First Community Corporation · NASDAQ:FCCO
First Community — 2016 US Bank Conference
41 slides from First Community's conference presentation, Sep 7, 2016
Slide 1: 2016 US Bank Conference
Joe Sawyer EVP and CFO 2016 US BANK CONFERENCE September 7 , 2016 David Proctor EVP and CRO Mike Crapps President and CEO
Slide 2: Outline
2 OUTLINE I. Highlights II. Identity III. Line of Business Review » Commercial and Retail Banking » Residential Mortgage Banking » Financial Planning and Investment Advisory Services IV. Risk Management V. Financial Results VI. Look Ahead
Slide 3: Highlights
3 HIGHLIGHTS
Slide 4: Highlights
4 HIGHLIGHTS » Began in 1995 x Lexington x Forest Acres » Five (5) acquisitions x 2004 – Newberry Federal x 2006 – Bank of Camden x 2008 – EAH Financial Planning Practice x 2011 – Palmetto South Mortgage Corp. x 2014 – Savannah River Financial Corp. » Eight (8) De - Novo Branches » June 30, 2016 x T
Slide 5: Identity
5 IDENTITY
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Slide 7: Identity: vision, core values and cultural beliefs
7 As the provider of choice of financial solutions to local businesses and professionals in the markets we serve, we optimize the long - term return to our shareholders, while providing a safe and sound investment. VISION » Quality and integrity in all endeavors » Passionate focus on customer experi
Slide 8: 8 LINE OF BUSINESS REVIEW
8 LINE OF BUSINESS REVIEW
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Slide 10: Lines of business
10 » Commercial and Retail Banking » Residential Mortgage Banking » Financial Planning and Investment Advisory Services LINE OF BUSINESS REVIEW
Slide 11: Commercial and Retail Banking
11 » Commercial and Retail Banking LINE OF BUSINESS REVIEW
Slide 12: Commercial and Retail Banking Deposit Growth
12 Commercial and Retail Banking Deposit Growth LINE OF BUSINESS REVIEW $0.0 $100.0 $200.0 $300.0 $400.0 $500.0 $600.0 $700.0 $800.0 12/31/2013 12/31/2014 12/31/2015 6/30/2016 $363.2 $504.5 $563.1 $581.0 Pure (Non-CD) Deposit Total Customer Cash Management Certificates of Deposit (CDs) $515.7 $687.0
Slide 13: Deposit Market Share
13 LINE OF BUSINESS REVIEW Deposit Market Share Commercial and Retail Banking As of 6/30/2015. 12 th of 18 Banks 12 th of 17 Banks Largest Community Bank in the Midlands 7 th of 25 Banks 12 th of 17 Banks
Slide 14: Loan Portfolio
14 Constr & Dev 11% 1 - 4 Family Residential 19% Home Equity 6% Owner - OCC CRE 28% Other CRE 23% Multi - Family 2% Comm'l & Industrial 8% Consr & Other 4% Composition 6/30/16 Yield 5.11% 4.99% 4.91% 4.66% Loan Portfolio Commercial and Retail Banking LINE OF BUSINESS REVIEW $347.6 $443.8 $489.2 $511
Slide 15: Investment Portfolio
15 Composition 6/30/16 Yield 1.85% 2.06% 1.92% 2.10% Investment Portfolio Commercial and Retail Banking LINE OF BUSINESS REVIEW Modified Duration = 3.61 $227.0 $282.8 $283.8 $286.8 $0 $50 $100 $150 $200 $250 $300 $350 12/31/2013 12/31/2014 12/31/2015 6/30/2016 US Treasury Securities 1% Agency Bonds
Slide 16: Opened Greenville Loan Production office
16 Opened Greenville Loan Production office – March 14, 2016 LINE OF BUSINESS REVIEW
Slide 17: Residential Mortgage Banking
17 » Commercial and Retail Banking » Residential Mortgage Banking LINE OF BUSINESS REVIEW
Slide 18: Residential Mortgage Banking Annualized Production
18 Residential Mortgage Banking LINE OF BUSINESS REVIEW $0.0 $20.0 $40.0 $60.0 $80.0 $100.0 $120.0 2013 2014 2015 6/30/16 $119.5 $90.8 $111.4 $96.2 Annualized Production (millions)
Slide 19: Annualized Residential Mortgage Banking Revenue
19 $2.9 $3.0 $3.1 $3.2 $3.3 $3.4 $3.5 $3.6 $3.7 $3.8 2013 2014 2015 6/30/16 $3.8 $3.2 $3.4 $3.2 Annualized Residential Mortgage Banking LINE OF BUSINESS REVIEW Revenue (000s omitted)
Slide 20: Residential Mortgage Banking
20 LINE OF BUSINESS REVIEW Residential Mortgage Banking
Slide 21: We know the relationships we cultivate today
We know the relationships we cultivate today will yield direct dividends tomorrow. And we're stil growing, one client at a time.
Slide 22: Financial Planning and Investment Advisory Services
22 » Commercial and Retail Banking » Residential Mortgage Banking » Financial Planning and Investment Advisory Services LINE OF BUSINESS REVIEW
Slide 23: Financial Planning / Investment Advisory Services AUM
23 Financial Planning / Investment Advisory Services LINE OF BUSINESS REVIEW $0.0 $20.0 $40.0 $60.0 $80.0 $100.0 $120.0 $140.0 $160.0 $180.0 $200.0 2013 2014 2015 6/30/16 $147.1 $142.6 $175.6 $181.8 AUM (millions)
Slide 24: Financial Planning / Investment Advisory Services Revenue
24 LINE OF BUSINESS REVIEW Financial Planning / Investment Advisory Services $0 $200 $400 $600 $800 $1,000 $1,200 $1,400 2013 2014 2015 6/30/16 $972 $1,268 $1,287 $1,176 Revenue (000s omitted) Annualized
Slide 25: Risk Management
25 RISK MANAGEMENT
Slide 26: Risk Management: Capital and Credit
26 June 30, 2016 » Capital ▪ TCE / TA 8.82% ▪ Leverage 10.26% ▪ Total Capital 16.12% » Credit ▪ Nonperforming Assets 0.66% ▪ Net Charge - Off Ratio 0.02% RISK MANAGEMENT
Slide 27: Risk Management: Regulatory and Cyber Security
27 » Regulatory ▪ Cost increasing in all lines of business ▪ Compliance Programs - Satisfactory » Cyber Security / Fraud ▪ Areas of Great Focus ▪ Increasing Cost » Enterprise Risk Management (ERM) June 30, 2016 RISK MANAGEMENT
Slide 28: Financial Results
28 FINANCIAL RESULTS
Slide 29: Net Income and Earnings Per Share
29 FINANCIAL RESULTS *Core net income and EPS exclude merger and acquisition cost, gains (losses) on sale of securities and losses on early extinguishment o f d ebt. Net Income and Earnings Per Share (EPS)* $4,316 $5,591 $6,027 $6,264 0.81 0.85 0.90 0.93 0.10 0.30 0.50 0.70 0.90 1.10 1.30 1.50 $0 $5
Slide 30: Dividend
30 *Increased in January 2016 to $0.08 for the quarter. FINANCIAL RESULTS Dividend $0.05 $0.10 $0.15 $0.20 $0.25 $0.30 $0.35 2013 2014 2015 6/30/16 $0.22 $0.24 $0.28 $0.32 Annualized
Slide 31: Tangible Book Value
31 $9.80 $10.00 $10.20 $10.40 $10.60 $10.80 $11.00 $11.20 $11.40 $11.60 $11.80 6/30/15 9/30/15 12/31/15 3/31/16 6/30/16 $10.44 $10.76 $10.84 $11.23 $11.62 FINANCIAL RESULTS Tangible Book Value
Slide 32: 2015 Shareholder Return vs. Indexes
32 2015 Shareholder Return vs. Index(s) 0.00% 5.00% 10.00% 15.00% 20.00% 25.00% 30.00% 35.00% FCCO NASDAQ Bank Index SNL Microcap Bank Index 34.45% 8.84% 12.31% FINANCIAL RESULTS
Slide 33: 2016 Shareholder Total Return vs. Indexes
33 FINANCIAL RESULTS 0.00% 0.50% 1.00% 1.50% 2.00% 2.50% 3.00% 3.50% 4.00% 4.50% 5.00% FCCO NASDAQ Bank Index SNL Microcap Bank Index 2.24% 0.85% 4.57% 2016 Shareholder Total Return vs. Index(s) As of July 31, 2016
Slide 34: Shareholder Return vs. Indexes, Three Years
34 Shareholder Return vs. Index(s) Three Years Ended 7/31/2016 FINANCIAL RESULTS 0.00% 5.00% 10.00% 15.00% 20.00% 25.00% 30.00% 35.00% 40.00% 45.00% 50.00% FCCO NASDAQ Bank Index SNL Microcap Bank Index 48.18% 27.08% 40.56%
Slide 35: ‘Sometimes, it’s the insights we glean once the
‘Sometimes, it’s the insights we glean once the meeting has ended that are most revealing. We take care of clients before and after they clock out.
Slide 36: Look Ahead
36 LOOK AHEAD
Slide 37: Look Ahead
37 LOOK AHEAD » Commercial and Retail Banking ▪ Remix asset side of balance sheet – 2018 Target of 80% loan/earning asset ratio ▪ Build out CSRA franchise ▪ Leverage Greenville LPO » Residential Mortgage Banking ▪ 2018 Target of $200 million in annual production » Financial Planning & Investment Adv
Slide 38: Summary
38 SUMMARY
Slide 39: Summary: Investment Thesis
39 SUMMARY » High quality balance sheet » Revenue Diversity x Commercial and Retail Banking x Mortgage Banking x Financial Planning / Investment Advisory x Capital Strength x Asset Quality x Deposit Mix / Franchise Value » Geographical Diversity x Columbia x Augusta x Greenville » Focused Strategic
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Slide 41: Forward-Looking Statements Safe Harbor Statement
41 FORWARD - LOOKING STATEMENTS SAFE HARBOR STATEMENT – INCLUDING ALL DOCUMENTS INCORPORATED HEREIN BY REFERENCE, CONTAINS FORWARD - LOOKING STATEMENTS . ADDITIONAL WRITTEN OR ORAL FORWARD - LOOKING STATEMENTS MAY BE MADE BY THE COMPANY FROM TIME TO TIME IN FILINGS WITH THE SECURITIES & EXCHANGE COM