8-K
First Community Corp /Sc/ (FCCO)
UNITED STATES
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
D.C. 20549
FORM
8-K
CURRENT REPORT
PURSUANT TO
SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): April 20, 2022
FirstCommunity Corporation
(Exact name of registrant as specified in its charter)
South Carolina
(State or other jurisdiction of incorporation)
| 000-28344 | 57-1010751 |
|---|---|
| (Commission<br> File Number) | (IRS<br> Employer Identification No.) |
| 5455<br> Sunset Blvd, Lexington, South Carolina | 29072 |
| (Address<br> of principal executive offices) | (Zip<br> Code) |
(803) 951-2265
(Registrant’s telephone number, including area code)
Not Applicable
(Former name or former address, if changed since last report.)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Act:
| Title<br> of each class | Trading<br> Symbol(s) | Name<br> of exchange on which registered |
|---|---|---|
| Common<br> stock, par value $1.00 per share | FCCO | The Nasdaq Capital Market |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company o
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o
Item 2.02. Results of Operations and Financial Condition.
On April 20, 2022, First Community Corporation (the “Company”), holding company for First Community Bank, issued a press release announcing its financial results for the period ended March 31, 2022. The Company announced that the Board of Directors has approved a cash dividend for the first quarter of 2022. The Company will pay a $0.13 per share dividend to holders of the Company’s common stock. This dividend is payable on May 17, 2022 to shareholders of record as of May 3, 2022.
A copy of the press release is attached hereto as Exhibit 99.1.
Item 8.01. Other Events.
On April 20, 2022, the Company announced that its Board of Directors approved the repurchase up to 375,000 shares of its common stock, which represents approximately 5% of the Company’s 7,559,760 shares outstanding as of March 31, 2022.
Under the repurchase plan, the Company may repurchase shares from time to time, through December 31, 2023, by means of, among other means, open market purchases and in solicited and unsolicited privately negotiated transactions. The actual means and timing of any purchases, quantity of purchased shares and prices will be, subject to certain limitations, at the discretion of management during such period, and will depend on a number of factors, including the market price of the Company’s common stock, share issuances under Company equity plans, general market and economic conditions, and applicable legal and regulatory requirements.
The Company’s management believes the repurchase plan, depending upon market and business conditions, may, among other things, provide capital management opportunities for the Company. The Company is not obligated to repurchase any such shares under the repurchase plan. The repurchase plan may be discontinued, suspended or restarted at any time.
FORWARD-LOOKING STATEMENTS
Certain statements in this report may 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. Forward looking statements can be identified by words such as “anticipate,” “expects,” “intends,” “believes,” “may,” “likely,” “will,” “plans” or other statements that indicate future periods. 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, including, but not limited to, due to the negative impacts and disruptions resulting from the outbreak of the novel coronavirus, or COVID-19, on the economies and communities we serve, which may continue to have an adverse impact on our business, operations and performance, and could continue to have a negative impact on our credit portfolio, share price, borrowers, and on the economy as a whole, both domestically and globally; (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 legislation, regulation, policies, or administrative practices, whether by judicial, governmental, or legislative action; (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; 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, except as required by law.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits
| Item | Exhibits |
|---|---|
| 99.1 | Earnings Press Release for the period ended March 31, 2022. |
| 104 | Cover Page Interactive Data File (the cover page XBRL tags are embedded within the Inline XBRL document). |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| FIRST COMMUNITY CORPORATION | |
|---|---|
| By: | /s/<br> D. Shawn Jordan |
| Name: | D.<br> Shawn Jordan |
| Title: | Chief<br> Financial Officer |
Dated: April 20, 2022
Exhibit 99.1
News Release
For Release April 20, 2022
9:00A.M.
| Contact: | D. Shawn Jordan, Executive<br> Vice President & Chief Financial Officer or |
|---|---|
| Robin D. Brown, Executive Vice President<br> & Chief Marketing Officer | |
| (803) 951- 2265 |
First CommunityCorporation Announces First Quarter Results and Cash Dividend
Lexington,SC – April 20, 2022
Highlights for FirstQuarter 2022
| · | Net<br> income of $3.5 million |
|---|---|
| · | Pre-tax<br> pre-provision earnings of $4.2 million |
| --- | --- |
| · | Diluted<br> EPS of $0.46 per common share |
| --- | --- |
| · | Pure<br> (non-CD) deposit growth, including customer cash management accounts, of $83.5 million<br> during the quarter, a 25.9% annualized growth rate |
| --- | --- |
| · | Total<br> loan growth of $12.1 million during the quarter. Loan growth, excluding Paycheck Protection<br> Program (PPP) loans was $13.3 million, a 6.3% annualized growth rate |
| --- | --- |
| · | Key<br> credit quality metrics continued to be strong during the quarter with net loan recoveries<br> of $19 thousand, non-performing assets ratio of 0.09%, and past due loans of 0.07% |
| --- | --- |
| · | Investment<br> advisory revenue of $1.2 million. Assets under management exceeded $632 million at March<br> 31, 2022 |
| --- | --- |
| · | Mortgage<br> revenue of $839 thousand |
| --- | --- |
| · | Cash<br> dividend of $0.13 per common share, the 81^st^ consecutive quarter of cash dividends<br> paid to common shareholders |
| --- | --- |
| · | Share<br> Repurchase authorization of 375,000 shares |
| --- | --- |
| · | Announced<br> expansion into York County with a loan production office in Rock Hill, South Carolina |
| --- | --- |
Today, First Community Corporation (Nasdaq: FCCO), the holding company for First Community Bank, announced earnings and discussed the results of operations and the company’s activities during the first quarter of 2022.
First Community reported net income for the first quarter of 2022 of $3.5 million with diluted earnings per common share of $0.46. This compares to net income and diluted earnings per common share of $3.9 million and $0.52, respectively, on a linked quarter basis and $3.3 million and $0.43 year-over-year, respectively. Pre-tax pre-provision earnings during the first quarter of 2022 were $4.2 million. This compares to pre-tax pre-provision earnings of $4.9 million for fourth quarter of 2021 and pre-tax pre-provision earnings of $4.3 million for the first quarter of 2021. For comparison purposes, it should be noted that fee accretion related to PPP loans was $44 thousand in the first quarter of 2022. This compares to $241 thousand in the fourth quarter of 2021 and $542 thousand in the first quarter of 2021.
CashDividend and Capital
The Board of Directors has approved a cash dividend for the first quarter of 2022 of $0.13 per common share. This dividend is payable on May 17, 2022 to shareholders of record of the company’s common stock as of May 3, 2022. First Community President and CEO, Mike Crapps commented, “The entire board is pleased that our performance enables the company to continue its cash dividend for the 81^st^consecutive quarter.”
The Company’s previously announced share repurchase plan expired at the market close on March 31, 2022 with no shares repurchased under the plan. The Company’s Board of Directors has approved a new share repurchase plan that provides for the repurchase of up to 375,000 shares of its common stock, which represents approximately 5% of the Company’s 7,559,760 shares outstanding as of March 31, 2022. This new share repurchase plan expires on December 31, 2023 [date corrected]. Under the repurchase plan, the Company may repurchase shares from time to time. Crapps noted, “This approved share repurchase provides us with some flexibility in managing capital going forward.”
Each of the regulatory capital ratios for the bank exceed the well capitalized minimum levels currently required by regulatory statute. At March 31, 2022, the bank’s regulatory capital ratios, Leverage, Tier I Risk Based and Total Risk Based, were 8.43%, 14.14%, and 15.29%, respectively. This compares to the same ratios as of March 31, 2021 of 8.73%, 13.20%, and 14.34%, respectively. As of March 31, 2022, the bank’s Common Equity Tier One ratio was 14.14% compared to 13.20% at March 31, 2021. The bank’s Tangible Common Equity to Tangible Assets ratio (TCE ratio) was 7.36% at March 31, 2022. Further, the Company’s TCE ratio was 6.71% as of March 31, 2022 compared to 7.92% as of March 31, 2021. Crapps commented, “While the bank’s regulatory capital ratios have actually increased in some cases, the TCE ratio has declined. This is primarily due to the rapid growth in the Company’s balance sheet and the Accumulated Other Comprehensive Income (Loss) (AOCI) resulting from an increase in market interest rates which have negatively impacted the fair value of our investment portfolio.”
LoanPortfolio Quality/Allowance for Loan Losses
The Company’s asset quality metrics as of March 31, 2022 remained sound. The non-performing asset ratio was 0.09% of total assets with $1.5 million in non-performing assets. Loans past due 30 days or more represented only 0.07% of the loan portfolio. The ratio of classified loans plus OREO is 6.13% of total bank regulatory risk-based capital at March 31, 2022. During the first quarter, the bank had net loan recoveries of $19 thousand.
The Company recorded a $125 thousand dollar credit in provision for loan losses during the quarter. As a result, the Allowance for Loan Losses as a percentage of total loans decreased slightly to 1.26%.
BalanceSheet
Total loans increased by $12.1 million during the first quarter of 2022, a 5.7% annualized growth rate. Ted Nissen, First Community Bank President and Chief Banking Officer, noted, “We are pleased with our loan activity during the first quarter with production of $55.3 million and strong momentum going into the second quarter of the year.” Total loan growth during the quarter, excluding PPP loans, was $13.3 million, a 6.3% annualized growth rate. Year-over-year, loan growth, excluding PPP loans and a related credit facility, increased $71.2 million, an 8.8% growth rate. As of March 31, 2022, the Company had only $269 thousand in PPP loans remaining on the balance sheet.
Total deposits were $1.43 billion at March 31, 2022 compared to $1.36 billion at December 31, 2021. Pure deposits, which are defined as total deposits less certificates of deposits, increased $69.7 million during the first quarter, to $1.3 billion at March 31, 2022, a 22.5% annualized growth rate. The bank had no brokered deposits and no listing services deposits at March 31, 2022. Securities sold under agreements to repurchase, which are related to customer cash management accounts or business sweep accounts, were $68.1 million at March 31, 2022 compared to $54.2 million at December 31, 2021, an increase of 25.5%. Costs of deposits decreased on a linked quarter basis to 0.10% in the first quarter of 2022 from 0.11% in the fourth quarter of 2021. Cost of funds also decreased on a linked quarter basis to 0.13% in the first quarter of 2022 from 0.14% in the fourth quarter of 2021. Mr. Crapps commented, “A strength of our bank has been and continues to be our low-cost deposit base and the strong momentum in deposit growth has continued into 2022. While our cost of deposits and cost of funds decreased again in the first quarter of 2022, in this rising rate market that trend will reverse and we are very focused on continuing to manage these expenses.”
Net Interest Income/Net Interest Margin
Net interest income was $10.7 million in the first quarter of 2022 compared to $11.2 million in the fourth quarter of 2021 and $10.6 million in the first quarter of 2021. The net interest margin, on a taxable equivalent basis, was 2.91% for the first quarter of 2022 compared to 3.01% in the fourth quarter of the 2021 and 3.23% in the first quarter of 2021.
Non-Interest Income
Non-interest income for the first quarter of 2022 was $3.4 million, compared to $3.6 million in the fourth quarter of 2021 and $3.3 million in the first quarter of 2021. The mortgage line of business had fee revenue of $839 thousand in the first quarter of 2022 on production of $30.0 million. This compares to fee revenue and production year-over-year of $990 thousand and $42.7 million, respectively. With the headwinds of low housing inventories and a rising interest rate market, the Company is exploring additional mortgage products to help offset anticipated production challenges.
Revenue from the financial planning and investment advisory line of business increased 6.9% on a linked quarter basis to $1.2 million for the first quarter of 2022 compared to $1.1 million in the fourth quarter of 2021. Year over year, revenue increased 36.6% from $877 thousand in the first quarter of 2021. Assets Under Management (AUM) were $632.8 million at March 31, 2022 compared to $650.9 million at December 31, 2021, and $519.3 million at March 31, 2021.
Non-Interest Expense
Non-interest expense increased $76 thousand on a linked quarter basis to $9.954 million in the first quarter of 2022 from $9.878 million in the fourth quarter of 2021. On a related note, the effective income tax rate for the first quarter of 2022 was 18.44% compared to 21.16% in the fourth quarter of 2021 and 21.49% in the first quarter of 2021. The reduction in the effective tax rate this quarter was due to a non-recurring tax adjustment of $153 thousand.
Other
On March 1, 2022, the Company announced plans to enter the Piedmont Region of South Carolina with the addition of a loan production office in York County staffed with a team of veteran local bankers. The Company plans to follow with a full-service banking office in the future. During the first quarter of 2022, the Company experienced one month of impact to non-interest expense for this new initiative.
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 is a full-service commercial bank offering deposit and loan products and services, residential mortgage lending and financial planning/investment advisory services for businesses and consumers. First Community serves customers in the Midlands, Aiken, Upstate and Piedmont Regions of South Carolina as well as Augusta, Georgia. For more information, visit www.firstcommunitysc.com.
FORWARD-LOOKING STATEMENTS
This news release and certain statements by our management may 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. Forward looking statements can be identified by words such as “anticipate”, “expects”, “intends”, “believes”, “may”, “likely”, “will”, “plans” or other statements that indicate future periods. 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 including, but not limited to, due to the negative impacts and disruptions resulting from the outbreak of the novel coronavirus, or COVID-19, on the economies and communities we serve, which has had and may continue to have an adverse impact on our business, operations, and performance, and could continue to have a negative impact on our credit portfolio, share price, borrowers, and on the economy as a whole both domestically and globally; (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 legislation, regulation, policies or administrative practices, whether by judicial, governmental, or legislative action, (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; 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, except as required by law.
FIRST COMMUNITYCORPORATION
BALANCESHEET DATA
(Dollarsin thousands, except per share data)
| As of | |||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| March 31, | December 31, | September 30, | June 30, | March 31, | |||||||||||
| 2022 | 2021 | 2021 | 2021 | 2021 | |||||||||||
| Total Assets | $ | 1,652,279 | $ | 1,584,508 | $ | 1,560,326 | $ | 1,514,973 | $ | 1,492,494 | |||||
| Other Short-term Investments and CD's^1^ | 68,169 | 47,049 | 55,259 | 52,316 | 88,389 | ||||||||||
| Investment Securities | 579,699 | 566,624 | 515,260 | 470,669 | 407,547 | ||||||||||
| Loans Held for Sale | 12,095 | 7,120 | 6,213 | 11,416 | 23,481 | ||||||||||
| Loans | |||||||||||||||
| Paycheck Protection Program (PPP) Loans | 269 | 1,467 | 9,109 | 47,229 | 61,836 | ||||||||||
| Non-PPP Loans | 875,528 | 862,235 | 872,411 | 831,089 | 807,230 | ||||||||||
| Total Loans | 875,797 | 863,702 | 881,520 | 878,318 | 869,066 | ||||||||||
| Allowance for Loan Losses | 11,063 | 11,179 | 11,025 | 10,638 | 10,563 | ||||||||||
| Goodwill | 14,637 | 14,637 | 14,637 | 14,637 | 14,637 | ||||||||||
| Other Intangibles | 879 | 919 | 959 | 1,011 | 1,063 | ||||||||||
| Total Deposits | 1,430,748 | 1,361,291 | 1,333,568 | 1,289,883 | 1,271,440 | ||||||||||
| Securities Sold Under Agreements to Repurchase | 68,060 | 54,216 | 59,821 | 60,487 | 60,319 | ||||||||||
| Federal Home Loan Bank Advances | — | — | — | — | — | ||||||||||
| Junior Subordinated Debt | 14,964 | 14,964 | 14,964 | 14,964 | 14,964 | ||||||||||
| Shareholders' Equity | 125,380 | 140,998 | 139,113 | 137,927 | 132,687 | ||||||||||
| Book Value Per Common Share | $ | 16.59 | $ | 18.68 | $ | 18.44 | $ | 18.29 | $ | 17.63 | |||||
| Tangible Book Value Per Common Share | $ | 14.53 | $ | 16.62 | $ | 16.37 | $ | 16.22 | $ | 15.55 | |||||
| Equity to Assets | 7.59 | % | 8.90 | % | 8.92 | % | 9.10 | % | 8.89 | % | |||||
| Tangible Common Equity to Tangible Assets | 6.71 | % | 8.00 | % | 8.00 | % | 8.16 | % | 7.92 | % | |||||
| Loan to Deposit Ratio (Includes Loans Held for Sale) | 62.06 | % | 63.97 | % | 66.57 | % | 68.98 | % | 70.20 | % | |||||
| Loan to Deposit Ratio (Excludes Loans Held for Sale) | 61.21 | % | 63.45 | % | 66.10 | % | 68.09 | % | 68.35 | % | |||||
| Allowance for Loan Losses/Loans | 1.26 | % | 1.29 | % | 1.25 | % | 1.21 | % | 1.22 | % | |||||
| Regulatory Capital Ratios (Bank): | |||||||||||||||
| Leverage Ratio | 8.43 | % | 8.45 | % | 8.56 | % | 8.48 | % | 8.73 | % | |||||
| Tier 1 Capital Ratio | 14.14 | % | 13.97 | % | 13.58 | % | 13.52 | % | 13.20 | % | |||||
| Total Capital Ratio | 15.29 | % | 15.15 | % | 14.74 | % | 14.66 | % | 14.34 | % | |||||
| Common Equity Tier 1 Capital Ratio | 14.14 | % | 13.97 | % | 13.58 | % | 13.52 | % | 13.20 | % | |||||
| Tier 1 Regulatory Capital | $ | 135,555 | $ | 132,918 | $ | 129,741 | $ | 125,732 | $ | 122,854 | |||||
| Total Regulatory Capital | $ | 146,618 | $ | 144,097 | $ | 140,766 | $ | 136,370 | $ | 133,417 | |||||
| Common Equity Tier 1 Capital | $ | 135,555 | $ | 132,918 | $ | 129,741 | $ | 125,732 | $ | 122,854 |
^1^Includes federal funds sold, securities sold under agreement to resell and interest-bearing deposits
| Average Balances: | Three Months Ended | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| March 31, | December 31, | March 31, | ||||||||
| 2022 | 2021 | 2021 | ||||||||
| Average Total Assets | $ | 1,622,265 | $ | 1,593,657 | $ | 1,435,259 | ||||
| Average Loans (Includes Loans Held for Sale) | 876,349 | 880,026 | 886,379 | |||||||
| Average Earning Assets | 1,515,374 | 1,490,507 | 1,339,053 | |||||||
| Average Deposits | 1,374,813 | 1,363,235 | 1,208,081 | |||||||
| Average Other Borrowings | 97,517 | 77,098 | 78,266 | |||||||
| Average Shareholders' Equity | 137,245 | 140,180 | 135,580 | |||||||
| Asset Quality: | As of | |||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| March 31, | December 31, | September 30, | June 30, | March 31, | ||||||
| 2022 | 2021 | 2021 | 2021 | 2021 | ||||||
| Loan Risk Rating by Category (End of Period) | ||||||||||
| Special Mention | $ | 1,668 | $ | 1,626 | $ | 2,851 | $ | 3,085 | $ | 3,507 |
| Substandard | 7,849 | 7,872 | 7,992 | 11,707 | 12,136 | |||||
| Doubtful | — | — | — | — | — | |||||
| Pass | 866,280 | 854,204 | 870,677 | 863,526 | 853,423 | |||||
| Total Loans | $ | 875,797 | $ | 863,702 | $ | 881,520 | $ | 878,318 | $ | 869,066 |
| Nonperforming Assets | ||||||||||
| Non-accrual Loans | $ | 148 | $ | 250 | $ | 359 | $ | 3,986 | $ | 4,521 |
| Other Real Estate Owned and Repossessed Assets | 1,146 | 1,165 | 1,165 | 1,182 | 1,076 | |||||
| Accruing Loans Past Due 90 Days or More | 174 | — | — | 4,165 | — | |||||
| Total Nonperforming Assets | $ | 1,468 | $ | 1,415 | $ | 1,524 | $ | 9,333 | $ | 5,597 |
| Accruing Trouble Debt Restructurings | $ | 1,393 | $ | 1,444 | $ | 1,474 | $ | 1,510 | $ | 1,515 |
| Three Months Ended | ||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | |
| March 31, | December 31, | March 31, | ||||||||
| 2022 | 2021 | 2021 | ||||||||
| Loans Charged-off | $ | 1 | $ | 5 | $ | 16 | ||||
| Overdrafts Charged-off | 14 | 10 | 8 | |||||||
| Loan Recoveries | (20 | ) | (224 | ) | (8 | ) | ||||
| Overdraft Recoveries | (3 | ) | (4 | ) | (14 | ) | ||||
| Net Charge-offs (Recoveries) | $ | (8 | ) | $ | (213 | ) | $ | 2 | ||
| Net Charge-offs / (Recoveries) to Average Loans^2^ | (0.00 | )% | (0.10 | )% | 0.00 | % |
^2^ Annualized
FIRSTCOMMUNITY CORPORATION
INCOMESTATEMENT DATA
(Dollarsin thousands, except per share data)
| Three months ended | |||||||||
|---|---|---|---|---|---|---|---|---|---|
| March 31, | December 31, | March 31, | |||||||
| 2022 | 2021 | 2021 | |||||||
| Interest income | $ | 11,195 | $ | 11,656 | $ | 11,218 | |||
| Interest expense | 462 | 492 | 651 | ||||||
| Net interest income | 10,733 | 11,164 | 10,567 | ||||||
| Provision for loan losses | (125 | ) | (59 | ) | 177 | ||||
| Net interest income after provision | 10,858 | 11,223 | 10,390 | ||||||
| Non-interest income | |||||||||
| Deposit service charges | 265 | 262 | 246 | ||||||
| Mortgage banking income | 839 | 1,039 | 990 | ||||||
| Investment advisory fees and non-deposit commissions | 1,198 | 1,121 | 877 | ||||||
| Gain (loss) on sale of securities | — | — | — | ||||||
| Gain (loss) on sale of other assets | — | 103 | 77 | ||||||
| Other non-recurring income | 4 | 24 | 100 | ||||||
| Other | 1,068 | 1,077 | 1,006 | ||||||
| Total non-interest income | 3,374 | 3,626 | 3,296 | ||||||
| Non-interest expense | |||||||||
| Salaries and employee benefits | 6,119 | 6,188 | 5,964 | ||||||
| Occupancy | 705 | 740 | 730 | ||||||
| Equipment | 332 | 347 | 275 | ||||||
| Marketing and public relations | 361 | 324 | 396 | ||||||
| FDIC assessment | 130 | 114 | 169 | ||||||
| Other real estate expenses | 47 | (37 | ) | 29 | |||||
| Amortization of intangibles | 39 | 40 | 57 | ||||||
| Other | 2,221 | 2,162 | 1,920 | ||||||
| Total non-interest expense | 9,954 | 9,878 | 9,540 | ||||||
| Income before taxes | 4,278 | 4,971 | 4,146 | ||||||
| Income tax expense | 789 | 1,052 | 891 | ||||||
| Net income | $ | 3,489 | $ | 3,919 | $ | 3,255 | |||
| Per share data | |||||||||
| Net income, basic | $ | 0.46 | $ | 0.52 | $ | 0.44 | |||
| Net income, diluted | $ | 0.46 | $ | 0.52 | $ | 0.43 | |||
| Average number of shares outstanding - basic | 7,518,375 | 7,503,835 | 7,475,522 | ||||||
| Average number of shares outstanding - diluted | 7,594,840 | 7,564,909 | 7,522,568 | ||||||
| Shares outstanding period end | 7,559,760 | 7,548,638 | 7,524,944 | ||||||
| Return on average assets | 0.87 | % | 0.98 | % | 0.92 | % | |||
| Return on average common equity | 10.31 | % | 11.09 | % | 9.74 | % | |||
| Return on average tangible common equity | 11.63 | % | 12.48 | % | 11.01 | % | |||
| Net interest margin (non taxable equivalent) | 2.87 | % | 2.97 | % | 3.20 | % | |||
| Net interest margin (taxable equivalent) | 2.91 | % | 3.01 | % | 3.23 | % | |||
| Efficiency ratio^1^ | 69.93 | % | 66.74 | % | 69.16 | % |
^1^Calculated by dividing non-interest expense by net interest income on tax equivalent basis and non interest income, excluding gain on sale of other assets and other non-recurring noninterest income.
FIRSTCOMMUNITY CORPORATION
Yieldson Average Earning Assets and
Rateson Average Interest-Bearing Liabilities
| Three months ended March 31, 2022 | Three months ended March 31, 2021 | |||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Average | Interest | Yield/ | Average | Interest | Yield/ | |||||||||||
| Balance | Earned/Paid | Rate | Balance | Earned/Paid | Rate | |||||||||||
| Assets | ||||||||||||||||
| Earning assets | ||||||||||||||||
| Loans | ||||||||||||||||
| PPP loans | $ | 609 | $ | 45 | 29.97 | % | $ | 55,540 | $ | 684 | 4.99 | % | ||||
| Non-PPP loans | 875,740 | 8,958 | 4.15 | % | 830,839 | 8,767 | 4.28 | % | ||||||||
| Total loans | 876,349 | 9,003 | 4.17 | % | 886,379 | 9,451 | 4.32 | % | ||||||||
| Securities | 571,831 | 2,159 | 1.53 | % | 373,340 | 1,734 | 1.88 | % | ||||||||
| Other short-term investments and CD's | 67,194 | 33 | 0.20 | % | 79,334 | 33 | 0.17 | % | ||||||||
| Total earning assets | 1,515,374 | 11,195 | 3.00 | % | 1,339,053 | 11,218 | 3.40 | % | ||||||||
| Cash and due from banks | 28,511 | 18,429 | ||||||||||||||
| Premises and equipment | 32,722 | 34,351 | ||||||||||||||
| Goodwill and other intangibles | 15,536 | 15,726 | ||||||||||||||
| Other assets | 41,348 | 38,124 | ||||||||||||||
| Allowance for loan losses | (11,226 | ) | (10,424 | ) | ||||||||||||
| Total assets | $ | 1,622,265 | $ | 1,435,259 | ||||||||||||
| Liabilities | ||||||||||||||||
| Interest-bearing liabilities | ||||||||||||||||
| Interest-bearing transaction accounts | $ | 331,772 | $ | 45 | 0.06 | % | $ | 277,476 | $ | 58 | 0.08 | % | ||||
| Money market accounts | 295,536 | 112 | 0.15 | % | 254,412 | 141 | 0.22 | % | ||||||||
| Savings deposits | 145,340 | 20 | 0.06 | % | 125,981 | 19 | 0.06 | % | ||||||||
| Time deposits | 152,884 | 156 | 0.41 | % | 160,321 | 301 | 0.76 | % | ||||||||
| Other borrowings | 97,517 | 129 | 0.54 | % | 78,266 | 132 | 0.68 | % | ||||||||
| Total interest-bearing liabilities | 1,023,049 | 462 | 0.18 | % | 896,456 | 651 | 0.29 | % | ||||||||
| Demand deposits | 449,281 | 389,891 | ||||||||||||||
| Other liabilities | 12,690 | 13,332 | ||||||||||||||
| Shareholders' equity | 137,245 | 135,580 | ||||||||||||||
| Total liabilities and shareholders' equity | $ | 1,622,265 | $ | 1,435,259 | ||||||||||||
| Cost of deposits, including demand deposits | 0.10 | % | 0.17 | % | ||||||||||||
| Cost of funds, including demand deposits | 0.13 | % | 0.21 | % | ||||||||||||
| Net interest spread | 2.82 | % | 3.11 | % | ||||||||||||
| Net interest income/margin - excluding PPP loans | $ | 10,688 | 2.86 | % | $ | 9,883 | 3.12 | % | ||||||||
| Net interest income/margin - including PPP loans | $ | 10,733 | 2.87 | % | $ | 10,567 | 3.20 | % | ||||||||
| Net interest income/margin (tax equivalent) - excl. PPP loans | $ | 10,819 | 2.90 | % | $ | 9,991 | 3.16 | % | ||||||||
| Net interest income/margin (tax equivalent) - incl. PPP loans | $ | 10,864 | 2.91 | % | $ | 10,675 | 3.23 | % |
The tables below provide a reconciliation of non-GAAP measures to GAAP for the periods indicated:
| March 31, | December 31, | September 30, | June 30, | March 31, | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Tangible book value per common share | 2022 | 2021 | 2021 | 2021 | 2021 | ||||||||||
| Tangible common equity per common share (non-GAAP) | $ | 14.53 | $ | 16.62 | $ | 16.37 | $ | 16.22 | $ | 15.55 | |||||
| Effect to adjust for intangible assets | 2.06 | 2.06 | 2.07 | 2.07 | 2.08 | ||||||||||
| Book value per common share (GAAP) | $ | 16.59 | $ | 18.68 | $ | 18.44 | $ | 18.29 | $ | 17.63 | |||||
| Tangible common shareholders’ equity to tangible assets | |||||||||||||||
| Tangible common equity to tangible assets (non-GAAP) | 6.71 | % | 8.00 | % | 8.00 | % | 8.16 | % | 7.92 | % | |||||
| Effect to adjust for intangible assets | 0.88 | % | 0.90 | % | 0.92 | % | 0.94 | % | 0.97 | % | |||||
| Common equity to assets (GAAP) | 7.59 | % | 8.90 | % | 8.92 | % | 9.10 | % | 8.89 | % | |||||
| Three months ended | |||||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | ||||||
| March 31, | December 31, | March 31, | |||||||||||||
| Return on average tangible common equity | 2022 | 2021 | 2021 | ||||||||||||
| Return on average common tangible equity (non-GAAP) | 11.63 | % | 12.48 | % | 11.01 | % | |||||||||
| Effect to adjust for intangible assets | (1.32 | )% | (1.39 | )% | (1.27 | )% | |||||||||
| Return on average common equity (GAAP) | 10.31 | % | 11.09 | % | 9.74 | % | |||||||||
| Three months ended | |||||||||||||||
| March 31, | December 31, | March 31, | |||||||||||||
| Pre-tax, pre-provision earnings | 2022 | 2021 | 2021 | ||||||||||||
| Pre-tax, pre-provision earnings (non-GAAP) | $ | 4,153 | $ | 4,912 | $ | 4,323 | |||||||||
| Effect to adjust for pre-tax, pre-provision earnings | (664 | ) | (993 | ) | (1,068 | ) | |||||||||
| Net Income (GAAP) | $ | 3,489 | $ | 3,919 | $ | 3,255 | |||||||||
| Three months ended | |||||||||||||||
| --- | --- | --- | --- | --- | --- | --- | |||||||||
| March<br> 31, | |||||||||||||||
| Net interest margin excluding PPP Loans | 2022 | 2021 | |||||||||||||
| Net<br> interest margin excluding PPP loans (non-GAAP) | 2.86 | % | 3.12 | % | |||||||||||
| Effect<br> to adjust for PPP loans | 0.01 | 0.08 | |||||||||||||
| Net<br> interest margin (GAAP) | 2.87 | % | 3.20 | % | |||||||||||
| Three months ended | |||||||||||||||
| Net interest margin on a tax-equivalent basis excluding | March<br> 31, | ||||||||||||||
| PPP Loans | 2022 | 2021 | |||||||||||||
| Net<br> interest margin on a tax-equivalent basis excluding PPP loans (non-GAAP) | 2.90 | % | 3.16 | % | |||||||||||
| Effect<br> to adjust for PPP loans | 0.01 | 0.07 | |||||||||||||
| Net<br> interest margin on a tax equivalent basis (GAAP) | 2.91 | % | 3.23 | % | |||||||||||
| March 31, | December 31, | Growth | Annualized<br><br> Growth | ||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | |||||
| Loans and loan growth | 2022 | 2021 | Dollars | Rate | |||||||||||
| Non-PPP Loans and Related Credit Facilities (non-GAAP) | $ | 875,528 | 862,235 | 13,293 | 6.3 | % | |||||||||
| PPP Related Credit Facilities | 0 | 0 | 0 | 0 | % | ||||||||||
| Non-PPP Loans (non-GAAP) | $ | 875,528 | $ | 862,235 | $ | 13,293 | 6.3 | % | |||||||
| PPP Loans | 269 | 1,467 | (1,198 | ) | (331.2 | )% | |||||||||
| Total Loans (GAAP) | $ | 875,797 | $ | 863,702 | $ | 12,095 | 5.7 | % | |||||||
| March 31, | March 31, | Growth | Annualized <br><br>Growth | ||||||||||||
| Loans and loan growth | 2022 | 2021 | Dollars | Rate | |||||||||||
| Non-PPP Loans and Related Credit Facilities (non-GAAP) | $ | 875,528 | 804,377 | 71,151 | 8.8 | % | |||||||||
| PPP Related Credit Facilities | 0 | 2,853 | (2,853 | ) | (100.0 | )% | |||||||||
| Non-PPP Loans (non-GAAP) | $ | 875,528 | $ | 807,230 | $ | 68,298 | 8.5 | % | |||||||
| PPP Loans | 269 | 61,836 | (61,567 | ) | (99.6 | )% | |||||||||
| Total Loans (GAAP) | $ | 875,797 | $ | 869,066 | $ | 6,731 | 0.8 | % |
Certain financial information presented above is determined by methods other than in accordance with generally accepted accounting principles (“GAAP”). These non-GAAP financial measures include “Tangible book value per common share,” “Tangible common shareholders’ equity to tangible assets,” “Return on average tangible common equity,” “Pre-tax, pre-provision earnings,” “Net interest margin excluding PPP Loans,” “Net interest margin on a tax-equivalent basis excluding PPP Loans,” “Non-PPP Loans and Related Credit Facilities,” and “Non-PPP Loans.”
| · | “Tangible<br> book value per common share” is defined as total equity reduced by recorded intangible<br> assets divided by total common shares outstanding. |
|---|---|
| · | “Tangible<br> common shareholders’ equity to tangible assets” is defined as total common<br> equity reduced by recorded intangible assets divided by total assets reduced by recorded<br> intangible assets. |
| --- | --- |
| · | “Return<br> on average tangible common equity” is defined as net income on an annualized basis<br> divided by average total equity reduced by average recorded intangible assets. |
| --- | --- |
| · | “Pre-tax,<br> pre-provision earnings” is defined as net interest income plus non-interest income,<br> reduced by non-interest expense. |
| --- | --- |
| · | “Net<br> interest margin excluding PPP Loans” is defined as annualized net interest income<br> less annualized interest income on PPP Loans divided by average earning assets less the<br> average balance of PPP Loans. |
| --- | --- |
| · | “Net<br> interest margin on a tax-equivalent basis excluding PPP Loans” is defined as annualized<br> net interest income on a tax-equivalent basis less annualized interest income on PPP<br> Loans divided by average earning assets less the average balance of PPP Loans. |
| --- | --- |
| · | “Non-PPP<br> Loans and Related Credit Facilities” is defined as Total Loans less PPP Related<br> Credit Facilities and PPP Loans. |
| --- | --- |
| · | “Non-PPP<br> Loans” is defined as Total Loans less PPP Loans. |
| --- | --- |
| · | “Non-PPP<br> Loans and Related Credit Facilities Growth - Dollars” is calculated by taking the<br> difference between two time periods compared for Total Loans less PPP Loans and PPP Related<br> Credit Facilities. “Non-PPP Loans and Related Credit Facilities – Annualized<br> Growth Rate” is calculated by (i) dividing “Non-PPP Loans and Related Credit<br> Facilities Loan Growth - Dollars” by the number of days between the two time periods<br> compared (ii) times the number of days in the year (iii) divided by the prior time period<br> Non-PPP Loans and Related Credit Facilities balance. |
| --- | --- |
| · | “Non-PPP<br> Loans Growth - Dollars” is calculated by taking the difference between two time<br> periods compared for Total Loans less PPP Loans. “Non-PPP Loans – Annualized<br> Growth Rate” is calculated by (i) dividing “Non-PPP Loans Loan Growth - Dollars”<br> by the number of days between the two time periods compared (ii) times the number of<br> days in the year (iii) divided by the prior time period Non-PPP Loans balance. |
| --- | --- |
Our management believes that these non-GAAP measures are useful because they enhance the ability of investors and management to evaluate and compare our operating results from period-to-period in a meaningful manner. Non-GAAP measures have limitations as analytical tools, and investors should not consider them in isolation or as a substitute for analysis of the company’s results as reported under GAAP.