First Community Corporation Announces Record Earnings and Increased Cash Dividend

LEXINGTON, S.C., July 23, 2025 /PRNewswire/ -- 

Highlights for Second Quarter of 2025

• Net income of $5.186 million during the second quarter of 2025, an increase of 29.7% on a linked quarter basis, and 58.8% year-over-year.
• Net income for the six months ended June 30, 2025 of $9.183 million, a 56.7% increase over the same time period in 2024.
• Diluted EPS of $0.67 per common share for the second quarter of 2025, an increase of 31.4% on a linked quarter basis and 59.5% year-over-year.
• Diluted EPS of $1.18 per common share for the six months ended June 30, 2025, an increase of 55.3% over the same time period in 2024.
• Net interest margin on a tax equivalent basis of 3.21% with margin expansion of eight basis points during the second quarter of 2025.
• Assets under management (AUM) exceeded $1 billion for the first time and were a record $1.011 billion at June 30, 2025, a 9.1 % increase year-to-date through June 30, 2025. Investment advisory revenue was $1.751 million during the second quarter of 2025.
• Mortgage line of business total production was a record $62.9 million during the second quarter of 2025 with fee revenue of $879 thousand.
• Total loans increased by $8.1 million during the second quarter of 2025, an annualized growth rate of 2.6%. Year-to-date through June 30, 2025, loans increased by $39.5 million, an annualized growth rate of 6.5%
• Total deposits were $1.754 billion and customer deposits (excludes brokered CDs) were $1.744 billion at June 30, 2025. Customer deposit growth was $28.3 million during the second quarter of 2025, a 6.6% annualized growth rate, and $78.1 million year-to-date through June 30, 2025, a 9.5% annualized growth rate.
• Excellent key credit quality metrics with net charge-offs, including overdrafts, during the second quarter of 2025 of $10 thousand; net loan recoveries, excluding overdrafts, during the quarter of $5 thousand; non-performing assets of 0.02%; and past due loans of 0.02% at June 30, 2025.
• Increased cash dividend to $0.16 per common share, which is the 94^th consecutive quarter of cash dividends paid to common shareholders.
• Announced the signing of an agreement to acquire Signature Bank of Georgia.

Today, First Community Corporation (Nasdaq:  FCCO), the holding company for First Community Bank, reported net income for the second quarter of 2025 of $5.186 million as compared to $3.997 million in the first quarter of 2025 and $3.265 million in the second quarter of 2024.  Diluted earnings per common share were $0.67 for the second quarter of 2025 as compared to $0.51 in the first quarter of 2025 and $0.42 for the second quarter of 2024.  

Year-to-date through June 30, 2025, net income was $9.183 million compared to $5.862 million during the first six months of 2024.  Diluted earnings per share for the first half of 2025 were $1.18, compared to $0.76 during the same time period in 2024. 

Cash Dividend and Capital

The Board of Directors approved an increased cash dividend for the second quarter of 2025.  The company will pay a $0.16 per share dividend to holders of the company's common stock.  This dividend is payable August 19, 2025 to shareholders of record as of August 5, 2025.  First Community Corporation President and CEO Mike Crapps commented, "Our entire board is pleased that our performance enables the company to continue its cash dividend for the 94^th consecutive quarter." 

As previously announced on May 9, 2025, the Company's Board of Directors approved a plan to utilize up to $7.5 million of capital to repurchase shares of its common stock, which represented approximately 5.0% of total shareholders' equity as of March 31, 2025.  This new share repurchase plan expires on May 8, 2026.  Under the repurchase plan, the Company may repurchase shares from time to time.  No shares have been repurchased under this plan.  Mr. 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 June 30, 2025, the bank's regulatory capital ratios (Leverage, Tier I Risk Based and Total Risk Based) were 8.44%, 13.04%, and 14.10%, respectively.  This compares to the same ratios as of June 30, 2024 of 8.44%, 12.56%, and 13.62%, respectively. As of June 30, 2025, the bank's Common Equity Tier I ratio was 13.04% compared to 12.56% at June 30, 2024.  The Company's Tangible Common Equity to Tangible Assets ratio (TCE ratio) was 6.92% at June 30, 2025, compared to 6.66% at March 31, 2025 and 6.47% at June 30, 2024. 

Tangible Book Value (TBV) per share increased during the second quarter to $18.28 per share at June 30, 2025, from $17.56 per share as of March 31, 2025 and $15.85 as of June 30, 2024. 

Loan Portfolio Quality/Allowance for Credit Losses

The company's asset quality metrics as of June 30, 2025 were excellent.  The non-performing assets ratio as of June 30, 2025 was 0.02% and the total past dues ratio was 0.02%.  Non-accrual loans were $210 thousand, which is 0.02% of total loans, at June 30, 2025.  During the second quarter of 2025, the bank had net charge-offs, including overdrafts, of $10 thousand and net loan recoveries, excluding overdrafts, of $5 thousand.  Year-to-date through June 30, 2025, net recoveries, including overdrafts, were $1 thousand and net loan recoveries, excluding overdrafts, were $19 thousand.  The ratio of classified loans plus OREO now stands at 0.82% of total bank regulatory risk-based capital as of June 30, 2025.  At June 30, 2025, the company had $194 thousand in OREO compared to $437 thousand the prior quarter.     

The allowance for credit losses (ACL) on loans as a percentage of total loans declined to 1.06% at June 30, 2025, from 1.09% at March 31, 2025, due to a three basis points reduction in our ACL qualitative factors primarily related to improvements in external forecasts for the probability of a United States recession.

Balance Sheet                   

Total loans increased during the second quarter of 2025 by $8.1 million, which is an annualized growth rate of 2.6%.  Commercial loan production was $46.3 million and advances from unfunded commercial construction loans available for draws were $14.8 million during the second quarter of 2025.  This compares to $53.6 million and $9.0 million, respectively on a linked quarter basis.  Loan payoffs and paydowns were up 126.3% on a linked quarter basis.  Loan yields increased in the second quarter of 2025 to 5.77% from 5.71% in the first quarter of the year.  First Community Bank President and CEO Ted Nissen noted, "Loan production continued strong in the second quarter, but was significantly offset by much higher loan payoffs during the quarter.  We are pleased that our annualized growth rate for loans is still solid at 6.5% and we see positive momentum going into the third quarter." 

Total deposits were $1.754 billion at June 30, 2025 compared to $1.726 billion at March 31, 2025, an increase of $28.3 million, a 6.6% annualized growth rate.  Pure deposits, which are defined as total deposits less certificates of deposit, increased $23.0 million during the second quarter of 2025, to $1.437 billion at June 30, 2025, a 6.5% annualized growth rate.  Non-interest bearing accounts increased $7.0 million to $475.9 million during the quarter and at June 30, 2025 represented 27.1% of total deposits. This compares to 27.2% as of March 31, 2025. The average balance of all customer deposit accounts as of June 30, 2025 was $31,119.  The average balance for consumer accounts was $16,138 and for non-consumer accounts was $70,257.  Securities sold under agreements to repurchase, which are related to customer cash management accounts or business sweep accounts, were $103.6 million at June 30, 2025, compared to $129.8 million at March 31, 2025 and $59.3 million at June 30, 2024.  All of the above point to the granularity and the quality of the bank's deposit franchise. 

Costs of deposits decreased on a linked quarter basis to 1.82% in the second quarter of 2025 from 1.85% in the first quarter of 2025.  Cost of funds decreased on a linked quarter basis to 1.91% in the second quarter of 2025 from 1.94% in the first quarter of 2025.  Mr. Nissen commented, "A strength of our bank has been and continues to be the value of our deposit franchise.  In the second quarter of 2025, we saw growth in total deposits, pure deposits and non-interest bearing deposits.  While customer cash management accounts were down on a linked quarter due to seasonality in those deposits, they were up 74.8% year-over-year.  In addition, with this growth, we were still able to continue to proactively manage the pricing of our interest-bearing deposit products and saw a decrease in the cost of deposits and cost of funds during the second quarter of 2025."

The bank has short-term investments, primarily interest bearing cash at the Federal Reserve Bank, of $151.3 million at June 30, 2025 compared to $173.2 million at March 31, 2025.  Further, the bank has additional sources of liquidity in the form of federal funds purchased lines of credit in the total amount of $77.5 million with three financial institutions and $10.0 million through the Federal Reserve Discount Window.  The bank also has substantial borrowing capacity at the Federal Home Loan Bank (FHLB) of Atlanta with an approved line of credit of up to 25% of assets, subject to collateral requirements.  There were no borrowings against the above lines of credit as of June 30, 2025.

The investment portfolio was $507.3 million at June 30, 2025 compared to $495.7 million at March 31, 2025 with a yield of 3.43% in the second quarter of 2025.  The effective duration of the total investment portfolio is relatively low at 3.3.  Accumulated other comprehensive loss (AOCL) improved to $21.9 million at June 30, 2025 from $23.0 million at March 31, 2025.  During the second quarter of 2025, the company purchased four fixed rate agency mortgage-backed security bonds (MBS) totaling $20.0 million with a purchase yield of 4.78% and entered into a $19.8 million amortizing notional amount pay-fixed/receive-floating interest rate swap, which was designated as a fair value hedge.  This transaction was part of a hedging strategy which converts these fixed rate agency MBS bonds to synthetic floaters. The company pays a fixed rate of 3.67% and receives overnight SOFR.

Revenue

Net Interest Income/Net Interest Margin

Net interest income was $15.3 million for the second quarter of 2025 compared to first quarter of 2025 net interest income of $14.4 million and $12.7 million for the second quarter of 2024.  Second quarter of 2025 net interest margin, on a tax equivalent basis, was 3.21% compared to 3.13% in the first quarter of the year, up eight basis points on a linked quarter. 

Effective May 5, 2023, the company entered into a pay-fixed swap agreement with an initial notional amount of $150.0 million ($149.8 million as of June 30, 2025), designated as a fair value hedge for fixed rate loans in the closed loan portfolio. The swap converts these loans to a synthetic floating SOFR rate, with the company paying a fixed 3.58% and receiving overnight SOFR through maturity on May 5, 2026. This interest rate swap positively impacted interest on loans by $284 thousand during the second quarter of 2025 and $571 thousand year-to-date through June 30, 2025.  Loan yields and net interest margin both benefitted from this interest rate swap with  increases of nine basis points and six basis points respectively during the second quarter of 2025 and 10 basis points and six basis points respectively, year-to-date through June 30, 2025. 

Non-Interest Income

Non-interest income in the second quarter of 2025 was $4.206 million, compared to $3.982 million in the first quarter of 2025 and $3.642 million in the second quarter of 2024, an increase of 5.6% and 15.5%, respectively. 

Total production in the mortgage line of business in the second quarter of 2025 was $62.9 million which was comprised of $31.9 million in secondary market loans, $5.7 million in adjustable rate mortgages (ARMs) and $25.3 million in construction loans.  Fee revenue from the mortgage line of business was $879 thousand for the second quarter of 2025 which includes $876 thousand associated with the secondary market loans with a gain-on-sale margin of 2.74%.  This compares to production year-over-year of $49.0 million which was comprised of $22.7 million in secondary market loans, $14.6 million in ARMs, and $11.7 million in construction loans.  Fee revenue associated with the secondary market loans in the second quarter of 2024 was $655 thousand with a gain-on-sale margin of 2.89%.  Mr. Nissen noted, "Mortgage loan production was strong in the second quarter of the year, especially the demand for secondary market and construction loans." 

Total assets under management (AUM) in the investment advisory line of business were $1.011 billion at June 30, 2025 from $892.8 million at March 31, 2025 and $926.0 million at December 31, 2024. This record setting AUM is driven by a combination of net new asset growth and market appreciation. Revenue in this line of business was $1.751 million in the second quarter of 2025, compared to $1.806 million at March 31, 2025 and $1.508 million in the second quarter of 2024. 

During the second quarter of 2025, the company realized a $127 thousand gain on the sale of other real estate owned property.

Non-Interest Expense

Non-interest expense was $13.083 million in the second quarter of 2025 an increase of $329 thousand over the first quarter of the year.  During the second quarter of 2025, the company recognized $234 thousand in expenses related to its planned acquisition of Signature Bank of Georgia which was announced on July 14, 2025 and is discussed in more detail below. Salaries and benefits expense increased $403 thousand on a linked quarter due to higher variable compensation expenses in the mortgage and financial planning lines of business, higher incentive accruals and payroll taxes related to higher performance, and the full quarter impact of annual increases for exempt employees which were effective on March 1, 2025.  Marketing and public relations expenses were down $306 thousand in the second quarter of 2025 due to planned lower media expenses and marketing activities during the quarter.  The Other expense category decreased $70 thousand on a linked quarter basis due to lower professional and legal expenses (non-acquisition related) compared to the first quarter of 2025.  Other real estate expenses were up $98 thousand in the second quarter of 2025 due to a write down of an OREO property.

Other

As previously announced, on July 13, 2025, the company entered into an agreement to acquire Signature Bank of Georgia. This planned acquisition will provide the company with a presence in the exciting Atlanta area as well as the addition of an SBA lending line of business.  Mr. Crapps noted, "This expansion into a new market and the addition of a new line of business are two key initiatives that we have been diligently working towards." It is anticipated that the financial closing will be early in the first quarter of 2026 with the operational conversion to follow later in the first or early second quarter of 2026. 

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", "positions", "future", "forward", 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) the possibility that the planned acquisition of Signature Bank of Georgia may not be completed in a timely manner or at all; (2) failure to obtain required shareholder or regulatory approvals in connection with the planned acquisition; (3) the risk that anticipated cost savings or other expected benefits of the planned acquisition may not be realized; (4) potential disruption to client or employee relationships as a result of the planned acquisition; (5) competitive pressures among depository and other financial institutions may increase significantly and have an effect on pricing, spending, third-party relationships and revenues; (6) 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; (7) the rate of delinquencies and amounts of charge-offs, the level of allowance for credit 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; (8) changes in legislation, regulation, policies or administrative practices, whether by judicial, governmental, or legislative action; (9) adverse conditions in the stock market, the public debt markets and other capital markets (including changes in interest rate conditions) could continue to have a negative impact on the company; (10) changes in interest rates, which have and may continue to affect our deposit and funding costs, net income, prepayment penalty income, mortgage banking income, and other future cash flows, or the market value of our assets, including our investment securities; (11) 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; (12) elevated inflation which causes adverse risk to the overall economy, and could indirectly pose challenges to our customers and to our business; (13) any increases in FDIC assessment which has increased, and may continue to increase, our cost of doing business; (14) the adverse effects of events beyond our control that may have a destabilizing effect on financial markets and the economy, such as epidemics and pandemics, war or terrorist activities, essential utility outages, deterioration in the global economy, instability in the credit markets, disruptions in our customers' supply chains or disruption in transportation; and (15) 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.

ADDITIONAL INFORMATION ABOUT THE ACQUISITION AND WHERE TO FIND IT

First Community intends to file with the SEC a registration statement on Form S-4 containing a joint proxy statement of First Community and Signature Bank of Georgia and a prospectus of First Community, and First Community will file other documents with respect to the proposed acquisition. A definitive joint proxy statement/prospectus will be mailed to shareholders of both First Community and Signature Bank of Georgia. Investors and shareholders of First Community and Signature Bank of Georgia are urged to read the entire joint proxy statement/prospectus and other documents that will be filed with the SEC carefully and in their entirety when they become available because they will contain important information. Investors and shareholders will be able to obtain free copies of the registration statement and joint proxy statement/prospectus (when available) and other documents filed with the SEC by First Community through the website maintained by the SEC at https://www.sec.gov. Copies of the documents filed with the SEC by First Community will be available free of charge on First Community's internet website or by contacting First Community.

This communication does not constitute an offer to sell or the solicitation of an offer to buy any securities or a solicitation of any vote or approval, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation, or sale would be unlawful prior to registration or qualification under the securities law of such jurisdiction.

First Community, Signature Bank of Georgia, and each company's respective directors and executive officers and other members of management and employees may be considered participants in the solicitation of proxies in connection with the proposed merger. Information regarding the participants in the proxy solicitation and a description of their direct and indirect interests, by security holdings or otherwise, will be contained in the joint proxy statement/prospectus and other relevant materials to be filed with the SEC when they become available.

 

 

 

 

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

 

 

 

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," and "Pre-tax, pre-provision earnings." 

• "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.

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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SOURCE First Community Corporation