Earnings of $1.40 million, a 62.9% increase in net income year-over-year
EPS of $0.21 per common share, a 50% increase year-over-year
Loan growth of $10.5 million, a 9.5% annualized rate of increase
Pure deposit growth of $28.0 million, a 22.2% annualized rate of increase
Total assets of $835.8 million, an increase of 4.8% year-over-year
Year-over-year increases in fees from mortgage and financial planning business units of 18.6% and 15.1%, respectively
Regulatory capital ratios remain strong at 10.26% (Tier 1 Leverage) and 16.77% (Total Capital) along with Tangible Common Equity / Tangible Assets (TCE/TA) ratio of 8.42%
Non-performing assets (NPAs) of 1.05%
Cash dividend of $0.07 per common share, which is the 53rd consecutive quarter of cash dividends paid to common shareholders
Today, First Community Corporation (Nasdaq: FCCO), the holding company for First Community Bank, reported net income for the first quarter of 2015. Net income for the first quarter of 2015 was $1.40 million as compared to $862 thousand in the first quarter of 2014. Diluted earnings per common share were $0.21 for the first quarter of 2015 as compared to $0.14 for the first quarter of 2014.
First Community President and CEO, Mike Crapps, commented, "We are extremely pleased with positive results in the first quarter of 2015 across so many of our performance metrics. Of particular note is the growth of $10.5 million in our loan portfolio, which is the result of our focused efforts in this key performance area. We are beginning to see the benefit of several initiatives implemented in the loan area during 2014."
As previously announced, the company expanded its footprint in the Midlands of South Carolina with the opening of a banking office in the town of Blythewood. Construction was completed during the first quarter of 2015 and the new office opened on April 9th. Mr. Crapps commented, "The Blythewood community has been extremely supportive of our bank and we are excited to be a part of its future. We look forward to working with Blythewood businesses and professionals to help them meet their financial goals."
Cash Dividend and Capital
The Board of Directors has approved a cash dividend for the first quarter of 2015. The company will pay a $0.07 per share dividend to holders of the company's common stock. This dividend is payable May 15, 2015 to shareholders of record as of May 4, 2015. Mr. Crapps commented, "Our entire board is pleased that our performance enables the company to continue its cash dividend for the 53rd 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 March 31, 2015, the company's regulatory capital ratios (Leverage, Tier I Risk Based and Total Risk Based) were 10.26%, 15.95%, and 16.77%, respectively. This compares to the same ratios as of March 31, 2014, of 10.67%, 15.67%, and 16.51%, respectively. Additionally, the regulatory capital ratios for the company's wholly owned subsidiary, First Community Bank, were 9.73%, 15.15%, and 15.98% respectively as of March 31, 2015. Further, the company's ratio of tangible common equity to tangible assets was 8.42% as of March 31, 2015. As of March 31, 2015, the company began calculating the Common Equity Tier One ratio which is 13.10% for the company and 15.20% for the bank.
The non-performing assets ratio remained an area of strength for the company, decreasing to 1.05% of total assets, as compared to the prior quarter ratio of 1.18%. Trouble debt restructurings, that are still accruing interest, remained relatively stable at $1.95 million at March 31, 2015. Loans past due 30-89 days were $2.6 million (0.58% of loans) this quarter, an increase of $865 thousand on a linked quarter basis. This increase over the prior quarter was primarily due to one loan.
Net loan charge-offs for the quarter were $286 thousand (0.24% annualized ratio) as compared to the 2014 fourth quarter total of $202 thousand (0.16% annualized ratio). The company believes that these levels compare very favorably to its peer group average.
The provision for loan loss reserves as of March 31, 2015 was $406 thousand, which increased on a linked quarter basis from $178 thousand. This increase reflects the company's overall assessment of the allowance for loan losses including the increase in loan balances during the first quarter.
The ratio of classified loans plus OREO now stands at 18.41% of total regulatory risk-based capital as of March 31, 2015.
Balance Sheet (Numbers in millions)
Total Pure Deposits
Certificates of Deposit
Customer Cash Management
Cost of Funds*
(*including demand deposits)
Cost of Deposits
Mr. Crapps commented, "First quarter results were strong with significant growth of $10.5 million in our loan portfolio. Pure deposit growth continues to be an area of strength for the company and in the first quarter of 2015, balances grew by $28 million. Deposits at quarter end did include approximately $12 million that was only on deposit for a brief period of time."
Net Interest Income/Net Interest Margin
Net interest income was $6.5 million for the first quarter of 2015 an increase of $300 thousand over fourth quarter net interest income of $6.2 million. First quarter net interest margin, on a tax equivalent basis, was 3.62% compared to net interest margin of 3.36% in the fourth quarter. This increase in net interest margin was partially attributed to the recognition of a credit mark on two purchased impaired loans included as part of the acquisition of Savannah River Financial Corporation that were paid off during the quarter. Excluding the benefit from the credit mark, the net interest margin for the first quarter would have been approximately 3.40% on a tax equivalent basis.
Non-interest income, adjusted for securities gains and losses, increased by $106 thousand as compared to the first quarter of 2014. This was partially driven by the mortgage line of business which experienced an increase year-over-year of $116 thousand. Production was $26.9 million during the first quarter of 2015, significantly higher than $19.3 million during the same period in 2014. Mr. Crapps noted, "Our mortgage line of business had strong production during the quarter, exceeding our expectations. Yields were somewhat lower than anticipated due to a higher mix of refinance loans and construction-permanent loans. We anticipate yields returning to normal levels in future quarters."
Revenue earned in the first quarter of this year in the financial planning and investment advisory line of business was $296 thousand, an increase of 15.2% compared to first quarter of 2014 which had revenues of $257 thousand. Mr. Crapps commented, "In addition to developing new customer relationships, this line of business continues to grow recurring revenue streams that will be a benefit during future periods."
Non-interest expense was relatively stable on a linked quarter basis with total non-interest expense of $6.1 million.
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 the Midlands, Aiken, and Augusta, Georgia in addition to two other lines of business, First Community Bank Mortgage and 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 cybersercurity 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; and (7) 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
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FIRST COMMUNITY CORPORATION
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