First Community Corporation Announces Second Quarter Results and Cash Dividend

First Community Corporation Announces Second Quarter Results and Cash Dividend

PR Newswire

LEXINGTON, S.C., July 11, 2012

LEXINGTON, S.C., July 11, 2012 /PRNewswire/ --

Highlights

  o36% increase in net income available to common shareholders to $760,000 or
    $0.23 per share
  oContinued payment of cash dividend
  oCapital ratios of 9.94% (Tier 1 Leverage), 16.64% (Tier 1 Risk Based) and
    18.59% (Total Capital)
  oLoan portfolio quality better than peers, with NPA ratio decreasing to
    1.60%
  oOCC exam completed during the 2nd quarter results in lifting of regulatory
    agreement

Today, First Community Corporation (Nasdaq: FCCO), the holding company for
First Community Bank, reported net income available to common shareholders for
the second quarter of 2012. Net income available to common shareholders for
the second quarter of 2012 was $760 thousand as compared to $558 thousand in
the second quarter of 2011, an increase of 36.2%. Diluted earnings per common
share were $0.23 for the second quarter of 2012 as compared to $0.17 for the
second quarter of 2011, an increase of 35.3%.

(Logo: http://photos.prnewswire.com/prnh/20030508/FCCOLOGO )

Year-to-date 2012 net income available to common shareholders was $1.39
million compared to $961 thousand during the first six months of 2011, an
increase of 44.6%. Diluted earnings per share for the first half of 2012 were
$0.42, an increase of 44.8% over the same period in 2011, which produced
diluted earnings per share of $0.29.

Cash Dividend and Capital

The company announced that the Board of Directors has approved a cash dividend
for the second quarter of 2012. The company will pay a $.04 per share
dividend to holders of the company's common stock. This dividend is payable
August 3, 2012, to shareholders of record as of July 20, 2012.

During the second quarter of 2012, all of the company's regulatory capital
ratios continued to increase as compared to the prior year. Each of these
ratios (Leverage, Tier I Risk Based, and Total Risk Based) exceeds the well
capitalized minimum level currently required by regulatory statute. At June
30, 2012, the company's regulatory capital ratios (Leverage, Tier I Risk
Based, and Total Risk Based) were 9.94%, 16.64% and 18.59%, respectively.
This compares to the same ratios as of June 30, 2011, of 8.98%, 14.57% and
15.87%, respectively. Additionally, it should be noted that the regulatory
capital ratios for the company's wholly owned subsidiary, First Community
Bank, N.A., were 9.93%, 16.62% and 17.88%, respectively, as of June 30, 2012,
compared to 8.75%, 14.21% and 15.49%, respectively, as of June 30, 2011. The
improvement in the capital ratios is a result of the company's continued
earnings and its success in executing its previously announced strategy of
controlling the overall size of its balance sheet. 

Further, the company's ratio of tangible common equity to tangible assets
showed growth increasing to 6.24% as of June 30, 2012, as compared to 5.33% as
of June 30, 2011. Tangible book value is $11.14 per share as of June 30,
2012, as compared to $9.85 as of June 30, 2011.

Asset Quality

Loan Portfolio

Non-performing assets declined by $1,250,000 (11.6%) to $9.5 million (1.60% of
total assets) at the end of the quarter, as compared to $10.8 million (1.80%)
as of March 31, 2012. This ratio compares favorably with the bank's peer
group non-performing assets ratio which the company believes to be in excess
of 4.00% (based on information obtained from SNL Financial, LC).

Troubled debt restructurings that are still accruing interest increased during
the quarter to $4.1 million from $3.7 million at March 31, 2012. Loans past
due 30-89 days decreased from $3.3 million (0.99% of loans) to $2.4 million
(0.74% of loans) on a linked quarter basis. 

Net loan charge-offs for the quarter were $75 thousand (0.09% annualized
ratio) as compared to the same period in the prior year total of $329 thousand
(0.40% annualized ratio). The company believes that this compares very
favorably to its peer group average.

Classified loans decreased slightly in the quarter to $16.6 million. This
decrease is a continuation of a trend of declining balances of classified
loans. The ratio of classified loans plus OREO now stands at 34.07% of total
regulatory risk-based capital as of June 30, 2012.

Mike Crapps, First Community President and CEO, commented, "Nearly every
metric for loan portfolio quality showed improvement during the quarter and it
should be noted that we were already performing at better than peer levels.
This is evidence of the credit culture of this organization and can be
attributed to the men and women that implement this culture daily and to the
high quality of our customers."

Balance Sheet

The company continued to move forward with its previously announced strategy
of controlling the overall size of its balance sheet while improving the mix
of both assets and liabilities. As seen below, the company reported continued
success in growing pure deposits (deposits other than certificates of
deposit), while reducing the balances of certificates of deposit and Federal
Home Loan Bank advances, thereby achieving an even lower cost of funding.

(Numbers in millions)
                                    12/31/11 6/30/12 $        %
                                   12/31/10                   Variance Variance
Total Pure Deposits        $259.8    $286.8   $307.9  $21.1    7.4%
CDs <$100K         $122.3    $107.4   $100.2  ($7.2)   (6.7%)
CDs>$100K    73.2      70.4     65.9    (4.5)    (6.4%)
Brokered CDs    0.0       0.0      0.0     0.0      0.0%
Total CDs  $195.5    $177.8   $166.1  ($11.7)  (6.6%)
Total Deposits     $455.3    $464.6   $474.0  $ 9.4    2.0%
Customer Cash Management        12.7      13.6     12.8    (0.8)    ( 5.9%)
FHLB Advances   68.1      43.9     38.5    (5.4)    (12.3%)
Total                              $536.2    $522.1   525.3   3.2      0.6%
Funding

Mr. Crapps commented, "Our success in serving our target market of local
businesses and professionals is evidenced by the tremendous momentum we have
built in the growth of pure deposits. This success has enabled us to continue
to reduce our cost of funds and control our balance sheet size by reducing
certificates of deposit and Federal Home Loan Bank advances. Certificates of
deposit now represent only 35.0% of the total deposits. As a result of this
success, the cost of funds, including non-interest bearing demand deposits,
has declined to 1.03% from 1.33% in the second quarter of 2011." Mr. Crapps
continued, "While we have achieved much success on the liability side of our
balance sheet, we are frustrated by continuing weak demand in our efforts to
grow our loan portfolio. Nevertheless, our team will continue, with renewed
effort, to identify, underwrite, and appropriately price sound loan
opportunities."

Net Interest Income/Net Interest Margin

Net interest income was $4.5 million for the second quarter of 2012, which
represents a decrease as compared to $4.6 million in the second quarter of
2011. The net interest margin, on a tax equivalent basis, was 3.30% for the
second quarter of 2012, which represents a decrease from 3.37% during the same
period in 2011. These decreases are driven primarily by declining yields in
the investment portfolio as the company sold non-agency mortgage backed
securities (MBS) and replaced those investments with lower risk weighted
investments earning lower yields. The company has now substantially reduced
its non-agency MBS portfolio, with only $1.7 million remaining that are rated
below investment grade by the rating agencies. 

Non-Interest Income

Non-interest income increased significantly by 52.3% to $1,855,000 as compared
to $1,218,000 in the second quarter of 2011. This increase was led by the
success in mortgage origination revenue increasing from $263,000 to $877,000
this quarter. Mr. Crapps commented, "The acquisition of Palmetto South
Mortgage Corporation in July of 2011 continues to be beneficial and, in
combination with the legacy mortgage unit, is a real story of success. It is
also noteworthy that in this quarter, core non-interest income (non-interest
income derived from customer activities) represented 30.7% of total revenues.
This diversification of revenue positions us to be successful even in a low
net interest margin environment."

Non-Interest Expense

Non-interest expense increased by $481 thousand (10.9%) to $4.9 million for
the second quarter. This was driven primarily by increased salary and benefit
costs in the mortgage unit and increased OREO expenses.

Regulatory Matters

The OCC completed its safety and soundness examination of the bank during the
quarter. As previously announced, upon conclusion of the exam, the OCC lifted
its formal agreement with the bank. This agreement was entered into on April
6, 2010 based on the findings of the OCC during its 2009 examination of the
bank. As reflected in the formal agreement, the OCC's primary concern with
the bank was driven by rating agency downgrades of non-agency MBSs in the
bank's investment portfolio. These securities, purchased in 2004 through
2008, were all rated AAA by the rating agencies at the time of purchase;
however, they were impacted by the economic recession and the stress on the
residential housing sector and were subsequently downgraded, many to below
investment grade. As noted above, the bank has reduced the non-agency MBSs in
its investment portfolio that are rated below investment grade to $1.7
million.

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

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 and expectations, and are thus
prospective. Such forward-looking statements are subject to risks,
uncertainties, and other factors, such as a downturn in the economy, 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
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,
                                2012      2011       2012      2011       2012      2011
 Interest Income               $       $        $       $        $        $ 
                                5,840     6,466      6,044     6,440      11,884    12,906
 Interest Expense              1,389     1,847      1,535     1,986      2,924     3,833
 Net Interest Income           4,451     4,619      4,509     4,454      8,960     9,073
 Provision for Loan Losses     71        390        230       360        301       750
 Net Interest Income After     4,380     4,229      4,279     4,094      8,659     8,323
Provision
 Non-interest Income:
 Deposit service charges     375       478        389       458        764       936
 Mortgage origination fees   877       263        723       191        1,600     454
 Investment advisory fees    162       138        147       175        309       313
and non-deposit commissions
 Gain (loss) on sale of      (38)      7          11        134        (27)      141
securities
 Gain (loss) on sale of      (36)      (44)       50        (47)       14        (91)
other assets
 Fair value gain (loss)      (4)       (129)      (33)      4          (37)      (125)
adjustment

Other-than-temporary-impairment -         -          (200)     (4)        (200)     (4)
write-down on securities
 Loss on early               -                    (121)     -          (121)
extinguishment of debt
 Other                       519       505        497       516        1,016     974
 Total non-interest income     1,855     1,218      1,463     1,427      3,318     2,598
 Non-interest Expense:
 Salaries and employee       2,747     2,196      2,558     2,313      5,305     4,509
benefits
 Occupancy                   335       308        345       309        680       617
 Equipment                   283       290        287       281        570       571
 Marketing and public        108       126        186       171        294       297
relations
 FDIC assessment            196       250        184       255        380       505
 Other real estate expenses  267       158        119       346        386       504
 Amortization of intangibles 51        155        51        155        102       310
 Other                       921       944        882       893        1,803     1,790
 Total non-interest expense    4,908     4,427      4,612     4,723      9,520     9,103
 Income before taxes           1,327     1,020      1,130     798        2,457     1,818
 Income tax expense            399       294        331       228        730       522
 Net Income                    928       726        $      $       $       $  
                                                     799       570        1,727     1,296
 Preferred stock dividends     168       168        169       167        337       335
 Net income available to       $      $       $      $       $       $   
common shareholders             760       558        630       403        1,390     961
 Per share data:
 Net income, basic         $       $        $       $        $       $  
                                0.23     0.17      0.19     0.12      0.42     0.29
 Net income, diluted       $       $        $       $        $       $  
                                0.23     0.17      0.19     0.12      0.42     0.29
 Average number of shares      3,295,804 3,275,515  3,308,677 3,271,758  3,302,236 3,273,647
outstanding - basic
 Average number of shares      3,356,785 3,275,515  3,329,175 3,271,758  3,343,040 3,273,647
outstanding - diluted
                                -                                         -
 Return on average assets      0.51%     0.39%      0.43%     0.27%      0.47%     0.32%
 Return on average common      8.02%     7.31%      6.86%     5.31%      7.46%     6.15%
equity:
 Return on average common      8.22%     7.46%      7.09%     5.45%      7.64%     6.30%
tangible equity:
 Net Interest Margin (non      3.25%     3.37%      3.34%     3.30%      3.32%     3.33%
taxable equivalent)
 Net Interest Margin (taxable  3.30%     3.37%      3.36%     3.30%      3.35%     3.34%
equivalent)



FIRST COMMUNITY
CORPORATION
BALANCE SHEET DATA
(Dollars in thousand,
except per share data)
                                    At June 30,                     December
                                                                     31,
                                    2012      2011                   2011
 Total Assets                      $       $                   $   
                                    598,014   605,179                593,887
 Other short-term                  18,205    13,467                 5,893
investments (1)
 Investment                        201,381   210,742                206,669
Securities
 Loans held for sale               4,356     625                    3,725
 Loans                             324,913   325,671                324,311
 Allowance for Loan                4,742     4,716                  4,699
Losses
 Total Deposits                    474,019   470,917                464,585
 Securities Sold
Under Agreements to                 12,817    15,551                 13,616
Repurchase
 Federal Home Loan                 38,496    54,228                 43,862
Bank Advances
 Junior Subordinated               17,916    15,464                 17,913
Debt
 Shareholders' equity              49,296    43,926                 47,896
 Book Value Per                    $     $                  $    
Common Share                        11.39     10.02                 11.11
 Tangible Book Value               $     $                 $    
Per Common Share                   11.14     9.85                  10.83
 Equity to Assets                  8.24%     7.26%                  8.06%
 Tangible common
equity to tangible                  6.24%     5.33%                  6.04%
assets
 Loan to Deposit                   69.46%    69.29%                 70.61%
Ratio
 Allowance for Loan                1.46%     1.45%                  1.45%
Losses/Loans
(1) Includes federal funds sold, securities sold under agreements to resell
and interest-bearing deposits
 Regulatory Ratios:                At June 30,                     December
                                                                     31,
                                    2012      2011                   2011
 Leverage Ratio                   9.94%     8.98%                  9.40%
 Tier 1 Capital                   16.64%    14.57%                 15.33%
Ratio
 Total Capital Ratio              18.59%    15.87%                 17.25%
 Tier 1 Regulatory                $      $                  $    
Capital                             58,822    53,884                 56,207
 Total Regulatory                 $      $                  $    
Capital                             68,706    58,678                 60,801
Average Balances:       Three months ended                Six months ended
                        June 30,                          June 30,
                        2012        2011                  2012       2011
 Average Total Assets  $598,124    $                   $596,048   $   
                                    603,209                          602,899
 Average Loans         332,081     330,939               330,342    332,301
 Average Earning       550,899     550,347               547,022    549,192
Assets
 Average Deposits      471,955     466,985               469,270    464,022
 Average Other         71,746      88,727                72,838     91,813
Borrowings
 Average               49,207      43,340                48,650     42,554
Shareholders' Equity
Asset Quality:          June 30,    March 31  December
                                              31,
                        2012        2012      2011
Loan Risk Rating by
Category (End of
Period)
 Special Mention  $  9,917  $     $    
                                    8,632     8,856
 Substandard      16,612      16,807    17,814
 Doubtful         -           -         -
 Pass             302,740     309,514   301,366
                        $329,269    $       $   
                                    334,953   328,036
                        June 30,    March 31, December
                                              31,
                        2012        2012      2011
 Nonperforming
Assets:
 Non-accrual      $  4,640  $     $    
loans                               5,416     5,403
 Other real       4,909       5,383     7,351
estate owned
 Accruing loans
past due 90 days or     -           -         25
more
 Total       $  9,549  $      $    
nonperforming assets                10,799    12,779
Accruing trouble debt  $  4,081  $     $    
restructurings                      3,651     3,950
                        Three months ended              Six months ended
                        June 30,                          June 30,
                        2012        2011                  2012       2011
 Loans charged-off     $    88 $                 $   292 $    
                                     334                             965
 Overdrafts            7           8                     15         15
charged-off
 Loan recoveries       (18)        (10)                  (41)       (27)
 Overdraft recoveries  (2)         (3)                   (7)        (8)
 Net Charge-offs    $    75 $                 $   259 $    
                                     329                             945
 Net charge-offs to    0.02%       0.10%                 0.08%      0.28%
average loans



FIRST COMMUNITY CORPORATION
Yields on Average Earning Assets and Rates
 on Average Interest-Bearing Liabilities
                     Three months ended June 30, Three months ended June 30,
                     2012                        2011
                     Average Interest    Yield/ Average Interest    Yield/
                     Balance Earned/Paid  Rate   Balance Earned/Paid  Rate
Assets
Earning assets
 Loans              $       $   4,629 5.59%  $       $   4,821 5.84%
                     332,081                     330,939
 Securities:        200,308 1,189        2.39%  203,158 1,625        3.21%
 Federal funds sold
and securities       18,510  22           0.48%  16,250  20           0.49%
purchased
 Total        550,899 5,840        4.26%  550,347 6,466        4.71%
earning assets
Cash and due from    8,408                       7,078
banks
Premises and         17,416                      17,805
equipment
Other assets         26,148                      32,743
Allowance for loan   (4,747)                     (4,764)
losses
 Total assets  $                           $
                     598,124                     603,209
Liabilities
Interest-bearing
liabilities
 Interest-bearing   $      $       0.18%  $      $       0.37%
transaction accounts 89,647  41                  81,150  75
 Money market       52,309  42           0.32%  49,534  58           0.47%
accounts
 Savings deposits   38,752  12           0.12%  31,957  13           0.16%
 Time deposits      201,079 713          1.43%  221,800 1,039        1.88%
 Other borrowings   71,746  581          3.26%  88,727  662          2.99%
 Total
interest-bearing     453,533 1,389        1.23%  473,168 1,847        1.57%
liabilities
Demand deposits      90,168                      82,544
Other liabilities    5,216                       4,157
Shareholders' equity 49,207                      43,340
 Total liabilities $                           $
and shareholders'    598,124                     603,209
equity
Cost of funds,
including demand                          1.03%                       1.33%
deposits
Net interest spread                      3.03%                       3.15%
Net interest                 $   4,451 3.25%          $   4,619 3.37%
income/margin
Net interest         $                        $   
income/margin FTE     65   $   4,516 3.30%    5  $   4,624 3.37%
basis



FIRST COMMUNITY CORPORATION
Yields on Average Earning Assets and Rates
 on Average Interest-Bearing Liabilities
                     Six months ended June 30,     Six months ended June 30,
                     2012                          2011
                     Average   Interest    Yield/ Average Interest    Yield/
                     Balance   Earned/Paid  Rate   Balance Earned/Paid  Rate
Assets
Earning assets
 Loans              $ 330,342 $   9,321 5.67%  $       $   9,629 5.84%
                                                   332,301
 Securities:        201,908   2,590        2.58%  199,775 3,236        3.27%
 Federal funds sold
and securities
purchased
 under agreements 14,772    38           0.52%  17,116  41           0.48%
to resell
 Total        547,022   11,949       4.39%  549,192 12,906       4.74%
earning assets
Cash and due from    8,520                         7,542
banks
Premises and         17,430                        17,887
equipment
Other assets         27,815                        33,123
Allowance for loan   (4,739)                       (4,845)
losses
 Total assets  $ 596,048                     $
                                                   602,899
Liabilities
Interest-bearing
liabilities
 Interest-bearing   $        83           0.19%  $      148          0.37%
transaction accounts 87,318                        79,774
 Money market       51,226    84           0.33%  47,999  111          0.47%
accounts
 Savings deposits   37,598    24           0.13%  31,168  26           0.17%
 Time deposits      204,822   1,544        1.52%  223,198 2,158        1.95%
 Other borrowings   72,838    1,189        3.28%  91,813  1,390        3.05%
 Total
interest-bearing     453,802   2,924        1.30%  473,952 3,833        1.63%
liabilities
Demand deposits      88,306                        81,883
Other liabilities    5,290                         4,510
Shareholders' equity 48,650                        42,554
 Total liabilities                               $
and shareholders'    $ 596,048                     602,899
equity
Cost of funds,
including demand                            1.08%                       1.39%
deposits
Net interest spread                        3.10%                       3.11%
Net interest                   $   9,025 3.32%          $   9,073 3.33%
income/margin
Net interest         $                         $   
income/margin FTE    96       $   9,121 3.35%   13   $   9,086 3.34%
basis



SOURCE First Community Corporation

Contact: Joseph G. Sawyer, Senior Vice President & Chief Financial Officer or
Robin D. Brown, Senior Vice President & Director of Marketing, +1-803-951-
2265
 
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