FIRST COMMUNITY CORPORATION 
By LEXINGTON, S.C., Jan. 20 /PRNewswire-FirstCall/ -- Today, First Community Corporation (Nasdaq: FCCO), the holding company for First Community Bank, reported net income available to common shareholders for the fourth quarter of 2009 and for year-to-date 2009. Net income available to common shareholders for the fourth quarter was $705,000, as compared to a loss of $559,000 in the fourth quarter of 2008. Diluted earnings per common share were $0.22 in the fourth quarter, as compared to a loss of $0.17 per share in the fourth quarter of 2008.
(Logo: http://www.newscom.com/cgi-bin/prnh/20030508/FCCOLOGO )
For the year ended December 31, 2009, operating earnings available to the common shareholder was $1.9 million as compared to a loss in the year ended December 31, 2008 of $6.9 million. Reported results for the year of 2009 also included the previously announced non-cash goodwill impairment charge of $27.8 million, which results in a reported loss of $25.9 million or $7.95 per common share for the year. The above referenced goodwill impairment charge, taken in the third quarter of 2009, represented the complete write-off of the Company's goodwill intangibles. As previously disclosed, given the non-cash nature of a goodwill charge, this non-interest expense item had no adverse impact upon the Company's capital, liquidity position, operating performance or the Company's prospects for future earnings.
Capital and Cash Dividend
During the fourth quarter of 2009, all of the Company's regulatory capital ratios continued to increase. Each of these ratios (Leverage, Tier 1 Risk Based and Total Risk Based) substantially exceeds the well-capitalized minimum levels currently required by regulatory statute. Mike Crapps, President and CEO of First Community commented, "In the current regulatory environment, there is a heightened emphasis for banks to have less leverage and higher levels of capital. The topic of capital planning will continue to be a focus for our Company so that we are able to meet changing regulatory expectations."
At the end of the fourth quarter, the Company's regulatory capital ratios (Leverage, Tier 1 Risk Based and Total Risk Based) were 8.32%, 12.09%, and 13.23% respectively. This compares to the same ratios at the end of the third quarter of 8.24%, 11.90%, and 12.96% respectively. The required minimums levels are 5%, 6%, and 10% respectively, to be deemed a "well capitalized" financial institution. Further, the Company's ratio of tangible common equity to tangible assets improved from 4.69% at September 30, 2009 to 4.80% at December 31, 2009.
The Corporation also announced that the Board of Directors has approved a cash dividend for the fourth quarter of 2009. The Company will pay a $0.04 per share dividend to holders of the Company's common stock. This dividend is payable February 16, 2010 to shareholders of record as of February 1, 2010.
Asset Quality
Asset quality remained a real strength of the Company. Non-performing assets increased $722,000 from the third quarter of 2009 to $8.3 million at December 31, 2009. This represents 1.38% of total assets, which the Company believes continues to compare very favorably to its peer group. Loan charge-offs for the year totaled $2.8 million or 84 basis points, which again the Company believes compares favorably to its peers. The allowance for loan losses increased during the quarter from 1.32% of loans to 1.41% of loans with the provision expense of $1,046,000 exceeding the net charge-offs of $750,000.
Balance Sheet
The company continued to execute its previously announced strategy to improve the mix of the overall balance sheet. During the fourth quarter, the Company decreased its investment portfolio by $25.3 million, prepaid Federal Home Loan Bank advances of $28.7 million, and reduced brokered CDs by $8.1 million. Core deposits grew by $11.8 million in the fourth quarter and during all of 2009 core deposits increased $32.9 million, an increase of 10.2%, with particular success in the third and fourth quarters of the year.
During 2009, the loan portfolio grew 3.4%, which the Company feels is an acceptable increase during a recessionary economic environment. In addition, the investment portfolio declined by 16.7% and as a percent of total assets decreased from 36% to 32%.
Mr. Crapps noted, "We are well positioned to serve our targeted market of local businesses and professionals and continue to grow core deposits and our loan portfolio. We are excited by our success in these areas in 2009 and see increasing opportunities in the marketplace in 2010. The structure of our balance sheet provides the flexibility to grow core deposits and loans without substantially increasing our overall total assets. This will result in an improved mix of assets and liabilities, as well as an improving net-interest margin."
Net Interest Income/Net Interest Margin
Net interest income increased by $283,000 (6.3%) on a linked quarter basis, driven primarily by continued asset and liability mix improvement. The net interest margin improved for the third consecutive quarter with the fourth quarter taxable equivalent net interest margin of 3.27% compared to 3.11% in the third quarter. Mr. Crapps commented, "The Company sees continued positive momentum in this important metric as we move into 2010."
Non-Interest Income
Non-interest income improved to $1,322,000 in the fourth quarter from $1,160,000 on a linked quarter basis. Excluding gain (loss) on the sale of securities and the loss on early extinguishment of debt, non-interest income showed even more significant improvement, increasing by 31.8% from $869,000 in the third quarter of 2009 to $1,145,000 in the fourth quarter. This improvement was primarily driven by an improvement late in the quarter in the value of an interest rate swap purchased in October of 2008 to protect the Company against the impact of rising interest rates. Additionally, the Company experienced less Other Than Temporary Impairment (OTTI) in its investment portfolio, and benefited from increased fees from its financial planning / investment advisory unit.
Non-Interest Expense
Non-interest expense, excluding the third quarter goodwill impairment, decreased on a linked quarter basis by $191,000 (4.6%) from $4,159,000 in the third quarter to $3,968,000 in the fourth quarter of 2009. The largest component of the decrease was in salaries and benefits ($102,000) as a result of adjustments for incentive plan payouts.
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 eleven banking offices located in Lexington, Forest Acres, Irmo, Gilbert, Cayce - West Columbia, Chapin, Northeast Columbia, Newberry, Prosperity, Red Bank and Camden.
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
BALANCE SHEET DATA
(Dollars in thousand, except per share data)
At December 31,
2009 2008
---- ----
Total Assets $605,827 $650,233
Investment Securities 195,844 235,075
Loans 344,187 332,964
Allowance for Loan Losses 4,854 4,581
Total Deposits 449,576 423,798
Securities Sold Under Agreements
to Repurchase 20,676 28,151
Federal Home Loan Bank Advances 73,326 92,689
Junior Subordinated Debt 15,464 15,464
Shareholders' Equity 41,440 68,156
Book Value Per Common Share $9.38 $17.76
Tangible Book Value Per Common
Share $8.92 $8.50
Equity to Assets 6.84% 10.48%
Tangible common equity to
tangible assets 4.80% 4.42%
Loan to Deposit Ratio 76.56% 78.57%
Allowance for Loan Losses/Loans 1.41% 1.38%
Regulatory Ratios:
Leverage Ratio 8.32% 8.28%
Tier 1 Capital Ratio 12.09% 12.58%
Total Capital Ratio 13.23% 13.73%
Average Balances:
Three months ended Year ended
December 31, December 31,
2009 2008 2009 2008
---- ---- ---- ----
Average Total
Assets $629,233 $641,696 $647,637 $619,984
Average Loans 345,911 327,559 337,743 318,954
Average Earning
Assets 581,469 563,336 576,821 543,678
Average Deposits 449,605 427,688 438,658 422,736
Average Other
Borrowings 131,515 146,531 141,047 129,225
Average
Shareholders'
Equity 42,285 62,428 61,699 62,364
Asset Quality
Nonperforming
Assets:
Non-accrual
loans $4,136 $1,757 $4,136 $1,757
Other real
estate owned 3,181 748 3,181 748
Accruing loans
past due 90
days or more 1,022 59 1,022 59
----- --- ----- ---
Total
nonperforming
assets $8,339 $2,564 $8,339 $2,564
====== ====== ====== ======
Loans charged-
off $775 $491 $2,917 $1,140
Overdrafts
charged-off 15 41 67 110
Loan recoveries (34) (14) (123) (114)
Overdraft
recoveries (6) (28) (31) (58)
--- --- --- ---
Net Charge-offs $750 $490 $2,830 $1,078
==== ==== ====== ======
Net charge-offs
to average
loans 0.22% 0.15% 0.84% 0.34%
FIRST COMMUNITY CORPORATION
INCOME STATEMENT DATA
(Dollars in thousands, except per share data)
Three months ended Three months ended
December 30, September 30,
2009 2008 2009 2008
Interest Income $7,686 $8,242 $7,714 $8,427
Interest Expense 2,922 3,955 3,233 3,990
Net Interest Income 4,764 4,287 4,481 4,437
Provision for Loan
Losses 1,046 1,407 665 359
Net Interest Income
After Provision 3,718 2,880 3,816 4,078
Non-interest Income:
Deposit service charges 581 612 599 750
Mortgage origination
fees 131 119 159 130
Investment advisory
fees and non-deposit
commissions 158 91 85 85
Gain (loss) on sale of
securities 835 - 291 (28)
Fair value gain (loss)
adjustment (8) (788) (185) (8)
Other-than-temporary-
impairment write-down
on securities (80) (169) (179) (8,163)
Loss on early
extinguishment of debt (658) - - -
Other 363 367 390 396
Total non-interest
income 1,322 232 1,160 (6,838)
Non-interest Expense:
Salaries and employee
benefits 2,010 2,070 2,112 1,987
Occupancy 302 296 307 298
Equipment 305 333 321 314
Marketing and public
relations 82 167 99 94
FDIC assessment 203 101 215 56
Amortization of
intangibles 155 123 156 123
Impairment of goodwill - - 27,761 -
Other 911 1,149 949 999
Total non-interest
expense 3,968 4,239 31,920 3,871
Income (loss) before
taxes 1,072 (1,127) (26,944) (6,631)
Income tax expense
(benefit) 204 (639) 141 (2,686)
Net Income (loss) 868 $(488) (27,085) $(3,945)
Preferred stock
dividends, including
discount accretion 163 71 165 -
Net income (loss)
available to common
shareholders $705 $(559) $(27,250) $(3,945)
Per share data:
Net income (loss),
basic $0.22 $(0.17) $(8.35) $(1.23)
Net income (loss),
diluted $0.22 $(0.17) $(8.35) $(1.23)
Average number of
shares outstanding -
basic 3,269,761 3,224,246 3,261,631 3,205,148
Average number of
shares outstanding -
diluted 3,269,761 3,224,246 3,261,631 3,205,148
Net Interest Margin
(non taxable
equivalent) 3.25% 3.02% 3.08% 3.15%
Net Interest Margin
(taxable equivalent) 3.27% 3.05% 3.11% 3.18%
Reconciliation of GAAP
Net Income available
to common
shareholders to
operating earnings
available to
common shareholders:
(1)
Net earnings (loss)
available to common
shareholders (GAAP) 705 (559) (27,250) (3,945)
Goodwill impairment - - 27,761 -
Operating earnings
available to common
shareholders $705 $(559) $511 $(3,945)
Per share data:
Net income (loss)
diluted (GAAP) $0.22 $(0.17) $(8.35) $(1.23)
Goodwill impairment - - 8.51 -
Operating earnings
(loss) -diluted $0.22 $(0.17) $0.16 $(1.23)
Three months ended Three months ended
June 30, March 31,
2009 2008 2009 2008
Interest Income $7,662 $8,484 $7,919 $7,854
Interest Expense 3,340 3,997 3,609 3,866
Net Interest Income 4,322 4,487 4,310 3,988
Provision for Loan
Losses 941 209 451 155
Net Interest Income
After Provision 3,381 4,278 3,859 3,833
Non-interest Income:
Deposit service charges 576 657 556 664
Mortgage origination
fees 246 145 217 186
Investment advisory
fees and non-deposit
commissions 103 70 149 88
Gain (loss) on sale of
securities 9 - 354 (29)
Fair value gain (loss)
adjustment 230 24 21 -
Other-than-temporary-
impairment write-down
on securities (85) (6,162) (657) 149
Loss on early
extinguishment of debt - - - -
Other 423 365 408 364
Total non-interest
income 1,502 (4,901) 1,048 1,422
Non-interest Expense:
Salaries and employee
benefits 2,127 2,006 2,013 1,901
Occupancy 289 281 300 279
Equipment 304 317 319 325
Marketing and public
relations 55 98 107 203
FDIC assessment 566 56 121 54
Amortization of
intangibles 155 123 155 138
Impairment of goodwill - - - -
Other 933 899 1,009 748
Total non-interest
expense 4,429 3,780 4,024 3,648
Income (loss) before
taxes 454 (4,403) 883 1,607
Income tax expense
(benefit) 40 (921) 311 484
Net Income (loss) 414 $(3,482) $572 $1,123
Preferred stock
dividends, including
discount accretion 165 - 164 -
Net income (loss)
available to common
shareholders $249 $(3,482) $408 $1,123
Per share data:
Net income (loss),
basic $0.08 $(1.09) $0.13 $0.35
Net income (loss),
diluted $0.08 $(1.09) $0.13 $0.35
Average number of
shares outstanding -
basic 3,239,863 3,198,598 3,231,411 3,205,676
Average number of
shares outstanding -
diluted 3,239,863 3,198,598 3,231,411 3,240,530
Net Interest Margin
(non taxable
equivalent) 3.02% 3.26% 3.05% 3.21%
Net Interest Margin
(taxable equivalent) 3.04% 3.33% 3.08% 3.30%
Reconciliation of GAAP
Net Income available
to common
shareholders to
operating earnings
available to
common shareholders:
(1)
Net earnings (loss)
available to common
shareholders (GAAP) 249 (3,482) 408 1,123
Goodwill impairment - - - -
Operating earnings
available to common
shareholders $249 $(3,482) $408 $1,123
Per share data:
Net income (loss)
diluted (GAAP) $0.08 $(1.09) $0.13 $0.35
Goodwill impairment - - - -
Operating earnings
(loss) -diluted $0.08 $(1.09) $0.13 $0.35
Year ended
December 31,
2009 2008
Interest Income $30,981 $33,008
Interest Expense 13,104 15,810
Net Interest Income 17,877 17,198
Provision for Loan Losses 3,103 2,129
Net Interest Income After Provision 14,774 15,069
Non-interest Income:
Deposit service charges 2,312 2,682
Mortgage origination fees 753 579
Investment advisory fees and non-
deposit commissions 495 334
Gain (loss) on sale of securities 1,489 (28)
Fair value gain (loss) adjustment 58 (623)
Other-than-temporary-impairment
write-down on securities (1,001) (14,494)
Loss on early extinguishment of debt (658) -
Other 1,584 1,466
Total non-interest income 5,032 (10,084)
Non-interest Expense:
Salaries and employee benefits 8,262 7,964
Occupancy 1,198 1,155
Equipment 1,249 1,289
Marketing and public relations 343 563
FDIC assessment 1,105 267
Amortization of intangibles 621 507
Impairment of goodwill 27,761 -
Other 3,802 3,794
Total non-interest expense 44,341 15,539
Income (loss) before taxes (24,535) (10,554)
Income tax expense (benefit) 696 (3,761)
Net Income (loss) $(25,231) $(6,793)
Preferred stock dividends, including
discount accretion 656 71
Net income (loss) available to common
shareholders $(25,887) $(6,864)
Per share data:
Net income (loss), basic $(7.95) $(2.14)
Net income (loss), diluted $(7.95) $(2.14)
Average number of shares outstanding -
basic 3,257,021 3,203,148
Average number of shares outstanding -
diluted 3,257,021 3,203,148
Net Interest Margin (non taxable
equivalent) 3.10% 3.21%
Net Interest Margin (taxable
equivalent) 3.12% 3.27%
Reconciliation of GAAP Net Income
available to common
shareholders to operating earnings
available to
common shareholders: (1)
Net earnings (loss) available to common
shareholders (GAAP) (25,887) (6,864)
Goodwill impairment 27,761 -
Operating earnings available to common
shareholders $1,874 $(6,864)
Per share data:
Net income (loss) diluted (GAAP) $(7.95) $(1.97)
Goodwill impairment 8.53 -
Operating earnings (loss) - diluted $0.58 $(1.97)
(1) Operating earnings equals GAAP net earnings (loss) available to
common shareholders plus one time impairment of goodwill
SOURCE First Community Corporation
