-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, IOCMpq8jNcS5PuU9xq1haAcfdRkNOIDx+yA894aebtGP+T1S0xKhisW4yYuEYXsP gXD1wFBtoj++/Ouhmbm4VQ== 0000950144-97-012241.txt : 19971117 0000950144-97-012241.hdr.sgml : 19971117 ACCESSION NUMBER: 0000950144-97-012241 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19970930 FILED AS OF DATE: 19971114 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: FIRST COMMUNITY CORP /SC/ CENTRAL INDEX KEY: 0000932781 STANDARD INDUSTRIAL CLASSIFICATION: NATIONAL COMMERCIAL BANKS [6021] IRS NUMBER: 571010751 STATE OF INCORPORATION: SC FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10QSB SEC ACT: SEC FILE NUMBER: 000-28344 FILM NUMBER: 97718204 BUSINESS ADDRESS: STREET 1: 5455 SUNSET BLVD CITY: LEXINGTON STATE: SC ZIP: 29072 BUSINESS PHONE: 8032538875 10QSB 1 FIRST COMMUNITY CORP 10QSB 9-30-1997 1 U.S. SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 FORM 10-QSB (Mark One) X Quarterly report under Section 13 or 15(d) of the Securities Exchange - ----- Act of 1934 for the quarterly period ended September 30, 1997 Transition report under Section 13 or 15(d) of the Exchange Act for - ----- the transition period from to ----------------- ------------------- Commission File No. 33-86258 FIRST COMMUNITY CORPORATION --------------------------- (Exact Name of Small Business Issuer as Specified in its Charter) South Carolina 57-1010751 -------------- ---------- (State of Incorporation) (I.R.S. Employer Identification) 5455 Sunset Boulevard, Lexington, South Carolina 29072 ------------------------------------------------------ (Address of Principal Executive Offices) (803) 951-2265 -------------- (Issuer's Telephone Number, Including Area Code) ----------------------------------------------------------------- (Former Name, Former Address and Former Fiscal Year, if Changed Since Last Report) Check whether the issuer: (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 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 --- --- State the number of shares outstanding of each of the issuer's classes of common equity, as of the latest practicable date: 689,677 shares of common stock, par value $1.00 per share, were issued and outstanding as of October 31, 1997. Transitional Small Business Disclosure Format (check one): Yes No X --- --- 2 PART I FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS. The financial statements of First Community Corporation (the "Company") are set forth in the following pages. 3 FIRST COMMUNITY CORPORATION BALANCE SHEETS
September 30, 1997 December 31, (Unaudited) 1996 ------------------ --------------- ASSETS Cash and due from banks $ 1,757,799 $ 1,975,527 Federal funds sold and securities purchased under agreements to resell 2,560,887 5,752,272 Investment securities - available for sale 10,927,914 9,213,248 Investment securities - held to maturity (market value of $2,593,133 and $2,562,844 at September 30, 1997 and December 31, 1996, respectively) 2,600,000 2,600,076 Loans 27,220,210 15,915,004 Less, allowance for loan losses 349,652 200,860 ------------ ------------ Net loans 26,870,558 15,714,144 Property, furniture and equipment - net 3,008,311 2,544,140 Other assets 342,111 329,834 ------------ ------------ Total assets $ 48,067,580 $ 38,129,241 ============ ============ LIABILITIES Deposits: Non-interest bearing demand $ 7,192,023 $ 6,043,599 NOW and money market accounts 10,662,677 5,963,086 Savings 6,125,375 7,154,307 Time deposits less than $100,000 9,738,371 6,731,697 Time deposits $100,000 and over 6,332,304 5,008,135 ------------ ------------ Total deposits 40,050,750 30,900,824 Securities sold under agreements to repurchase 1,571,700 923,400 Other borrowed money - demand note to US Treasury 124,054 299,559 Other liabilities 342,714 223,352 ------------ ------------ Total liabilities 42,089,218 32,347,135 ------------ ------------ SHAREHOLDERS' EQUITY Common stock, par value $1.00 per share; 10,000,000 shares authorized; issued and outstanding 689,677 and 688,077 at September 30, 1997 and December 31, 1996, respectively 689,677 688,077 Additional paid in capital 6,155,237 6,140,837 Accumulated deficit (867,905) (984,080) Unrealized gain (loss) on securities available-for-sale 1,353 (62,728) ------------ ------------ Total shareholders' equity 5,978,362 5,782,106 ------------ ------------ Total liabilities and shareholders' equity $ 48,067,580 $ 38,129,241 ============ ============
4 FIRST COMMUNITY CORPORATION STATEMENTS OF OPERATIONS
Nine Nine Months Ended Months Ended September 30, September 30, 1997 1996 (Unaudited) (Unaudited) ----------------- ----------------- Interest income: Loans, including fees $ 1,501,475 $ 630,878 Investment securities - taxable 579,142 467,428 Federal funds sold and securities purchased under resale agreements 188,377 92,667 ----------- ---------- Total interest income 2,268,994 1,190,973 ----------- ---------- Interest expense: Deposits 951,694 472,433 Federal funds sold and securities sold under agreement to repurchase 49,653 35,525 Other borrowed money 3,344 1,431 ----------- ---------- Total interest expense 1,004,691 509,389 ----------- ---------- Net interest income 1,264,303 681,584 Provision for loan losses 158,860 98,000 ----------- ---------- Net interest income after provision for loan losses 1,105,443 583,584 ----------- ---------- Non-interest income: Deposit service charges 121,821 50,976 Mortgage origination fees 28,458 18,459 Other 33,751 12,480 ----------- ---------- Total non-interest income 184,030 81,915 ----------- ---------- Non-interest expense: Salaries and employee benefits 633,671 519,769 Occupancy 85,282 106,300 Equipment 103,784 75,368 Marketing and public relations 72,728 26,115 Other 277,833 223,475 ----------- ---------- Total non-interest expense 1,173,298 951,027 ----------- ---------- Net income (loss) $ 116,175 $ (285,528) =========== ========== Net income (loss) per share $ 0.17 $ (0.41) =========== ==========
5 FIRST COMMUNITY CORPORATION STATEMENTS OF OPERATIONS
Three Three Months Ended Months Ended September 30, September 30, 1997 1996 (Unaudited) (Unaudited) ----------------- ----------------- Interest income: Loans, including fees $ 588,165 $ 278,670 Investment securities - taxable 203,723 164,188 Federal funds sold and securities purchased under resale agreements 61,857 30,389 --------- --------- Total interest income 853,745 473,247 --------- --------- Interest expense: Deposits 361,328 191,370 Federal funds sold and securities sold under agreement to repurchase 15,850 12,182 Other borrowed money 1,151 849 --------- --------- Total interest expense 378,329 204,401 --------- --------- Net interest income 475,416 268,846 Provision for loan losses 61,860 33,000 --------- --------- Net interest income after provision for loan losses 413,556 235,846 --------- --------- Non-interest income: Deposit service charges 39,617 22,956 Mortgage origination fees 13,591 8,002 Other 14,146 5,569 --------- --------- Total non-interest income 67,354 36,527 --------- --------- Non-interest expense: Salaries and employee benefits 217,877 179,271 Occupancy 26,982 27,112 Equipment 36,507 26,498 Marketing and public relations 30,700 7,408 Other 97,600 77,886 --------- --------- Total non-interest expense 409,666 318,175 --------- --------- Net income (loss) $ 71,244 $ (45,802) ========= ========= Net income (loss) per share $ 0.10 $ (0.07) ========= =========
6 FIRST COMMUNITY CORPORATION STATEMENT OF CHANGES IN SHAREHOLDER'S EQUITY NINE MONTHS ENDED SEPTEMBER 30, 1997 (UNAUDITED)
Unrealized Gain Additional on Securities Common Paid-in Accumulated Available for Stock Capital Deficit Sale Total -------------- -------------- ------------ --------------- --------------- Balance December 31, 1996 $ 688,077 $ 6,140,837 $ (984,080) $ (62,728) $ 5,782,106 Net income 116,175 116,175 Exercise stock options 1,600 14,400 16,000 Unrealized gain (loss) on securities available-for-sale 64,081 64,081 --------- ----------- ---------- --------- ----------- Balance September 30, 1997 $ 689,677 $ 6,155,237 $ (867,905) $ 1,353 $ 5,978,362 ========= =========== ========== ========= ===========
7 FIRST COMMUNITY CORPORATION STATEMENTS OF CASH FLOWS
Nine months ended September 30, ------------------------------------ 1997 1996 --------------- ----------- Cash flows from operating activities: Net income (loss) $ 116,175 $ (285,528) Adjustments to reconcile net income (loss) to net cash used in operating activities: Depreciation 103,227 134,071 Premium amortization (Discount accretion) (50,457) (2,396) Provision for loan losses 158,860 98,000 (Increase) decrease in other assets (12,277) (94,073) Increase in accounts payable 119,362 118,739 ----------- ----------- Net cash used in operating activities 434,890 (31,187) ----------- ----------- Cash flows form investing activities: Purchase of investment securities available-for-sale (5,586,967) (7,418,434) Maturity of investment securities available-for-sale 3,986,915 4,947,337 Purchase of investment securities held-to-maturity - (1,400,312) Maturity of investment securities held-to-maturity - 1,000,000 Increase in loans (11,315,274) (9,747,253) Proceeds from sale of fixed assets 50,000 - Purchase of property and equipment (617,398) (910,927) ----------- ----------- Net cash used in investing activities (13,482,724) (13,529,589) ----------- ----------- Cash flows from financing activities: Increase in deposit accounts 9,149,926 13,296,524 Proceeds from exercise of stock options 16,000 - Increase (decrease) in securities sold under agreements to repurchase 648,300 (472,200) Decrease in other borrowings (175,505) (57,442) ----------- ----------- Net cash provided from financing activities 9,638,721 12,766,882 ----------- ----------- Net increase in cash and cash equivalents (3,409,113) (793,894) Cash and cash equivalents at beginning of period 7,727,799 4,853,213 ----------- ----------- Cash and cash equivalents at end of period $ 4,318,686 $ 4,059,319 =========== =========== Supplemental disclosure: Cash paid during the period for: Interest $ 910,133 $ 418,295 Non-cash investing and financing activities: Unrealized gain (loss) on securities available-for-sale $ 64,081 $ (94,073)
8 FIRST COMMUNITY CORPORATION NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 1997 Note 1 - Basis of Presentation The consolidated financial statements include the accounts of First Community Corporation and its wholly owned subsidiary First Community Bank, N.A. All material inter-company transactions are eliminated in consolidation. In the opinion of management, the unaudited financial statements reflect all adjustments necessary for a fair presentation of the balance sheet and results of operations for the periods presented. 9 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS First Community Corporation (the Company) is a one bank holding company which was incorporated in South Carolina on November 2, 1994 and from that date through August 16, 1995, the Company was a development stage company. First Community Bank N.A. (the "Bank"), the Company's only subsidiary, began operations on August 17, 1995. The Company expected to experience losses until the Bank grew its assets to a point where the assets generated revenue from operations which exceeded the Bank's fixed costs. The Company experienced its first quarterly profit in the fourth quarter of 1996 and continued to reflect a profit in the nine months and three months ended September 30, 1997 of $116,175 and $71,245, respectively. The following discussion contains forward-looking statements that involve risks and uncertainties. The Company's actual results may differ materially from the results discussed in the forward-looking statements, and the Company's operating performance each quarter is subject to various risks and uncertainties that are discussed in detail in the Company's filings with the Securities and Exchange Commission, including the "Risk Factors" section in the Company's Registration Statement on Form S-1 (Registration Number 33-86258) as filed with and declared effective by the Securities and Exchange Commission. Comparison of Results of Operations for Nine Months Ended September 30, 1997 to the Nine Months Ended September 30, 1996: Net Income (Loss) The Company's net income was $116,175 for the nine months ended September 30, 1997 as compared to a loss of $285,528 for the nine months ended September 30, 1996. This improvement in earnings reflect the continued growth in the level of earning assets since the Bank commenced operations. The level of average earning assets was $21,997,187 for the nine months ended September 30, 1996 as compared to $39,336,171 for the nine months ended September 30, 1997. This reflects an 78.8% increase in the level average earning assets for the two periods. In addition, net interest margin improved from 4.13% to 4.30% for the nine months ended September 30, 1996 and 1997, respectively. Non-interest income increased 125.7% to $184,030 for the nine months ended September 30, 1997 as compared to $81,915 for the nine months ended September 30, 1996. During these same periods, non-interest expense increased 23.3% to $1,173,298 for the nine months ended September 30, 1997 as compared to $951,027 for the nine months ended September 30, 1996. Net Interest Income The table on page 15 shows yield and rate data for interest-bearing balance sheet components during the nine month periods ended September 30, 1997 and 1996, along with average balances and the related interest income and interest expense amounts. 10 ITEM 2. CONTINUED PAGE 2 Net interest income was $1,264,303 during the nine months ended September 30, 1997 as compared to $681,584 for the nine months ended September 30, 1996. The net interest margin was 4.30% for the nine months ended September 30, 1997 as compared to 4.13% for the nine months ended September 30, 1996. This improvement of net interest income is a result of the increase of the level of earning assets as well as the change in the mix of earning assets. For the nine months ended September 30, 1996 average loans accounted for 40.9% of earning assets whereas for the nine months ended September 30, 1997 they represented 54.8% of earning assets. Loans typically provide a higher yield then the Bank's alternative uses of these funds such as securities and short-term overnight investments. Interest income during the nine months ended September 30, 1997 was $2,268,994 as compared to $1,190,973 for the nine months ended September 30, 1996. The average yield on earning assets during the first nine months of 1997 was 7.71% as compared to 7.21% during the same period of 1996. The largest component of interest income for the nine months ended September 30, 1997 was interest on loans and amounted to $1,501,475 as compared to $630,878 for the comparable prior year period. The overall yield on loans was 9.33% for the nine months ended September 30, 1996 as compared to 9.31% for the nine months ended September 30, 1997. The investment portfolio income increased $111,714, or 23.9%, to $579,142 for the nine months ended September 30, 1997 as compared to $467,428 for the nine months ended September 30, 1996. The increase in investment portfolio income is a result of the average investment portfolio balance being $2,432,834 greater for the nine month period ended September 30, 1997 as compared to the same period in the prior year. Interest on overnight federal funds sold and securities purchased under agreements to resell increased $95,710 or 103.3%, to $188,377 for the nine month period ended September 30, 1997 as compared to $92,667 for the nine month period ended September 30, 1996. Average short term overnight fund balances were 102.8% greater during the nine months ended September 30, 1997 as compared to the same period in the prior year. Interest expense during the nine months ended September 30, 1997 was $1,004,691 with an average rate paid on interest-bearing liabilities of 4.30% as compared to $681,584 and 4.29% during the nine months ended September 30, 1996. The primary reason for the increase in interest expense was that average interest-bearing liabilities were $15,441,408 greater for the nine months ended September 30, 1997 as compared to the nine months ended September 30, 1996. Provision and Allowance for Loan Losses The provision for loan losses was $158,860 and $98,000 for nine months ended September 30, 1997 and 1996, respectively, and reflects management's estimate of the amount necessary to maintain the allowance for loan losses at a level believed to be adequate in relation to the current size, mix and quality of the portfolio. The Company's allowance for loan losses as a percentage of its period-end loans was 1.28% at September 30, 1997. The Company had no 11 ITEM 2. CONTINUED PAGE 3 nonperforming loans at September 30, 1997. Charge-offs during nine months ended September 30, 1997, amounted to $12,825 as compared to $9,705 for the same period in the prior year. Recoveries during the nine months ended September 30, 1997 amounted to $2,757. Loans past due 30 days through 89 days amounted to $10,019 and loans greater than 90 days past due amounted to $2,355 at September 30, 1997. The loan portfolio is periodically reviewed to evaluate the outstanding loans and to measure both the performance of the portfolio and the adequacy of the allowance for loan losses. This analysis includes a review of delinquency trends, actual losses, and internal credit ratings. Management's judgment as to the adequacy of the allowance is based upon a number of assumptions about future events which it believes to be reasonable, but which may or may not be reasonable. However, because of the inherent uncertainty of assumptions made during the evaluation process, there can be no assurance that loan losses in future periods will not exceed the allowance for loan losses or that additional allocations to the allowance will not be required. Noninterest Income and Expense Noninterest income during the nine months ended September 30, 1997 was $184,030 as compared to $81,915 for the nine months ended September 30, 1996. This was primarily a result of increased income from deposit service charges of $70,845 (139.0%), resulting from the increase deposit balances during the comparable periods. Other income during the nine months ended September 30, 1997 was $33,751 as compared to $12,480 during the same period in the prior year. This increase is primarily due to an increase in customer check sales income of approximately $1,700 increases in bankcard fee income of approximately $3,600 and increased loan late charge income of $8,300. Noninterest expense amounted to $1,173,298 as compared to $951,027 during the nine months ended September 30, 1997 and 1996, respectively. Salary and employee benefits increased $113,902 or 21.9% in the nine months ended September 30, 1997 as compared to the comparable period in 1996. This increase results from normal merit increases as well as the addition of two full time equivalent and one part time equivalent employees during the first quarter of 1997. Occupancy expense decreased from $106,300 for the nine months ended September 30, 1996 to $85,282 for the nine months ended September 30, 1997. This decrease is a result of reduced cost related to the move of the Lexington office in August of 1996 and the move of the Forest Acres office in June 1997 to permanent facilities. Prior to moving into permanent facilities the cost of the temporary facilities were being depreciated over a short time period and resulted in higher depreciation expense during the comparable periods. Equipment expense increased from $75,368 for the nine months ended September 30, 1996 to $103,784 for the nine months ended September 30, 1997. This increase is primarily due to increased maintenance contract expense of approximately $22,089 on computer hardware and software equipment which was initially under warranty for the first twelve months after being purchased. 12 ITEM 2. CONTINUED PAGE 4 Marketing and public relations expense increased by $46,613 or 178.5% in the nine months ended ended September 30, 1997 as compared to the comparable period in the prior year. This increase is a result of planned increases in advertising and marketing during the Bank's second full year of operations. Other non-interest expense increased $54,358 or 24.3 % in the nine months ended September 30, 1997 compared to the same period in the prior year. An increase in computer service bureau expense of $6,500, correspondent bank charges of $8,300 postage of $4,900 and contributions of $6,800 account for the majority of the increase in other non-interest expense. The computer service bureau expense, postage and correspondent bank charges are directly related to the number of accounts and the volume of activity, and have increased due to the growth of the Bank for the nine months ended September 30, 1997 as compared to the same period in the prior year. Contributions expense has increased as a result of management determining to keep this expense to a very minimum during the period the Company was experiencing operating losses during the initial stages of operations. Comparison of Results of Operations for Three Months Ended September 30, 1997 to the Three Months Ended September 30, 1996: Net income for the third quarter of 1997 was $71,245 or $.10 per share, as compared to a loss of $45,802, or $.07 per share, during the comparable period in 1996. This improvement, as explained in the nine months results, is due to the significant increase in the level of earning assets during these two periods. Average earning assets were $43,177,565 during the third quarter of 1997 as compared to $25,421,662 during the third quarter of 1996. The table on page 16 shows yield and rate data for interest-bearing balance sheet components during the three month periods ended September 30, 1997 and 1996, along with average balances and the related interest income and interest expense amounts. The yield on average earning assets increased from 7.39% in the third quarter of 1996 to 7.84% in the third quarter of 1997. This increase is a result of loans comprising 58.6% of earning assets during the third quarter of 1997 as compared to 47.3% percent during the third quarter of 1996. The cost of interest bearing liabilities was 4.27% in third quarter of 1996 as compared to 4.30% in the third quarter of 1997. Total non-interest income increased by $30,827 during the third quarter of 1997 as compared to the same period in 1996. As explained in the analysis of nine month results, the increase is primarily due to increased fees related to deposit and loan balances and related activity charges. The Company originates mortgage loans which are closed in the name of a third party for which the Company receives a fee. These fees amounted to $13,591 during the third quarter of 1997 as compared to $8,002 during the third quarter of 1996. Total non-interest expense increased by $91,490 in the third quarter of 1997 as compared to the same quarter of 1996. This increase is primarily a result of a $38,606 increase in salary and benefits expense and a $23,292 increase in marketing expense. As stated in the analysis of the nine month results, the salary increase is a result of the addition of two full time and one part 13 ITEM 2. CONTINUED PAGE 5 time employees during the second quarter of 1997. The increase in marketing expense is a result of planned increases in advertising during the second full year of the Company's operation. Financial Position Assets totaled $48,067,580 at September 30, 1997 as compared to $38,129,241 at December 31, 1996 an increase of $8,898,110 (26.1%). Loans grew by $11,305,206 during the nine months ended September 30, 1997 from $15,915,004 to $27,220,210. This loan growth was funded by growth in deposits of $9,149,926 (29.6%) from $30,900,824 at December 31, 1996 to $40,050,750 at September 30, 1997. The balance of the loan growth was funded by a decrease in federal funds sold and securities purchased under agreements to resell of $3,191,385 from $5,752,272 at December 31, 1996 to $2,560,887 at September 30, 1997. The loan to deposit ratio at September 30, 1997 was 68.0% as compared to 50.9% at December 31, 1996. It is anticipated that this ratio will continue to increase as management invests more of the Bank's assets in the higher earning loan portfolio as compared to the investment portfolio. The Company's management closely monitors and seeks to maintain appropriate levels of interest earning assets and interest bearing liabilities so that maturities of assets are such that adequate funds are provided to meet customer withdrawals and demand. Management expects asset and liability growth to continue at a rapid pace during the coming months, with the growth tapering off to a slower, more deliberate and controllable pace over the longer term, and believes capital should continue to be adequate. Liquidity and Capital Resources Management believes that the Company's liquidity remains adequate to meet operating and loan funding requirements. Federal funds sold and investment securities available-for sale represent 28.1% of total assets at September 30, 1997. Management believes that its existing stable base of core deposits along with continued growth in this deposit base will enable the Company to meet its long term and short term liquidity needs successfully. These needs include the ability to respond to short-term demand for funds caused by the withdrawal of deposits, maturity of repurchase agreements, extensions of credit, and the payment of operating expenses. Sources of liquidity in addition to deposit gathering activities include maturing loans and investments, purchase of federal funds from other financial institutions, and selling securities under agreements to repurchase. The Company monitors closely the level of large certificates of deposits in amounts of $100,000 or more as they tend to be extremely sensitive to interest rate levels, and thus less reliable sources of funding for liquidity purposes. At September 30, 1997 the amount of certificates of deposits of $100,000 or more represented 15.8% of total deposits. These deposits are issued to local customers, many of which have other product relationships with the Bank, and none of these deposits are brokered deposits. Management is not aware of any trends, events or uncertainties that may result in a significant adverse effect on the Company's 14 ITEM 2. CONTINUED PAGE 6 liquidity position. However, no assurances can be given in this regard, as rapid growth, deterioration in loan quality, and poor earnings, or a combination of these factors, could change the Company's liquidity position in a relatively short period of time. The capital needs of the Company have been primarily met to date through the initial common stock offering which raised approximately $6.8 million. This capital was sufficient to fund the activities of the Bank during the initial stages of operations and has allowed the Bank to remain a "well capitalized" institution until sufficient income was generated from operations to fund its activities on an on-going basis. Shareholders' equity was 12.4% of total assets at September 30, 1997 as compared to 15.2% at December 31, 1996. The Bank's risked-based capital ratios of Tier 1, total capital, and leverage ratio were 15.4%, 16.4%, and 10.8%, respectively, at September 30, 1997. This compares to required OCC regulatory capital guidelines for Tier 1 capital, total capital, and leverage capital ratios of 4.0%, 8.0%, and 3.0%, respectively. The Company will be required by the Federal Reserve to meet the same guidelines once its consolidated total assets exceed $150 million. 15 FIRST COMMUNITY CORPORATION YIELDS ON AVERAGE EARNING ASSETS AND RATES ON AVERAGE INTEREST-BEARING LIABILITIES
Nine months ended September 30, 1997 Nine months ended September 30, 1996 --------------------------------------- -------------------------------------- Average Interest Yield/ Average Interest Yield/ Balance Earned/Paid Rate Balance Earned/Paid Rate ASSETS Earning assets Loans $ 21,567,447 1,501,475 9.31% $ 9,008,025 $ 630,878 9.33% Securities: Taxable 13,116,452 579,142 5.90% 10,683,618 467,428 5.83% Federal funds sold and securities purchased under agreements to resell 4,652,272 188,377 5.41% 2,305,544 92,667 5.35% -------------------------------------- ------------------------------------ Total earning assets 39,336,171 2,268,994 7.71% 21,997,187 1,190,973 7.21% -------------------------------------- ------------------------------------ Cash and due from banks 1,363,489 807,034 Premises and equipment 2,829,250 1,863,068 Other assets 329,083 247,269 Allowance for loan losses (258,052) (117,859) ============ =========== Total assets $ 43,599,941 $24,796,699 ============ =========== LIABILITIES Interest-bearing liabilities Interest-bearing transaction accounts 4,280,279 46,566 1.45% 2,057,921 22,841 1.48% Money market accounts 4,212,618 140,266 4.45% 1,422,731 34,343 3.22% Savings deposits 6,287,824 180,714 3.84% 3,058,189 91,499 3.99% Time deposits 14,892,483 584,148 5.24% 8,139,916 323,750 5.30% Other short term borrowings 1,583,715 52,997 4.47% 1,136,754 36,956 4.33% -------------------------------------- ------------------------------------ Total interest-bearing liabilities 31,256,919 1,004,691 4.30% 15,815,511 509,389 4.29% -------------------------------------- ------------------------------------ Demand deposits 6,262,052 2,941,724 Other liabilities 266,097 165,717 Shareholders' equity 5,814,873 5,873,747 ============ =========== Total liabilities and shareholders' equity $ 43,599,941 $24,796,699 ============ =========== Net interest spread 3.41% 2.92% Net interest income/margin $1,264,303 4.30% $ 681,584 4.13% ========== =========
16 FIRST COMMUNITY CORPORATION YIELDS ON AVERAGE EARNING ASSETS AND RATES ON AVERAGE INTEREST-BEARING LIABILITIES
Three months ended September 30, 1997 Three months ended September 30, 1996 ------------------------------------- ------------------------------------ Average Interest Yield/ Average Interest Yield/ Balance Earned/Paid Rate Balance Earned/Paid Rate ASSETS Earning assets Loans $ 25,309,712 588,165 9.22% $12,027,143 $ 278,670 9.19% Securities: Taxable 13,404,639 203,723 6.03% 11,113,702 164,188 5.86% Federal funds sold and securities purchased under agreements to resell 4,463,214 61,857 5.50% 2,280,817 30,389 5.29% ----------------------------------- ---------------------------------- Total earning assets 43,177,565 853,745 7.84% 25,421,662 473,247 7.39% ------------------------------------- ---------------------------------- Cash and due from banks 1,447,488 916,272 Premises and equipment 3,018,275 2,176,247 Other assets 340,397 271,447 Allowance for loan losses (309,656) (142,186) ============= =========== Total assets $ 47,674,069 $28,643,442 ============= =========== LIABILITIES Interest-bearing liabilities Interest-bearing transaction accounts 5,309,895 18,670 1.39% 2,595,324 9,805 1.50% Money market accounts 6,301,887 74,118 4.67% 1,322,824 10,627 3.19% Savings deposits 5,860,754 56,045 3.79% 4,606,285 48,376 4.17% Time deposits 15,928,394 212,495 5.29% 9,255,808 122,562 5.25% Other short term borrowings 1,473,450 17,001 4.58% 1,210,258 13,031 4.27% ----------------------------------- ---------------------------------- Total interest-bearing liabilities 34,874,380 378,329 4.30% 18,990,499 204,401 4.27% ----------------------------------- ---------------------------------- Demand deposits 6,608,039 3,704,280 Other liabilities 311,730 207,605 Shareholders' equity 5,879,920 5,741,058 ============= =========== Total liabilities and shareholders' equity $ 47,674,069 $28,643,442 ============= =========== Net interest spread 3.54% 3.12% Net interest income/margin $ 475,416 4.37% $ 268,846 4.20% ========= =========
17 PART II OTHER INFORMATION ITEM 1. LEGAL PROCEEDINGS. There are no material pending legal proceedings to which the Company or any of its subsidiaries is a party or of which any of their property is the subject. ITEM 2. CHANGES IN SECURITIES. (a) Not applicable (b) Not applicable ITEM 3. DEFAULTS UPON SENIOR SECURITIES. Not Applicable ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS. There were no matters submitted to security holders for a vote during the three months ended September 30, 1997 ITEM 5. OTHER INFORMATION. None ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K. (a) The following documents are filed as part of this report: 3.1 Amended and Restated Articles of Incorporation (incorporated by reference to Exhibit 3.1 to the Company's Registration Statement No. 33-86258 on Form S-1). 3.2 Bylaws (incorporated by reference to Exhibit 3.2 to the Company's Registration Statement No. 33-86258 on Form S-1). 4.1 Provisions in the Company's Articles of Incorporation and Bylaws defining the rights of holders of the Company's Common Stock (incorporated by reference to Exhibit 4.1 to the Company's Registration Statement No. 33-86258 on Form S-1).
18 10.1 Employment Agreement dated June 1, 1994, by and between Michael C. Crapps and the Company (incorporated by reference to Exhibit 10.1 to the Company's Registration Statement No. 33-86258 on Form S-1).* 10.2 Employment Agreement dated June 1, 1994, by and between James C. Leventis and the Company (incorporated by reference to Exhibit 10.2 to the Company's Registration Statement No. 33-86258 on Form S-1).* 10.3 Construction agreement dated January 11, 1996 by and between the Bank and Summerfield Associates, Inc. to build permanent banking facility in Lexington, South Carolina (incorporated by reference to Exhibit 10.3 to the Company's Annual Report for fiscal year ended December 31, 1995 on Form 10-KSB). 10.4 Contract of sale of real estate dated August 1, 1994 between First Community Bank (In Organization) and Three Seventy-Eight Company, Inc. (Incorporated by reference to the Company's Registration Statement No. 33-86258 on Form S-1). 10.5 Contract of sale of real estate dated July 28, 1994, between First Community Bank (In Organization) and the Crescent Partnership (Incorporated by reference to the Company's Registration Statement No. 33-86258 on Form S-1). 10.6 First Community Corporation 1996 Stock Option Plan (Incorporated by reference to Exhibit 10.6 to the Company's Annual Report for fiscal year ended December 31, 1995 on Form 10-KSB). 10.7 Construction Agreement dated November 7, 1996 by and between the Bank and Summerfield Associates, Inc. To build a banking facility in Forest Acres, South Carolina. (Incorporated by reference to the Company's 1996 Annual Report on Form 10 KSB). 27 Financial Data Schedule (SEC use only).
*Denotes executive compensation contract or arrangement. (b) Reports on Form 8-K. There were no reports on Form 8-K filed by the Company during the quarter ended September 30, 1997 19 SIGNATURES In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. FIRST COMMUNITY CORPORATION --------------------------- (REGISTRANT) Date: November 13, 1997 By: /s/ Michael C. Crapps ------------------ --------------------------------------- Michael C. Crapps President and Chief Executive Officer By: /s/ Joseph G. Sawyer --------------------------------------- Joseph G. Sawyer Senior Vice President, Principal Financial Officer EX-27 2 FINANCIAL DATA SCHEDULE
9 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM FINANCIAL STATEMENTS OF FIRST COMMUNITY CORP FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1997, CONTAINED IN FORM 10-QSB AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FORM 10-QSB. 9-MOS DEC-31-1997 JAN-01-1997 SEP-30-1997 1,757,799 0 2,560,887 0 10,927,714 2,600,000 2,593,133 27,220,210 349,652 48,067,580 40,050,750 1,695,754 342,714 0 0 0 689,677 5,288,685 48,067,580 1,501,475 579,142 188,377 2,268,994 951,694 1,004,691 1,264,303 158,860 0 1,173,298 116,175 116,175 0 0 116,175 .17 0 4.30 0 2,355 0 0 200,860 12,825 2,757 349,652 349,652 0 0
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