Exhibit 99.1

 

 

News Release

For Release January 20, 2016

9:00 A.M.

 

 

Contact:

Joseph G. Sawyer, Executive Vice President & Chief Financial Officer or

Robin D. Brown, Executive Vice President & Chief Marketing Officer

(803) 951- 2265

 

First Community Corporation Announces Annual and Fourth Quarter Results and Increased Cash Dividend

 

Highlights

·

Net income of $ 6.1 million in 2015, a 19.6% increase over 2014 earnings

·

Diluted EPS of $0.91 per common share in 2015, compared to $0.78 in 2014, an increase of 16.7%

·

Increase in cash dividend to $0.08 per common share, the 56th consecutive quarter of cash dividends paid to common shareholders

·

Total shareholder return of 35% in 2015, as compared to the NASDAQ Bank Index growth of 6.6%

·

Total revenue growth of $2.276 million, a 7.1% increase to $34.2 million in total revenue in 2015

·

Strong loan growth of $45.3 million in 2015, an increase of 10.2%

·

Pure deposit growth (including customer cash management accounts) of $62.2 million during the year, an 11.9% increase.

·

Key credit quality metrics were excellent with net charge-offs of 0.14% during the year and non-performing assets of 0.85% at year end.

·

Regulatory capital ratios of 10.19% (Tier 1 Leverage) and 16.21% (Total Capital) along with Tangible Common Equity / Tangible Assets (TCE/TA) ratio of 8.47%

 

 

Lexington, SC – January 20, 2016 Today, First Community Corporation (Nasdaq: FCCO), the holding company for First Community Bank, reported net income available to common shareholders for the fourth quarter and year end of 2015. For the year ended December 31, 2015 net income available to common shareholders was $6.1 million compared to $5.1 million during year ended December 31, 2014. Diluted earnings per share for 2015 were $0.91 an increase over $0.78 in 2014. Net income available to common shareholders for the fourth quarter of 2015 was $1.60 million, compared to $1.51 million in the fourth quarter of 2014. Diluted earnings per common share were $0.24 for the fourth quarter of 2015 as compared to $0.22 for the fourth quarter of 2014. First Community President and CEO Michael Crapps commented, “We are pleased with our company’s financial results during 2015 led by strong organic growth in both loans and pure deposits. This is built on top of the transformational year of 2014, which included both acquisitions and a denovo banking office.”

  

Cash Dividend and Capital

 

The Board of Directors has approved an increase in the cash dividend for the fourth quarter of 2015 to $0.08. This dividend is payable on February 12, 2016 to shareholders of record of the company’s common stock as of February 1, 2016. Mr. Crapps commented, “The entire board is pleased that our company’s strong financial performance enables us to increase the cash dividend. We are also proud that dividend payments have continued uninterrupted for 56 consecutive quarters.”

 

Each of the regulatory capital ratios (Leverage, Tier I Risk Based and Total Risk Based) exceeds the well capitalized minimum levels currently required by regulatory statute. At December 31, 2015, the company’s regulatory capital ratios (Leverage, Tier I Risk Based and Total Risk Based) were 10.19%, 15.40%, and 16.21%, respectively. This compares to the same ratios as of December 31, 2014 of 10.02%, 16.12%, and 16.94%, respectively. Additionally, the regulatory capital ratios for the company’s wholly owned subsidiary, First Community Bank, were 9.73%, 14.72%, and 15.54% respectively as of December 31, 2015. Further, the company’s ratio of tangible common equity to tangible assets indicates a high quality of capital with a ratio of 8.47% as of December 31, 2015. The common equity tier one ratio for the company and the bank was 12.87% and 14.72%, respectively, at December 31, 2015.

 

Asset Quality

 

The company’s asset quality remains strong and showed continued improvement on a linked quarter and year-over-year comparison. The non-performing assets ratio declined to 0.85% of total assets at December 31, 2015, as compared to the ratio of 0.88% at the end of the third quarter of 2015 and 1.18% at December 31, 2014. The nominal level of non-performing assets decreased to $7.297 million at year end 2015 from $7.519 million at the end of the third quarter of 2015 and $9.528 million at the end of 2014. Trouble debt restructurings, that are still accruing interest, declined slightly during the quarter to $1.632 million from $1.654 million at the end of the third quarter of 2015 and $2.200 million at year end 2014.

 

Net loan charge-offs for the quarter were $9 thousand and $642 thousand for the year of 2015. The ratio of classified loans plus OREO now stands at 14.68% of total bank regulatory risk-based capital as of December 31, 2015.

 

Balance Sheet

 

(Numbers in millions)

 

		Quarter ending				Quarter ending				Quarter ending				12 Month				12 Month
		12/31/15				12/31/14				9/30/15				$ Variance				% Variance
Assets
Investments		$	283.8			$	282.8			$	273.7			$	1.0				.4	%
Loans			489.2				443.8				483.9				45.4				10.2	%
Liabilities
Total Pure Deposits		$	563.1			$	504.5			$	549.9			$	58.6				11.6	%
Certificates of Deposit			153.0				165.1				154.5				(12.1	)			(7.3	%)
Total Deposits		$	716.1			$	669.6			$	704.4			$	46.5				6.9	%
Customer Cash Management			21.0				17.4				19.9				3.6				20.7	%
FHLB Advances			24.8				28.8				27.5				(4.0	)			(13.9	%)
Total Funding		$	761.9			$	715.8				751.8				46.1				6.4	%
Cost of Funds*			0.44	%			0.47	%			0.45	%							(3bps	)
(*including demand deposits)
Cost of Deposits			0.25	%			0.26	%			0.26	%							(1bp	)

 

Mr. Crapps commented, “Deposit and loan growth during 2015 were both strong and we are encouraged as that momentum continues into 2016. During 2015, our company saw the benefit of a number of previously discussed initiatives focused on increasing loan growth, resulting in loan production of $116 million and net loan growth of $45.3 million. This will continue to be an area of intense focus for our company. With our current level of liquidity and continued success in pure deposit growth, we have the funding available to support significant additional loan growth.”

 

Revenue

 

Net Interest Income/Net Interest Margin

 

Net interest income increased on a linked quarter basis to $6.348 million for the fourth quarter up from $6.253 million in the third quarter of 2015 and year-over-year increased to $25.253 million at December 31, 2015 from $23.731 million at December 31, 2014. The net interest margin, on a taxable equivalent basis, decreased slightly to 3.29% for the fourth quarter of 2015 from 3.32% in the third quarter of the year.

 

Non-Interest Income

 

Non-interest income, adjusted for securities gains and loss on the early extinguishment of debt, increased year-over-year to $8.810 million in 2015 from $8.382 million in 2014, although it decreased on a linked quarter basis. During the quarter, the company repaid $2.75 million in Federal Home Loan Bank (FHLB) advances and experienced a $226 thousand loss on this early extinguishment of debt. This prepayment of the FHLB advances will enable the bank to save the expense of these borrowings in future periods. This loss was offset by a gain on the sale of securities of $84 thousand and as well as a gain of $130 thousand on the redemption of $500 thousand in Trust Preferred securities at a discount.

 

Revenues in the mortgage line of business increased year-over-year to $3.432 million in 2015 from $3.186 million in 2014, but declined as anticipated on a linked quarter basis from $964 thousand in the third quarter to $753 thousand in the fourth quarter of 2015. Mortgage production year-over-year increased $20.6 million or 22.6%, but declined on a linked quarter basis which was expected due to seasonal fluctuations and the impact of the historic floods which occurred in a major portion of the company’s market area early in the fourth quarter. Revenue in the investment advisory line of business was up slightly year-over-year, $1.287 million in 2015 and $1.268 million in 2014, and was flat on a linked quarter basis, $294 thousand in the fourth quarter of 2015 compared to $290 thousand in the third quarter.

 

Non-Interest Expense

Non-interest expenses increased slightly on a linked quarter basis to $6.122 million in the fourth quarter from $6.067 million in the third quarter of 2015. Occupancy expenses related to flood damage, including an insurance deductible and other small losses not covered by insurance, and marketing expenses associated with an expanded media campaign to support commercial loan growth represented the majority of the expense increase.

 

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 Lexington, Richland, Newberry, Kershaw, and Aiken counties in South Carolina and Augusta, Georgia, in addition to 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; (7) we may be unable to comply, or may need to devote more resources than currently expected in order to comply, with the requirements that will be set forth in our final BSA-related Consent Order with the FDIC, and (8) 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;

(Dollars in thousands, except per share data)

 

		At December 31,
		2015				2014
Total Assets		$	862,734			$	812,363
Other short-term investments (1)			11,968				10,052
Investment Securities			283,841				282,814
Loans held for sale			2,962				4,124
Loans			489,191				443,844
Allowance for Loan Losses			4,596				4,132
Total Deposits			716,151				669,583
Securities Sold Under Agreements to Repurchase			21,033				17,383
Federal Home Loan Bank Advances			24,788				28,807
Junior Subordinated Debt			14,964				15,464
Shareholders’ Equity			79,038				74,528
Book Value Per Common Share		$	11.81			$	11.18
Tangible Book Value Per Common Share		$	10.84			$	10.25
Tangible Book Value Per Common Share (Excluding AOCI)		$	10.72			$	10.06
Equity to Assets			9.16	%			9.17	%
Tangible common equity to tangible assets			8.47	%			8.48	%
Loan (incl loans held for sale) to Deposit Ratio			68.72	%			66.90	%
Allowance for Loan Losses/Loans			0.94	%			0.93	%
Allowance for Loan Losses plus credit mark/Loans			1.15	%			1.33	%
Regulatory Ratios:
Leverage Ratio			10.19	%			10.02	%
Tier 1 Capital Ratio			15.40	%			16.12	%
Total Capital Ratio			16.21	%			16.94	%
Common Equity Tier 1			12.87	%			N/A
Tier 1 Regulatory Capital		$	86,682			$	81,431
Total Regulatory Capital		$	91,278			$	85,563
Common Equity Tier 1 Capital		$	72,444				N/A

 

(1) Includes federal funds sold, securities purchased under agreements to resell and interest-bearing deposits

 

 

Average Balances:
		Three months ended								Year ended
		December 31,								December 31,
		2015				2014				2015				2014
Average Total Assets		$	858,413			$	820,861			$	835,604			$	780,797
Average Loans (incl loans held for sale)			487,203				451,334				473,367				439,174
Average Earning Assets			790,288				751,935				769,604				714,332
Average Deposits			708,583				676,415				688,573				635,238
Average Other Borrowings			64,639				64,540				64,072				51,871
Average Shareholders’ Equity			78,797				73,523				77,124				69,760

 

 

Asset Quality:		December 31,				September 30,				June 30,				March 31,				December 31,
		2015				2015				2015				2015				2014
Loan Risk Rating by Category (End of Period)
Special Mention		$	9,869			$	11,688			$	11,806			$	12,314			$	13,817
Substandard			10,327				10,206				10,905				12,356				13,499
Doubtful			—				—				—				—				—
Pass (includes held for sale)			468,995				462,037				451,305				429,631				416,528
		$	489,191			$	483,931			$	474,016			$	454,301			$	443,844
Nonperforming Assets:
Non-accrual loans		$	4,839			$	5,067			$	5,349				5,943			$	6,585
Other real estate owned			2,458				2,450				2,523				2,817				2,943
Accruing loans past due 90 days or more			—				2				—				—				—
Total nonperforming assets		$	7,297			$	7,519			$	7,872			$	8,760			$	9,528
Accruing trouble debt restructurings		$	1,632			$	1,654			$	1,674			$	1,954			$	2,200

 

 

		Three months ended								Year ended
		December 31,								December 31,
		2015				2014				2015				2014
Loans charged-off:		$	29			$	273			$	756			$	1,069
Overdrafts charged-off			13				13				50				42
Loan recoveries			(20	)			(84	)			(114	)			(133	)
Overdraft recoveries			(2	)			—				(18	)			(11	)
Net Charge-offs		$	20			$	202			$	674			$	967
Net charge-offs to average loans			0.00	%			0.04	%			0.14	%			0.22	%

 

FIRST COMMUNITY CORPORATION

INCOME STATEMENT DATA

(Dollars in thousands, except per share data)

 

		Three months ended								Three months ended								Three months ended								Three months ended								Year ended
		December 31,								September 30,								June 30,								March 31,								December 31,
		2015				2014				2015				2014				2015				2014				2015				2014				2015				2014
Interest Income		$	7,203			$	7,078			$	7,114			$	6,968			$	7,049			$	6,849			$	7,283			$	6,403			$	28,649			$	27,298
Interest Expense			855				886				861				872				845				902				835				907				3,396				3,567
Net Interest Income			6,348				6,192				6,253				6,096				6,204				5,947				6,448				5,496				25,253				23,731
Provision for Loan Losses			148				179				193				152				391				400				406				150				1,138				881
Net Interest Income After Provision			6,200				6,013				6,060				5,944				5,813				5,547				6,042				5,346				24,115				22,850
Non-Interest Income:
Deposit service charges			386				372				390				400				346				379				347				366				1,469				1,517
Mortgage banking income			753				849				964				1,016				980				702				735				619				3,432				3,186
Investment advisory fees and non-deposit commissions			294				546				290				267				407				198				296				257				1,287				1,268
Gain on sale of securities			84				80				—				16				167				78				104				8				355				182
Gain (loss) on sale other assets			(16	)			(9	)			19				10				3				(24	)			4				12				8				(11	)
Gain on redemption of subordinated debt (TRUPS)			130				—				—				—				—				—				—				—				130				—
Loss on early extinguishment of debt			(226	)			(284	)			—				—				—				(67	)			(103	)			—				(329	)			(351	)
Other			686				585				666				591				662				633				598				613				2,614				2,422
Total non-interest income			2,091				2,139				2,329				2,300				2,565				1,899				1,981				1,875				8,966				8,213
Non-interest Expense:
Salaries and employee benefits			3,610				3,545				3,595				3,502				3,658				3,272				3,565				3,424				14,428				13,743
Occupancy			578				515				513				489				500				465				485				413				2,076				1,882
Equipment			416				377				437				414				394				375				402				339				1,649				1,505
Marketing and public relations			165				147				129				218				328				212				226				161				848				738
FDIC assessment			138				128				113				138				138				131				138				124				527				521
Other real estate expense			90				193				126				105				154				117				154				138				524				553
Amortization of intangibles			88				111				98				64				98				63				103				42				387				280
Merger expenses			—				29				—				39				—				15				—				420				—				503
Other			1,037				1,044				1,056				1,091				1,119				1,135				1,027				965				4,239				4,235
Total non-interest expense			6,122				6,089				6,067				6,060				6,389				5,785				6,100				6,026				24,678				23,960
Income before taxes			2,169				2,063				2,322				2,184				1,989				1,661				1,923				1,195				8,403				7,103
Income tax expense			568				557				643				632				546				460				519				333				2,276				1,982
Net Income		$	1,601			$	1,506			$	1,679			$	1,552			$	1,443			$	1,201			$	1,404			$	862			$	6,127			$	5,121
Per share data:
Net income, basic		$	0.24			$	0.23			$	0.26			$	0.23			$	0.22			$	0.18			$	0.22			$	0.14			$	0.93			$	0.78
Net income, diluted		$	0.24			$	0.22			$	0.25			$	0.23			$	0.22			$	0.18			$	0.21			$	0.14			$	0.91			$	0.78
Average number of shares outstanding - basic			6,569,379				6,662,514				6,559,844				6,658,679				6,539,154				6,654,359				6,522,420				6,168,949				6,558,386				6,537,813
Average number of shares outstanding - diluted			6,736,615				6,733,513				6,712,026				6,726,849				6,697,620				6,719,110				6,664,654				6,228,512				6,718,553				6,608,487
Shares outstanding period end			6,690,551				6,664,391				6,684,563				6,660,466				6,679,938				6,656,139				6,683,960				6,652,189				6,690,551				6,664,391
Return on average assets			0.74	%			0.73	%			0.81	%			0.79	%			0.70	%			0.61	%			0.70	%			0.48	%			0.73	%			0.73	%
Return on average common equity			8.06	%			8.13	%			8.73	%			8.61	%			7.53	%			6.88	%			7.54	%			5.49	%			7.94	%			8.13	%
Return on average common tangible equity			8.79	%			8.88	%			9.55	%			9.32	%			8.25	%			7.54	%			8.23	%			5.89	%			8.68	%			8.88	%
Net Interest Margin (non taxable equivalent)			3.19	%			3.27	%			3.22	%			3.40	%			3.25	%			3.32	%			3.51	%			3.32	%			3.28	%			3.32	%
Net Interest Margin (taxable equivalent)			3.29	%			3.36	%			3.32	%			3.48	%			3.34	%			3.38	%			3.62	%			3.40	%			3.38	%			3.40	%
Efficiency Ratio			71.47	%			71.00	%			70.69	%			71.85	%			74.27	%			73.64	%			73.27	%			81.84	%			71.25	%			74.14	%

 

FIRST COMMUNITY CORPORATION

Yields on Average Earning Assets and Rates
on Average Interest-Bearing Liabilities

 

		Three Months ended December 31, 2015												Three Months ended December 31, 2014
		Average				Interest				Yield/				Average				Interest				Yield/
		Balance				Earned/Paid				Rate				Balance				Earned/Paid				Rate
Assets
Earning assets
Loans		$	487,203			$	5,846				4.76	%		$	451,334			$	5,638				4.96	%
Securities:			280,804				1,324				1.87	%			276,625				1,408				2.02	%
Other funds			22,281				33				0.59	%			23,976				32				0.53	%
Total earning assets			790,288				7,203				3.62	%			751,935				7,078				3.73	%
Cash and due from banks			10,002												10,533
Premises and equipment			31,128												29,619
Intangible assets			6,545												6,255
Other assets			24,999												26,779
Allowance for loan losses			(4,549	)											(4,260	)
Total assets		$	858,413											$	820,861
Liabilities
Interest-bearing liabilities
Interest-bearing transaction accounts			144,177				42				0.12	%			135,492				40				0.12	%
Money market accounts			163,314				108				0.26	%			151,382				97				0.25	%
Savings deposits			60,458				18				0.12	%			53,893				16				0.12	%
Time deposits			182,382				278				0.60	%			197,385				285				0.57	%
Other borrowings			64,639				409				2.51	%			64,540				449				2.76	%
Total interest-bearing liabilities			614,970				855				0.55	%			602,692				887				0.58	%
Demand deposits			158,252												138,263
Other liabilities			6,394												6,383
Shareholders’ equity			78,797												73,523
Total liabilities and shareholders’ equity		$	858,413											$	820,861
Cost of funds including demand deposits											0.44	%											0.47	%
Net interest spread											3.06	%											3.15	%
Net interest income/margin						$	6,348				3.19	%						$	6,191				3.27	%
Tax equivalent						$	6,559				3.29	%						$	6,360				3.36	%

 

FIRST COMMUNITY CORPORATION

Yields on Average Earning Assets and Rates
on Average Interest-Bearing Liabilities

 

		Year ended December 31, 2015												Year ended December 31, 2014
		Average				Interest				Yield/				Average				Interest				Yield/
		Balance				Earned/Paid				Rate				Balance				Earned/Paid				Rate
Assets
Earning assets
Loans		$	473,367			$	23,219				4.91	%		$	439,174			$	21,915				4.99	%
Securities:			275,944				5,311				1.92	%			256,392				5,277				2.06	%
Other funds			20,293				119				0.59	%			18,766				106				0.56	%
Total earning assets			769,604				28,649				3.72	%			714,332				27,298				3.82	%
Cash and due from banks			8,070												10,344
Premises and equipment			30,833												28,098
Intangible assets			6,575												5,554
Other assets			24,895												26,623
Allowance for loan losses			(4,373	)											(4,154	)
Total assets		$	835,604											$	780,797
Liabilities
Interest-bearing liabilities
Interest-bearing transaction accounts			137,969				160				0.12	%			131,767				167				0.13	%
Money market accounts			158,726				423				0.27	%			141,020				336				0.24	%
Savings deposits			57,958				68				0.12	%			51,768				60				0.12	%
Time deposits			186,911				1,099				0.59	%			179,384				1,147				0.64	%
Other borrowings			64,072				1,646				2.57	%			70,083				1,858				2.65	%
Total interest-bearing liabilities			605,636				3,396				0.56	%			574,022				3,568				0.62	%
Demand deposits			147,009												131,299
Other liabilities			5,835												5,716
Shareholders’ equity			77,124												69,760
Total liabilities and shareholders’ equity		$	835,604											$	780,797
Net interest spread											3.16	%											3.20	%
Net interest income/margin						$	25,253				3.28	%						$	23,730				3.32	%
Tax Equivalent		$	—			$	26,024				3.38	%						$	24,287				3.40	%