First Community Corporation · NASDAQ:FCCO
First Community — Investor Presentation (November 2022)
40 slides from First Community's investor presentation, Nov 2, 2022
Slide 1: The Bank Behind Your Business November 2022
The Bank Behind Your Business November 2022
Slide 2: Outline
OUTLINE 2 I. Overview II. 3Q22 Highlights / Topics of Interest III. Foundational Franchise Value IV. Performance V. What’s Ahead Impacting Lives for Success and Significance
Slide 3: Overview: Our Identity and Cause
OVERVIEW OUR IDENTITY AND CAUSE n impact. OUR PURP! Everythi Pros the bes products nd secs possible s what we do; however, has nat why we oi. Wetnon that everthing we tar ania andre bse ut ‘espa tomate sures postive one for success and significance = Impacting lives
Slide 4: Overview Highlights
» Began in 1995 » Focused on Organic Growth, Augmented with Opportunistic 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 » Execut
Slide 5: 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 6: Three Lines of Business
Three Lines of Business OVERVIEW 6
Slide 7: 3Q22 Highlights / Topics of Interest
3Q22 HIGHLIGHTS / TOPICS OF INTEREST Impacting Lives for Success and Significance
Slide 8: Loan Growth
» Loan Growth 3Q22 HIGHLIGHTS / TOPICS OF INTEREST ▪ 3Q22 1 $33.9 million 14.7% annualized growth rate ▪ 2022 YTD 2 $86.5 million 13.4% annualized growth rate Notes: ▪ CRE – 80% of 3Q22 growth ▪ Rock Hill, SC – new LPO beginning to contribute • LPO converted to a full - service branch on 10/20/2022
Slide 9: Credit Quality
» Credit Quality ▪ NPAs – $5.9 million (or 0.36% of total assets) Notes: ▪ One credit of $4.0 million in non - accrual • Mixed use CRE (multi - family and retail) • Recent appraisals indicate loan to value of 76% • Early stages of the resolution process 3Q22 HIGHLIGHTS / TOPICS OF INTEREST 9
Slide 10: Net Interest Income / Net Interest Margin
» Net Interest Income (NII) / Net Interest Margin (NIM) ▪ 3Q22 – NIM expanded 36 bps to 3.29% compared to 2Q22 Notes: ▪ Two events that muted NII and NIM in 2Q22 were not recurring 1. Variable rate CMO prepayments 2. NII reversal as a result of loan moved to non - accrual ▪ Loan and Investment Portf
Slide 11: Mortgage
» Mortgage 3Q22 2Q22 ▪ Production $17.4 million $21.0 million • Secondary 58% 76% • Portfolio ARMS 42% 24% ▪ Gain on Sale • Revenue $289,900 $480,860 • Margin 2.85% 3.01% ▪ Production likely near a floor with recent mix trending toward ARMS ▪ Recruiting success to bring benefits in 2023 3Q22 HIGHLIG
Slide 12: Capital
» Capital ▪ Regulatory Capital Ratios – strong (see page 18) ▪ AOCI pressure lessened but continued in 3Q22 • TCE declined to 6.03% from 6.12% 1 TCE (ex. AOCI) increased to 7.90% from 7.59% 1 • TBV declined to $13.03 from $13.50 1 TBV (ex. AOCI) increased to $17.43 from $17.00 1 • Reclassified $224.
Slide 13: Foundational Franchise Value
FOUNDATIONAL FRANCHISE VALUE Impacting Lives for Success and Significance
Slide 14: Foundational Franchise Value
FOUNDATIONAL FRANCHISE VALUE Great Deposits Excellent Asset Quality Strong Capital Risk Management Technology 14
Slide 15: Pure Deposit Growth
Total Deposit Cost 0.47% 0.20% 0.11% 0.09% Pure Deposit Growth FOUNDATIONAL FRANCHISE VALUE Millions 12/31/2019 12/31/2020 12/31/2021 9/30/2022 $1,021.5 $1,230.3 $1,415.5 $1,509.9 Excellent Deposit Franchise • 92% Pure (Non - CD) Deposits • 34% (Non - Interest Bearing DDA Balances) • “0” Deposit Bet
Slide 16: Credit Quality: NPA / Assets, Net Charge-Offs
Credit Quality FOUNDATIONAL FRANCHISE VALUE NPA / Assets Net Loan Charge - Offs 16
Slide 17: Credit Quality: Allowance and Loan Loss Provision
Allowance for Loan Losses to Loans FOUNDATIONAL FRANCHISE VALUE Credit Quality Loan Loss Provision Expense (000s omitted) 17
Slide 18: Capital Ratios
FOUNDATIONAL FRANCHISE VALUE Capital Ratios 18 *On 4/20/22, announced a share repurchase authorization of 375,000 shares (5% of the outstanding shares) Leverage Ratio (Bank) Total Capital Ratio (Bank)
Slide 19: Capital Ratios: Tangible Common Equity
FOUNDATIONAL FRANCHISE VALUE Capital Ratios 19 Tangible Common Equity Tangible Common Equity (ex. AOCI)
Slide 20: Risk Management
Compliance Cybersecurity / Fraud Audit Enterprise Risk Management (ERM) - Internal PT Risk Report - External Risk / Reward Optimization Risk Management 20 FOUNDATIONAL FRANCHISE VALUE
Slide 21: Risk Management
Risk Management 21 FOUNDATIONAL FRANCHISE VALUE
Slide 22: Technology: Self-Service and Enabling Tools
Technology 22 FOUNDATIONAL FRANCHISE VALUE » Self - Service and Contactless Tools when the Customer Prefers ▪ Mobile Apps ▪ Mobile Deposit ▪ Zelle ▪ Fraud Reduction Tools ▪ Contactless Cards » Enabling Technologies to Meet Staffing and Efficiency Needs ▪ Universal Bankers ▪ Replacement of High - Vol
Slide 23: Technology: Customer Experience
Technology » Customer Experience ▪ Significant Focus on Digital Customer Experience ▪ Products and Features like Zelle and Debit Card “Automated Lock” keep FCB current ▪ Current Core Provider permits FCB to track along and, in some cases, “outpace” local competitor banks ▪ “Big Tech without the Big
Slide 24: Performance
PERFORMANCE Impacting Lives for Success and Significance
Slide 25: Loan Portfolio
PERFORMANCE LTM Growth = 9.1% 2 1 Includes PPP and related LOC to SBA partner. 2 Excludes PPP and related LOC to SBA partner. CRE as a % of RBC = 268.5% Yield 4.75% 4.36% 4.29% 4.27% 12/31/2019 12/31/2020 12/31/2021 9/30/2022 $863.7 25 Loan Portfolio (millions) Composition 9/30/22 $950.2 (4 th Quart
Slide 26: Investment Portfolio
Investment Portfolio Yield 2.49% 1.98% 1.56% 2.09% (4 th Quarter for 2019 - 2021, and 3 rd Quarter for 2022) Modified Duration AFS - 2.96 HTM - 6.07 (millions) 26 PERFORMANCE Composition 9/30/22 $288.8 $361.9 $566.6 $573.6
Slide 27: Net Interest Income / NIM (FTE)
Net Interest Income / NIM (FTE) PERFORMANCE 27 Net interest Income (Millions) $36.8 $40.0 2 $45.3 2 1 Net - interest margin (FTE) – 4 th quarter for 2019 - 2021, and 3 rd Quarter for 2022. 2 Includes accretion of PPP deferred fees of $738 thousand 2020, $3.0 million in 2021, and $45 thousand in 2022
Slide 28: Financial Planning / Investment Advisory AUM
Financial Planning / Investment Advisory Services AUM (millions) 28 PERFORMANCE
Slide 29: Investment Advisory Revenue and Pre-Tax Income
Financial Planning / Investment Advisory Services Revenue and Pre - Tax Income (thousands) 29 PERFORMANCE
Slide 30: Residential Mortgage Banking Production
30 Residential Mortgage Banking Production (millions) PERFORMANCE
Slide 31: Mortgage Gain on Sale and Revenue
Residential Mortgage Banking Gain on Sale Mortgage Banking Revenue (millions) 31 PERFORMANCE
Slide 32: Core Net Income and EPS
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, and collection of summary judgements on two loans charged off at an FCCO acquired bank. S ee non - GAAP reconciliation on page 39.
Slide 33: Tangible Book Value
Tangible Book Value 1 1 See Non - GAAP reconciliation on page 38. 33 PERFORMANCE Tangible Book Value Tangible Book Value (ex. AOCI)
Slide 34: Dividend
Dividend 34 PERFORMANCE 1 This compares to 2021 YTD of $0.36. On 4/20/22, announced a share repurchase authorization of 375,000 shares (5% of the outstanding shares). 1
Slide 35: What's Ahead
WHAT’S AHEAD Impacting Lives for Success and Significance
Slide 36: What's Ahead
WHAT’S AHEAD Near Term $2.00 EPS - - - - - - - - - - - - - - - - Longer Term 1.20% ROA 14.00% ROTE 65.00% ER “Big leaps” in Automation and Technology to gain efficiency and capacity Growth in the Loan Portfolio Grow the Investment Advisory business to be “much” larger Development of People and Cultu
Slide 37: Forward-Looking Statements
FORWARD - LOOKING STATEMENTS 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 FCB
Slide 38: Non-GAAP Reconciliation
NON - GAAP RECONCILIATION 38 The tables below provide a reconciliation of non - GAAP measures to GAAP for each of the periods presented:
Slide 39: Non-GAAP Reconciliation
NON - GAAP RECONCILIATION 39 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 40: First Community Corporation
§) First Community Corporation
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