Exhibit 99.1
| News Release |
| For Release July 29, 2009 |
| 1:00 P.M. |
Contact: | Joseph G. Sawyer, Senior Vice President & Chief Financial Officer or |
| Robin D. Brown, Senior Vice President & Director of Marketing |
| (803) 951- 2265 |
First Community Corporation Announces Earnings and Cash Dividend
Lexington, SC. July 29, 2009 - Today, First Community Corporation (FCCO), the holding company for First Community Bank, reported results for the second quarter of 2009.
Earnings
Net income available to common shareholders for the second quarter of 2009 was $249,000 thousand compared to first quarter of 2009 net income of $408,000. Diluted earnings per share were $.08 for the second quarter of 2009 compared to $.13 in the first quarter of 2009. The reduction in net income as compared to the first quarter is primarily attributable to a $300,000 FDIC Insurance Fund special assessment and an increased loan loss provision ($941,000 in the second quarter of 2009 as compared to $451,000 in the first quarter of 2009). The company showed significant improvement in net income as compared to the same quarter in 2008 when the results included a $6.2 million write down of Freddie Mac preferred stock.
Asset Quality
The quarter was highlighted by improvement in nearly every asset quality metric when compared to the first quarter of 2009. Non-performing assets decreased by 13.90% during the quarter to $7.5 million, which represents 1.15% of total assets. The company believes this compares favorably to its peer group which has a ratio in excess of 2.00%. Additionally, net loans charged off during the quarter decreased from $1,002,000 to $809,000 in the second quarter. As previously noted, the loan loss provision during the quarter was $941,000, which results in an increase in the allowance for loan losses to $4,147,000 or 1.25% of total loans.
Non-Interest Income
Non-interest income increased from $1,048,000 in the first quarter of 2009 to $1,502,000 in the second quarter of this year. Operating non-interest income remained consistent and continues to be an important component of the company’s revenues. The significant improvement is due to an Other Than Temporary Impairment (OTTI) charge of only $85,000 in the second quarter as compared to $657,000 during the first quarter of 2009. Mike Crapps, President and CEO, commented, “We remain very focused on growing revenue in our mortgage banking and financial planning/investment advisory divisions. These sources of revenue are not dependent on capital formation, which is especially beneficial in the current economic environment.”
Non-Interest Expense
Non-interest expense increased $400,000 during the second quarter of 2009, primarily due to the previously mentioned special assessment by the FDIC of $300,000.
Balance Sheet
On a linked quarter basis, the overall size of the company’s balance sheet remained stable with assets of $651 million at June 30, 2009. Crapps noted, “As a local community bank, we reflect the impact this recession is
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having on our customers and the local economy. We are continuing to focus our efforts on the growth in core deposits and loan production.”
Cash Dividend and Capital Planning
The company also reported that the Board of Directors has approved a cash dividend for the second quarter of 2009. The company has declared a $.04 per share dividend payable August 17, 2009 to shareholders of record as of August 10, 2009. This represents a reduction from recent dividend amounts of $.08 per share. Crapps commented, “We recognize the importance of the cash dividend to our shareholders and this decision was made with much consideration and study. This decision is made in recognition of the reality of increased capital requirements by the regulatory agencies throughout the industry and necessitated by the continued lack of clarity in future economic conditions. As has been reported, many banks have eliminated or substantially reduced their cash dividend to common shareholders and we are pleased that we can continue to provide this payout to our shareholders. The company’s regulatory capital ratios continue to meet and exceed the stated regulatory definitions of “well-capitalized”. As of June 30, 2009, the Tier 1 capital, Total capital, and Leverage capital ratios were approximately 11.90%, 12.89%, and 8.18% respectively. This compares to the stated regulatory guidelines of 6%, 10%, and 5% respectively to be considered well-capitalized. The tangible equity to tangible assets ratio at June 30, 2009 was 6.08%, with the tangible common equity to tangible assets ratio being 4.33%. Crapps noted, “As the country transitions from a recession to recovery, there is much uncertainty about the direction of the national and local economy. Preservation of capital is an important strategy at this time. Capital planning, which includes cash dividends, is a continuous process and this decision, along with study of other capital options, will be ongoing.”
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.
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FIRST COMMUNITY CORPORATION
BALANCE SHEET DATA
(Dollars in thousand, except per share data)
| | At June 30, | | December 31, | |
| | 2009 | | 2008 | | 2008 | |
| | | | | | | |
Total Assets | | $ | 650,679 | | $ | 640,568 | | $ | 650,233 | |
Investment Securities | | 216,837 | | 238,122 | | 235,075 | |
Loans | | 331,761 | | 319,112 | | 332,964 | |
Allowance for Loan Losses | | 4,147 | | 3,744 | | 4,581 | |
Total Deposits | | 433,646 | | 437,554 | | 423,798 | |
Securities Sold Under Agreements to Repurchase | | 25,220 | | 23,347 | | 28,151 | |
Federal Home Loan Bank Advances | | 102,415 | | 97,552 | | 108,536 | |
Junior Subordinated Debt | | 15,464 | | 15,464 | | 15,464 | |
Shareholders’ equity | | 67,345 | | 61,192 | | 68,156 | |
| | | | | | | |
Book Value Per Common Share | | $ | 17.41 | | $ | 19.12 | | $ | 17.76 | |
Tangible Book Value Per Common Share | | $ | 8.29 | | $ | 9.91 | | $ | 8.50 | |
Equity to Assets | | 10.35 | % | 9.55 | % | 10.48 | % |
Loan to Deposit Ratio | | 76.51 | % | 72.93 | % | 75.45 | % |
Allowance for Loan Losses/Loans | | 1.25 | % | 1.17 | % | 1.38 | % |
Average Balances:
| | Three months ended | | Six months ended | |
| | June 30, | | June 30, | |
| | 2009 | | 2008 | | 2009 | | 2008 | |
| | | | | | | | | |
Average Total Assets | | $ | 652,637 | | $ | 626,545 | | $ | 653,420 | | $ | 601,139 | |
Average Loans | | 332,029 | | 315,734 | | 332,216 | | 313,266 | |
Average Earning Assets | | 574,207 | | 552,775 | | 573,574 | | 526,095 | |
Average Deposits | | 433,327 | | 426,891 | | 432,329 | | 415,184 | |
Average Other Borrowings | | 145,073 | | 130,342 | | 146,603 | | 116,027 | |
Average Shareholders’ Equity | | 68,133 | | 63,642 | | 68,462 | | 63,973 | |
| | | | | | | | | |
Asset Quality | | | | | | | | | |
Nonperforming Assets: | | | | | | | | | |
Non-accrual loans | | $ | 6,381 | | $ | 814 | | $ | 6,381 | | $ | 814 | |
Other real estate owned | | 1,127 | | 173 | | 1,127 | | 173 | |
Accruing loans past due 90 days or more | | — | | 569 | | — | | 569 | |
Total nonperforming assets | | $ | 7,508 | | $ | 1,556 | | $ | 7,508 | | $ | 1,556 | |
| | | | | | | | | |
Loans charged-off | | $ | 834 | | $ | 155 | | $ | 1,861 | | $ | 207 | |
Overdrafts charged-off | | 15 | | 19 | | 36 | | 50 | |
Loan recoveries | | (25 | ) | (20 | ) | (50 | ) | (86 | ) |
Overdraft recoveries | | (6 | ) | (9 | ) | (21 | ) | (21 | ) |
Net Charge-offs | | $ | 818 | | $ | 145 | | $ | 1,826 | | $ | 150 | |
Net charge-offs to average loans | | 0.25 | % | 0.04 | % | 0.55 | % | 0.05 | % |
| | Post Office Box 64 / Lexington, SC 29071 |
FIRST COMMUNITY CORPORATION
INCOME STATEMENT DATA
(Dollars in thousands, except per share data)
| | Three months ended | | Three months ended | | Six months ended | |
| | June 30, | | March 31, | | June 30, | |
| | 2009 | | 2008 | | 2009 | | 2008 | | 2009 | | 2008 | |
| | | | | | | | | | | | | |
Interest Income | | $ | 7,662 | | $ | 8,484 | | $ | 7,919 | | $ | 7,854 | | $ | 15,581 | | $ | 16,338 | |
Interest Expense | | 3,340 | | 3,997 | | 3,609 | | 3,866 | | 6,949 | | 7,864 | |
Net Interest Income | | 4,322 | | 4,487 | | 4,310 | | 3,988 | | 8,632 | | 8,474 | |
Provision for Loan Losses | | 941 | | 209 | | 451 | | 155 | | 1,392 | | 364 | |
Net Interest Income After Provision | | 3,381 | | 4,278 | | 3,859 | | 3,833 | | 7,240 | | 8,110 | |
Non-interest Income: | | | | | | | | | | | | | |
Deposit service charges | | 576 | | 657 | | 556 | | 664 | | 1,132 | | 1,321 | |
Mortgage origination fees | | 246 | | 145 | | 217 | | 186 | | 463 | | 330 | |
Commission on sale of non-deposit products | | 103 | | 70 | | 149 | | 88 | | 252 | | 158 | |
Gain (loss) on sale of securities | | 9 | | — | | 354 | | (29 | ) | 363 | | (28 | ) |
Fair value gain (loss) adjustment | | 230 | | 24 | | 21 | | 149 | | 251 | | 173 | |
Other-than-temporary-impairment write-down on securities | | (85 | ) | (6,162 | ) | (657 | ) | | | (742 | ) | (6,162 | ) |
Other | | 423 | | 365 | | 408 | | 364 | | 831 | | 729 | |
Total non-interest income | | 1,502 | | (4,901 | ) | 1,048 | | 1,422 | | 2,550 | | (3,479 | ) |
Non-interest Expense: | | | | | | | | | | | | | |
Salaries and employee benefits | | 2,127 | | 2,006 | | 2,013 | | 1,901 | | 4,140 | | 3,907 | |
Occupancy | | 289 | | 281 | | 300 | | 279 | | 589 | | 560 | |
Equipment | | 304 | | 317 | | 319 | | 325 | | 623 | | 642 | |
Marketing and public relations | | 55 | | 98 | | 107 | | 203 | | 162 | | 301 | |
Amortization of intangibles | | 155 | | 123 | | 155 | | 138 | | 310 | | 261 | |
Other | | 1,499 | | 955 | | 1,130 | | 802 | | 2,629 | | 1,756 | |
Total non-interest expense | | 4,429 | | 3,780 | | 4,024 | | 3,648 | | 8,453 | | 7,427 | |
Income before taxes | | 454 | | (4,403 | ) | 883 | | 1,607 | | 1,337 | | (2,796 | ) |
Income tax expense (benefit) | | 40 | | (921 | ) | 311 | | 484 | | 351 | | (437 | ) |
Net Income (loss) | | $ | 414 | | $ | (3,482 | ) | $ | 572 | | $ | 1,123 | | $ | 986 | | $ | (2,359 | ) |
Preferred stock dividends | | 165 | | — | | 164 | | — | | 329 | | — | |
Net income (loss) available to common shareholders | | $ | 249 | | $ | (3,482 | ) | $ | 408 | | $ | 1,123 | | $ | 657 | | $ | (2,359 | ) |
| | | | | | | | | | | | | |
Per share data: | | | | | | | | | | | | | |
Net income (loss), basic | | $ | 0.08 | | $ | (1.09 | ) | $ | 0.13 | | $ | 0.35 | | $ | 0.20 | | $ | (0.74 | ) |
Net income (loss), diluted | | $ | 0.08 | | $ | (1.09 | ) | $ | 0.13 | | $ | 0.35 | | $ | 0.20 | | $ | (0.74 | ) |
| | | | | | | | | | | | | |
Average number of shares outstanding - basic | | 3,239,863 | | 3,198,598 | | 3,231,411 | | 3,205,676 | | 3,235,660 | | 3,202,136 | |
Average number of shares outstanding - diluted | | 3,239,863 | | 3,198,598 | | 3,231,411 | | 3,240,530 | | 3,235,660 | | 3,202,136 | |
| | | | | | | | | | | | | |
Return on average assets | | 0.15 | % | -2.23 | % | 0.25 | % | 0.79 | % | 0.20 | % | -0.79 | % |
Return on average common equity: | | 1.74 | % | -22.00 | % | 2.86 | % | 7.03 | % | 2.30 | % | -7.42 | % |
Return on average common tangible equity: | | 3.62 | % | -41.07 | % | 5.88 | % | 13.04 | % | 4.76 | % | -13.80 | % |
Net Interest Margin (non taxable equivalent) | | 3.02 | % | 3.26 | % | 3.05 | % | 3.21 | % | 3.03 | % | 3.24 | % |
Net Interest Margin (taxable equivalent) | | 3.04 | % | 3.33 | % | 3.08 | % | 3.30 | % | 3.06 | % | 3.31 | % |
