First Community Corporation Announces Earnings and Increased Cash Dividend
Highlights
- Net income of
$5.8 million in 2017 and$502 thousand for the fourth quarter - Increased cash dividend to
$0.10 per common share, the 64th consecutive quarter of cash dividends paid to common shareholders, highest dividend ever paid by the company - Adjustment to deferred tax asset of
$1.2 million as a result of new tax rate legislation - Merger expenses of
$619 thousand in the quarter and$945 thousand for the year - Completed acquisition of
Cornerstone Bancorp - Assets now in excess of
$1 billion - Organic loan growth of
$18.2 million during the quarter, a 12.8% annualized growth rate - Key credit quality metrics continue to be excellent with a year-to-date net loan recovery of
$145 thousand and non-performing assets of 0.51% at year end
Today,
Cash Dividend and Capital
The Board of Directors has approved an increase in the cash dividend for the fourth quarter of 2017 to
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
Asset Quality
The company's asset quality remains strong. The non-performing assets ratio increased on a linked quarter basis to 0.51% of total assets at
Net loan recoveries were
Balance Sheet
(Numbers in millions)
Quarter |
Quarter |
Quarter |
12 Month $ Variance |
12 Month % Variance |
|
Assets |
|||||
Investments |
|
|
|
|
4.4% |
Loans |
646.8 |
546.7 |
568.5 |
100.1 |
18.3% |
Liabilities |
|||||
Total Pure Deposits |
|
|
|
|
19.2% |
Certificates of Deposit |
158.8 |
154.7 |
139.3 |
4.1 |
2.7% |
Total Deposits |
|
|
|
121.7 |
15.9% |
Customer Cash Management |
|
|
|
( |
(1.0)% |
FHLB Advances |
14.3 |
24.0 |
17.3 |
(9.7) |
(40.4%) |
Total Funding |
|
|
|
|
13.8% |
Cost of Funds (including demand deposits) |
0.30% |
0.35% |
0.34% |
-5bps |
|
Cost of Deposits |
0.22% |
0.24% |
0.24% |
-2bps |
Revenue
Net Interest Income/Net Interest Margin
Net interest income increased on a linked quarter basis to
Non-Interest Income
Non-interest income for the year, adjusted for securities gains and loss on the early extinguishment of debt, increased year-over-year to
Revenues in the mortgage line of business for the year increased year-over-year to
Non-Interest Expense
Non-interest expenses were
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
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.
|
||||||
BALANCE SHEET DATA; |
||||||
(Dollars in thousands, except per share data) |
||||||
At |
||||||
2017 |
2016 |
|||||
Total Assets |
$ 1,050,731 |
$ 914,793 |
||||
Other short-term investments (1) |
15,788 |
10,074 |
||||
|
284,395 |
272,396 |
||||
Loans held for sale |
5,093 |
5,707 |
||||
Loans |
646,805 |
546,709 |
||||
Allowance for Loan Losses |
5,797 |
5,214 |
||||
Total Deposits |
888,323 |
766,622 |
||||
Securities Sold Under Agreements to Repurchase |
19,270 |
19,527 |
||||
Federal Home Loan Bank Advances |
14,250 |
24,035 |
||||
Junior Subordinated Debt |
14,964 |
14,964 |
||||
Shareholders' Equity |
105,663 |
81,861 |
||||
Book Value Per Common Share |
$ 13.93 |
$ 12.20 |
||||
Tangible Book Value Per Common Share |
$ 11.66 |
$ 11.28 |
||||
Equity to Assets |
10.06% |
8.95% |
||||
Tangible common equity to tangible assets |
8.56% |
8.33% |
||||
Loan (incl loans held for sale) to Deposit Ratio |
73.39% |
72.06% |
||||
Allowance for Loan Losses/Loans |
0.90% |
0.95% |
||||
Regulatory Ratios: |
||||||
Leverage Ratio |
10.35% |
10.23% |
||||
Tier 1 Capital Ratio |
14.25% |
14.46% |
||||
Total Capital Ratio |
15.05% |
15.28% |
||||
Common Equity Tier 1 |
12.26% |
12.18% |
||||
Tier 1 |
$ 103,639 |
$ 91,973 |
||||
Total Regulatory Capital |
$ 109,436 |
$ 97,187 |
||||
Common Equity Tier 1 Capital |
$ 89,139 |
$ 77,473 |
||||
(1) Includes federal funds sold, securities purchased under agreements to resell and interest-bearing deposits |
||||||
Average Balances: |
||||||
Three months ended |
Year ended |
|||||
|
|
|||||
2017 |
2016 |
2017 |
2016 |
|||
Average Total Assets |
$ 1,018,290 |
$ 905,882 |
|
$ 888,240 |
||
Average Loans (incl loans held for sale) |
624,871 |
536,925 |
577,730 |
514,766 |
||
Average Earning Assets |
926,052 |
832,192 |
859,453 |
815,863 |
||
Average Deposits |
866,672 |
760,512 |
790,500 |
739,355 |
||
Average Other Borrowings |
41,406 |
54,709 |
51,171 |
59,569 |
||
Average Shareholders' Equity |
102,075 |
83,518 |
88,706 |
82,653 |
||
Asset Quality: |
December 31, |
September 30, |
|
|
|
|
2017 |
2017 |
2017 |
2017 |
2016 |
||
Loan Risk Rating by Category (End of Period) |
||||||
Special Mention |
$ 10,121 |
$ 9,620 |
$ 6,743 |
$ 6,783 |
$ 6,799 |
|
Substandard |
7,380 |
6,482 |
6,592 |
7,113 |
7,930 |
|
Doubtful |
- |
- |
- |
- |
- |
|
Pass (includes held for sale) |
629,304 |
552,392 |
546,675 |
545,593 |
537,687 |
|
$ 646,805 |
$ 568,494 |
$ 560,010 |
|
$ 552,416 |
||
Nonperforming Assets: |
||||||
Non-accrual loans |
$ 3,380 |
$ 2,914 |
$ 3,030 |
3,465 |
$ 4,049 |
|
Other real estate owned |
1,934 |
733 |
838 |
1,156 |
1,146 |
|
Accruing loans past due 90 days or more |
- |
102 |
- |
108 |
53 |
|
Total nonperforming assets |
$ 5,314 |
$ 3,749 |
$ 3,868 |
$ 4,729 |
$ 5,248 |
|
Accruing troubled debt restructurings |
$ 1,883 |
$ 1,715 |
$ 1,733 |
$ 1,762 |
$ 1,770 |
|
Three months ended |
Year ended |
|||||
|
|
|||||
2017 |
2016 |
2017 |
2016 |
|||
Loans charged-off: |
$ 17 |
$ 69 |
$ 61 |
$ 180 |
||
Overdrafts charged-off |
36 |
13 |
112 |
59 |
||
Loan recoveries |
(18) |
(10) |
(207) |
(72) |
||
Overdraft recoveries |
(6) |
(8) |
(19) |
(16) |
||
Net Charge-offs (Recoveries) |
$ 29 |
$ 64 |
$ (53) |
$ 151 |
||
Net charge-offs to average loans |
0.00% |
0.01% |
n/a |
0.03% |
|
||||||||||||||||
INCOME STATEMENT DATA |
||||||||||||||||
(Dollars in thousands, except per share data) |
||||||||||||||||
Three months ended |
Three months ended |
Three months ended |
Three months ended |
Year ended |
||||||||||||
|
|
|
|
|
||||||||||||
2017 |
2016 |
2017 |
2016 |
2017 |
2016 |
2017 |
2016 |
2017 |
2016 |
|||||||
Interest Income |
$ 8,738 |
$ 7,510 |
$ 7,921 |
$ 7,400 |
$ 7,724 |
$ 7,459 |
$ 7,773 |
$ 7,137 |
$ 32,156 |
$ 29,506 |
||||||
Interest Expense |
680 |
716 |
694 |
749 |
675 |
782 |
712 |
800 |
2,762 |
3,047 |
||||||
Net Interest Income |
8,058 |
6,794 |
7,227 |
6,651 |
7,049 |
6,677 |
7,061 |
6,337 |
29,394 |
26,459 |
||||||
Provision for Loan Losses |
170 |
238 |
166 |
179 |
78 |
217 |
116 |
140 |
530 |
774 |
||||||
Net Interest Income After Provision |
7,888 |
6,556 |
7,061 |
6,472 |
6,971 |
6,460 |
6,945 |
6,197 |
28,864 |
25,685 |
||||||
Non-Interest Income: |
||||||||||||||||
Deposit service charges |
439 |
341 |
379 |
377 |
348 |
340 |
320 |
347 |
1,486 |
1,405 |
||||||
Mortgage banking income |
828 |
867 |
1,032 |
937 |
1,248 |
913 |
670 |
665 |
3,778 |
3,382 |
||||||
Investment advisory fees and non-deposit commissions |
383 |
264 |
336 |
283 |
314 |
297 |
258 |
291 |
1,291 |
1,135 |
||||||
Gain on sale of securities |
49 |
- |
124 |
478 |
172 |
64 |
54 |
59 |
400 |
601 |
||||||
Gain (loss) on sale other assets |
107 |
3 |
40 |
45 |
68 |
(84) |
20 |
3 |
235 |
(33) |
||||||
Loss on early extinguishment of debt |
- |
- |
(165) |
(459) |
(223) |
- |
(58) |
- |
(447) |
(459) |
||||||
Other |
787 |
725 |
676 |
726 |
717 |
734 |
714 |
724 |
2,896 |
2,909 |
||||||
Total non-interest income |
2,593 |
2,200 |
2,422 |
2,387 |
2,644 |
2,264 |
1,978 |
2,089 |
9,639 |
8,940 |
||||||
Non-interest Expense: |
||||||||||||||||
Salaries and employee benefits |
4,482 |
3,851 |
4,122 |
3,888 |
4,261 |
3,833 |
4,086 |
3,751 |
16,951 |
15,323 |
||||||
Occupancy |
568 |
566 |
532 |
531 |
539 |
511 |
527 |
559 |
2,166 |
2,167 |
||||||
Equipment |
422 |
420 |
396 |
442 |
506 |
437 |
446 |
429 |
1,771 |
1,728 |
||||||
Marketing and public relations |
286 |
336 |
96 |
240 |
298 |
195 |
221 |
94 |
901 |
865 |
||||||
|
78 |
76 |
78 |
60 |
78 |
138 |
78 |
138 |
312 |
412 |
||||||
Other real estate expense |
(33) |
14 |
19 |
115 |
29 |
21 |
27 |
51 |
42 |
201 |
||||||
Amortization of intangibles |
120 |
75 |
74 |
80 |
74 |
80 |
75 |
83 |
343 |
318 |
||||||
Merger expenses |
619 |
228 |
- |
98 |
- |
- |
- |
945 |
- |
|||||||
Other |
1,832 |
1,180 |
1,349 |
1,227 |
1,487 |
1,118 |
1,260 |
1,237 |
5,928 |
4,762 |
||||||
Total non-interest expense |
8,374 |
6,518 |
6,894 |
6,583 |
7,370 |
6,333 |
6,720 |
6,342 |
29,359 |
25,776 |
||||||
Income before taxes |
2,107 |
2,238 |
2,589 |
2,276 |
2,245 |
2,391 |
2,203 |
1,944 |
9,144 |
8,849 |
||||||
Income tax expense |
1,605 |
446 |
696 |
599 |
581 |
646 |
447 |
476 |
3,329 |
2,167 |
||||||
Net Income |
$ 502 |
$ 1,792 |
$ 1,893 |
$ 1,677 |
$ 1,664 |
$ 1,745 |
$ 1,756 |
$ 1,468 |
$ 5,815 |
$ 6,682 |
||||||
Per share data: |
||||||||||||||||
Net income, basic |
$ 0.07 |
$ 0.27 |
$ 0.28 |
$ 0.26 |
$ 0.25 |
$ 0.27 |
$ 0.27 |
$ 0.22 |
$ 0.85 |
$ 1.01 |
||||||
Net income, diluted |
$ 0.07 |
$ 0.26 |
$ 0.28 |
$ 0.25 |
$ 0.24 |
$ 0.26 |
$ 0.26 |
$ 0.22 |
$ 0.83 |
$ 0.98 |
||||||
Average number of shares outstanding - basic |
7,366,508 |
6,630,951 |
6,666,168 |
6,572,614 |
6,634,462 |
6,553,752 |
6,687,942 |
6,572,969 |
6,849,419 |
6,616,741 |
||||||
Average number of shares outstanding - diluted |
7,521,198 |
6,805,447 |
6,807,936 |
6,762,074 |
6,803,370 |
6,732,574 |
6,813,460 |
6,751,074 |
6,998,282 |
6,787,132 |
||||||
Shares outstanding period end |
7,587,888 |
6,708,393 |
6,706,408 |
6,703,317 |
6,701,642 |
6,699,030 |
6,697,130 |
6,893,042 |
7,587,888 |
6,708,393 |
||||||
Return on average assets |
0.20% |
0.78% |
0.83% |
0.74% |
0.73% |
0.80% |
0.78% |
0.68% |
0.62% |
0.75% |
||||||
Return on average common equity |
1.96% |
8.51% |
8.71% |
7.90% |
7.87% |
8.53% |
8.63% |
7.35% |
6.56% |
8.08% |
||||||
Return on average common tangible equity |
2.27% |
9.20% |
9.46% |
8.54% |
8.48% |
9.24% |
9.32% |
7.99% |
7.22% |
8.76% |
||||||
Net Interest Margin (non taxable equivalent) |
3.45% |
3.25% |
3.42% |
3.19% |
3.39% |
3.32% |
3.42% |
3.22% |
3.42% |
3.24% |
||||||
Net Interest Margin (taxable equivalent) |
3.54% |
3.35% |
3.52% |
3.29% |
3.49% |
3.43% |
3.52% |
3.33% |
3.52% |
3.35% |
||||||
Efficiency Ratio |
78.98% |
72.47% |
69.64% |
72.99% |
73.99% |
71.34% |
72.56% |
73.86% |
75.12% |
73.11% |
|
||||||||
Yields on Average Earning Assets and Rates |
||||||||
on Average Interest-Bearing Liabilities |
||||||||
Three Months ended |
Three Months ended |
|||||||
Average |
Interest |
Yield/ |
Average |
Interest |
Yield/ |
|||
Balance |
Earned/Paid |
Rate |
Balance |
Earned/Paid |
Rate |
|||
Assets |
||||||||
Earning assets |
||||||||
Loans |
$ 624,871 |
$ 7,131 |
4.53% |
$ 536,925 |
$ 6,095 |
4.52% |
||
Securities: |
277,693 |
1,541 |
2.20% |
281,631 |
1,393 |
1.97% |
||
Other funds |
23,488 |
68 |
1.15% |
13,636 |
22 |
0.64% |
||
Total earning assets |
926,052 |
8,740 |
3.74% |
832,192 |
7,510 |
3.59% |
||
Cash and due from banks |
12,519 |
11,374 |
||||||
Premises and equipment |
35,123 |
29,927 |
||||||
Intangible assets |
14,243 |
6,217 |
||||||
Other assets |
36,023 |
31,273 |
||||||
Allowance for loan losses |
(5,670) |
(5,101) |
||||||
Total assets |
$ 1,018,290 |
$ 905,882 |
||||||
Liabilities |
||||||||
Interest-bearing liabilities |
||||||||
Interest-bearing transaction accounts |
180,680 |
47 |
0.10% |
155,757 |
41 |
0.10% |
||
Money market accounts |
176,654 |
115 |
0.26% |
163,598 |
103 |
0.25% |
||
Savings deposits |
100,641 |
32 |
0.13% |
75,518 |
23 |
0.12% |
||
Time deposits |
188,050 |
290 |
0.61% |
183,401 |
293 |
0.64% |
||
Other borrowings |
41,406 |
198 |
1.90% |
54,709 |
256 |
1.86% |
||
Total interest-bearing liabilities |
687,431 |
682 |
0.39% |
632,983 |
716 |
0.45% |
||
Demand deposits |
220,647 |
182,238 |
||||||
Other liabilities |
8,137 |
7,143 |
||||||
Shareholders' equity |
102,075 |
83,518 |
||||||
Total liabilities and shareholders' equity |
$ 1,018,290 |
$ 905,882 |
||||||
Cost of funds including demand deposits |
0.35% |
|||||||
Net interest spread |
3.35% |
3.14% |
||||||
Net interest income/margin |
$ 8,058 |
3.45% |
$ 6,794 |
3.25% |
||||
Tax equivalent |
$ 8,274 |
3.54% |
$ 7,013 |
3.35% |
|
||||||||
Yields on Average Earning Assets and Rates |
||||||||
on Average Interest-Bearing Liabilities |
||||||||
Year ended |
Year ended |
|||||||
Average |
Interest |
Yield/ |
Average |
Interest |
Yield/ |
|||
Balance |
Earned/Paid |
Rate |
Balance |
Earned/Paid |
Rate |
|||
Assets |
||||||||
Earning assets |
||||||||
Loans |
$ 577,730 |
$ 26,134 |
4.52% |
$ 514,766 |
$ 23,677 |
4.60% |
||
Securities: |
265,751 |
5,859 |
2.20% |
283,585 |
5,724 |
2.02% |
||
Other funds |
15,972 |
163 |
1.02% |
17,512 |
105 |
0.60% |
||
Total earning assets |
859,453 |
32,156 |
3.74% |
815,863 |
29,506 |
3.62% |
||
Cash and due from banks |
11,571 |
10,903 |
||||||
Premises and equipment |
31,850 |
30,084 |
||||||
Intangible assets |
8,128 |
6,334 |
||||||
Other assets |
32,160 |
29,922 |
||||||
Allowance for loan losses |
(5,479) |
(4,866) |
||||||
Total assets |
$ 937,683 |
$ 888,240 |
||||||
Liabilities |
||||||||
Interest-bearing liabilities |
||||||||
Interest-bearing transaction accounts |
163,870 |
190 |
0.12% |
152,936 |
173 |
0.11% |
||
Money market accounts |
170,296 |
435 |
0.26% |
164,826 |
426 |
0.26% |
||
Savings deposits |
80,807 |
94 |
0.12% |
69,176 |
82 |
0.12% |
||
Time deposits |
176,358 |
1,106 |
0.63% |
180,447 |
1,137 |
0.63% |
||
Other borrowings |
51,171 |
937 |
1.83% |
59,569 |
1,229 |
2.06% |
||
Total interest-bearing liabilities |
642,502 |
2,762 |
0.43% |
626,856 |
3,047 |
0.49% |
||
Demand deposits |
199,169 |
171,968 |
||||||
Other liabilities |
7,306 |
6,663 |
||||||
Shareholders' equity |
88,706 |
82,653 |
||||||
Total liabilities and shareholders' equity |
$ 937,683 |
$ 888,240 |
||||||
Net interest spread |
3.31% |
3.13% |
||||||
Net interest income/margin |
$ 29,394 |
3.42% |
$ 26,459 |
3.24% |
||||
Tax Equivalent |
$ 30,252 |
3.52% |
$ 27,326 |
3.35% |
The tables below provide a reconciliation of non‑GAAP measures to GAAP for the periods indicated:
December |
December |
||||||
Tangible book value per common share |
2017 |
2016 |
|||||
Tangible common equity per common share (non‑GAAP) |
$ |
11.66 |
$ |
11.28 |
|||
Effect to adjust for intangible assets |
2.27 |
0.92 |
|||||
Book value per common share (GAAP) |
$ |
13.93 |
$ |
12.20 |
|||
Tangible common shareholders' equity to tangible |
|||||||
Tangible common equity to tangible assets (non‑GAAP) |
8.56 |
% |
8.33 |
% |
|||
Effect to adjust for intangible assets |
1.50 |
% |
0.62 |
% |
|||
Common equity to assets (GAAP) |
10.06 |
% |
8.95 |
% |
Return on average |
Three months ended |
Three months ended |
Three months ended |
Three months ended |
Year Ended |
|||||||||||||||
2017 |
2016 |
2017 |
2016 |
2017 |
2016 |
2017 |
2016 |
2017 |
2016 |
|||||||||||
Return on average common |
3.45 |
% |
9.20 |
% |
9.46 |
% |
8.54 |
% |
8.48 |
% |
9.25 |
% |
9.32 |
% |
7.99 |
% |
7.22 |
% |
8.76 |
% |
Effect to adjust for |
(1.18) |
% |
(0.69) |
% |
(0.75) |
% |
0.64 |
% |
(0.61) |
% |
(0.72) |
% |
(0.69) |
% |
(0.64) |
% |
(0.66) |
% |
(0.68) |
% |
Return on average common |
2.27 |
% |
8.51 |
% |
8.71 |
% |
7.87 |
% |
7.87 |
% |
8.53 |
% |
8.63 |
% |
7.35 |
% |
6.56 |
% |
8.08 |
% |
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.
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