First Community Corporation Announces Second Quarter Results and Cash Dividend

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PR Newswire

LEXINGTON, S.C., July 22, 2015

LEXINGTON, S.C., July 22, 2015 /PRNewswire/ --

Highlights

Earnings of $1.443 million in the second quarter of 2015, a 20.1% increase in net income year-over-year
EPS of $.22 per common share in the second quarter of 2015, a 22.2% increase year-over-year
Net loan growth of $19.7 million in the second quarter of 2015, a 17.4% annualized growth rate and year-to-date net loan growth of $30.2 million, an annualized growth rate of 13.6%.
Pure deposit growth (including customer cash management accounts) of $24.3 million year-to-date, a 9.31% annualized growth rate
Year-over-year increases in revenues from mortgage and financial planning business units of 29.8% and 54.5% respectively for the first six months of the year
Regulatory capital ratios remain strong at 10.41% (Tier 1 Leverage) and 16.56% (Total Capital) along with Tangible Common Equity / Tangible Assets (TCE/TA) ratio of 8.40%
Strong credit quality with non-performing assets (NPAs) of just .94%
Cash dividend of $0.07 per common share, which is the 54^th 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 second quarter of 2015. Net income for the second quarter of 2015 was $1.443 million as compared to $1.201 million in the second quarter of 2014. Diluted earnings per common share were $0.22 for the second quarter of 2015 as compared to $0.18 for the second quarter of 2014. Year-to-date 2015 net income was $2.847 million compared to $2.063 million during the first six months of 2014. Diluted earnings per share for the first half of 2015 were $0.43, compared to $0.32 during the same time period in 2014. Mike Crapps, First Community President and CEO, commented, "We are pleased with the growth in income in 2015, with all three lines of business contributing to this success. This quarter and the first half of the year is a story of significant revenue growth and building momentum."

Cash Dividend and Capital

The Board of Directors has approved a cash dividend for the second 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 August 14, 2015 to shareholders of record as of August 3, 2015. Mr. Crapps commented, "Our entire board is pleased that our performance enables the company to continue its cash dividend for the 54^th consecutive quarter."

At June 30, 2015, the company's regulatory capital ratios (Leverage, Tier I Risk Based and Total Risk Based) were 10.41%, 15.67%, and 16.56%, respectively. This compares to the same ratios as of June 30, 2014, of 10.10%, 15.79%, and 16.61%, respectively. Additionally, the regulatory capital ratios for the company's wholly owned subsidiary, First Community Bank, were 9.77%, 15.03%, and 15.83% respectively as of June 30, 2015. The company's ratio of tangible common equity to tangible assets was 8.40% as of June 30, 2015. Also, as of June 30, 2015, the Common Equity Tier One ratio for the company and the bank were 12.36% and 15.03%, respectively.

Asset Quality

ARIVA.DE Börsen-Geflüster

Kurse

First Community

15,93 $

-2,09%

The non-performing assets ratio declined to .94% of total assets, as compared to the prior quarter ratio of 1.05%. The nominal level of non-performing assets decreased to $7.872 million from $8.760 million at the end of the prior quarter. Trouble debt restructurings, that are still accruing interest, declined during the quarter to $1.674 million from $1.954 million at the end of the first quarter of 2015.

Net loan charge-offs for the first six months of 2015 were $648 thousand (0.28% annualized ratio) as compared to $703 thousand (0.32% annualized ratio) in the first six months of 2014. Net charge-offs for the second quarter of 2015 were $362 thousand, with one credit responsible for nearly the entire amount. The ratio of classified loans plus OREO now stands at 15.9% of total bank regulatory risk-based capital as of June 30, 2015.

Balance Sheet
(Numbers in millions)
	Quarter ending	Quarter ending	Quarter ending	3 Month	3 Month
	6/30/15	3/31/15	12/31/14	$ Variance	% Variance
Assets
Investments	$271.2	$274.1	$282.8	($2.9)	(1.1%)
Loans	474.0	454.3	443.8	19.7	4.3%

Liabilities
Total Pure Deposits	$526.7	$532.5	$504.5	($5.8)	(1.1%)
Certificates of Deposit	157.3	162.1	165.1	(4.8)	(3.0%)
Total Deposits	$684.0	$694.6	$669.6	($10.6)	(1.5%)

Customer Cash Management	$19.5	$16.7	$17.4	$2.8	16.8%
FHLB Advances	35.5	27.6	28.8	7.9	28.6%

Total Funding	$739.0	$738.9	$715.8	$0.1	(0.01%)
Cost of Funds*	0.45%	0.46%	0.47%		(1 bp)
(*including demand deposits)
Cost of Deposits	0.25 %	0.26%	0.26%	(.01)	(0.04%)

Mr. Crapps commented, "The tremendous loan growth experienced is the result of focused efforts in this key area and momentum remains strong. Pure deposit growth for the year has been solid, but did decline on a linked quarter basis due to approximately $12 million that was only on deposit for a brief period of time beginning late in the first quarter."

Revenue

Net Interest Income/Net Interest Margin

Net interest income was $6.2 million in the second quarter of 2015. This compares to $5.9 million in the same period of 2014. On a linked quarter basis, after adjusting for a material credit mark recovery in the first quarter, net interest income represents an increase of $136,000 in the second quarter over the adjusted first quarter result.

Net interest margin (taxable equivalent) declined in the second quarter to 3.34%, as compared to 3.38% during the same period of 2014. This compares to a first quarter of 2015 net interest margin (adjusted for the above referenced credit mark) of approximately 3.40%.

Mr. Crapps commented, "In this low interest rate environment, we continue to experience pressure on our margin. Our strategy and success in the remix of the asset side of our balance sheet will position us to mitigate this margin pressure and importantly continue to grow our net-interest income."

Non-Interest Income

Non-interest income, adjusted for securities gains and losses and excluding any loss on the early extinguishment of debt, increased 21.3% on a linked quarter basis to $2.397 million in the second quarter of 2015, up from $1.976 million in the first quarter of this year. Revenues in the mortgage line of business increased 33.3% on a linked quarter basis to $980 thousand in the second quarter of 2015, up from $735 thousand in the first quarter of 2015 and $701 thousand in the second quarter of 2014. Production increased to $30 million for the quarter with yields returning to more normalized levels. The investment advisory line of business also saw a significant revenue increase of 37.5% on a linked quarter basis to $407 thousand in the second quarter of 2015 up from $296 thousand in the first quarter of 2015 and $198 thousand in the second quarter of 2014. Mr. Crapps commented, "Our strategy of multiple revenue streams continues to serve us well with all of our lines of business growing revenue nicely."

Non-Interest Expense

Non-interest expense increased on a linked quarter basis to $6.389 million in the second quarter of 2015, up from $6.100 million in the first quarter of 2015. Included in this increase is additional variable compensation paid in the mortgage and investment advisory areas and additional marketing expense dedicated to an expanded loan marketing campaign. Also, during the second quarter of 2015, the company signed a contract to sell excess property adjacent to the Augusta banking office which was included as part of the February 2014 acquisition of Savannah River Banking Company. The contract price of the property was approximately the appraised value; however, during the second quarter the company recognized $100 thousand in expenses associated with this potential sale. Under the terms of the contract, there should be no additional charges or costs incurred by First Community associated with the sale of this property.

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

BALANCE SHEET DATA

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