average Earning Assets


719,104

585,174


695,472

573,615

  Average Deposits


638,915

498,720


612,599

487,768

  Average Other Borrowings


72,770

69,455


75,090

69,466

  Average Shareholders' Equity


70,035

55,162


66,847

54,844








Asset Quality:


June 30,

March 31,

December 31,





2014

2014

2013



Loan Risk Rating by Category (End of Period)






       Special Mention


$    11,274

$     13,891

$        10,708



       Substandard


15,795

15,358

10,609



       Doubtful


-

-

-



       Pass


417,601

414,619

326,280





$  444,670

$    443,868

$       347,597










June 30,

March 31,

December 31,




2014

2014

2013










  Nonperforming Assets:







       Non-accrual loans


$      7,647

$       7,865

$          5,406



       Other real estate owned


3,302

3,147

3,370



       Accruing loans past due 90 days or more

160

125

1



            Total nonperforming assets


$    11,109

$     11,137

$          8,777



 Accruing trouble debt restructurings


$        560

$          568

$             576



















 Three months ended 


 Six months ended 



June 30,


June 30,



2014

2013


2014

2013

  Loans charged-off


$        504

$          200


$           726

$           505

  Overdrafts charged-off


10

9


18

18

  Loan recoveries


(15)

(12)


(34)

(86)

  Overdraft recoveries


(4)

(2)


(7)

(5)

     Net Charge-offs


$        495

$          195


$           703

$           432

  Net charge-offs to average loans


0.11%

0.05%


0.16%

0.13%















 

FIRST COMMUNITY CORPORATION



INCOME STATEMENT DATA





(Dollars in thousands, except per share data)







Three months ended


Three months ended


Six months ended




June 30,


March 31,


June 30,




2014

2013


2014

2013


2014

2013













  Interest Income


$     6,849

$      5,370


$      6,403

$      5,283


$   13,252

$   10,653


  Interest Expense


902

947


907

1,004


1,809

1,951


  Net Interest Income


5,947

4,423


5,496

4,279


11,443

8,702


  Provision for Loan Losses


400

100


150

150


550

250


  Net Interest Income After Provision


5,547

4,323


5,346

4,129


10,893

8,452


  Non-interest Income:











    Deposit service charges


379

367


366

361


745

728


    Mortgage banking income


702

1,183


619

1,015


1,321

2,198


    Investment advisory fees and non-deposit commissions

198

218


257

198


455

416


    Gain (loss) on sale of securities


78

133


8

15


86

148


    Gain (loss) on sale of other assets


(24)

32


12

(2)


(12)

30


    Loss on early extinquishment of debt


(67)

(141)


-

-


(67)

(141)


    Other


633

503


613

496


1,246

999


  Total non-interest income


1,899

2,295


1,875

2,083


3,774

4,378


  Non-interest Expense:











    Salaries and employee benefits


3,272

2,994


3,424

2,992


6,696

5,986


    Occupancy


465

334


413

346


878

680


    Equipment


375

314


339

283


714

597


    Marketing and public relations


212

112


161

93


373

205


    FDIC assessment 


131

102


124

99


255

201


    Other real estate expenses


117

115


138

112


255

206


    Amortization of intangibles


63

45


42

51


105

96


    Merger and acquisition expenses


15

-


420

-


435

-


    Other


1,135

939


965

831


2,100

1,791


  Total non-interest expense


5,785

4,955


6,026

4,807


11,811

9,762


  Income before taxes


1,661

1,663


1,195

1,405


2,856

3,068


  Income tax expense


460

460


333

367


793

827


  Net Income


$     1,201

$      1,203


$        862

$      1,038


$     2,063

$     2,241













  Per share data:











     Net income, basic 


$       0.18

$        0.23


$       0.14

$       0.20


$      0.32

$      0.42


     Net income, diluted 


$       0.18

$        0.23


$       0.14

$       0.20


$      0.32

$      0.42













  Average number of shares outstanding - basic

6,654,359

5,291,828


6,168,949

5,255,525


6,412,995

5,273,777


  Average number of shares outstanding - diluted

6,719,110

5,311,194


6,228,512

5,292,000


6,477,537

5,330,011


  Shares outstanding period end


6,656,139

5,293,116


6,652,189

5,290,452


6,656,139

5,293,116




-

-





-

-


  Return on average assets


0.61%

0.77%


0.48%

0.69%


0.55%

0.73%


  Return on average common equity:


6.88%

8.75%


5.49%

7.72%


6.22%

8.24%


  Return on average common tangible equity:

7.54%

8.88%


5.89%

7.82%


6.73%

8.28%


  Net Interest Margin (non taxable equivalent)

3.32%

3.03%


3.32%

3.09%


3.32%

3.06%


  Net Interest Margin (taxable equivalent)


3.38%

3.11%


3.40%

3.15%


3.39%

3.13%
























FIRST COMMUNITY CORPORATION

Yields on Average Earning Assets and Rates 

  on Average Interest-Bearing Liabilities









Three months ended June 30, 2014

Three months ended June 30, 2013


Average

Interest 

Yield/

Average

Interest 

Yield/


Balance

Earned/Paid

Rate

Balance

Earned/Paid

Rate

Assets







Earning assets







  Loans

$        444,060

$        5,582

5.04%

$        344,009

$      4,462

5.20%

  Securities:

261,673

1,243

1.91%

229,845

891

1.55%

  Federal funds sold and securities purchased

13,371

24

0.72%

11,320

17

0.60%

        Total earning assets

719,104

6,849

3.82%

585,174

5,370

3.68%

Cash and due from banks

10,454



8,403



Premises and equipment

28,720



17,230



Other assets

32,810



22,050



Allowance for loan losses

(4,022)



(4,527)



       Total assets

$        787,066



$        628,330










Liabilities







Interest-bearing liabilities







  Interest-bearing transaction accounts

$        135,875

$             46

0.14%

$        101,247

$           29

0.11%

  Money market accounts

145,973

85

0.23%

76,272

44

0.23%

  Savings deposits

50,593

15

0.12%

46,355

13

0.11%

  Time deposits

174,712

282

0.65%

173,879

371

0.86%

  Other borrowings

72,770

474

2.61%

69,455

490

2.83%

     Total interest-bearing liabilities

579,923

902

0.62%

467,208

947

0.81%

Demand deposits

131,762



100,967



Other liabilities

5,346



4,993



Shareholders' equity

70,035



55,162



   Total liabilities and shareholders' equity

$        787,066



$        628,330










Cost of funds, including demand deposits



0.51%



0.67%

Net interest spread 



3.20%



2.87%

Net interest income/margin


$        5,947

3.32%


$      4,423

3.03%

Net interest income/margin FTE basis


$        6,066

3.38%


$      4,532

3.11%

 

FIRST COMMUNITY CORPORATION

Yields on Average Earning Assets and Rates 

  on Average Interest-Bearing Liabilities









Six months ended June 30, 2014

Six months ended June 30, 2013


Average

Interest 

Yield/

Average

Interest 

Yield/


Balance

Earned/Paid

Rate

Balance

Earned/Paid

Rate

Assets







Earning assets







  Loans

$          430,000

$            10,662

5.00%

$        340,983

$              8,823

5.22%

  Securities:

248,394

2,543

2.06%

219,084

1,798

1.65%

  Federal funds sold and securities purchased







    under agreements to resell

17,078

47

0.55%

13,548

32

0.48%

        Total earning assets

695,472

13,252

3.84%

573,615

10,653

3.75%

Cash and due from banks

10,189



8,570



Premises and equipment

26,843



17,226



Other assets

31,671



22,458



Allowance for loan losses

(4,127)



(4,596)



       Total assets

$          760,048



$        617,273



Liabilities







Interest-bearing liabilities







  Interest-bearing transaction accounts

$          129,981

84

0.13%

$          91,056

58

0.13%

  Money market accounts

131,232

151

0.23%

75,869

79

0.21%

  Savings deposits

50,393

29

0.12%

44,485

24

0.11%

  Time deposits

174,553

593

0.69%

177,972

809

0.92%

  Other borrowings

75,090

952

2.56%

69,466

981

2.85%

     Total interest-bearing liabilities

561,249

1,809

0.65%

458,848

1,951

0.86%

Demand deposits

126,440



98,386



Other liabilities

5,512



5,195



Shareholders' equity

66,847



54,844



   Total liabilities and shareholders' equity

$          760,048



$        617,273










Cost of funds, including demand deposits



0.53%



0.71%

Net interest spread 



3.19%



2.89%

Net interest income/margin


$            11,443

3.32%


$              8,702

3.06%

Net interest income/margin FTE basis


$            11,698

3.39%


$              8,904

3.13%

 

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

 

SOURCE First Community Corporation



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