First Community Corporation · NASDAQ:FCCO
First Community — Investor Presentation (February 2020)
50 slides from First Community's investor presentation, Feb 19, 2020
Slide 1: The Bank Behind Your Business
The Bank Behind Your Business
Slide 2: 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 its our responsibilty to make sure it's a positive one. Employees Impacting lives for
Slide 3: Our Identity
OUR IDENTITY ) Purpose & Cause Impacting lives for ind significance Mission latters | Spirit of Service ith Humility
Slide 4: Highlights
HIGHLIGHTS
Slide 5: Highlights
» Began in 1995 x Lexington x Columbia » Six (6) 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. x 2017 – Cornerstone National Bank » Executive Leadership Team Stabi
Slide 6: Three Geographically Diverse Markets
» Columbia (Midlands of SC) ▪ State Capitol ▪ University of SC ▪ Fort Jackson ▪ Quality Public Schools ▪ Lake Murray » Greenville (Upstate of SC) ▪ Great Pure Business Market ▪ Attractive to Millennials » Augusta (CSRA) ▪ Cybersecurity x Fort Gordon x Private Sector ▪ Augusta University ▪ Excellent
Slide 7: Commercial & Retail Banking, Financial Planning, Mortgage Banking
Commercial & Retail Banking Online Banking ACH / Wire Transfer Service Remote Deposit Capture Positive Pay, Loans & Lines of Credit. Construction / Permanent ‘Commercial Real Estate Equipment Financing » First Community Bank Va Financial Planning & Investment Advisory Services Home Purchase Financia
Slide 8: Foundational Franchise Value
FOUNDATIONAL FRANCHISE VALUE
Slide 9: Great Deposits, Excellent Asset Quality, Strong Capital
FOUNDATIONAL FRANCHISE VALUE Great Deposits Excellent Asset Quality Strong Capital 9
Slide 10: Excellent Deposit Franchise
Total Deposit Cost 0.24% 0.22% 0.39% 0.47% (Quarter ending) Pure Deposit Growth Commercial and Retail Banking FOUNDATIONAL FRANCHISE VALUE Excellent Deposit Franchise • 86% Pure (Non - CD) Deposits • 29% (Non - Interest Bearing DDA Balances) • Largest Community Bank in the Midlands of SC 1 Cornersto
Slide 11: Credit Quality: NPA / Assets
Credit Quality NPA / Assets FOUNDATIONAL FRANCHISE VALUE 11
Slide 12: Credit Quality: Net Loan Charge-Offs
Credit Quality Net Loan Charge - Offs 12/31/2016 12/31/2017 12/31/2018 12/31/2019 FOUNDATIONAL FRANCHISE VALUE 12
Slide 13: Capital and Share Repurchase
FOUNDATIONAL FRANCHISE VALUE Share repurchase authorization of 300,000 shares announced May 30, 2019. Fully exercised as of July 18, 2019, at an average price of $18.79 per share. Additional share repurchase authorization of 200,000 shares announced September 18, 2019. 13 Capital
Slide 14: Enhance Earnings
ENHANCE EARNINGS
Slide 15: Enhance Earnings: Remix Asset Side of Balance Sheet
ENHANCE EARNINGS Quality Loan Portfolio Growth to Remix Asset Side of Balance Sheet Residential Mortgage Banking Financial Planning and Investment Advisory Services 15
Slide 16: Loan / Earning Asset Ratio
Loan / Earning Asset Ratio ENHANCE EARNINGS Average Loans to Average Earning Assets 16 12/31/2016 12/31/2017 12/31/2018 12/31/2019
Slide 17: Net Interest Margin - Components
ENHANCE EARNINGS Net Interest Margin - Components + 52 bps + 19 bps + 22 bps 17
Slide 18: Net Interest Margin Ratio
NIM Ratio 1 Adjusted for a 9 bps impact as a result of collection of interest on several non - accrual loans that were paid off during the qua rter. 2 Adjusted for a 5 bps impact as a result of collection of interest on a non - accrual loan that was paid off during the quarter. Estimated full quarte
Slide 19: Loan Growth and Composition
LTM Growth = 2.6% 1 Cornerstone Merger: $59.0 million CRE as a % of RBC = 261.9% Yield 4.52% 4.53% 4.90% 4.75% (Qtr Ending) ENHANCE EARNINGS Composition 12/31/19 19 Loan Growth (millions)
Slide 20: Investment Portfolio
Investment Portfolio ENHANCE EARNINGS Yield 1.97% 2.20% 2.53% 2.49% (Qtr Ending) Composition 12/31/19 Effective Duration = 3.30 (millions) 20
Slide 21: Financial Planning / Investment Advisory Services AUM
Financial Planning / Investment Advisory Services AUM (millions) ENHANCE EARNINGS *S&P 500 – Total Return – 53.1% 21
Slide 22: Financial Planning / Investment Advisory Services Revenue
Financial Planning / Investment Advisory Services Revenue (000s omitted) ENHANCE EARNINGS 22
Slide 23: Residential Mortgage Banking Production
Residential Mortgage Banking Production (millions) ENHANCE EARNINGS 23
Slide 24: Residential Mortgage Banking Revenue
Residential Mortgage Banking Revenue (millions) ENHANCE EARNINGS 24
Slide 25: Efficiency Ratio
Efficiency Ratio ENHANCE EARNINGS 25
Slide 26: Risk Management & Technology
RISK MANAGEMENT & TECHNOLOGY
Slide 27: Risk Management & Technology
RISK MANAGEMENT & TECHNOLOGY Compliance Cybersecurity / Fraud Audit Enterprise Risk Management (ERM) - Internal P.T. Risk Report - External December 31, 2019 27
Slide 28: Technology: Core System Conversion and Mobile Banking
RISK MANAGEMENT & TECHNOLOGY » Technology – Core System Conversion in 2017 x Enhanced client experience and product delivery x Increased security and fraud detection x Greater capacity for future growth x Focused project plan, i.e., M&A systems conversion x Higher level of system utilization and wor
Slide 29: Financial Results
FINANCIAL RESULTS
Slide 30: Core Net Income and Earnings Per Share
Core Net Income and Earnings Per Share (EPS)* 1 *Core net income and EPS exclude merger and acquisition cost, gains (losses) on sale of securities and losses on early exting uis hment of debt, and SC State income tax credit. 1 See Non - GAAP reconciliation on page 50. FINANCIAL RESULTS 30 0.95 1.11
Slide 31: ROAA
ROAA FINANCIAL RESULTS 1 Includes an increase in deferred tax expense of $1.247 million as a result of the lower tax rates enacted by the Tax Cut and Job s Act passed December 22, 2017. Without this one - time adjustment, the ROAA would have been 0.75%. 31
Slide 32: ROTCE
ROTCE 1 FINANCIAL RESULTS 1 See Non - GAAP reconciliation on page 50. 2 Includes an increase in deferred tax expense of $1.247 million as a result of the lower tax rates enacted by the Tax Cut and Job s Act passed December 22, 2017. Without this one - time adjustment, the ROTCE would have been 8.76%
Slide 33: Dividend
Increased January 2020 to $0.12 for the quarter Dividend FINANCIAL RESULTS 33
Slide 34: Tangible Book Value
Tangible Book Value 1 FINANCIAL RESULTS 34 1 See Non - GAAP reconciliation on page 50.
Slide 35: Shareholder Return vs. Benchmark
SHAREHOLDER RETURN VS. BENCHMARK
Slide 36: 2019 Total Shareholder Return vs. Index(es)
2019 Total Shareholder Return vs. Index(es) SHAREHOLDER RETURN vs. BENCHMARK As of December 31, 2019 36
Slide 37: Total Shareholder Return vs. Index(es), Three Years
Total Shareholder Return vs. Index(es) Three Years Ended December 31, 2019 SHAREHOLDER RETURN vs. BENCHMARK 37
Slide 38: Investment in the Franchise
INVESTMENT IN THE FRANCHISE
Slide 39: October 2017 Cornerstone National Bank Merger
INVESTMENT IN THE FRANCHISE October 2017 Cornerstone National Bank Merger 39
Slide 40: March 2018 Downtown Augusta Office
March 2018 Downtown Augusta Office INVESTMENT IN THE FRANCHISE 40
Slide 41: February 2019 Downtown Greenville Office
February 2019 Downtown Greenville Office INVESTMENT IN THE FRANCHISE 41
Slide 42: June 2019 Evans GA Office
INVESTMENT IN THE FRANCHISE June 2019 Evans GA Office 42
Slide 43: New Products/Services
INVESTMENT IN THE FRANCHISE New Products/Services • Mobile Wallet • Mobile Deposit • Fraud Monitoring Alerts • e-Alerts • *Digital One is dependent on FIS 43
Slide 44: New Products/Services
INVESTMENT IN THE FRANCHISE New Products/Services • Origination Transaction Monitoring (Wire & ACH Origination) • Mobile Deposit • Mobile Wallet • *Digital One is dependent on FIS • Paypoint • Full Reconcilement • Deposit Reconcilement • Contactless Cards • ACH Positive Pay 44
Slide 45: What's Ahead
WHAT’S AHEAD
Slide 46: What's Ahead
Maximize use of technology to build efficiency and capacity Quality loan portfolio growth to reach long - term target of 80% loan/earning asset ratio Increase mortgage loan production to reach $200 million FCFC to Grow AUM to $500 million Drive operating leverage from recent investment in the franch
Slide 47: Summary
SUMMARY
Slide 48: Summary
SUMMARY » High quality balance sheet » Revenue Diversity x Commercial and Retail Banking x Mortgage Banking x Financial Planning / Investment Advisory x Deposit Mix / Franchise Value x Asset Quality x Capital Strength » Geographical Diversity x Columbia x Augusta x Greenville » Focused Strategic Pla
Slide 49: Forward-Looking Statements
FORWARD - LOOKING STATEMENTS SAFE HARBOR STATEMENT – THIS PRESENTATION 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 AND EXCHANGE COMMISSION THE “SEC” OR OTHERWISE . THE WORD
Slide 50: Non-GAAP Reconciliation
NON - GAAP RECONCILIATION The Bank Behind Your Business 50 1, 2
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