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First Community Corporation Releases First Quarter Earnings21 April 2006
Today First Community Corporation (Nasdaq: FCCO), the holding company for First Community Bank, reported financial results for the first quarter of 2006. Net income for the quarter was $836 thousand, an increase of 7.2% as compared to the first quarter of 2005 net income of $780 thousand. Diluted earnings per share were $.28 for the first quarter of 2006 compared to $.26 in the first quarter of 2005, an increase of 7.7%. Total assets were $487.9 million at the end of the first quarter of 2006, an increase of 7.4% over the first quarter of 2005 assets of $454.1 million. Shareholders' equity at the end of the first quarter of 2006 was $52.4 million, an increase of 6.1% over the same period in 2005, which ended with shareholders' equity of $49.4 million.
In addition to releasing first quarter earnings, the company also announced that the board of directors has approved a twenty percent (20%) increase in the quarterly cash dividend. The company declared a $.06 per share dividend, payable May 12, 2006 to shareholders of record as of May 1, 2006.
Mike Crapps, President and CEO commented on the Company's performance saying, "Since the merger with DutchFork Bankshares on October 1, 2004, our primary focus has been to build strong core earnings momentum through quality growth in the loan portfolio funded by cash flow from the investment portfolio and core deposit growth."
Joe Sawyer, Senior Vice President and Chief Financial Officer noted, "Since that time, we have re-structured the investment portfolio to provide cash flow to meet the loan growth objectives. While initially giving up some investment portfolio yield and thus earnings, we have continued to focus on shifting these assets into loans, thus improving our mix of earning assets. Investments, as a percentage of total assets, have declined from 43.0% at 12/31/04 to 34.1% as of 3/31/06. During this same period of time, our loan to deposit ratio has increased from 55.4% at 12/31/04 to 61.6% as of 3/31/06. To further illustrate the growth in the loan portfolio, it is significant to note that the portfolio increased by $39.5 million (20.8%) during the last twelve months ending 3/31/06."
Crapps also noted, "With the strength of our local economies, combined with our team of experienced lenders, we are optimistic about the continued growth in loans. Certainly our history indicates the ability to successfully accomplish our goals in this area. Also noteworthy is our ability to maintain our high standards and expectations for loan quality. At 3/31/06, the Bank had only $101,000 in nonperforming assets, which is 0.02% of total assets, compared to an industry average of 0.41%. Net charge offs as a percent of average loans was 0.01% for the quarter ending 3/31/06. Not just during this most recent quarter, but over an extended period of time, we have demonstrated the ability to grow our loan portfolio in a quality manner."
Sawyer added, "Additionally, we are seeing very positive results from our focus on core deposit and funding growth. During the last twelve months ending 3/31/06, core deposits (including customer cash management sweep accounts) have grown by $29.8 million or 10.3%, and we especially gained momentum in this area in the most recent quarter with growth at an annualized rate of 16.0%."
Crapps continued, "We are extremely pleased to see these results. Entering 2006, we made adjustments to our marketing plan and the incentive compensation program for commercial bankers. Additionally, we have cross- functional teams working on various projects to enhance our products and services in order to assist our organization in the growth of core deposits. The results of these teams should impact our performance in the future. Examples of this are our recent introduction of Health Savings Accounts, which position us as one of the few community banks in our market area to offer this new product."
The flat yield curve continues to impact our net interest margin. However, core earnings (net income less the effect of securities gain/losses and gains on the early extinguishment of debt) have shown considerable improvement, increasing each quarter in 2005 and now continuing through the first quarter of 2006. For the quarter ending 3/31/06, as compared to the quarter ending 3/31/05, core earnings improved by 8.3% from $0.24 per share to $0.26 per share.
Core non-interest income showed significant improvement with growth in deposit service charges, mortgage origination fees, and commissions on the sale of non-deposit investment products leading the way. Core non-interest income was $1.1 million in the first quarter of 2006, an increase of 90.0% over the first quarter of 2005 core non-interest income of $558 thousand.
Crapps concluded, "With all of the positives in our financial performance, we are extremely excited about the momentum that we have in our organization. We see so many factors that contribute to a bright future for First Community and its quality earnings growth. As a demonstration of that confidence, we are pleased to announce the 20% increase in our quarterly cash dividend to $0.06 per share payable on May 12, 2006 to shareholders on record as of May 1, 2006."
First Community Corporation is the holding company for First Community Bank, a local community bank based in the midlands of South Carolina. First Community operates eleven banking offices located in Lexington, Forest Acres, Irmo, Gilbert, Cayce - West Columbia, Chapin, Northeast, Prosperity, Newberry (2), and Red Bank. First Community Corporation anticipates completing the acquisition of DeKalb Bankshares and its subsidiary, The Bank of Camden, in June of this year which will give First Community Bank a presence in Lexington, Richland, Newberry, and Kershaw counties. First Community Corporation stock trades on the NASDAQ Small Cap Market under the symbol "FCCO".
Statements contained in this press release that are not historical facts are forward-looking statements. All forward-looking statements are subject to risks and uncertainties that could cause actual results to differ from those projected. Other factors that may cause actual results to differ from the forward-looking statements contained in this release and that may affect the company's prospects in general include, but are not limited to, changes in general economic and business conditions and such other factors as are described in the company's filings with the Securities and Exchange Commission.
FIRST COMMUNITY CORPORATION
INCOME STATEMENT DATA
(Dollars in thousands, except per share data)
Three months ended
March 31,
2006 2005
Interest Income $ 5,937 $ 4,864
Interest Expense 2,610 1,694
Net Interest Income 3,327 3,170
Provision for Loan Losses 120 66
Net Interest Income After Provision 3,207 3,104
Non Interest Income
Deposit service charges 545 282
Mortgage origination fees 114 78
Commissions on sale of non-
deposit products 101 28
Gain (loss) on sale of securities (69) 181
Gain on early extinguishment of
debt 159 -
Other 301 170
1,151 739
Non Interest Expense
Salaries and employee benefits 1,694 1,509
Occupancy 208 185
Equipment 285 330
Marketing and public relations 71 88
Amortization of intangibles 149 149
Other 761 524
3,168 2,785
Income Before Taxes 1,190 1,058
Income Tax Expense 354 278
Net Income $ 836 $ 780
Primary Earnings Per Share $0.29 $0.28
Diluted Earnings Per Share $0.28 $0.26
Average Number of Shares
Outstanding (Basic) 2,870,884 2,812,835
Average Number of Shares
Outstanding (Diluted) 2,980,622 2,945,843
Return on Average Assets 0.7% 0.7%
Return on Average Equity 6.6% 6.3%
Return on Average Tangible Equity 13.8% 13.7%
Net Interest Margin (non taxable
equivalent) 3.3% 3.3%
Net Interest Margin (taxable
equivalent) 3.4% 3.5%
FIRST COMMUNITY CORPORATION
BALANCE SHEET DATA
(Dollars in thousand, except per share data)
At March 31, December 31,
2006 2005 2005
Total Assets $ 487,897 $ 454,138 $ 467,455
Investment Securities 166,492 185,918 176,372
Loans 229,621 190,072 221,668
Allowance for Loan Losses 2,806 2,856 2,701
Total Deposits 372,752 337,639 349,604
Other borrowings 59,507 64,928 63,963
Shareholders' equity 52,430 49,371 50,767
Book Value Per Share $ 17.44 $ 17.44 $ 17.82
Tangible Book Value Per Share $8.83 $7.74 $8.34
Equity to Assets 10.8% 10.9% 10.9%
Loan to Deposit Ratio 61.6% 56.3% 63.4%
Allowance for Loan Losses/Loans 1.2% 1.5% 1.2%
Average Balances:
Three months ended
March 31,
2006 2005
Average Total Assets $ 471,631 $ 451,570
Average Loans 225,989 188,661
Average Earning Assets 405,303 386,040
Average Deposits 353,519 332,569
Average Other Borrowings 63,467 66,525
Average Shareholders' Equity 51,622 50,619
Asset Quality
Nonperforming Assets:
Non-accrual loans $ 101 $ 373
Other real estate owned - 345
Accruing loans past due 90
days or more - 13
Total nonperforming assets $ 101 $ 731
Net Charge-offs (recoveries) $ 14 $ (26)
Net Charge-offs to Average Loans 0.01% N/A
Source: prnewswire
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