EX-99.1 2 e22266_ex99-1.htm

Exhibit 99.1

News Release

For Release April 20, 2022

9:00 A.M.

Contact:	D. Shawn Jordan, Executive Vice President & Chief Financial Officer or
	Robin D. Brown, Executive Vice President & Chief Marketing Officer
	(803) 951- 2265

First Community Corporation Announces First Quarter Results and Cash Dividend

Lexington, SC – April 20, 2022

Highlights for First Quarter 2022

Net income of $3.5 million

Pre-tax pre-provision earnings of $4.2 million

Diluted EPS of $0.46 per common share

Pure (non-CD) deposit growth, including customer cash management accounts, of $83.5 million during the quarter, a 25.9% annualized growth rate

Total loan growth of $12.1 million during the quarter. Loan growth, excluding Paycheck Protection Program (PPP) loans was $13.3 million, a 6.3% annualized growth rate

Key credit quality metrics continued to be strong during the quarter with net loan recoveries of $19 thousand, non-performing assets ratio of 0.09%, and past due loans of 0.07%

Investment advisory revenue of $1.2 million. Assets under management exceeded $632 million at March 31, 2022

Mortgage revenue of $839 thousand

Cash dividend of $0.13 per common share, the 81^st consecutive quarter of cash dividends paid to common shareholders

Share Repurchase authorization of 375,000 shares

Announced expansion into York County with a loan production office in Rock Hill, South Carolina

Today, First Community Corporation (Nasdaq: FCCO), the holding company for First Community Bank, announced earnings and discussed the results of operations and the company’s activities during the first quarter of 2022.

First Community reported net income for the first quarter of 2022 of $3.5 million with diluted earnings per common share of $0.46. This compares to net income and diluted earnings per common share of $3.9 million and $0.52, respectively, on a linked quarter basis and $3.3 million and $0.43 year-over-year, respectively. Pre-tax pre-provision earnings during the first quarter of 2022 were $4.2 million. This compares to pre-tax pre-provision earnings of $4.9 million for fourth quarter of 2021 and pre-tax pre-provision earnings of $4.3 million for the first quarter of 2021. For comparison purposes, it should be noted that fee accretion related to PPP loans was $44 thousand in the first quarter of 2022. This compares to $241 thousand in the fourth quarter of 2021 and $542 thousand in the first quarter of 2021.

Cash Dividend and Capital

The Board of Directors has approved a cash dividend for the first quarter of 2022 of $0.13 per common share. This dividend is payable on May 17, 2022 to shareholders of record of the company’s common stock as of May 3, 2022. First Community President and CEO, Mike Crapps commented, “The entire board is pleased that our performance enables the company to continue its cash dividend for the 81^stconsecutive quarter.”

The Company’s previously announced share repurchase plan expired at the market close on March 31, 2022 with no shares repurchased under the plan. The Company’s Board of Directors has approved a new share repurchase plan that provides for the repurchase of up to 375,000 shares of its common stock, which represents approximately 5% of the Company’s 7,559,760 shares outstanding as of March 31, 2022. This new share repurchase plan expires on December 31, 2023 [date corrected]. Under the repurchase plan, the Company may repurchase shares from time to time. Crapps noted, “This approved share repurchase provides us with some flexibility in managing capital going forward.”

Each of the regulatory capital ratios for the bank exceed the well capitalized minimum levels currently required by regulatory statute. At March 31, 2022, the bank’s regulatory capital ratios, Leverage, Tier I Risk Based and Total Risk Based, were 8.43%, 14.14%, and 15.29%, respectively. This compares to the same ratios as of March 31, 2021 of 8.73%, 13.20%, and 14.34%, respectively. As of March 31, 2022, the bank’s Common Equity Tier One ratio was 14.14% compared to 13.20% at March 31, 2021. The bank’s Tangible Common Equity to Tangible Assets ratio (TCE ratio) was 7.36% at March 31, 2022. Further, the Company’s TCE ratio was 6.71% as of March 31, 2022 compared to 7.92% as of March 31, 2021. Crapps commented, “While the bank’s regulatory capital ratios have actually increased in some cases, the TCE ratio has declined. This is primarily due to the rapid growth in the Company’s balance sheet and the Accumulated Other Comprehensive Income (Loss) (AOCI) resulting from an increase in market interest rates which have negatively impacted the fair value of our investment portfolio.”

Loan Portfolio Quality/Allowance for Loan Losses

The Company’s asset quality metrics as of March 31, 2022 remained sound. The non-performing asset ratio was 0.09% of total assets with $1.5 million in non-performing assets. Loans past due 30 days or more represented only 0.07% of the loan portfolio. The ratio of classified loans plus OREO is 6.13% of total bank regulatory risk-based capital at March 31, 2022. During the first quarter, the bank had net loan recoveries of $19 thousand.

The Company recorded a $125 thousand dollar credit in provision for loan losses during the quarter. As a result, the Allowance for Loan Losses as a percentage of total loans decreased slightly to 1.26%.

Balance Sheet

Total loans increased by $12.1 million during the first quarter of 2022, a 5.7% annualized growth rate. Ted Nissen, First Community Bank President and Chief Banking Officer, noted, “We are pleased with our loan activity during the first quarter with production of $55.3 million and strong momentum going into the second quarter of the year.” Total loan growth during the quarter, excluding PPP loans, was $13.3 million, a 6.3% annualized growth rate. Year-over-year, loan growth, excluding PPP loans and a related credit facility, increased $71.2 million, an 8.8% growth rate. As of March 31, 2022, the Company had only $269 thousand in PPP loans remaining on the balance sheet.

Total deposits were $1.43 billion at March 31, 2022 compared to $1.36 billion at December 31, 2021. Pure deposits, which are defined as total deposits less certificates of deposits, increased $69.7 million during the first quarter, to $1.3 billion at March 31, 2022, a 22.5% annualized growth rate. The bank had no brokered deposits and no listing services deposits at March 31, 2022. Securities sold under agreements to repurchase, which are related to customer cash management accounts or business sweep accounts, were $68.1 million at March 31, 2022 compared to $54.2 million at December 31, 2021, an increase of 25.5%. Costs of deposits decreased on a linked quarter basis to 0.10% in the first quarter of 2022 from 0.11% in the fourth quarter of 2021. Cost of funds also decreased on a linked quarter basis to 0.13% in the first quarter of 2022 from 0.14% in the fourth quarter of 2021. Mr. Crapps commented, “A strength of our bank has been and continues to be our low-cost deposit base and the strong momentum in deposit growth has continued into 2022. While our cost of deposits and cost of funds decreased again in the first quarter of 2022, in this rising rate market that trend will reverse and we are very focused on continuing to manage these expenses.”

Net Interest Income/Net Interest Margin

Net interest income was $10.7 million in the first quarter of 2022 compared to $11.2 million in the fourth quarter of 2021 and $10.6 million in the first quarter of 2021. The net interest margin, on a taxable equivalent basis, was 2.91% for the first quarter of 2022 compared to 3.01% in the fourth quarter of the 2021 and 3.23% in the first quarter of 2021.

Non-Interest Income

Non-interest income for the first quarter of 2022 was $3.4 million, compared to $3.6 million in the fourth quarter of 2021 and $3.3 million in the first quarter of 2021. The mortgage line of business had fee revenue of $839 thousand in the first quarter of 2022 on production of $30.0 million. This compares to fee revenue and production year-over-year of $990 thousand and $42.7 million, respectively. With the headwinds of low housing inventories and a rising interest rate market, the Company is exploring additional mortgage products to help offset anticipated production challenges.

Revenue from the financial planning and investment advisory line of business increased 6.9% on a linked quarter basis to $1.2 million for the first quarter of 2022 compared to $1.1 million in the fourth quarter of 2021. Year over year, revenue increased 36.6% from $877 thousand in the first quarter of 2021. Assets Under Management (AUM) were $632.8 million at March 31, 2022 compared to $650.9 million at December 31, 2021, and $519.3 million at March 31, 2021.

Non-Interest Expense

Non-interest expense increased $76 thousand on a linked quarter basis to $9.954 million in the first quarter of 2022 from $9.878 million in the fourth quarter of 2021. On a related note, the effective income tax rate for the first quarter of 2022 was 18.44% compared to 21.16% in the fourth quarter of 2021 and 21.49% in the first quarter of 2021. The reduction in the effective tax rate this quarter was due to a non-recurring tax adjustment of $153 thousand.

Other

On March 1, 2022, the Company announced plans to enter the Piedmont Region of South Carolina with the addition of a loan production office in York County staffed with a team of veteran local bankers. The Company plans to follow with a full-service banking office in the future. During the first quarter of 2022, the Company experienced one month of impact to non-interest expense for this new initiative.

First Community Corporation stock trades on The NASDAQ Capital Market under the symbol “FCCO” and is the holding company for First Community Bank, a local community bank based in the Midlands of South Carolina. First Community Bank is a full-service commercial bank offering deposit and loan products and services, residential mortgage lending and financial planning/investment advisory services for businesses and consumers. First Community serves customers in the Midlands, Aiken, Upstate and Piedmont Regions of South Carolina as well as Augusta, Georgia. For more information, visit www.firstcommunitysc.com.

FORWARD-LOOKING STATEMENTS

This news release and certain statements by our management may 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. Forward looking statements can be identified by words such as “anticipate”, “expects”, “intends”, “believes”, “may”, “likely”, “will”, “plans” or other statements that indicate future periods. 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 the United States economy in general and the strength of the local economies in which we conduct operations may be different than expected including, but not limited to, due to the negative impacts and disruptions resulting from the outbreak of the novel coronavirus, or COVID-19, on the economies and communities we serve, which has had and may continue to have an adverse impact on our business, operations, and performance, and could continue to have a negative impact on our credit portfolio, share price, borrowers, and on the economy as a whole both domestically and globally; (3) the rate of delinquencies and amounts of charge-offs, the level of allowance for loan loss, the rates of loan growth, or adverse changes in asset quality in our loan portfolio, which may result in increased credit risk-related losses and expenses; (4) changes in legislation, regulation, policies or administrative practices, whether by judicial, governmental, or legislative action, (5) adverse conditions in the stock market, the public debt markets and other capital markets (including changes in interest rate conditions) could have a negative impact on the company; (6) technology and cybersecurity risks, including potential business disruptions, reputational risks, and financial losses, associated with potential attacks on or failures by our computer systems and computer systems of our vendors and other third parties; and (7) risks, uncertainties and other factors disclosed in our most recent Annual Report on Form 10-K filed with the SEC, or in any of our Quarterly Reports on Form 10-Q or Current Reports on Form 8-K filed with the SEC since the end of the fiscal year covered by our most recently filed Annual Report on Form 10-K, which are available at the SEC’s Internet site (http://www.sec.gov).

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, except as required by law.

###

FIRST COMMUNITY CORPORATION

BALANCE SHEET DATA

(Dollars in thousands, except per share data)

	As of
	March 31,			December 31,			September 30,			June 30,			March 31,
	2022			2021			2021			2021			2021
Total Assets	$	1,652,279		$	1,584,508		$	1,560,326		$	1,514,973		$	1,492,494
Other Short-term Investments and CD's¹		68,169			47,049			55,259			52,316			88,389
Investment Securities		579,699			566,624			515,260			470,669			407,547
Loans Held for Sale		12,095			7,120			6,213			11,416			23,481
Loans
Paycheck Protection Program (PPP) Loans		269			1,467			9,109			47,229			61,836
Non-PPP Loans		875,528			862,235			872,411			831,089			807,230
Total Loans		875,797			863,702			881,520			878,318			869,066
Allowance for Loan Losses		11,063			11,179			11,025			10,638			10,563
Goodwill		14,637			14,637			14,637			14,637			14,637
Other Intangibles		879			919			959			1,011			1,063
Total Deposits		1,430,748			1,361,291			1,333,568			1,289,883			1,271,440
Securities Sold Under Agreements to Repurchase		68,060			54,216			59,821			60,487			60,319
Federal Home Loan Bank Advances		—			—			—			—			—
Junior Subordinated Debt		14,964			14,964			14,964			14,964			14,964
Shareholders' Equity		125,380			140,998			139,113			137,927			132,687

Book Value Per Common Share	$	16.59		$	18.68		$	18.44		$	18.29		$	17.63
Tangible Book Value Per Common Share	$	14.53		$	16.62		$	16.37		$	16.22		$	15.55
Equity to Assets		7.59	%		8.90	%		8.92	%		9.10	%		8.89	%
Tangible Common Equity to Tangible Assets		6.71	%		8.00	%		8.00	%		8.16	%		7.92	%
Loan to Deposit Ratio (Includes Loans Held for Sale)		62.06	%		63.97	%		66.57	%		68.98	%		70.20	%
Loan to Deposit Ratio (Excludes Loans Held for Sale)		61.21	%		63.45	%		66.10	%		68.09	%		68.35	%
Allowance for Loan Losses/Loans		1.26	%		1.29	%		1.25	%		1.21	%		1.22	%

Regulatory Capital Ratios (Bank):
Leverage Ratio		8.43	%		8.45	%		8.56	%		8.48	%		8.73	%
Tier 1 Capital Ratio		14.14	%		13.97	%		13.58	%		13.52	%		13.20	%
Total Capital Ratio		15.29	%		15.15	%		14.74	%		14.66	%		14.34	%
Common Equity Tier 1 Capital Ratio		14.14	%		13.97	%		13.58	%		13.52	%		13.20	%
Tier 1 Regulatory Capital	$	135,555		$	132,918		$	129,741		$	125,732		$	122,854
Total Regulatory Capital	$	146,618		$	144,097		$	140,766		$	136,370		$	133,417
Common Equity Tier 1 Capital	$	135,555		$	132,918		$	129,741		$	125,732		$	122,854

¹Includes federal funds sold, securities sold under agreement to resell and interest-bearing deposits

Average Balances:	Three Months Ended
	March 31,		December 31,		March 31,
	2022		2021		2021
Average Total Assets	$	1,622,265	$	1,593,657	$	1,435,259
Average Loans (Includes Loans Held for Sale)		876,349		880,026		886,379
Average Earning Assets		1,515,374		1,490,507		1,339,053
Average Deposits		1,374,813		1,363,235		1,208,081
Average Other Borrowings		97,517		77,098		78,266
Average Shareholders' Equity		137,245		140,180		135,580

Asset Quality:	As of
	March 31,		December 31,		September 30,		June 30,		March 31,
	2022		2021		2021		2021		2021
Loan Risk Rating by Category (End of Period)
Special Mention	$	1,668	$	1,626	$	2,851	$	3,085	$	3,507
Substandard		7,849		7,872		7,992		11,707		12,136
Doubtful		—		—		—		—		—
Pass		866,280		854,204		870,677		863,526		853,423
Total Loans	$	875,797	$	863,702	$	881,520	$	878,318	$	869,066
Nonperforming Assets
Non-accrual Loans	$	148	$	250	$	359	$	3,986	$	4,521
Other Real Estate Owned and Repossessed Assets		1,146		1,165		1,165		1,182		1,076
Accruing Loans Past Due 90 Days or More		174		—		—		4,165		—
Total Nonperforming Assets	$	1,468	$	1,415	$	1,524	$	9,333	$	5,597
Accruing Trouble Debt Restructurings	$	1,393	$	1,444	$	1,474	$	1,510	$	1,515

	Three Months Ended
	March 31,			December 31,			March 31,
	2022			2021			2021
Loans Charged-off	$	1		$	5		$	16
Overdrafts Charged-off		14			10			8
Loan Recoveries		(20	)		(224	)		(8	)
Overdraft Recoveries		(3	)		(4	)		(14	)
Net Charge-offs (Recoveries)	$	(8	)	$	(213	)	$	2
Net Charge-offs / (Recoveries) to Average Loans²		(0.00	)%		(0.10	)%		0.00	%

² Annualized

FIRST COMMUNITY CORPORATION

INCOME STATEMENT DATA

(Dollars in thousands, except per share data)

	Three months ended
	March 31,			December 31,			March 31,
	2022			2021			2021
Interest income	$	11,195		$	11,656		$	11,218
Interest expense		462			492			651
Net interest income		10,733			11,164			10,567
Provision for loan losses		(125	)		(59	)		177
Net interest income after provision		10,858			11,223			10,390
Non-interest income
Deposit service charges		265			262			246
Mortgage banking income		839			1,039			990
Investment advisory fees and non-deposit commissions		1,198			1,121			877
Gain (loss) on sale of securities		—			—			—
Gain (loss) on sale of other assets		—			103			77
Other non-recurring income		4			24			100
Other		1,068			1,077			1,006
Total non-interest income		3,374			3,626			3,296
Non-interest expense
Salaries and employee benefits		6,119			6,188			5,964
Occupancy		705			740			730
Equipment		332			347			275
Marketing and public relations		361			324			396
FDIC assessment		130			114			169
Other real estate expenses		47			(37	)		29
Amortization of intangibles		39			40			57
Other		2,221			2,162			1,920
Total non-interest expense		9,954			9,878			9,540
Income before taxes		4,278			4,971			4,146
Income tax expense		789			1,052			891
Net income	$	3,489		$	3,919		$	3,255

Per share data
Net income, basic	$	0.46		$	0.52		$	0.44
Net income, diluted	$	0.46		$	0.52		$	0.43

Average number of shares outstanding - basic		7,518,375			7,503,835			7,475,522
Average number of shares outstanding - diluted		7,594,840			7,564,909			7,522,568
Shares outstanding period end		7,559,760			7,548,638			7,524,944

Return on average assets		0.87	%		0.98	%		0.92	%
Return on average common equity		10.31	%		11.09	%		9.74	%
Return on average tangible common equity		11.63	%		12.48	%		11.01	%
Net interest margin (non taxable equivalent)		2.87	%		2.97	%		3.20	%
Net interest margin (taxable equivalent)		2.91	%		3.01	%		3.23	%
Efficiency ratio¹		69.93	%		66.74	%		69.16	%

¹Calculated by dividing non-interest expense by net interest income on tax equivalent basis and non interest income, excluding gain on sale of other assets and other non-recurring noninterest income.

FIRST COMMUNITY CORPORATION

Yields on Average Earning Assets and

Rates on Average Interest-Bearing Liabilities

	Three months ended March 31, 2022								Three months ended March 31, 2021
	Average			Interest		Yield/			Average			Interest		Yield/
	Balance			Earned/Paid		Rate			Balance			Earned/Paid		Rate
Assets
Earning assets
Loans
PPP loans	$	609		$	45		29.97	%	$	55,540		$	684		4.99	%
Non-PPP loans		875,740			8,958		4.15	%		830,839			8,767		4.28	%
Total loans		876,349			9,003		4.17	%		886,379			9,451		4.32	%
Securities		571,831			2,159		1.53	%		373,340			1,734		1.88	%
Other short-term investments and CD's		67,194			33		0.20	%		79,334			33		0.17	%
Total earning assets		1,515,374			11,195		3.00	%		1,339,053			11,218		3.40	%
Cash and due from banks		28,511								18,429
Premises and equipment		32,722								34,351
Goodwill and other intangibles		15,536								15,726
Other assets		41,348								38,124
Allowance for loan losses		(11,226	)							(10,424	)
Total assets	$	1,622,265							$	1,435,259

Liabilities
Interest-bearing liabilities
Interest-bearing transaction accounts	$	331,772		$	45		0.06	%	$	277,476		$	58		0.08	%
Money market accounts		295,536			112		0.15	%		254,412			141		0.22	%
Savings deposits		145,340			20		0.06	%		125,981			19		0.06	%
Time deposits		152,884			156		0.41	%		160,321			301		0.76	%
Other borrowings		97,517			129		0.54	%		78,266			132		0.68	%
Total interest-bearing liabilities		1,023,049			462		0.18	%		896,456			651		0.29	%
Demand deposits		449,281								389,891
Other liabilities		12,690								13,332
Shareholders' equity		137,245								135,580
Total liabilities and shareholders' equity	$	1,622,265							$	1,435,259

Cost of deposits, including demand deposits							0.10	%							0.17	%
Cost of funds, including demand deposits							0.13	%							0.21	%
Net interest spread							2.82	%							3.11	%
Net interest income/margin - excluding PPP loans				$	10,688		2.86	%				$	9,883		3.12	%
Net interest income/margin - including PPP loans				$	10,733		2.87	%				$	10,567		3.20	%
Net interest income/margin (tax equivalent) - excl. PPP loans				$	10,819		2.90	%				$	9,991		3.16	%
Net interest income/margin (tax equivalent) - incl. PPP loans				$	10,864		2.91	%				$	10,675		3.23	%

The tables below provide a reconciliation of non-GAAP measures to GAAP for the periods indicated:

	March 31,			December 31,			September 30,			June 30,			March 31,
Tangible book value per common share	2022			2021			2021			2021			2021
Tangible common equity per common share (non-GAAP)	$	14.53		$	16.62		$	16.37		$	16.22		$	15.55
Effect to adjust for intangible assets		2.06			2.06			2.07			2.07			2.08
Book value per common share (GAAP)	$	16.59		$	18.68		$	18.44		$	18.29		$	17.63
Tangible common shareholders’ equity to tangible assets
Tangible common equity to tangible assets (non-GAAP)		6.71	%		8.00	%		8.00	%		8.16	%		7.92	%
Effect to adjust for intangible assets		0.88	%		0.90	%		0.92	%		0.94	%		0.97	%
Common equity to assets (GAAP)		7.59	%		8.90	%		8.92	%		9.10	%		8.89	%

	Three months ended
	March 31,			December 31,			March 31,
Return on average tangible common equity	2022			2021			2021
Return on average common tangible equity (non-GAAP)		11.63	%		12.48	%		11.01	%
Effect to adjust for intangible assets		(1.32	)%		(1.39	)%		(1.27	)%
Return on average common equity (GAAP)		10.31	%		11.09	%		9.74	%

	Three months ended
	March 31,			December 31,			March 31,
Pre-tax, pre-provision earnings	2022			2021			2021
Pre-tax, pre-provision earnings (non-GAAP)	$	4,153		$	4,912		$	4,323
Effect to adjust for pre-tax, pre-provision earnings		(664	)		(993	)		(1,068	)
Net Income (GAAP)	$	3,489		$	3,919		$	3,255

	Three months ended
	March 31,
Net interest margin excluding PPP Loans	2022			2021
Net interest margin excluding PPP loans (non-GAAP)		2.86	%		3.12	%
Effect to adjust for PPP loans		0.01			0.08
Net interest margin (GAAP)		2.87	%		3.20	%

	Three months ended
Net interest margin on a tax-equivalent basis excluding	March 31,
PPP Loans	2022			2021
Net interest margin on a tax-equivalent basis excluding PPP loans (non-GAAP)		2.90	%		3.16	%
Effect to adjust for PPP loans		0.01			0.07
Net interest margin on a tax equivalent basis (GAAP)		2.91	%		3.23	%

	March 31,		December 31,		Growth			Annualized Growth
Loans and loan growth	2022		2021		Dollars			Rate
Non-PPP Loans and Related Credit Facilities (non-GAAP)	$	875,528		862,235		13,293			6.3	%
PPP Related Credit Facilities		0		0		0			0	%
Non-PPP Loans (non-GAAP)	$	875,528	$	862,235	$	13,293			6.3	%
PPP Loans		269		1,467		(1,198	)		(331.2	)%
Total Loans (GAAP)	$	875,797	$	863,702	$	12,095			5.7	%

	March 31,		March 31,		Growth			Annualized Growth
Loans and loan growth	2022		2021		Dollars			Rate
Non-PPP Loans and Related Credit Facilities (non-GAAP)	$	875,528		804,377		71,151			8.8	%
PPP Related Credit Facilities		0		2,853		(2,853	)		(100.0	)%
Non-PPP Loans (non-GAAP)	$	875,528	$	807,230	$	68,298			8.5	%
PPP Loans		269		61,836		(61,567	)		(99.6	)%
Total Loans (GAAP)	$	875,797	$	869,066	$	6,731			0.8	%

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 per common share,” “Tangible common shareholders’ equity to tangible assets,” “Return on average tangible common equity,” “Pre-tax, pre-provision earnings,” “Net interest margin excluding PPP Loans,” “Net interest margin on a tax-equivalent basis excluding PPP Loans,” “Non-PPP Loans and Related Credit Facilities,” and “Non-PPP Loans.”

“Tangible book value per common share” 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.

“Return on average tangible common equity” is defined as net income on an annualized basis divided by average total equity reduced by average recorded intangible assets.

“Pre-tax, pre-provision earnings” is defined as net interest income plus non-interest income, reduced by non-interest expense.

“Net interest margin excluding PPP Loans” is defined as annualized net interest income less annualized interest income on PPP Loans divided by average earning assets less the average balance of PPP Loans.

“Net interest margin on a tax-equivalent basis excluding PPP Loans” is defined as annualized net interest income on a tax-equivalent basis less annualized interest income on PPP Loans divided by average earning assets less the average balance of PPP Loans.

“Non-PPP Loans and Related Credit Facilities” is defined as Total Loans less PPP Related Credit Facilities and PPP Loans.

“Non-PPP Loans” is defined as Total Loans less PPP Loans.

“Non-PPP Loans and Related Credit Facilities Growth - Dollars” is calculated by taking the difference between two time periods compared for Total Loans less PPP Loans and PPP Related Credit Facilities. “Non-PPP Loans and Related Credit Facilities – Annualized Growth Rate” is calculated by (i) dividing “Non-PPP Loans and Related Credit Facilities Loan Growth - Dollars” by the number of days between the two time periods compared (ii) times the number of days in the year (iii) divided by the prior time period Non-PPP Loans and Related Credit Facilities balance.

	·	“Non-PPP Loans Growth - Dollars” is calculated by taking the difference between two time periods compared for Total Loans less PPP Loans. “Non-PPP Loans – Annualized Growth Rate” is calculated by (i) dividing “Non-PPP Loans Loan Growth - Dollars” by the number of days between the two time periods compared (ii) times the number of days in the year (iii) divided by the prior time period Non-PPP Loans balance.

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.