First Community Earnings 2020-09-30

Balance Sheet	Income Statement	Cash Flow
Assets, Equity	Rev, G Profit, Net Income	Ops, Inv, Fin

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, 2020

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
(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)

Not Applicable

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of exchange on which registered
Common stock, par value $1.00 per share	FCCO	The Nasdaq Capital Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No o

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). x Yes o No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company”, and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer o		Accelerated Filer x
Non-accelerated filer o		Smaller Reporting Company x
		Emerging growth company o

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No x

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date: On November 6, 2020, 7,492,908 shares of the issuer’s common stock, par value $1.00 per share, were issued and outstanding.

TABLE OF CONTENTS


PART I – FINANCIAL INFORMATION		1
Item 1.	Financial Statements	1
	Consolidated Balance Sheets	1
	Consolidated Statements of Income	2
	Consolidated Statements of Comprehensive Income	4
	Consolidated Statements of Changes in Shareholders’ Equity	5
	Consolidated Statements of Cash Flows	8
	Notes to Consolidated Financial Statements	9
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	37
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	64
Item 4.	Controls and Procedures	64

PART II – OTHER INFORMATION		65
Item 1.	Legal Proceedings	65
Item 1A.	Risk Factors	65
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	65
Item 3.	Defaults Upon Senior Securities	65
Item 4.	Mine Safety Disclosures	65
Item 5.	Other Information	65
Item 6.	Exhibits	66

SIGNATURES		67
INDEX TO EXHIBITS
EX-31.1 RULE 13A-14(A) CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER
EX-31.2 RULE 13A-14(A) CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER
EX-32 SECTION 1350 CERTIFICATIONS

PART I – FINANCIAL INFORMATION

Item 1. Financial Statements

FIRST COMMUNITY CORPORATION

CONSOLIDATED BALANCE SHEETS

	September 30,
(Dollars in thousands, except par value)	2020			December 31,
	(Unaudited)			2019
ASSETS
Cash and due from banks	$	17,279		$	14,951
Interest-bearing bank balances		106,231			32,741
Investment securities - available-for-sale		293,472			286,800
Other investments, at cost		2,053			1,992
Loans held-for-sale		37,587			11,155
Loans		844,460			737,028
Less, allowance for loan losses		10,113			6,627
Net loans		834,347			730,401
Property, furniture and equipment - net		34,527			35,008
Lease right-of-use asset		3,078			3,215
Premises held-for-sale		591			591
Bank owned life insurance		28,588			28,041
Other real estate owned		1,313			1,410
Intangible assets		1,188			1,483
Goodwill		14,637			14,637
Other assets		6,913			7,854
Total assets	$	1,381,804		$	1,170,279
LIABILITIES
Deposits:
Non-interest bearing	$	365,505		$	289,829
Interest bearing		808,046			698,372
Total deposits		1,173,551			988,201
Securities sold under agreements to repurchase		47,142			33,296
Federal Home Loan Bank advances		—			211
Junior subordinated debentures		14,964			14,964
Lease liability		3,154			3,266
Other liabilities		9,749			10,147
Total liabilities		1,248,560			1,050,085
SHAREHOLDERS’ EQUITY
Preferred stock, par value $1.00 per share, 10,000,000 shares authorized; none issued and outstanding		—			—
Common stock, par value $1.00 per share; 20,000,000 shares authorized; issued and outstanding 7,492,908 at September 30, 2020 7,440,026 at December 31, 2019		7,493			7,440
Nonvested restricted stock		(327	)		(151	)
Additional paid in capital		91,270			90,488
Retained earnings		23,912			19,927
Accumulated other comprehensive income		10,896			2,490
Total shareholders’ equity		133,244			120,194
Total liabilities and shareholders’ equity	$	1,381,804		$	1,170,279

See Notes to Consolidated Financial Statements

FIRST COMMUNITY CORPORATION

CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)

	Nine		Nine
	Months Ended		Months Ended
	September 30,		September 30,
	2020		2019
(Dollars in thousands, except per share amounts)	(Unaudited)		(Unaudited)
Interest income:
Loans, including fees	$	27,254	$	26,492
Taxable securities		3,797		3,840
Non-taxable securities		1,065		1,084
Other short-term investments		224		410
Other		12		18
Total interest income		32,352		31,844
Interest expense:
Deposits		2,415		3,401
Securities sold under agreement to repurchase		166		303
Other borrowed money		435		651
Total interest expense		3,016		4,355
Net interest income		29,336		27,489
Provision for loan losses		3,387		139
Net interest income after provision for loan losses		25,949		27,350
Non-interest income:
Deposit service charges		851		1,212
Mortgage banking income		3,957		3,333
Investment advisory fees and non-deposit commissions		1,977		1,436
Gain on sale of securities		99		135
Gain (loss) on sale of other assets		147		(3	)
Non-recurring bank owned life insurance (BOLI) income		311		—
Other		2,823		2,695
Total non-interest income		10,165		8,808
Non-interest expense:
Salaries and employee benefits		17,580		15,845
Occupancy		2,058		2,005
Equipment		934		1,140
Marketing and public relations		943		764
FDIC assessments		267		135
Other real estate expense		154		78
Amortization of intangibles		295		397
Other		5,652		5,389
Total non-interest expense		27,883		25,753
Net income before tax		8,231		10,405
Income taxes		1,568		2,131
Net income	$	6,663	$	8,274

Basic earnings per common share	$	0.90	$	1.10
Diluted earnings per common share	$	0.89	$	1.08

See Notes to Consolidated Financial Statements

FIRST COMMUNITY CORPORATION

CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)

	Three		Three
	Months Ended		Months Ended
	September 30,		September 30,
	2020		2019
(Dollars in thousands, except per share amounts)	(Unaudited)		(Unaudited)
Interest income:
Loans, including fees	$	9,408	$	9,091
Taxable securities		1,135		1,259
Non-taxable securities		390		350
Other short-term investments		40		158
Other		3		6
Total interest income		10,976		10,864
Interest expense:
Deposits		659		1,219
Securities sold under agreement to repurchase		25		102
Other borrowed money		116		190
Total interest expense		800		1,511
Net interest income		10,176		9,353
Provision for loan losses		1,062		25
Net interest income after provision for loan losses		9,114		9,328
Non-interest income:
Deposit service charges		242		421
Mortgage banking income		1,403		1,251
Investment advisory fees and non-deposit commissions		672		509
Gain on sale of securities		99		—
Gain on sale of other assets		141		—
Non-recurring bank owned life insurance (BOLI) income		311		—
Other		982		932
Total non-interest income		3,850		3,113
Non-interest expense:
Salaries and employee benefits		6,087		5,465
Occupancy		736		703
Equipment		318		365
Marketing and public relations		342		159
FDIC assessment		137		(10	)
Other real estate expense		79		31
Amortization of intangibles		95		133
Other		1,920		1,944
Total non-interest expense		9,714		8,790
Net income before tax		3,250		3,651
Income taxes		598		753
Net income	$	2,652	$	2,898

Basic earnings per common share	$	0.36	$	0.39
Diluted earnings per common share	$	0.35	$	0.39

See Notes to Consolidated Financial Statements

FIRST COMMUNITY CORPORATION

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(Unaudited)

(Dollars in thousands)
	Nine months ended September 30,
	2020			2019

Net income	$	6,663		$	8,274

Other comprehensive income:
Unrealized gain during the period on available-for-sale securities, net of tax expense of $2,255 and $1,511, respectively		8,484			5,677

Reclassification adjustment for gain on available-for-sale securities included in net income, net of tax benefit $21 and $29, respectively		(78	)		(106	)

Other comprehensive income		8,406			5,571
Comprehensive income	$	15,069		$	13,845

(Dollars in thousands)
	Three months ended September 30,
	2020			2019

Net income	$	2,652		$	2,898

Other comprehensive income:
Unrealized gain during the period on available-for-sale securities, net of tax expense of $160 and $271, respectively		602			1,232

Reclassification adjustment for gain on available-for-sale securities included in net income, net of tax benefit of $21 and $0, respectively		(78	)		—

Other comprehensive income		524			1,232
Comprehensive income	$	3,176		$	4,130

See Notes to Consolidated Financial Statements

FIRST COMMUNITY CORPORATION

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY

Nine months ended September 30, 2020 and 2019

(Unaudited)

																Accumulated
	Common						Additional			Nonvested						Other
(Dollars and shares in thousands)	Shares			Common			Paid-in			Restricted			Retained			Comprehensive
	Issued			Stock			Capital			Stock			Earnings			Income (loss)		Total
Balance, December 31, 2019		7,440		$	7,440		$	90,488		$	(151	)	$	19,927		$	2,490	$	120,194
Net income														6,663					6,663
Other comprehensive income net of tax expense of $2,234																	8,406		8,406
Issuance of common stock								4											4
Issuance of restricted stock		18			18			348			(366	)							—
Issuance of common stock-deferred compensation		18			18			182											200
Amortization of compensation on restricted stock											190								190
Shares retired		(1	)		(1	)		(14	)										(15	)
Dividends: Common ($0.36 per share)														(2,678	)				(2,678	)
Dividend reinvestment plan		18			18			262											280
Balance, September 30, 2020		7,493		$	7,493		$	91,270		$	(327	)	$	23,912		$	10,896	$	133,244

																			Accumulated
	Common						Common			Additional			Nonvested						Other
(Dollars and shares in thousands)	Shares			Common			Stock			Paid-in			Restricted			Retained			Comprehensive
	Issued			Stock			Warrants			Capital			Stock			Earnings			Income (loss)			Total
Balance, December 31, 2018		7,639		$	7,639		$	31		$	95,048		$	(149	)	$	12,262		$	(2,334	)	$	112,497
Net Income																	8,274						8,274
Other comprehensive income net of tax expense of $1,482																				5,571			5,571
Issuance of restricted stock		8			8						162			(170	)								—
Amortization of compensation on restricted stock														124									124
Shares retired		(8	)		(8	)					(148	)											(156	)
Exercise of warrants		26			26			(18	)		(8	)											—
Stock repurchase plan		(300	)		(300	)					(5,338	)											(5,638	)
Issuance of common stock - deferred compensation		24			24						241												265
Dividends: Common ($0.33 per share)																	(2,512	)					(2,512	)
Dividend reinvestment plan		20			20						335												355
Balance, September 30, 2019		7,409		$	7,409		$	13		$	90,292		$	(195	)	$	18,024		$	3,237		$	118,780

See Notes to Consolidated Financial Statements

FIRST COMMUNITY CORPORATION

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY

(Unaudited)

																Accumulated
	Common						Additional			Nonvested						Other
(Dollars and shares in thousands)	Shares			Common			Paid-in			Restricted			Retained			Comprehensive
	Issued			Stock			Capital			Stock			Earnings			Income (loss)		Total
Balance, December 31, 2019		7,440		$	7,440		$	90,488		$	(151	)	$	19,927		$	2,490	$	120,194
Net income														1,794					1,794
Other comprehensive income net of tax expense of $899																	3,381		3,381
Issuance of common stock								4											4
Issuance of restricted stock		18			18			348			(366	)							—
Amortization of compensation on restricted stock											52								52
Shares retired		(1	)		(1	)		(14	)										(15	)
Dividends: Common ($0.12 per share)														(891	)				(891	)
Dividend reinvestment plan		5			5			90											95
Balance, March 31, 2020		7,462		$	7,462		$	90,916		$	(465	)	$	20,830		$	5,871	$	124,614

Net income														2,217					2,217
Other comprehensive income net of tax expense of $1,196																	4,501		4,501
Issuance of common stock-Deferred Compensation		18			18			182											200
Amortization of compensation on restricted stock											69								69
Dividends: Common ($0.12 per share)														(892	)				(892	)
Dividend reinvestment plan		6			6			86											92
Balance, June 30, 2020		7,486		$	7,486		$	91,184		$	(396	)	$	22,155		$	10,372	$	130,801

Net income														2,652					2,652
Other comprehensive income net of tax expense of $139																	524		524
Amortization of compensation on restricted stock											69								69
Dividends: Common ($0.12 per share)														(895	)				(895	)
Dividend reinvestment plan		7			7			86											93
Balance, September 30, 2020		7,493		$	7,493		$	91,270		$	(327	)	$	23,912		$	10,896	$	133,244

See Notes to Consolidated Financial Statements

FIRST COMMUNITY CORPORATION

CONSOLIDATED STATEMEN

Price	19.77	EPS	1
Shares	8	P/E	14
MCap	151	P/FCF	54
Net Debt	-33	EBIT	18
TEV	118	TEV/EBIT	7
TTM 2019-09-30, in MM, except price, ratios

10-Q	2020-09-30	Filed 2020-11-06
10-Q	2020-06-30	Filed 2020-08-10
10-Q	2020-03-31	Filed 2020-05-08
10-K	2019-12-31	Filed 2020-03-13
10-Q	2019-09-30	Filed 2019-11-07
10-Q	2019-06-30	Filed 2019-08-08
10-Q	2019-03-31	Filed 2019-05-09
10-K	2018-12-31	Filed 2019-03-14
10-Q	2018-09-30	Filed 2018-11-08
10-Q	2018-06-30	Filed 2018-08-08
10-Q	2018-03-31	Filed 2018-05-09
10-K	2017-12-31	Filed 2018-03-14
10-Q	2017-09-30	Filed 2017-11-06
10-Q	2017-06-30	Filed 2017-08-09
10-Q	2017-03-31	Filed 2017-05-09
10-K	2016-12-31	Filed 2017-03-13
10-Q	2016-09-30	Filed 2016-11-10
10-Q	2016-06-30	Filed 2016-08-11
10-Q	2016-03-31	Filed 2016-05-12
10-K	2015-12-31	Filed 2016-03-16
10-Q	2015-09-30	Filed 2015-11-12
10-Q	2015-06-30	Filed 2015-08-12
10-Q	2015-03-31	Filed 2015-05-13
10-K	2014-12-31	Filed 2015-03-27
10-Q	2014-09-30	Filed 2014-11-13
10-Q	2014-06-30	Filed 2014-08-13
10-Q	2014-03-31	Filed 2014-05-12
10-K	2013-12-31	Filed 2014-03-21
10-Q	2013-09-30	Filed 2013-11-08
10-Q	2013-06-30	Filed 2013-08-13
10-Q	2013-03-31	Filed 2013-05-14
10-K	2012-12-31	Filed 2013-03-28
10-Q	2012-09-30	Filed 2012-11-13
10-Q	2012-06-30	Filed 2012-08-10
10-Q	2012-03-31	Filed 2012-05-11
10-K	2011-12-31	Filed 2012-03-27
10-Q	2011-09-30	Filed 2011-11-10
10-Q	2011-06-30	Filed 2011-08-08
10-Q	2011-03-31	Filed 2011-05-13
10-K	2010-12-31	Filed 2011-03-29
10-Q	2010-09-30	Filed 2010-11-15
10-Q	2010-06-30	Filed 2010-08-16
10-Q	2010-03-31	Filed 2010-05-17
10-K	2009-12-31	Filed 2010-03-29

8-K	2020-10-21	Earnings, Exhibits
8-K	2020-08-21	Regulation FD, Exhibits
8-K	2020-07-22	Earnings, Exhibits
8-K	2020-05-21
8-K	2020-05-20
8-K	2020-04-22
8-K	2020-02-19
8-K	2020-01-22
8-K	2019-12-16
8-K	2019-11-05
8-K	2019-10-25
8-K	2019-10-16
8-K	2019-09-18
8-K	2019-09-04
8-K	2019-07-17
8-K	2019-05-30
8-K	2019-05-22
8-K	2019-05-21
8-K	2019-05-13
8-K	2019-04-17
8-K	2019-01-16
8-K	2018-10-17
8-K	2018-09-05
8-K	2018-07-18
8-K	2018-05-16
8-K	2018-04-18
8-K	2018-01-17

EX-31.1	e20563_ex31-1.htm
EX-31.2	e20563_ex31-2.htm
EX-32	e20563_ex32.htm

FCCO 10Q Quarterly Report

First Community Earnings 2020-09-30