Attached files
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| 8-K - FIRST COMMUNITY CORP /SC/ | e18395_fcco-8k.htm |
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News Release |
| For Release October 17, 2018 | |
| 9:00 AM | |
| Contact: (803) 951- 2265 | |
| Joseph G. Sawyer, EVP & Chief Financial Officer or | |
| Robin D. Brown, EVP & Chief Marketing Officer |
First Community Corporation Announces Third Quarter Results and Cash Dividend
Third Quarter Highlights
| · | Net income of $2.833 million. |
| · | Diluted EPS of $0.37 per common share. |
| · | Net loan growth of $12.2 million during the quarter and $49.7 million year-to-date, an annualized growth rate of 10.2%. |
| · | Pure deposit growth, including customer cash management of $5.4 million during the quarter and $58.0 million year-to-date, a 10.3% annualized growth rate. |
| · | Excellent key credit quality metrics with non-performing assets (NPAs) of 0.45%, past dues of 0.39% and a year-to-date net loan recovery of $236 thousand. |
| · | Cash dividend of $0.10 per common share, the 67th consecutive quarter of cash dividends paid to common shareholders. |
Lexington, SC – October 17, 2018 Today, First Community Corporation (Nasdaq: FCCO), the holding company for First Community Bank, reported net income for the third quarter of 2018 of $2.833 million as compared to $1.893 million in the third quarter of 2017, a 49.7% increase. Diluted earnings per common share were $0.37 for the third quarter of 2018 compared to $0.28 in the third quarter of 2017, an increase of 32.1%. Year-to-date 2018 net income is $8.543 million, a 60.8% increase over the $5.313 million earned in the first nine months of 2017. Year-to-date diluted earnings per share are $1.11 compared to $0.78 during the same time period in 2017, a 42.3% increase. First Community President and CEO Mike Crapps commented, “Earnings continue to be strong and we are pleased with the annualized growth rates for both loans and deposits. Credit quality continues to be excellent with low NPAs and past dues and another quarter of net loan recovery.”
Cash Dividend and Capital
The Board of Directors approved a cash dividend for the third quarter of 2018. The company will pay a $0.10 per share dividend to holders of the company’s common stock. This dividend is payable November 13, 2018 to shareholders of record as of October 30, 2018. Mr. Crapps commented, “Our entire board is pleased that our performance enables the company to continue its cash dividend for the 67th consecutive quarter.”
Each of the regulatory capital ratios (Leverage, Tier I Risk Based and Total Risk Based) exceed the well capitalized minimum levels currently required by regulatory statute. At September 30, 2018, the company’s regulatory capital ratios (Leverage, Tier I Risk Based and Total Risk Based) were 10.32%, 13.76%, and 14.54%, respectively. This compares to the same ratios as of September 30, 2017, of 10.55%, 14.73%, and 15.60%, respectively. Additionally, the regulatory capital ratios for the company’s wholly owned subsidiary, First Community Bank, were 9.84%, 13.85%, and 13.96% respectively as of September 30, 2018. Further, the company’s ratio of tangible common equity to tangible assets was 8.51% as of September 30, 2018. Also, as of September 30, 2018, the Common Equity Tier One ratio for the company and the bank were 11.91% and 13.18%, respectively.
Asset Quality
The non-performing assets ratio for the third quarter of 2018 was 0.45% of total assets with a nominal level of non-performing assets of $4.854 million. Trouble debt restructurings, that are still accruing interest, were $1.256 million at the end of the third quarter of 2018.
There was a net loan recovery for the quarter of $118 thousand with a year-to-date net loan recovery of $236 thousand. The ratio of classified loans plus OREO now stands at 6.91% of total bank regulatory risk-based capital as of September 30, 2018.
Balance Sheet
(Numbers in millions)
Quarter Ended 9/30/18 | Quarter Ended 6/30/18 | Quarter Ended 12/31/17 | Year To Date $ Variance | Year To Date % Variance | ||||||||||||||||
| Assets | ||||||||||||||||||||
| Investments | $ | 270.0 | $ | 273.7 | $ | 284.4 | ($ | 14.4 | ) | (5.1 | %) | |||||||||
| Loans | 696.5 | 684.3 | 646.8 | 49.7 | 7.7 | % | ||||||||||||||
| Liabilities | ||||||||||||||||||||
| Total Pure Deposits | $ | 773.6 | $ | 773.2 | $ | 729.5 | $ | 44.1 | 6.0 | % | ||||||||||
| Certificates of Deposit | 148.2 | 160.2 | 158.8 | (10.6 | ) | (6.7 | %) | |||||||||||||
| Total Deposits | $ | 921.8 | $ | 933.4 | $ | 888.3 | $ | 33.5 | 3.8 | % | ||||||||||
| Customer Cash Management | $ | 33.2 | $ | 28.2 | $ | 19.3 | $ | 13.9 | 72.0 | % | ||||||||||
| FHLB Advances | 4.2 | 0.2 | 14.3 | (10.1 | ) | (70.6 | %) | |||||||||||||
| Total Funding | $ | 959.1 | $ | 961.8 | $ | 921.9 | $ | 37.2 | 4.0 | % | ||||||||||
| Cost of Funds (including demand deposits) | 0.45 | % | 0.37 | % | 0.30 | % | 15 | bps | ||||||||||||
| Cost of Deposits | 0.35 | % | 0.28 | % | 0.22 | % | 13 | bps | ||||||||||||
Mr. Crapps commented, “Strong commercial loan production continued this quarter with $34.9 million in new production bringing our total for the year to $105.8 million. This resulted in growth in the loan portfolio of $12.2 million in the quarter, which is an annualized growth rate of 10.2%. In addition, our deposit franchise remains strong, although we are seeing pressure on the cost of deposits in this rising interest rate environment.”
Revenue
Net Interest Income/Net Interest Margin
Net interest income was $8.883 million for the third quarter of 2018, relatively flat on a linked quarter basis. Net interest margin, on a taxable equivalent basis, was 3.60%, down 11 basis points on a linked quarter basis. This decline in net interest margin is primarily attributable to rising costs of funds. Crapps commented, “Given our strong liquidity, we have been able to limit the impact of rising interest rates on our overall cost of funds. This quarter reflects some pricing adjustments needed in order to remain competitive and defend our core banking relationships. Also impacting the net interest margin was pressure on the loan portfolio yield driven primarily by the flat yield curve, decreased interest income accretion from non-accrual loan payoffs, and the mix of new loans produced during the quarter. The securities portfolio yield was negatively impacted by elevated prepayments of certain floating rate SBA pool securities which accelerated the premium amortization. It should be noted that since the third quarter of 2016, our total cost of deposits have increased by just 10 basis points from 25 basis points to 35 basis points while average earning asset yields have increased by 44 basis points during that same period of time.”
Non-Interest Income
Non-interest income was $2.842 million for the third quarter. Revenues in the mortgage line of business were $1.159 million in the third quarter of 2018 up 12.3% year-over-year. This increase was driven by a similar percentage of increase in mortgage loan production. The investment advisory line of business revenue for the third quarter was $423 thousand, an increase of 25.9% year-over-year and 5.5% on a linked quarter basis. Notably, assets under management in this line of business are now $306.8 million, which is a 20.9% increase in the last twelve months. Deposit fees generated in the commercial and retail banking line of business increased 14.5% year-over-year and 2.6% on a linked quarter basis. Mr. Crapps commented, “Our strategy of generating revenue streams from multiple lines of business continues to serve us well. We continue to work to leverage each of our lines of business.”
Non-Interest Expense
Non-interest expense was $8.134 million for the quarter a slight decrease of 1.1% over the second quarter non-interest expense of $8.225 million. Other non-interest expense decreased by $306 thousand, primarily attributable to non-recurring expenses related to the purchase of a South Carolina Rehabilitation Tax Credit during the second quarter and the reimbursement during the third quarter of previously paid costs associated with a renegotiated contract within the financial planning line of business. This decrease was partially offset by higher salaries and benefit expenses of $198 thousand in the third quarter, the majority of this increase being higher mortgage expenses.
Other
During the third quarter, the company began renovations on a downtown banking office in Greenville, South Carolina and began construction on a new banking office facility in Evans, Georgia. These new banking offices are scheduled to open in early and mid-2019, respectively.
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, and Upstate, South Carolina markets as well as Augusta, Georgia. For more information, visit www.firstcommunitysc.com.
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 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.
###
FIRST COMMUNITY CORPORATION
| BALANCE SHEET DATA | ||||||||||||
| (Dollars in thousands, except per share data) | ||||||||||||
| At September 30, | December 31, | |||||||||||
| 2018 | 2017 | 2017 | ||||||||||
| Total Assets | $ | 1,091,142 | $ | 914,228 | $ | 1,050,731 | ||||||
| Other short-term investments (1) | 22,709 | 15,393 | 15,788 | |||||||||
| Investment Securities | 269,963 | 248,672 | 284,395 | |||||||||
| Loans held for sale | 5,528 | 6,018 | 5,093 | |||||||||
| Loans | 696,515 | 568,488 | 646,805 | |||||||||
| Allowance for Loan Losses | 6,212 | 5,656 | 5,797 | |||||||||
| Goodwill | 14,637 | 5,078 | 14,589 | |||||||||
| Other Intangibles | 2,142 | 878 | 2,569 | |||||||||
| Total Deposits | 921,722 | 770,082 | 888,323 | |||||||||
| Securities Sold Under Agreements to Repurchase | 33,226 | 17,469 | 19,270 | |||||||||
| Federal Home Loan Bank Advances | 4,236 | 17,255 | 14,250 | |||||||||
| Junior Subordinated Debt | 14,964 | 14,964 | 14,964 | |||||||||
| Shareholders’ Equity | 108,186 | 86,595 | 105,663 | |||||||||
| Book Value Per Common Share | $ | 14.18 | $ | 12.91 | $ | 13.93 | ||||||
| Tangible Book Value Per Common Share | $ | 11.98 | $ | 12.02 | $ | 11.66 | ||||||
| Equity to Assets | 9.91 | % | 9.47 | % | 10.06 | % | ||||||
| Tangible common equity to tangible assets | 8.51 | % | 8.88 | % | 8.56 | % | ||||||
| Loan to Deposit Ratio | 75.57 | % | 73.82 | % | 73.38 | % | ||||||
| Allowance for Loan Losses/Loans | 0.89 | % | 0.99 | % | 0.89 | % | ||||||
| (1) Includes federal funds sold, securities sold under agreements to resell and interest-bearing deposits | ||||||||||||
| Regulatory Ratios: | ||||||||||||
| Leverage Ratio | 10.32 | % | 10.55 | % | 10.11 | % | ||||||
| Tier 1 Capital Ratio | 13.76 | % | 14.72 | % | 14.01 | % | ||||||
| Total Capital Ratio | 14.54 | % | 15.59 | % | 14.79 | % | ||||||
| Common Equity Tier 1 | 11.91 | % | 12.48 | % | 12.07 | % | ||||||
| Tier 1 Regulatory Capital | $ | 110,461 | $ | 95,470 | $ | 103,754 | ||||||
| Total Regulatory Capital | $ | 116,674 | $ | 101,126 | $ | 109,551 | ||||||
| Common Equity Tier 1 | $ | 96,003 | $ | 80,970 | $ | 89,364 | ||||||
| Average Balances: | |||||||||||||||||
| Three months ended | Nine months ended | ||||||||||||||||
| September 30, | September 30, | ||||||||||||||||
| 2018 | 2017 | 2018 | 2017 | ||||||||||||||
| Average Total Assets | $ | 1,087,153 | $ | 911,217 | $ | 1,071,772 | $ | 911,042 | |||||||||
| Average Loans | 696,157 | 569,461 | 677,441 | 561,844 | |||||||||||||
| Average Earning Assets | 992,644 | 838,579 | 976,326 | 837,010 | |||||||||||||
| Average Deposits | 923,708 | 765,399 | 912,178 | 764,830 | |||||||||||||
| Average Other Borrowings | 47,018 | 52,139 | 45,194 | 54,461 | |||||||||||||
| Average Shareholders’ Equity | 107,892 | 86,224 | 106,514 | 84,725 | |||||||||||||
| Asset Quality: | ||||||||||||||||
| September 30, | June 30, | March 31, | December 31, | |||||||||||||
| 2018 | 2018 | 2018 | 2017 | |||||||||||||
| Loan Risk Rating by Category (End of Period) | ||||||||||||||||
| Special Mention | $ | 6,716 | $ | 7,212 | $ | 9,348 | $ | 10,121 | ||||||||
| Substandard | 5,811 | 5,923 | 7,033 | 7,380 | ||||||||||||
| Doubtful | — | — | — | — | ||||||||||||
| Pass | 683,988 | 671,198 | 652,202 | 629,304 | ||||||||||||
| $ | 696,515 | $ | 684,333 | $ | 668,583 | $ | 646,805 | |||||||||
| September 30, | June 30, | March 31, | December 31, | |||||||||||||
| 2018 | 2018 | 2018 | 2017 | |||||||||||||
| Nonperforming Assets: | ||||||||||||||||
| Non-accrual loans | $ | 2,904 | $ | 2,958 | 3,127 | $ | 3,380 | |||||||||
| Other real estate owned | 1,921 | 1,824 | 1,907 | 1,934 | ||||||||||||
| Accruing loans past due 90 days or more | 29 | 959 | 34 | — | ||||||||||||
| Total nonperforming assets | $ | 4,854 | $ | 5,741 | $ | 5,068 | $ | 5,314 | ||||||||
| Accruing trouble debt restructurings | $ | 1,829 | $ | 1,926 | $ | 1,794 | $ | 1,770 | ||||||||
| Three months ended | Nine months ended | |||||||||||||||
| September 30, | September 30, | September 30, | September 30, | |||||||||||||
| 2018 | 2017 | 2018 | 2017 | |||||||||||||
| Loans charged-off | $ | — | $ | 12 | $ | 9 | $ | 44 | ||||||||
| Overdrafts charged-off | 23 | 40 | 100 | 76 | ||||||||||||
| Loan recoveries | (119 | ) | (47 | ) | (246 | ) | (189 | ) | ||||||||
| Overdraft recoveries | (9 | ) | (5 | ) | (27 | ) | (13 | ) | ||||||||
| Net Charge-offs (recoveries) | $ | (105 | ) | $ | — | $ | (164 | ) | $ | (82 | ) | |||||
| Net Charge-offs to Average Loans | N/A | N/A | N/A | N/A | ||||||||||||
FIRST COMMUNITY CORPORATION
INCOME STATEMENT DATA
(Dollars in thousands, except per share data)
| Three months ended | Three months ended | Three months ended | Nine months ended | |||||||||||||||||||||||||||||
| September 30, | June 30, | March 31, | September 30, | |||||||||||||||||||||||||||||
| 2018 | 2017 | 2018 | 2017 | 2018 | 2017 | 2018 | 2017 | |||||||||||||||||||||||||
| Interest Income | $ | 9,985 | $ | 7,921 | $ | 9,819 | $ | 7,724 | $ | 9,331 | $ | 7,773 | $ | 29,135 | $ | 23,416 | ||||||||||||||||
| Interest Expense | 1,102 | 694 | 880 | 675 | 797 | 712 | 2,779 | 2,080 | ||||||||||||||||||||||||
| Net Interest Income | 8,883 | 7,227 | 8,939 | 7,049 | 8,534 | 7,061 | 26,356 | 21,336 | ||||||||||||||||||||||||
| Provision for Loan Losses | 21 | 166 | 29 | 78 | 202 | 116 | 252 | 360 | ||||||||||||||||||||||||
| Net Interest Income After Provision | 8,862 | 7,061 | 8,910 | 6,971 | 8,332 | 6,945 | 26,104 | 20,976 | ||||||||||||||||||||||||
| Non-interest Income: | ||||||||||||||||||||||||||||||||
| Deposit service charges | 434 | 379 | 423 | 348 | 463 | 320 | 1,320 | 1,047 | ||||||||||||||||||||||||
| Mortgage banking income | 1,159 | 1,032 | 1,016 | 1,248 | 951 | 670 | 3,126 | 2,950 | ||||||||||||||||||||||||
| Investment advisory fees and non-deposit commissions | 423 | 336 | 401 | 314 | 383 | 258 | 1,207 | 908 | ||||||||||||||||||||||||
| Gain on sale of securities | — | 124 | 94 | 172 | (104 | ) | 54 | (10 | ) | 350 | ||||||||||||||||||||||
| Gain (loss) on sale of other assets | (29 | ) | 40 | 22 | 68 | 15 | 20 | 8 | 128 | |||||||||||||||||||||||
| Loss on early extinguishment of debt | — | (165 | ) | — | (223 | ) | — | (58 | ) | — | (446 | ) | ||||||||||||||||||||
| Other | 855 | 676 | 955 | 717 | 923 | 714 | 2,733 | 2,108 | ||||||||||||||||||||||||
| Total non-interest income | 2,842 | 2,422 | 2,911 | 2,644 | 2,631 | 1,978 | 8,384 | 7,045 | ||||||||||||||||||||||||
| Non-interest Expense: | ||||||||||||||||||||||||||||||||
| Salaries and employee benefits | 5,079 | 4,122 | 4,881 | 4,261 | 4,577 | 4,086 | 14,537 | 12,469 | ||||||||||||||||||||||||
| Occupancy | 611 | 532 | 583 | 539 | 614 | 527 | 1,808 | 1,598 | ||||||||||||||||||||||||
| Equipment | 388 | 396 | 398 | 506 | 381 | 446 | 1,167 | 1,348 | ||||||||||||||||||||||||
| Marketing and public relations | 177 | 96 | 194 | 298 | 89 | 221 | 460 | 615 | ||||||||||||||||||||||||
| FDIC assessment | 94 | 78 | 83 | 78 | 81 | 78 | 258 | 234 | ||||||||||||||||||||||||
| Other real estate expense | 37 | 19 | 31 | 29 | 18 | 27 | 86 | 75 | ||||||||||||||||||||||||
| Amortization of intangibles | 142 | 74 | 143 | 74 | 142 | 75 | 427 | 223 | ||||||||||||||||||||||||
| Merger expenses | — | 228 | — | 98 | — | — | — | 326 | ||||||||||||||||||||||||
| Other | 1,606 | 1,349 | 1,912 | 1,487 | 1,692 | 1,260 | 5,210 | 4,096 | ||||||||||||||||||||||||
| Total non-interest expense | 8,134 | 6,894 | 8,225 | 7,370 | 7,594 | 6,720 | 23,953 | 20,984 | ||||||||||||||||||||||||
| Income before taxes | 3,570 | 2,589 | 3,596 | 2,245 | 3,369 | 2,203 | 10,535 | 7,037 | ||||||||||||||||||||||||
| Income tax expense | 737 | 696 | 595 | 581 | 660 | 447 | 1,992 | 1,724 | ||||||||||||||||||||||||
| Net Income | $ | 2,833 | $ | 1,893 | $ | 3,001 | $ | 1,664 | $ | 2,709 | $ | 1,756 | $ | 8,543 | $ | 5,313 | ||||||||||||||||
| Per share data: | ||||||||||||||||||||||||||||||||
| Net income, basic | $ | 0.37 | $ | 0.28 | $ | 0.40 | $ | 0.25 | $ | 0.36 | $ | 0.27 | $ | 1.13 | $ | 0.80 | ||||||||||||||||
| Net income, diluted | $ | 0.37 | $ | 0.28 | $ | 0.39 | $ | 0.24 | $ | 0.35 | $ | 0.26 | $ | 1.11 | $ | 0.78 | ||||||||||||||||
| Average number of shares outstanding - basic | 7,592,140 | 6,666,168 | 7,573,252 | 6,634,462 | 7,569,038 | 6,687,942 | 7,581,292 | 6,666,497 | ||||||||||||||||||||||||
| Average number of shares outstanding - diluted | 7,724,410 | 6,807,936 | 7,726,479 | 6,803,370 | 7,712,534 | 6,813,460 | 7,719,663 | 6,807,990 | ||||||||||||||||||||||||
| Shares outstanding period end | 7,629,638 | 6,706,408 | 7,605,053 | 6,701,642 | 7,600,690 | 6,697,130 | 7,629,638 | 6,706,408 | ||||||||||||||||||||||||
| Return on average assets | 1.03 | % | 0.83 | % | 1.12 | % | 0.73 | % | 1.04 | % | 0.78 | % | 1.07 | % | 0.78 | % | ||||||||||||||||
| Return on average common equity | 10.42 | % | 8.71 | % | 11.35 | % | 7.87 | % | 10.40 | % | 8.63 | % | 10.72 | % | 8.38 | % | ||||||||||||||||
| Return on average common tangible equity | 12.36 | % | 9.46 | % | 13.51 | % | 8.48 | % | 12.41 | % | 9.32 | % | 12.75 | % | 9.03 | % | ||||||||||||||||
| Net Interest Margin (non taxable equivalent) | 3.55 | % | 3.42 | % | 3.67 | % | 3.39 | % | 3.61 | % | 3.42 | % | 3.61 | % | 3.37 | % | ||||||||||||||||
| Net Interest Margin (taxable equivalent) | 3.60 | % | 3.52 | % | 3.71 | % | 3.49 | % | 3.66 | % | 3.52 | % | 3.66 | % | 3.46 | % | ||||||||||||||||
| Efficiency Ratio (1) | 69.37 | % | 69.64 | % | 69.96 | % | 75.64 | % | 67.39 | % | 72.56 | % | 68.93 | % | 72.06 | % | ||||||||||||||||
(1) Calculated by dividing non-interest expense by net interest income and non interest income, net of securities gains or losses and loss on extinguishment of debt.
FIRST COMMUNITY CORPORATION
Yields on Average Earning Assets and Rates
on Average Interest-Bearing Liabilities
| Three months ended September 30, 2018 | Three months ended September 30, 2017 | |||||||||||||||||||||||
| Average | Interest | Yield/ | Average | Interest | Yield/ | |||||||||||||||||||
| Balance | Earned/Paid | Rate | Balance | Earned/Paid | Rate | |||||||||||||||||||
| Assets | ||||||||||||||||||||||||
| Earning assets | ||||||||||||||||||||||||
| Loans | $ | 696,157 | $ | 8,277 | 4.72 | % | $ | 569,461 | $ | 6,438 | 4.49 | % | ||||||||||||
| Securities: | 271,348 | 1,583 | 2.31 | % | 254,401 | 1,442 | 2.25 | % | ||||||||||||||||
| Federal funds sold and securities purchased | 25,139 | 125 | 1.97 | % | 14,717 | 41 | 1.11 | % | ||||||||||||||||
| Total earning assets | 992,644 | 9,985 | 3.99 | % | 838,579 | 7,921 | 3.75 | % | ||||||||||||||||
| Cash and due from banks | 13,192 | 10,229 | ||||||||||||||||||||||
| Premises and equipment | 34,576 | 30,684 | ||||||||||||||||||||||
| Other assets | 52,895 | 37,272 | ||||||||||||||||||||||
| Allowance for loan losses | (6,154 | ) | (5,547 | ) | ||||||||||||||||||||
| Total assets | $ | 1,087,153 | $ | 911,217 | ||||||||||||||||||||
| Liabilities | ||||||||||||||||||||||||
| Interest-bearing liabilities | ||||||||||||||||||||||||
| Interest-bearing transaction accounts | $ | 193,941 | $ | 154 | 0.32 | % | $ | 157,329 | $ | 58 | 0.15 | % | ||||||||||||
| Money market accounts | 185,928 | 240 | 0.51 | % | 168,380 | 109 | 0.26 | % | ||||||||||||||||
| Savings deposits | 106,677 | 35 | 0.13 | % | 75,392 | 21 | 0.11 | % | ||||||||||||||||
| Time deposits | 185,857 | 387 | 0.83 | % | 167,017 | 271 | 0.64 | % | ||||||||||||||||
| Other borrowings | 47,018 | 286 | 2.41 | % | 52,139 | 235 | 1.79 | % | ||||||||||||||||
| Total interest-bearing liabilities | 719,421 | 1,102 | 0.61 | % | 620,257 | 694 | 0.44 | % | ||||||||||||||||
| Demand deposits | 251,305 | 197,281 | ||||||||||||||||||||||
| Other liabilities | 8,535 | 7,455 | ||||||||||||||||||||||
| Shareholders’ equity | 107,892 | 86,224 | ||||||||||||||||||||||
| Total liabilities and shareholders’ equity | $ | 1,087,153 | $ | 911,217 | ||||||||||||||||||||
| Cost of funds, including demand deposits | 0.45 | % | 0.34 | % | ||||||||||||||||||||
| Net interest spread | 3.38 | % | 3.31 | % | ||||||||||||||||||||
| Net interest income/margin | $ | 8,883 | 3.55 | % | $ | 7,227 | 3.42 | % | ||||||||||||||||
| Net interest income/margin FTE basis | $ | 8,998 | 3.60 | % | $ | 7,436 | 3.52 | % | ||||||||||||||||
FIRST COMMUNITY CORPORATION
Yields on Average Earning Assets and Rates
on Average Interest-Bearing Liabilities
| Nine months ended September 30, 2018 | Nine months ended September 30, 2017 | |||||||||||||||||||||||
| Average | Interest | Yield/ | Average | Interest | Yield/ | |||||||||||||||||||
| Balance | Earned/Paid | Rate | Balance | Earned/Paid | Rate | |||||||||||||||||||
| Assets | ||||||||||||||||||||||||
| Earning assets | ||||||||||||||||||||||||
| Loans | $ | 677,441 | $ | 23,974 | 4.73 | % | $ | 561,844 | $ | 19,003 | 4.52 | % | ||||||||||||
| Securities: | 275,216 | 4,855 | 2.36 | % | 261,728 | 4,319 | 2.21 | % | ||||||||||||||||
| Federal funds sold and securities purchased under agreements to resell | 23,669 | 306 | 1.73 | % | 13,438 | 94 | 0.94 | % | ||||||||||||||||
| Total earning assets | 976,326 | 29,135 | 3.99 | % | 837,010 | 23,416 | 3.74 | % | ||||||||||||||||
| Cash and due from banks | 13,398 | 11,253 | ||||||||||||||||||||||
| Premises and equipment | 34,972 | 30,512 | ||||||||||||||||||||||
| Other assets | 53,099 | 37,681 | ||||||||||||||||||||||
| Allowance for loan losses | (6,023 | ) | (5,414 | ) | ||||||||||||||||||||
| Total assets | $ | 1,071,772 | $ | 911,042 | ||||||||||||||||||||
| Liabilities | ||||||||||||||||||||||||
| Interest-bearing liabilities | ||||||||||||||||||||||||
| Interest-bearing transaction accounts | $ | 191,528 | $ | 292 | 0.20 | % | $ | 158,206 | 143 | 0.12 | % | |||||||||||||
| Money market accounts | 183,211 | 578 | 0.42 | % | 168,153 | 320 | 0.25 | % | ||||||||||||||||
| Savings deposits | 106,581 | 109 | 0.14 | % | 74,123 | 63 | 0.11 | % | ||||||||||||||||
| Time deposits | 190,877 | 1,022 | 0.72 | % | 172,418 | 815 | 0.63 | % | ||||||||||||||||
| Other borrowings | 45,194 | 778 | 2.30 | % | 54,461 | 739 | 1.81 | % | ||||||||||||||||
| Total interest-bearing liabilities | 717,391 | 2,779 | 0.52 | % | 627,361 | 2,080 | 0.44 | % | ||||||||||||||||
| Demand deposits | 239,981 | 191,930 | ||||||||||||||||||||||
| Other liabilities | 7,886 | 7,026 | ||||||||||||||||||||||
| Shareholders’ equity | 106,514 | 84,725 | ||||||||||||||||||||||
| Total liabilities and shareholders’ equity | $ | 1,071,772 | $ | 911,042 | ||||||||||||||||||||
| Cost of funds, including demand deposits | 0.39 | % | 0.34 | % | ||||||||||||||||||||
| Net interest spread | 3.47 | % | 3.30 | % | ||||||||||||||||||||
| Net interest income/margin | $ | 26,356 | 3.61 | % | $ | 21,336 | 3.41 | % | ||||||||||||||||
| Net interest income/margin FTE basis | $ | 26,702 | 3.66 | % | $ | 21,978 | 3.51 | % | ||||||||||||||||
The tables below provide a reconciliation of non-GAAP measures to GAAP for the periods indicated:
| September 30, | December 31, | September 30, | ||||||||||
| Tangible book value per common share | 2018 | 2017 | 2017 | |||||||||
| Tangible common equity per common share (non-GAAP) | $ | 11.98 | $ | 11.66 | $ | 12.02 | ||||||
| Effect to adjust for intangible assets | 2.20 | 2.27 | 0.89 | |||||||||
| Book value per common share (GAAP) | $ | 14.18 | $ | 13.93 | $ | 12.91 | ||||||
| Tangible common shareholders’ equity to tangible assets | ||||||||||||
| Tangible common equity to tangible assets (non-GAAP) | 8.51 | % | 8.56 | % | 8.88 | % | ||||||
| Effect to adjust for intangible assets | 1.40 | % | 1.50 | % | 0.59 | % | ||||||
| Common equity to assets (GAAP) | 9.91 | % | 10.06 | % | 9.47 | % | ||||||
| Return on average tangible common equity | Three months ended September 30, | Three months ended June 30, | Three months ended March 31, | Nine months ended September 30, | ||||||||||||||||||||||||||||
| 2018 | 2017 | 2018 | 2017 | 2018 | 2017 | 2018 | 2017 | |||||||||||||||||||||||||
| Return on average common tangible equity (non-GAAP) | 12.36 | % | 9..46 | % | 13.51 | % | 8.48 | % | 12.41 | % | 9.32 | % | 12.75 | % | 9.03 | % | ||||||||||||||||
| Effect to adjust for intangible assets | (1.94 | )% | (0.75 | )% | (2.16 | )% | (0.61 | )% | (2.01 | )% | (0.69 | )% | (2.03 | )% | (0.65 | )% | ||||||||||||||||
| Return on average common equity (GAAP) | 10.42 | % | 8.71 | % | 11.35 | % | 7.87 | % | 10.40 | % | 8.63 | % | 10.72 | % | 8.38 | % | ||||||||||||||||
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 at period end,” “return on average tangible common equity” and “tangible common shareholders’ equity to tangible assets.” “Tangible book value at period end” is defined as total equity reduced by recorded intangible assets divided by total common shares outstanding. “Tangible common shareholders’ equity to tangible assets” is defined as total common equity reduced by recorded intangible assets divided by total assets reduced by recorded intangible assets. 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.