First munity (FCCO)

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First munity (FCCO) - 2023 Q3 - Quarterly Report
2023-11-08 16:00
PART I – FINANCIAL INFORMATION [Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) The company's total assets grew to **$1.79 billion** and deposits to **$1.49 billion** by September 30, 2023, while Q3 net income significantly declined to **$1.8 million** [Consolidated Balance Sheets](index=3&type=section&id=Consolidated%20Balance%20Sheets) Total assets reached **$1.79 billion** and total deposits **$1.49 billion** by September 30, 2023, driven by growth in net loans held-for-investment Consolidated Balance Sheet Highlights (in thousands) | Account | Sep 30, 2023 | Dec 31, 2022 | Change | Change (%) | | :--- | :--- | :--- | :--- | :--- | | **Total Assets** | **$1,793,722** | **$1,672,946** | **$120,776** | **7.2%** | | Net Loans Held-for-Investment | $1,079,827 | $969,521 | $110,306 | 11.4% | | Total Deposits | $1,492,026 | $1,385,382 | $106,644 | 7.7% | | Federal Home Loan Bank advances | $80,000 | $50,000 | $30,000 | 60.0% | | **Total Liabilities** | **$1,670,121** | **$1,554,585** | **$115,536** | **7.4%** | | **Total Shareholders' Equity** | **$123,601** | **$118,361** | **$5,240** | **4.4%** | [Consolidated Statements of Income](index=4&type=section&id=Consolidated%20Statements%20of%20Income) Net income for Q3 2023 significantly decreased to **$1.8 million** from **$4.0 million** in Q3 2022, primarily due to lower net interest income and a securities sale loss Q3 2023 vs Q3 2022 Performance (in thousands, except per share) | Metric | Q3 2023 | Q3 2022 | Change (%) | | :--- | :--- | :--- | :--- | | Net Interest Income | $12,103 | $12,794 | -5.4% | | Provision for Credit Losses | $474 | $18 | 2533.3% | | Total Non-interest Income | $1,864 | $2,673 | -30.3% | | Total Non-interest Expense | $11,273 | $10,417 | 8.2% | | **Net Income** | **$1,756** | **$3,951** | **-55.6%** | | **Diluted EPS** | **$0.23** | **$0.52** | **-55.8%** | Nine Months 2023 vs 2022 Performance (in thousands, except per share) | Metric | Nine Months 2023 | Nine Months 2022 | Change (%) | | :--- | :--- | :--- | :--- | | Net Interest Income | $36,597 | $34,578 | 5.8% | | Provision for (Release of) Credit Losses | $730 | $(177) | N/A | | Total Non-interest Income | $7,490 | $9,056 | -17.3% | | Total Non-interest Expense | $32,464 | $30,559 | 6.2% | | **Net Income** | **$8,546** | **$10,570** | **-19.1%** | | **Diluted EPS** | **$1.12** | **$1.39** | **-19.4%** | [Consolidated Statements of Comprehensive Income (Loss)](index=6&type=section&id=Consolidated%20Statements%20of%20Comprehensive%20Income%20%28Loss%29) Comprehensive income for Q3 2023 was **$187,000**, a turnaround from a **$2.8 million** loss in Q3 2022, driven by reduced unrealized securities losses Comprehensive Income (Loss) Summary (in thousands) | Period | Net Income | Other Comprehensive Loss | Comprehensive Income (Loss) | | :--- | :--- | :--- | :--- | | **Q3 2023** | $1,756 | $(1,569) | $187 | | **Q3 2022** | $3,951 | $(6,708) | $(2,757) | | **9M 2023** | $8,546 | $(671) | $7,875 | | **9M 2022** | $10,570 | $(36,530) | $(25,960) | [Consolidated Statements of Changes in Shareholders' Equity](index=7&type=section&id=Consolidated%20Statements%20of%20Changes%20in%20Shareholders%27%20Equity) Shareholders' equity increased to **$123.6 million** by September 30, 2023, primarily due to net income, partially offset by dividends and comprehensive loss - For the nine months ended September 30, 2023, total shareholders' equity increased by **$5.2 million**[16](index=16&type=chunk) - Key drivers of the change in equity for the nine months ended September 30, 2023 include: Net Income of **$8.5 million**, cash dividends of **$3.2 million**, and an other comprehensive loss of **$0.7 million**[16](index=16&type=chunk) [Consolidated Statements of Cash Flows](index=10&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Net cash from operating activities decreased to **$3.7 million** for the nine months ended September 30, 2023, while overall cash and cash equivalents increased by **$60.1 million** Cash Flow Summary (in thousands) | Cash Flow Activity | Nine Months Ended Sep 30, 2023 | Nine Months Ended Sep 30, 2022 | | :--- | :--- | :--- | | Net Cash from Operating Activities | $3,717 | $17,772 | | Net Cash Used in Investing Activities | $(54,438) | $(142,056) | | Net Cash from Financing Activities | $110,776 | $93,515 | | **Net Increase (Decrease) in Cash** | **$60,055** | **$(30,769)** | [Notes to Consolidated Financial Statements](index=12&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) Key notes include the adoption of CECL, significant reduction in non-accrual loans to **$61,000**, and the introduction of **$48.2 million** in brokered deposits - The company adopted ASU 2016-13 (CECL) on January 1, 2023, resulting in a net decrease to retained earnings of **$337,400**[26](index=26&type=chunk) - As of September 30, 2023, there was no allowance for credit loss related to the available-for-sale securities portfolio[35](index=35&type=chunk) - Non-accrual loans decreased significantly from **$4.9 million** at year-end 2022 to **$61,000** at September 30, 2023[81](index=81&type=chunk) - Total uninsured deposits were **$429.7 million**, of which **$85.7 million** were collateralized public funds, leaving net uninsured deposits at **$344.0 million** (**23.1%** of total deposits)[105](index=105&type=chunk) - In May 2023, the company entered into a **$150.0 million** pay-fixed/receive-floating interest rate swap to hedge the fair value risk of its fixed-rate loan portfolio[111](index=111&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=35&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the **$2.2 million** Q3 net income decline, attributing it to net interest margin compression and a strategic securities sale, alongside strong loan growth and improved asset quality [Comparison of Results of Operations](index=37&type=section&id=Comparison%20of%20Results%20of%20Operations) Q3 2023 net income declined to **$1.8 million** from **$4.0 million** in Q3 2022, primarily due to reduced net interest income and a **$1.2 million** loss on securities sales - Q3 2023 net income declined by **$2.2 million** YoY, primarily due to a **$691,000** drop in net interest income, a **$456,000** increase in provision for credit losses, an **$809,000** fall in non-interest income, and an **$856,000** increase in non-interest expense[134](index=134&type=chunk) - The Q3 net interest margin decreased by **31 basis points** to **2.95%** YoY, as the cost of funds increased more rapidly than the yield on earning assets[137](index=137&type=chunk) - A strategic sale of **$39.9 million** in U.S. Treasuries during Q3 2023 resulted in a one-time pre-tax loss of **$1.2 million**, aimed at improving future liquidity and net interest margin[138](index=138&type=chunk)[189](index=189&type=chunk) - For the nine months ended Sep 30, 2023, net income declined by **$2.0 million** YoY, as increased non-interest expense and credit provisions, along with lower non-interest income, outweighed a **$2.0 million** increase in net interest income[160](index=160&type=chunk) [Financial Position](index=57&type=section&id=Financial%20Position) Total assets grew to **$1.8 billion** and loans to **$1.1 billion** by September 30, 2023, funded by increased deposits and FHLB advances - Assets increased by **$120.8 million** (**9.7%** annualized) to **$1.8 billion** at September 30, 2023[201](index=201&type=chunk) - Loans (excluding HFS) grew by **$110.3 million** (**15.2%** annualized) to **$1.1 billion**[201](index=201&type=chunk) - Deposits increased by **$106.6 million** (**10.3%** annualized) to **$1.5 billion**[215](index=215&type=chunk) - Shareholders' equity increased by **$5.2 million** to **$123.6 million**, impacted by net income of **$8.5 million**, dividends of **$3.2 million**, and a **$671,000** increase in accumulated other comprehensive loss[223](index=223&type=chunk) [Provision and Allowance for Credit Losses](index=49&type=section&id=Provision%20and%20Allowance%20for%20Credit%20Losses) The company recorded a **$730,000** provision for credit losses, while asset quality significantly improved with non-accrual loans decreasing to **$61,000** - The provision for credit losses for the nine months ended Sep 30, 2023 was **$730,000**, compared to a release of **$177,000** in the prior year period[161](index=161&type=chunk)[162](index=162&type=chunk) - The non-performing asset ratio improved significantly to **0.04%** at Sep 30, 2023, down from **0.35%** at Dec 31, 2022[181](index=181&type=chunk) - Non-accrual loans declined to **$61,000** at Sep 30, 2023 from **$4.9 million** at Dec 31, 2022, primarily due to the successful resolution of several large non-accrual relationships[181](index=181&type=chunk) Allowance for Credit Losses - Loans (in thousands) | Metric | Sep 30, 2023 | Dec 31, 2022 | | :--- | :--- | :--- | | Allowance for Credit Losses | $11,818 | $11,336 | | % of Total Loans | 1.08% | 1.16% | | % of Non-performing Loans | 18,465.63% | 230.68% | [Market Risk Management](index=64&type=section&id=Market%20Risk%20Management) The company is short-term liability-sensitive to interest rate changes, with a **2.63%** projected decrease in net interest income for a **+100 bp** rate shock - The company is liability sensitive in the short term (12 months), with a modeled **2.63%** decrease in net interest income for a **+100 bp** rate shock as of September 30, 2023[227](index=227&type=chunk)[228](index=228&type=chunk) - The company is asset sensitive based on the longer-term Present Value of Equity (PVE) measure, though PVE is projected to decline by **1.40%** in a **-100 bp** rate shock scenario[229](index=229&type=chunk)[230](index=230&type=chunk) - The company entered into a **$150.0 million** Pay-Fixed Swap Agreement on May 5, 2023, to partially offset its liability sensitivity[227](index=227&type=chunk) [Liquidity and Capital Resources](index=66&type=section&id=Liquidity%20and%20Capital%20Resources) The company maintains strong liquidity with over **$450.1 million** in credit lines and remains well-capitalized, despite slight decreases in capital ratios due to asset growth - The company has total remaining credit availability of over **$450.1 million**, primarily from the FHLB and federal funds lines[234](index=234&type=chunk) - Unused credit commitments to customers totaled **$221.9 million** at September 30, 2023[235](index=235&type=chunk) Bank Regulatory Capital Ratios | Capital Ratio | Sep 30, 2023 | Dec 31, 2022 | Well-Capitalized Minimum | | :--- | :--- | :--- | :--- | | Leverage Ratio | 8.63% | 8.63% | 5.00% | | Common Equity Tier 1 | 12.47% | 13.49% | 6.50% | | Tier 1 Capital | 12.47% | 13.49% | 8.00% | | Total Capital | 13.50% | 14.54% | 10.00% | - A cash dividend of **$0.14** per common share was approved for Q3 2023[244](index=244&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=70&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This section is not applicable as per the report - The report states this item is not applicable[246](index=246&type=chunk) [Controls and Procedures](index=70&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective as of September 30, 2023, with no material changes to internal controls during the quarter - The CEO and CFO concluded that disclosure controls and procedures were effective as of the end of the reporting period[247](index=247&type=chunk) - No material changes to internal control over financial reporting occurred during the quarter[249](index=249&type=chunk) PART II – OTHER INFORMATION [Legal Proceedings](index=71&type=section&id=Item%201.%20Legal%20Proceedings) Management is not aware of any pending legal proceedings that would materially impact the company's financial condition or results - Management does not believe any pending legal proceedings would have a material adverse impact on the company's financial position, results of operations, or cash flows[252](index=252&type=chunk) [Risk Factors](index=71&type=section&id=Item%201A.%20Risk%20Factors) A new risk factor highlights the potential instability and cost of brokered deposits, which totaled **$48.2 million** as of September 30, 2023 - A new risk factor was added regarding the use of brokered deposits, which may be an unstable and/or expensive funding source[255](index=255&type=chunk) - The company held **$48.2 million** in brokered deposits as of September 30, 2023, representing **3.2%** of total deposits[257](index=257&type=chunk) - The ability to accept, renew, or roll over brokered deposits is dependent on maintaining a "well capitalized" status, and limitations could adversely impact funding costs and liquidity[258](index=258&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=72&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company credited **1,979** deferred stock units to directors in Q3 2023, with no share repurchases made under the current plan - In Q3 2023, an aggregate of **1,979** deferred stock units were credited to directors who elected to defer fees[263](index=263&type=chunk) - No share repurchases were made during Q3 2023. The current repurchase plan for up to **375,000** shares expires on December 31, 2023[263](index=263&type=chunk) [Exhibits](index=73&type=section&id=Item%206.%20Exhibits) This section lists exhibits filed with the quarterly report, including officer certifications and iXBRL financial statements
First munity (FCCO) - 2023 Q2 - Quarterly Report
2023-08-09 16:00
UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) Commission File Number: 000-28344 FIRST COMMUNITY CORPORATION (Exact name of registrant as specified in its charter) South Carolina 57-1010751 (State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification No.) 5455 Sunset Boulevard, Lexington, South Carolina 29072 (Address of principal executive offices) (Zip Code) (803) 951-2265 (Registrant's telephone number, including area code) N ...
First munity (FCCO) - 2023 Q1 - Quarterly Report
2023-05-10 16:00
UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) Commission File Number: 000-28344 FIRST COMMUNITY CORPORATION (Exact name of registrant as specified in its charter) South Carolina 57-1010751 (State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification No.) 5455 Sunset Boulevard, Lexington, South Carolina 29072 (Address of principal executive offices) (Zip Code) (803) 951-2265 (Registrant's telephone number, including area code) N ...
First munity (FCCO) - 2022 Q4 - Annual Report
2023-03-21 16:00
UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Form 10-K (Mark One) x Annual Report under Section 13 or 15(d) of the Securities Exchange Act of 1934 For the fiscal year ended December 31, 2022 Or o Transition Report under Section 13 or 15(d) of the Securities Exchange Act of 1934 For the transition period from to Commission file number: 000-28344 First Community Corporation (Exact name of registrant as specified in its charter) South Carolina 57-1010751 (State or other jurisdiction ...
First munity (FCCO) - 2022 Q3 - Quarterly Report
2022-11-08 16:00
PART I – FINANCIAL INFORMATION [Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) The company's financial statements for the period ended September 30, 2022, reflect asset growth to $1.65 billion, driven by an increase in net loans, while shareholders' equity decreased significantly to $114.1 million due to a $36.5 million other comprehensive loss from unrealized losses on investment securities, and net income for the first nine months of 2022 was $10.6 million, a decrease from $11.5 million in the prior year period, impacted by lower non-interest income and higher non-interest expenses [Consolidated Balance Sheets](index=3&type=section&id=Consolidated%20Balance%20Sheets) As of September 30, 2022, total assets grew to $1.65 billion from $1.58 billion at year-end 2021, primarily driven by an increase in net loans held-for-investment, while total liabilities also increased, mainly due to growth in deposits, and a significant change was observed in shareholders' equity, which decreased from $141.0 million to $114.1 million, largely because of a substantial increase in accumulated other comprehensive loss from $(33.3) million, reflecting unrealized losses on investment securities Consolidated Balance Sheet Highlights (in thousands) | Account | Sep 30, 2022 (Unaudited) | Dec 31, 2021 | | :--- | :--- | :--- | | **Total Assets** | **$1,651,829** | **$1,584,508** | | Net Loans Held-for-Investment | $938,895 | $852,523 | | Investment Securities (AFS & HTM) | $571,651 | $564,839 | | **Total Liabilities** | **$1,537,684** | **$1,443,510** | | Total Deposits | $1,436,256 | $1,361,291 | | **Total Shareholders' Equity** | **$114,145** | **$140,998** | | Accumulated Other Comprehensive (Loss) | ($33,251) | $3,279 | [Consolidated Statements of Income](index=4&type=section&id=Consolidated%20Statements%20of%20Income) For the nine months ended September 30, 2022, net income was $10.6 million, down from $11.5 million in the prior-year period, driven by a decline in non-interest income, particularly a 51% drop in mortgage banking income, and a 4.2% rise in non-interest expenses, while net interest income saw a slight increase of 1.4%, and for the third quarter of 2022, net income was $4.0 million, compared to $4.7 million in Q3 2021, with diluted EPS at $0.52 versus $0.63 Nine Months Ended September 30 (in thousands, except per share data) | Metric | 2022 | 2021 | | :--- | :--- | :--- | | Net Interest Income | $34,578 | $34,115 | | Provision for (Release of) Loan Losses | ($177) | $394 | | Total Non-interest Income | $9,056 | $10,278 | | Total Non-interest Expense | $30,559 | $29,323 | | **Net Income** | **$10,570** | **$11,546** | | **Diluted EPS** | **$1.39** | **$1.53** | Three Months Ended September 30 (in thousands, except per share data) | Metric | 2022 | 2021 | | :--- | :--- | :--- | | Net Interest Income | $12,794 | $12,456 | | Provision for Loan Losses | $18 | $49 | | Total Non-interest Income | $2,673 | $3,564 | | Total Non-interest Expense | $10,417 | $9,905 | | **Net Income** | **$3,951** | **$4,748** | | **Diluted EPS** | **$0.52** | **$0.63** | [Consolidated Statements of Comprehensive Income (Loss)](index=6&type=section&id=Consolidated%20Statements%20of%20Comprehensive%20Income%20(Loss)) The company reported a comprehensive loss of $26.0 million for the nine months ended September 30, 2022, a stark contrast to the $4.9 million comprehensive income in the same period of 2021, primarily driven by a significant $36.5 million other comprehensive loss, net of tax, resulting from unrealized losses on available-for-sale securities and securities transferred to held-to-maturity Comprehensive Income (Loss) Summary (in thousands) | Period | Net Income | Other Comprehensive Loss | Comprehensive Income (Loss) | | :--- | :--- | :--- | :--- | | **Nine Months Ended Sep 30, 2022** | $10,570 | ($36,530) | **($25,960)** | | **Nine Months Ended Sep 30, 2021** | $11,546 | ($6,694) | **$4,852** | | **Three Months Ended Sep 30, 2022** | $3,951 | ($6,708) | **($2,757)** | | **Three Months Ended Sep 30, 2021** | $4,748 | ($2,853) | **$1,895** | [Consolidated Statements of Changes in Shareholders' Equity](index=7&type=section&id=Consolidated%20Statements%20of%20Changes%20in%20Shareholders'%20Equity) Shareholders' equity decreased by $26.9 million during the first nine months of 2022, ending at $114.1 million, with the decline primarily caused by a $36.5 million other comprehensive loss, which more than offset the $10.6 million in net income, and dividends of $2.9 million were paid to common shareholders during the period - Total shareholders' equity fell from **$141.0 million** at the end of 2021 to **$114.1 million** at September 30, 2022[21](index=21&type=chunk) - The primary driver of the equity reduction was a **$36.5 million** other comprehensive loss, net of tax, related to unrealized losses on securities[21](index=21&type=chunk) - The company paid common dividends of **$0.39 per share**, totaling **$2.9 million** for the nine-month period[21](index=21&type=chunk) [Consolidated Statements of Cash Flows](index=10&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) For the nine months ended September 30, 2022, cash and cash equivalents decreased by $30.8 million, with net cash provided by operating activities at $17.8 million, a significant decrease from $53.9 million in the prior year, mainly due to changes in loans held-for-sale, while net cash used in investing activities was $142.1 million, primarily for purchasing investment securities and funding loan growth, and financing activities provided $93.5 million in cash, largely from an increase in deposit accounts Cash Flow Summary (Nine Months Ended Sep 30, in thousands) | Activity | 2022 | 2021 | | :--- | :--- | :--- | | Net Cash from Operating Activities | $17,772 | $53,938 | | Net Cash used in Investing Activities | ($142,056) | ($200,222) | | Net Cash from Financing Activities | $93,515 | $160,986 | | **Net (Decrease) Increase in Cash** | **($30,769)** | **$14,702** | - A significant non-cash investing activity was the transfer of **$245.6 million** of available-for-sale securities to held-to-maturity[26](index=26&type=chunk) [Notes to Consolidated Financial Statements](index=12&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) The notes detail significant accounting policies and provide further information on financial statement items, including the impact of rising interest rates on operations, the reclassification of $224.5 million in securities from available-for-sale to held-to-maturity, a detailed breakdown of the loan portfolio and allowance for loan losses, and segment reporting, with the company also noting its ongoing evaluation of the upcoming CECL accounting standard, expected to be adopted in Q1 2023 - The Federal Open Market Committee (FOMC) increased the target range for federal funds by a total of **3.00%** during the first nine months of 2022, significantly impacting market interest rates[31](index=31&type=chunk)[32](index=32&type=chunk) - On June 1, 2022, the company reclassified **$224.5 million** in investments from available-for-sale (AFS) to held-to-maturity (HTM) to mitigate the impact of rising interest rates on accumulated other comprehensive income[47](index=47&type=chunk) - The company is preparing to adopt the Current Expected Credit Loss (CECL) model in the first quarter of 2023, which may have a material effect on its financial statements[71](index=71&type=chunk)[95](index=95&type=chunk) Loan Portfolio Composition (in thousands) | Loan Category | Sep 30, 2022 | Dec 31, 2021 | | :--- | :--- | :--- | | Commercial, financial and agricultural | $70,712 | $69,952 | | Real estate: Construction | $84,355 | $94,969 | | Real estate: Mortgage-commercial | $698,416 | $617,464 | | Real estate: Mortgage-residential | $53,553 | $45,498 | | Consumer | $43,174 | $35,819 | | **Total Loans** | **$950,210** | **$863,702** | [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=38&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the financial results, highlighting a decrease in net income for the first nine months of 2022 to $10.6 million from $11.5 million year-over-year, attributed to lower non-interest income, particularly from mortgage banking, and higher non-interest expenses, while net interest income grew slightly due to increased earning assets, though the net interest margin compressed, and the financial position strengthened with total assets reaching $1.7 billion, driven by strong loan growth, maintaining a strong liquidity and capital position, with all capital ratios exceeding 'well-capitalized' regulatory minimums [Comparison of Results of Operations](index=41&type=section&id=Comparison%20of%20Results%20of%20Operations) For the nine months ended September 30, 2022, net income fell by $976 thousand compared to the prior year, primarily due to a $1.7 million decline in mortgage banking income and a $1.2 million increase in non-interest expenses, partially offset by a $463 thousand increase in net interest income and a $571 thousand reduction in the provision for loan losses, and the third quarter of 2022 saw net income of $4.0 million, down from $4.7 million in Q3 2021, reflecting similar trends of lower mortgage income and higher operating costs - Net income for the nine months ended Sep 30, 2022, was **$10.6 million**, a decrease from **$11.5 million** in the same period of 2021[157](index=157&type=chunk) - The decline in non-interest income was primarily driven by a **$1.7 million** decrease in mortgage banking income[158](index=158&type=chunk) - Non-interest expense increased by **$1.2 million**, mainly due to higher salaries, professional fees, and data processing costs[158](index=158&type=chunk) [Net Interest Income](index=43&type=section&id=Net%20Interest%20Income) Net interest income for the first nine months of 2022 increased by 1.4% to $34.6 million, driven by a 10.0% increase in average earning assets to $1.5 billion, however, the net interest margin (tax-equivalent) declined by 25 basis points to 3.05%, primarily due to the deployment of excess liquidity into lower-yielding securities and a significant reduction in high-yield PPP loan income Net Interest Income and Margin (Nine Months Ended Sep 30) | Metric | 2022 | 2021 | | :--- | :--- | :--- | | Net Interest Income | $34.6M | $34.1M | | Average Earning Assets | $1.5B | $1.4B | | Net Interest Margin (Tax-Equivalent) | 3.05% | 3.30% | - Interest income from PPP loans fell to just **$48 thousand** in the first nine months of 2022, compared to **$3.1 million** in the same period of 2021[163](index=163&type=chunk) [Provision and Allowance for Loan Losses](index=44&type=section&id=Provision%20and%20Allowance%20for%20Loan%20Losses) The company recorded a provision release (credit) of $177 thousand for the first nine months of 2022, compared to a $394 thousand provision expense in the prior year, primarily due to a reduction in the COVID-19 qualitative factor in the allowance methodology, and the allowance for loan losses stood at $11.3 million, or 1.19% of total loans, at September 30, 2022, while non-performing assets increased to 0.36% of total assets, up from 0.09% at year-end 2021, mainly because one $4.1 million loan was moved to non-accrual status Allowance and Asset Quality Ratios | Metric | Sep 30, 2022 | Dec 31, 2021 | | :--- | :--- | :--- | | Allowance for Loan Losses | $11.3M | $11.2M | | Allowance / Total Loans | 1.19% | 1.29% | | Non-performing Assets / Total Assets | 0.36% | 0.09% | | Non-accrual Loans | $4.9M | $0.25M | - The increase in non-performing assets was primarily due to one **$4.1 million** loan being placed on non-accrual status in June 2022[178](index=178&type=chunk) [Financial Position](index=55&type=section&id=Financial%20Position) Total assets grew to $1.7 billion at September 30, 2022, an increase of $67.3 million from year-end 2021, fueled by an $86.5 million increase in loans (excluding loans held-for-sale), and deposits also grew by $75.0 million to $1.4 billion, while shareholders' equity declined by $26.9 million to $114.1 million, primarily due to unrealized losses on the investment portfolio, which led to a reclassification of $224.5 million in securities to held-to-maturity to mitigate further equity volatility - Total assets reached **$1.7 billion** at September 30, 2022[212](index=212&type=chunk) - Loans (excluding held-for-sale) increased by **$86.5 million** since December 31, 2021[212](index=212&type=chunk) - Total deposits increased by **$75.0 million** to **$1.4 billion**[228](index=228&type=chunk) - Shareholders' equity declined to **6.9%** of total assets from **8.9%** at year-end, driven by a **$36.5 million** reduction in accumulated other comprehensive income[232](index=232&type=chunk) [Liquidity and Capital Resources](index=61&type=section&id=Liquidity%20and%20Capital%20Resources) The company maintains a strong liquidity position with ample capacity to meet funding needs through core deposits and access to borrowing lines, and capital ratios remain robust and well above regulatory minimums for a 'well-capitalized' institution, with the Bank's Tier 1 leverage ratio at 8.53%, Common Equity Tier 1 ratio at 13.42%, and Total Capital ratio at 14.49% as of September 30, 2022, and the decline in shareholders' equity due to AOCI changes did not materially impact regulatory capital, as the company has opted out of including AOCI in its regulatory capital calculations Bank Regulatory Capital Ratios | Ratio | Sep 30, 2022 | Well-Capitalized Minimum | | :--- | :--- | :--- | | Leverage Ratio | 8.53% | 5.00% | | Common Equity Tier 1 Capital Ratio | 13.42% | 6.50% | | Tier 1 Capital Ratio | 13.42% | 8.00% | | Total Capital Ratio | 14.49% | 10.00% | - The company has opted out of including Accumulated Other Comprehensive Income (AOCI) in its regulatory capital calculations, mitigating the impact of unrealized securities losses on its capital ratios[253](index=253&type=chunk) - The Board of Directors approved a cash dividend of **$0.13 per common share** payable on November 15, 2022[259](index=259&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=69&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This item is marked as not applicable for this filing - The company has indicated that this section is not applicable[271](index=271&type=chunk) [Controls and Procedures](index=69&type=section&id=Item%204.%20Controls%20and%20Procedures) Management, including the CEO and CFO, evaluated the company's disclosure controls and procedures and concluded they were effective as of September 30, 2022, with no material changes to the company's internal control over financial reporting during the third quarter - The CEO and CFO concluded that disclosure controls and procedures were effective as of the end of the reporting period[273](index=273&type=chunk) - No material changes were made to internal control over financial reporting during the quarter ended September 30, 2022[275](index=275&type=chunk) PART II – OTHER INFORMATION [Legal Proceedings](index=70&type=section&id=Item%201.%20Legal%20Proceedings) The company is party to various claims and lawsuits arising in the normal course of business, but management is not aware of any pending legal proceedings that would have a material adverse impact on its financial condition - There are no material pending legal proceedings against the company[278](index=278&type=chunk) [Risk Factors](index=70&type=section&id=Item%201A.%20Risk%20Factors) There have been no material changes to the risk factors previously disclosed in the company's Annual Report on Form 10-K for the fiscal year ended December 31, 2021 - The report refers to the risk factors identified in the Annual Report on Form 10-K for the year ended December 31, 2021, with no material updates provided in this quarterly report[279](index=279&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=70&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) During the third quarter of 2022, the company credited 1,696 deferred stock units to directors under the Non-Employee Director Deferred Compensation Plan, and no shares were repurchased during the quarter under the 2022 Repurchase Plan, which authorizes the repurchase of up to 375,000 shares and expires on December 31, 2023 - On April 20, 2022, the Board approved a repurchase plan for up to **375,000 shares** of common stock, valid through December 31, 2023, with no shares repurchased in Q3 2022[280](index=280&type=chunk) - Deferred stock units were issued to directors as part of their compensation plan, exempt from registration under Section 4(a)(2) of the Securities Act of 1933[280](index=280&type=chunk) [Exhibits](index=71&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Form 10-Q, including certifications by the Principal Executive Officer and Principal Financial Officer, and the iXBRL formatted financial statements - Exhibits filed include CEO and CFO certifications (31.1, 31.2), Section 1350 certifications (32), and iXBRL data files (101, 104)[289](index=289&type=chunk)[290](index=290&type=chunk)[291](index=291&type=chunk)[292](index=292&type=chunk)
First munity (FCCO) - 2022 Q2 - Quarterly Report
2022-08-09 16:00
[PART I – FINANCIAL INFORMATION](index=3&type=section&id=PART%20I%20%E2%80%93%20FINANCIAL%20INFORMATION) [Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) The unaudited consolidated financial statements reflect a decrease in net income and a significant reclassification of securities to held-to-maturity [Consolidated Balance Sheets](index=3&type=section&id=Consolidated%20Balance%20Sheets) Total assets grew to **$1.68 billion** while shareholders' equity decreased to **$117.6 million** due to a significant accumulated other comprehensive loss Consolidated Balance Sheet Highlights (in thousands) | Account | June 30, 2022 (Unaudited) | December 31, 2021 | | :--- | :--- | :--- | | **Total Assets** | **$1,684,824** | **$1,584,508** | | Net loans held-for-investment | $905,112 | $852,523 | | Investment securities available-for-sale | $337,254 | $564,839 | | Investment securities held-to-maturity | $233,730 | $— | | **Total Liabilities** | **$1,567,232** | **$1,443,510** | | Total deposits | $1,468,975 | $1,361,291 | | **Total Shareholders' Equity** | **$117,592** | **$140,998** | | Accumulated other comprehensive income (loss) | $(26,543) | $3,279 | [Consolidated Statements of Income](index=4&type=section&id=Consolidated%20Statements%20of%20Income) Net income for the six months ended June 30, 2022, decreased to **$6.6 million**, driven by lower non-interest income and higher expenses Six Months Ended June 30 (in thousands, except per share data) | Metric | 2022 | 2021 | | :--- | :--- | :--- | | Net Interest Income | $21,784 | $21,659 | | Provision for (release of) loan losses | $(195) | $345 | | Total Non-interest Income | $6,383 | $6,714 | | Total Non-interest Expense | $20,142 | $19,418 | | **Net Income** | **$6,619** | **$6,798** | | **Diluted EPS** | **$0.87** | **$0.90** | Three Months Ended June 30 (in thousands, except per share data) | Metric | 2022 | 2021 | | :--- | :--- | :--- | | Net Interest Income | $11,051 | $11,092 | | Provision for (release of) loan losses | $(70) | $168 | | Total Non-interest Income | $3,009 | $3,418 | | Total Non-interest Expense | $10,188 | $9,878 | | **Net Income** | **$3,130** | **$3,543** | | **Diluted EPS** | **$0.41** | **$0.47** | [Consolidated Statements of Comprehensive Income (Loss)](index=6&type=section&id=Consolidated%20Statements%20of%20Comprehensive%20Income%20%28Loss%29) A comprehensive loss of **$23.2 million** for the first six months of 2022 resulted from unrealized losses and securities reclassification Comprehensive Income (Loss) Summary (in thousands) | Period | Net Income | Other Comprehensive Loss | Comprehensive Income (Loss) | | :--- | :--- | :--- | :--- | | **Six Months Ended June 30, 2022** | $6,619 | $(29,822) | $(23,203) | | **Six Months Ended June 30, 2021** | $6,798 | $(3,841) | $2,957 | | **Three Months Ended June 30, 2022** | $3,130 | $(11,534) | $(8,404) | | **Three Months Ended June 30, 2021** | $3,543 | $2,320 | $5,863 | [Consolidated Statements of Changes in Shareholders' Equity](index=7&type=section&id=Consolidated%20Statements%20of%20Changes%20in%20Shareholders%27%20Equity) Shareholders' equity decreased to **$117.6 million** at June 30, 2022, primarily due to a **$29.8 million** other comprehensive loss Reconciliation of Shareholders' Equity - Six Months Ended June 30, 2022 (in thousands) | Description | Amount | | :--- | :--- | | **Balance, December 31, 2021** | **$140,998** | | Net income | $6,619 | | Other comprehensive loss net of tax | $(29,822) | | Dividends: Common ($0.26 per share) | $(1,956) | | Stock-based compensation & other | $1,653 | | **Balance, June 30, 2022** | **$117,592** | [Consolidated Statements of Cash Flows](index=10&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Net cash increased by **$35.4 million**, driven by **$125.1 million** from financing activities, despite a significant decrease in operating cash flow Cash Flow Summary - Six Months Ended June 30 (in thousands) | Activity | 2022 | 2021 | | :--- | :--- | :--- | | Net cash (used in) provided by operating activities | $8,708 | $41,432 | | Net cash used in investing activities | $(98,392) | $(149,113) | | Net cash provided by financing activities | $125,065 | $118,676 | | **Net increase in cash and cash equivalents** | **$35,381** | **$10,995** | - A significant non-cash investing activity was the transfer of **$245.6 million** of investment securities from available-for-sale to held-to-maturity[29](index=29&type=chunk) [Notes to Consolidated Financial Statements](index=11&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) Detailed notes cover financial statements, including risks from rising interest rates, investment securities, loan portfolio, credit quality, and the upcoming CECL accounting standard - The company is evaluating the impact of the new Current Expected Credit Loss (CECL) model, which will be **effective in the first quarter of 2023** and may have a **material effect on the financial statements**[97](index=97&type=chunk)[101](index=101&type=chunk) - On June 1, 2022, the company reclassified **$224.5 million** in investments from available-for-sale (AFS) to held-to-maturity (HTM) to **mitigate the impact of rising interest rates on regulatory capital**[51](index=51&type=chunk) - The company's loan portfolio is heavily concentrated in real estate, with commercial mortgage loans comprising **72.3% of the total loan portfolio** as of June 30, 2022[63](index=63&type=chunk)[239](index=239&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=37&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses financial results, macroeconomic impacts, net income decline, balance sheet growth, and securities reclassification to manage interest rate risk - The company's net interest margin declined to **2.89%** for the first six months of 2022 from **3.18%** in the prior year, primarily due to excess liquidity deployment in lower-yielding securities[178](index=178&type=chunk) - Non-performing assets increased to **0.32% of total assets** at June 30, 2022, from **0.09%** at year-end 2021, mainly due to one **$4.1 million commercial loan** moving to non-accrual status[163](index=163&type=chunk)[195](index=195&type=chunk) - To manage interest rate risk and protect capital, the company reclassified **$224.5 million** of securities from Available-for-Sale (AFS) to Held-to-Maturity (HTM) on June 1, 2022[235](index=235&type=chunk)[254](index=254&type=chunk) - The Board of Directors approved a new share repurchase plan for up to **375,000 shares**, effective through December 31, 2023, with **no shares repurchased yet**[255](index=255&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=68&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This section is not applicable for the current filing - The company has determined that this section is **not applicable** for this quarterly report[290](index=290&type=chunk) [Controls and Procedures](index=68&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded disclosure controls were effective, with no material changes to internal control over financial reporting during the quarter - The CEO and CFO concluded that the company's disclosure controls and procedures were **effective** as of the end of the reporting period[292](index=292&type=chunk) - No **material changes** in internal control over financial reporting occurred during the quarter[294](index=294&type=chunk) [PART II – OTHER INFORMATION](index=69&type=section&id=PART%20II%20%E2%80%93%20OTHER%20INFORMATION) [Legal Proceedings](index=69&type=section&id=Item%201.%20Legal%20Proceedings) The company reports no material pending legal proceedings that would adversely impact its financial condition or operations - There are **no material pending legal proceedings** against the company[297](index=297&type=chunk) [Risk Factors](index=69&type=section&id=Item%201A.%20Risk%20Factors) This section refers to risk factors previously disclosed in the Annual Report on Form 10-K, with no material changes reported - There have been **no material changes** to the risk factors previously disclosed in the company's 2021 Annual Report on Form 10-K[298](index=298&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=69&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company issued 1,698 deferred stock units to directors and approved a new share repurchase plan, with no repurchases made in the quarter - In Q2 2022, **1,698 deferred stock units** were issued to directors under the deferred compensation plan, exempt from registration under Section 4(a)(2) of the Securities Act[299](index=299&type=chunk) - A new stock repurchase plan for up to **375,000 shares** was approved on April 20, 2022, with **no shares repurchased** under this plan in Q2 2022[299](index=299&type=chunk) [Defaults Upon Senior Securities](index=69&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) This section is not applicable - The company reports **no defaults** upon senior securities[300](index=300&type=chunk) [Mine Safety Disclosures](index=69&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This section is not applicable - The company has **no mine safety disclosures** to report[301](index=301&type=chunk)[302](index=302&type=chunk) [Other Information](index=69&type=section&id=Item%205.%20Other%20Information) No other information is reported in this item - **None**[304](index=304&type=chunk) [Exhibits](index=70&type=section&id=Item%206.%20Exhibits) This section lists exhibits filed with the Form 10-Q, including officer certifications and iXBRL financial statements - Exhibits filed include **CEO and CFO certifications** and the **iXBRL Interactive Data File**[306](index=306&type=chunk)
First munity (FCCO) - 2022 Q1 - Quarterly Report
2022-05-10 16:00
UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) x Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for the quarterly period ended March 31, 2022 o Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for the transition period from ____ to ____ Commission File Number: 000-28344 FIRST COMMUNITY CORPORATION (Exact name of registrant as specified in its charter) South Carolina 57-1010751 (Stat ...
First munity (FCCO) - 2021 Q4 - Annual Report
2022-03-15 16:00
UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Form 10-K (Mark One) x Annual Report under Section 13 or 15(d) of the Securities Exchange Act of 1934 For the fiscal year ended December 31, 2021 Or o Transition Report under Section 13 or 15(d) of the Securities Exchange Act of 1934 For the transition period from to Commission file number: 000-28344 First Community Corporation (Exact name of registrant as specified in its charter) South Carolina 57-1010751 (State or other jurisdiction ...
First munity (FCCO) - 2021 Q3 - Quarterly Report
2021-11-08 16:00
UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) x Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for the quarterly period ended September 30, 2021 o Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for the transition period from ____ to ____ Commission File Number: 000-28344 FIRST COMMUNITY CORPORATION (Exact name of registrant as specified in its charter) South Carolina 57-1010751 ( ...
First munity (FCCO) - 2020 Q4 - Annual Report
2021-03-11 16:00
UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Form 10-K (Mark One) x Annual Report under Section 13 or 15(d) of the Securities Exchange Act of 1934 For the fiscal year ended December 31, 2020 Or o Transition Report under Section 13 or 15(d) of the Securities Exchange Act of 1934 For the transition period from to Commission file number: 000-28344 First Community Corporation (Exact name of registrant as specified in its charter) South Carolina 57-1010751 (State or other jurisdiction ...