Slide 1: Common Stock Offering Investor Presentation July 2012
Mike Crapps President and CEO Joe Sawyer Senior Vice President and CFO Common Stock Offering Investor Presentation July 2012 Filed Pursuant to Rule 433 Issuer Free Writing Prospectus Dated July 17, 2012 Relating to Preliminary Prospectus dated July 13, 2012 Registration Statement No. 333-181437
Slide 2: Cautionary Statements
CAUTIONARY STATEMENTS The issuer has filed a registration statement (including a prospectus) with the SEC for the offering to which this communication relates. Before you invest, you should read the prospectus in that registration statement and other documents the issuer has filed with the SEC for m
Slide 3: Offering Terms
OFFERING TERMS Issuer First Community Corporation Type of Security Common Stock Base Transaction Size $12.5 million Overallotment Option 15% Share Price TBD Shares Issued TBD Pre-Offering Shares Outstanding 3,346,365 Primary Use of Proceeds Repayment of TARP funds, with any remainder used for genera
Slide 4: Investment Opportunity
INVESTMENT OPPORTUNITY 16-year old, $600 million institution headquartered in Lexington, SC in a region known as the “Midlands” Largest deposit market share of any community bank in its markets Positioned well for organic growth opportunities and acquisitions Markets benefit from economic diversity
Slide 5: Strategic Focus
STRATEGIC FOCUS Be the provider of choice of financial solutions to local businesses and professionals in the Midlands market and optimize the long-term return to shareholders, while providing a safe and sound investment Target markets are communities and neighborhoods that have a local identity Acc
Slide 6: Company Profile & Branch Map
Bank subsidiary is First Community Bank (“Bank”) Footprint in the Midlands region of South Carolina Located along and at the intersection of three major interstates: I-26, I-20 and I-77 COMPANY PROFILE & BRANCH MAP Company Profile NASDAQ Ticker FCCO Headquarters Lexington, SC Established 1995 Market
Slide 7: Common Stock Performance
COMMON STOCK PERFORMANCE One Year Stock Price Performance vs. Relevant Indices Note: Trading data as of July 13, 2012 Source: SNL Financial LC FCCO Trading Overview Stock Price $7.90 Tangible Book Value $11.14 Price / Tangible Book 71% Price / LTM EPS 8.5x 52-Week Average Daily Volume 2,374 Annual D
Slide 8: Experienced Management Team
EXPERIENCED MANAGEMENT TEAM Years Years in with Name / Position Education Banking FCCO Prior Experience Michael C. Crapps (53) B.S., Economics, Clemson 32 18 Republic National Bank President & Chief Executive Officer M.B.A., USC Joseph G. Sawyer (61) B.A., Political Science, 28 17 NBSC; Ernst & Youn
Slide 9: Attractive Markets
ATTRACTIVE MARKETS First Community’s branches are located in the Midlands region, which accounts for approximately 20% of South Carolina’s total deposits and approximately 16% of its population The Midlands is positioned at the intersection of three major interstates, encompasses a diversified econo
Slide 10: Attractive Size and Franchise
ATTRACTIVE SIZE AND FRANCHISE Midlands Deposit Market Share FCCO ranks among the largest banks headquartered in South Carolina based on asset size The Company ranks #1 among community banks with a presence in the Midlands based on deposit market share Note: Deposit information as of June 30, 2011 So
Slide 11: Improving Unemployment in Core Markets
IMPROVING UNEMPLOYMENT IN CORE MARKETS Lexington County has the lowest unemployment rate in South Carolina There are several large employers in the Company’s markets 26 companies headquartered in the Midlands currently have over 500 employees Unemployment Trend Note: Unemployment data as of May, 201
Slide 12: Major Employers
Expected Job Growth Company Industry Estimated New Jobs Amazon Internet Retail 2,000 Continental Tire Manufacturing 1,500 AQT Solar Manufacturing 1,000 WNS Global Services Finance and Insurance 750 Nephron Health Care 707 Verizon Communications Information 500 AFLAC Finance and Insurance 450 Micheli
Slide 13: Key Financial Metrics
KEY FINANCIAL METRICS Excludes goodwill impairment, amortization of intangibles, OTTI write-down and realized gain (loss) on securities Holding company level Note: ROAA and ROAA, Adjusted were calculated using net income; ROAA reported in FCCO’s Q2 2012 press release was calculated using net income
Slide 14: Favorable Profitability Trends
(1) Excludes the impact of goodwill impairment, amortization of intangibles, OTTI write-down and realized gain (loss) on sale of securities (2) YTD financials for the Company are for the six months ended June 30, 2012; YTD financials for the peer group are for the three months ended March 31, 2012 N
Slide 15: Customer Non-interest Income Growth
Since 2008, First Community has grown customer non-interest income by 11.4% per year on average The Company targets 30% of its total revenue from customer non-interest income sources EAH Financial Group and Pooled Resources, LLC were acquired in 2008 to form First Community Financial Consultants Lin
Slide 16: Opportunities to Reduce Expenses
OPPORTUNITIES TO REDUCE EXPENSES First Community’s incremental expense relating to the previous regulatory agreements was approximately $450,000 per year (including elevated OCC assessment expense, FDIC insurance cost, third-party quarterly OTTI test, additional appraisals, etc.) The Company has oth
Slide 17: Increasing Profitability – Funding Trends
“Pure” deposit growth – 32.4% since December 31, 2009 Reduction in CDs and FHLB Borrowings No brokered CDs $116.0 million in CDs (weighted average rate of 1.24%) mature by June 30, 2013; after-tax earnings impact of approximately $370,000 (annualized) if those CDs reprice at 0.75% INCREASING PROFITA
Slide 18: Loan Portfolio Composition
In-market lending focus No participations purchased No mountain or coastal lending Limited construction and raw land exposure Strict lending authorization LOAN PORTFOLIO COMPOSITION Source: Company reports Guiding Principles Mortgage – Commercial Non-owner Occupied ($000) 6/30/2012 (%) Mortgage - Co
Slide 19: Nonperforming Assets
NONPERFORMING ASSETS Source: Company reports Nonperforming assets have been declining since their peak in 2010 Classified Assets Ratio was 32.75% as of June 30, 2012 NPA Composition and Trend ($000) (%) of (%) of 6/30/2012 NPAs Assets Nonaccrual Loans $ 4,640 34.0% 0.8% Other Real Estate Owned 4,909
Slide 20: Solid Asset Quality
SOLID ASSET QUALITY (1) NPAs include nonaccrual loans, OREO and loans 90+ days past due (2) NPLs include nonaccrual loans and loans 90+ days past due (3) YTD financials for the Company are at or for the six months ended June 30, 2012; YTD financials for the peer group are at or for the three months
Slide 21: Investment Portfolio Composition
INVESTMENT PORTFOLIO COMPOSITION First Community’s investment portfolio represents a significant portion of the Company’s assets The 2008 leverage strategy is completely unwound and has no material impact on the current investment portfolio Only $1.7 million of below investment grade securities rema
Slide 22: Solid Capital Position
SOLID CAPITAL POSITION Holding Company Level Capital Trends Holding Company Capital Levels with Capital Raise and TARP Redemption(1) (1) Assumes TARP redemption at par (excluding the exercise or redemption of warrants) and transaction expenses of 6.0% for the common stock offering Source: SNL Financ
Slide 23: Strategic Growth Opportunities
STRATEGIC GROWTH OPPORTUNITIES First Community is uniquely positioned to take advantage of potential strategic growth opportunities First Community is one of only four banks in South Carolina with: Size – total assets > $500 million Capital – pro forma tangible common equity ratio > 7.00% Performanc
Slide 24: Investment Opportunity
INVESTMENT OPPORTUNITY 16-year old, $600 million institution headquartered in Lexington, SC in a region known as the “Midlands” Strong and diverse core profitability, which was sustained through difficult economic cycles Valuable core deposit gathering franchise in attractive markets Experienced exe
Slide 25: Appendix: Balance Sheet & Earnings
APPENDIX: BALANCE SHEET & EARNINGS Source: SNL Financial LC ($000) Balance Sheet Assets 2008 FYE 2009 FYE 2010 FYE 2011 FYE 6/30/12 Cash & Securities $ 247,442 $ 216,688 $ 223,990 $ 224,422 $ 229,932 Net Loans 328,383 339,333 325,043 323,337 324,527 Other Real Estate Owned 747 3,167 6,904 7,351 4,90
Slide 26: Appendix: Bank Acquisitions
APPENDIX: BANK ACQUISITIONS Announced December, 2005 DeKalb Bankshares, Inc., holding company of The Bank of Camden, had assets of $45 million Served as First Community’s entry into Kershaw county, where it became a top 10 bank with over a 5% deposit market share Announced in April, 2004 DutchFork B
Slide 27: Appendix: Non-GAAP Reconciliation
APPENDIX: NON-GAAP RECONCILIATION Source: SNL Financial LC ($000) Balance Sheet Assets 2008 FYE 2009 FYE 2010 FYE 2011 FYE 6/30/12 Cash & Securities $ 247,442 $ 216,688 $ 223,990 $ 224,422 $ 229,932 Net Loans 328,383 339,333 325,043 323,337 324,527 Other Real Estate Owned 747 3,167 6,904 7,351 4,909
Slide 28: Appendix: Non-GAAP Reconciliation
APPENDIX: NON-GAAP RECONCILIATION Source: SNL Financial LC ($000), except where otherwise noted and per share amounts Non-GAAP Reconciliation 2008 FYE 2009 FYE 2010 FYE 2011 FYE 6/30/2012 Total Equity $ 68,156 $ 41,440 $ 41,797 $ 47,896 $ 49,296 Less: Preferred Equity 10,850 10,939 11,035 11,137 11,
Slide 29: First Community Corporation
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