First Community Corporation · NASDAQ:FCCO
First Community — Investor Presentation (September 2023)
46 slides from First Community's investor presentation, Sep 6, 2023
Slide 1: The Bank Behind Your Business September 2023
The Bank Behind Your Business September 2023
Slide 2: Outline
OUTLINE 2 I. Overview 3 II. 2Q23 Highlights / Topics of Interest 9 » Earning Assets 10 » Funding 14 » Net Interest Margin (NIM) 18 » Risk Management 23 » Capital 28 » Non - Interest Income Highlights 33 » Non - Interest Expense 38 » Net Income 40 Impacting Lives for Success and Significance
Slide 3: Overview
OVERVIEW Impacting Lives for Success and Significance
Slide 4: Our Purpose and Cause
OUR PURPOSE AND CAUSE Everything we do has an impact. | Providing the best products and services possible is what we do; however, that’s not why we do it. We know that everything we do has an impact, and we believe it’s our responsibility to make sure it’s a positive one. Employees Impacting lives f
Slide 5: Our Identity
OUR IDENTITY Purpose & Cause Impacting lives for and signifi Mission To provide best in class financial solutions to local profe ionals, and organi ions in our as optimize the long-term return to our while providing a safe, sound investment. Long-Term Direction Strategy Goals & Tactics Cultural Beli
Slide 6: Overview Highlights
» Began in 1995 » Focused on Organic Growth, Augmented with Opportunistic Acquisitions ▪ 2004 – Newberry Federal ▪ 2006 – Bank of Camden ▪ 2008 – EAH Financial Planning Practice ▪ 2011 – Palmetto South Mortgage Corp. ▪ 2014 – Savannah River Financial Corp. ▪ 2017 – Cornerstone National Bank » Execut
Slide 7: Geographically Diverse and Growing Markets
» Columbia (Midlands of SC) ▪ State Capitol ▪ University of SC ▪ Fort Jackson ▪ Quality Public Schools ▪ Lake Murray ▪ Riverbanks Zoo » Greenville (Upstate of SC) ▪ Great Pure Business Market ▪ Attractive to Millennials » Augusta (CSRA) ▪ Cybersecurity x Fort Gordon x Private Sector ▪ Augusta Univer
Slide 8: Three Lines of Business
Three Lines of Business OVERVIEW 8
Slide 9: 2Q23 Highlights / Topics of Interest
2Q23 HIGHLIGHTS / TOPICS OF INTEREST Impacting Lives for Success and Significance
Slide 10: Earning Assets
EARNING ASSETS Impacting Lives for Success and Significance
Slide 11: Loan Portfolio
Loan Portfolio LTM Growth = 12.7% 2 1 Includes PPP and related LOC to SBA partner. 2 Excludes PPP and related LOC to SBA partner. CRE as a % of RBC = 285.4% (4 th Quarter for 2019 - 2022 and 2 nd Quarter for 2023) $863.7 $980.9 $844.2 Yield 4.75% 4.36% 4.29% 4.43% 4.86% 11 EARNING ASSETS $1,032.2 Co
Slide 12: Loan Portfolio Growth
▪ 2Q23 1 $39.4 million 15.9% annualized growth rate ▪ 1H23 2 $51.3 million 10.5% annualized growth rate 2Q23 Notes: ▪ CRE – 62% of growth ▪ Midlands of SC – 52% of growth ▪ Mortgage – 25% of growth (ARMs and residential construction) ▪ Production was moderate and advances from unfunded commercial co
Slide 13: Investment Portfolio
Investment Portfolio Yield 2.49% 1.98% 1.56% 2.78% 3.27% (4 th Quarter for 2019 - 2022, and 2 nd Quarter for 2023) Modified Duration AFS - 3.38 HTM - 6.01 Composition 6/30/23 $288.8 $361.9 $566.6 $564.8 EARNING ASSETS Millions $555.9 13
Slide 14: Funding
FUNDING Impacting Lives for Success and Significance
Slide 15: High Quality Deposit Franchise
Total Deposit Cost 0.47% 0.20% 0.11% 0 .25% 0.97% Non - Interest Bearing 29% 32% 33% 33% 31% Millions $1,021.5 $1,230.3 $1,415.5 $1,454.1 (4 th Quarter for 2019 - 2022 & 2 nd Quarter for 2023) 12/31/2019 12/31/2020 12/31/2021 12/31/2022 06/30 /20 23 15 High Quality Deposit Franchise $1,492.9 FUNDING
Slide 16: High Quality Deposit Franchise Notes
2Q23 Notes: ▪ 19.8% Cumulative Cycle Deposit Beta ▪ Uninsured deposits of $422.4 million (29.7% of total), of which $82.4 million (5.8% of total) are public funds that are secured or collateralized ▪ Average balance of customer deposits accounts - $28,049 ▪ Total remaining credit availability in exc
Slide 17: Sources and Uses
17 1H2023 ▪ Sources of funds Investment Securities $ 9 million Deposits 35 million Customer Cash Management 3 million FHLB Borrowings and Federal Funds Purchased 23 million Capital 6 million Total $76 million ▪ Uses of funds Cash / Overnight Investments $20 million Loans (includes held - for - sale)
Slide 18: Net Interest Margin
NET INTEREST MARGIN Impacting Lives for Success and Significance
Slide 19: Net Interest Margin: Loan Portfolio Yield
NET INTEREST MARGIN (NIM) Loan Portifolio Yield 4.86% A039, 410% mm sa sae ts New/Renewed Loans Weighted Average Rate 6.80% 6.30% 6.16% 580% 5.30% 5.043 6.22% 4.80% 4.49% 430% 3.80% 4.04% 2022 3022 4022 1023 2023 19
Slide 20: Net Interest Margin: Securities Portfolio Yield
3.50% 3.00% 2.50% 2.00% 1.50% 4.00% 0.50% red raw NET INTEREST MARGIN (NIM) Securities Portifolio Yield soz 270% 4oz 20%, 1023 2% 2023 4.80% 4.40% 420% 4.00% 3.80% 3.60% 3.40% 3.20% 3.00% 2.80% ‘Average Earnings Assets (AEA) Yield 439% 49 3.83% 3.40%, 2022 3022 4022 1023 2023 20
Slide 21: Net Interest Margin: Cost of Deposits and Funds
NET INTEREST MARGIN (NIM) Cost of Deposits Cost of Funds 120% 150% 10%, oars 140% 1% 1.20% 80% 100% on, osey, 60% 080% 0.40% Lied 0.435 bee 0.40% 020% — cons ony 0.00% 0.08%. 0.00% = mz sa samt 2023 mz sa came tt Net Interest Margin FTE 350% 40% 330% 320% 210% 300% 290% 20% 280% 202% 3.29%, 2.10% 0%
Slide 22: Net Interest Margin Notes
22 Notes: ▪ NIM Contraction decelerating • 1Q23 23 bps • 2Q23 17 bps ▪ Effective May 5, 2023, entered into a pay - fixed / receive floating interest rate swap • Notional amount: $150 million • Synthetically converts approximately 15% of the Loan Portfolio from fixed to floating • Pay a fixed rate of
Slide 23: Risk Management
RISK MANAGEMENT Impacting Lives for Success and Significance
Slide 24: Credit Quality
24 Credit Quality RISK MANAGMENT 2019 2020 2021 2022 1H23 NPA / Assets Net Loan Charge - Offs
Slide 25: Credit Quality: Allowance and Provision
25 Allowance for Credit Losses on Loans to Loans Provision for (Release of) Credit Losses (000s omitted) Credit Quality RISK MANAGMENT
Slide 26: Credit Quality Notes
2Q23 Notes: ▪ Key Loan Portfolio Sectors ▪ During 2Q23, resolved one non - accrual loan ($3.9 million) through the foreclosure process, followed by the sale of the real estate at a gain to the bank of $105,000. 26 • Only four loans secured by office buildings in excess of 50,000 square feet of renta
Slide 27: Risk Management
RISK MANAGMENT Cybersecurity Program Formal ERM. Program including Fraud Prevention Program Enterprise Risk Management Framework is key to balance of Risk and Reward.... PT Score and Board Risk Appetite Audit ee BSA Program Compliance Program
Slide 28: Capital
CAPITAL Impacting Lives for Success and Significance
Slide 29: Leverage Ratio and Total Capital Ratio
29 Leverage Ratio (Bank) Total Capital Ratio (Bank) *On 4/20/22, announced a share repurchase authorization of 375,000 shares (5% of the outstanding shares) CAPITAL
Slide 30: Tangible Common Equity
30 Tangible Common Equity Tangible Common Equity (ex. AOCI) CAPITAL 1 See Non - GAAP reconciliation on pages 44 - 45.
Slide 31: Dividend
Dividend 31 CAPITAL On 4/20/22, announced a share repurchase authorization of 375,000 shares (5% of the outstanding shares).
Slide 32: Tangible Book Value
Tangible Book Value 1 1 See Non - GAAP reconciliation on pages 44 - 45. 32 Tangible Book Value Tangible Book Value (ex. AOCI) CAPITAL
Slide 33: Non-Interest Income Highlights
NON - INTEREST INCOME HIGHLIGHTS Impacting Lives for Success and Significance
Slide 34: Financial Planning / Investment Advisory AUM
Financial Planning / Investment Advisory Services AUM (millions) 34 NON - INTEREST INCOME HIGHLIGHTS
Slide 35: Financial Planning / Investment Advisory Revenue and Pre-Tax Income
Financial Planning / Investment Advisory Services Revenue and Pre - Tax Income (thousands) 35 Pre - tax Profit Margin 14.3% 29.7% 30.5% 33.9% 29.5% NON - INTEREST INCOME HIGHLIGHTS
Slide 36: Residential Mortgage Banking Production
36 Residential Mortgage Banking Production (millions) NON - INTEREST INCOME HIGHLIGHTS $55.4 $107.2
Slide 37: Residential Mortgage Banking Revenue and Pre-Tax Income
Pre - tax Profit Margin 32.9% 31.6% 11.9% 3.6% 15.5% Residential Mortgage Banking Revenue and Pre - Tax Income (000’s omitted) 37 $5,616.5 $7,294.7 $5,327.8 $3,763.8 1 $1,976.3 1 Note: Pre - tax net income does not include fund transfer pricing or ACL allocations. 1 Includes mortgage late charges an
Slide 38: Non-Interest Expense
NON - INTEREST EXPENSE Impacting Lives for Success and Significance
Slide 39: Non-Interest Expense
NON - INTEREST EXPENSE 39 Non interest Expense (Millions) $34.6 $37.5 $39.2 Notes: 2019 Opened two additional offices – Greenville and Augusta. 2022 Opened new office – Rock Hill. $21.2 $41.3
Slide 40: Net Income
NET INCOME Impacting Lives for Success and Significance
Slide 41: Net Income and Core Earnings
1 Core net income and EPS exclude gains (losses) on sale of securities and bank premises, write - downs on bank premises held - for - sa le, non - recurring BOLI income, gains on insurance proceeds, and collection of summary judgements on two loans charged off at an FCCO acquired bank. S ee non - GA
Slide 42: Forward-Looking Statements
FORWARD - LOOKING STATEMENTS 42 SAFE HARBOR STATEMENT – In this presentation, unless the context suggests otherwise, references to the “Company” or “FCCO” refer to First Community Corporation and references to “we,” “us,” and “our” mean the combined business of the Company, First Community Bank (or
Slide 43: Non-GAAP Financial Measures
NON - GAAAP FINANCIAL MEASURES The Bank Behind Your Business 43 NON - GAAP FINANCIAL MEASURES – This presentation contains certain non - GAAP financial measures that are not in accordance with US generally accepted accounting principles (GAAP) . We use certain non - GAAP financial measures to provid
Slide 44: Non-GAAP Reconciliation
NON - GAAP RECONCILIATION 44 The tables below provide a reconciliation of non - GAAP measures to GAAP for each of the periods presented:
Slide 45: Non-GAAP Reconciliation
NON - GAAP RECONCILIATION 45 1 Excludes gains (losses) on sale of securities and bank premises, write - downs on bank premises held - for - sale, non - recurring BOLI income, gains on insuranc e proceeds, and collection of summary judgements on two loans charged off at an FCCO acquired bank. The tab
Slide 46: First Community Corporation
§) First Community Corporation
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