Slide 1: The Bank Behind Your Business
The Bank Behind Your Business September 2022
Slide 2: Outline
OUTLINE 2 I. Overview II. 2Q22 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, Purpose and Cause
OVERVIEW OUR IDENTITY OUR PURPOSE AND CAUSE Impacting lives for success and significance
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: 2Q22 Highlights / Topics of Interest
2Q22 HIGHLIGHTS / TOPICS OF INTEREST Impacting Lives for Success and Significance
Slide 8: Loan Growth
» Loan Growth 2Q22 HIGHLIGHTS / TOPICS OF INTEREST ▪ 2Q22 1 $40.5 million 18.6% annualized growth rate ▪ 1H22 2 $52.6 million 12.3% annualized growth rate Notes: ▪ CRE – 82% of growth ▪ Midlands and Upstate of SC – 76% of growth ▪ Rock Hill, SC – new LPO beginning to contribute ▪ Production was at r
Slide 9: Credit Quality
» Credit Quality ▪ NPAs – Linked quarter increase of $3.9 million to $5.3 million or 0.32% of total assets Notes: ▪ One credit of $4.1 million moved to non - accrual • Mixed use CRE (multi - family and retail) • Recent appraisals indicate loan to value of 76% • Early stages of the resolution process
Slide 10: Net Interest Income / Net Interest Margin
» Net Interest Income / Net Interest Margin ▪ 2Q22 – NIM expanded 3 bps to 2.90% compared to 1Q22 ▪ ALCO Model ( as of June 30, 2022) 2Q22 HIGHLIGHTS / TOPICS OF INTEREST Year 1 Year 2 Up 100 0.96% 5.08% Up 200 1.53% 9.87% Up 300 1.68% 14.20% 10
Slide 11: NII and NIM impact events
2. $4.1 million loan moved to non - accrual – resulted in reversal of interest income of $51,000 Loan Portfolio Yield Impact 2 bps NIM Impact 1 bps EPS Impact $0.01 per share 2Q22 HIGHLIGHTS / TOPICS OF INTEREST Notes: ▪ Inflection point as margin compression stopped and expansion started ▪ Two even
Slide 12: Mortgage
» Mortgage ▪ Production $21 million • Secondary 76% • Portfolio ARMS 24% ▪ Production likely near a floor with recent mix trending toward ARMS ▪ Recruiting success to bring benefits in 2023 2Q22 HIGHLIGHTS / TOPICS OF INTEREST 12
Slide 13: Capital
» Capital ▪ Regulatory Capital Ratios – strong (see page 19) ▪ AOCI pressure continued in 2Q22 • TCE declined to 6.12% from 6.71% 1 TCE (ex. AOCI) increased to 7.59% from 7.56% 1 • TBV declined to $13.50 from $14.53 1 TBV (ex. AOCI) increased to $17.00 from $16.52 1 • Reclassified $224.6 million (39
Slide 14: Foundational Franchise Value
FOUNDATIONAL FRANCHISE VALUE Impacting Lives for Success and Significance
Slide 15: Foundational Franchise Value
FOUNDATIONAL FRANCHISE VALUE Great Deposits Excellent Asset Quality Strong Capital Risk Management Technology 15
Slide 16: Pure Deposit Growth and Total Deposit Cost
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 6/30/2022 $1,021.5 $1,230.3 $1,415.5 $1,540.8 Excellent Deposit Franchise • 92% Pure (Non - CD) Deposits • 32% (Non - Interest Bearing DDA Balances) • Largest Communi
Slide 17: Credit Quality: NPA / Assets, Net Loan Charge-Offs
Credit Quality FOUNDATIONAL FRANCHISE VALUE NPA / Assets Net Loan Charge - Offs 17
Slide 18: Credit Quality: Allowance and Loan Loss Provision
Allowance for Loan Losses to Loans FOUNDATIONAL FRANCHISE VALUE Credit Quality Loan Loss Provision Expense (000s omitted) 18
Slide 19: Capital Ratios
FOUNDATIONAL FRANCHISE VALUE Capital Ratios 19 *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 20: Capital Ratios: Tangible Common Equity
FOUNDATIONAL FRANCHISE VALUE Capital Ratios 20 Tangible Common Equity Tangible Common Equity (ex. AOCI)
Slide 21: Risk Management
Compliance Cybersecurity / Fraud Audit Enterprise Risk Management (ERM) - Internal PT Risk Report - External Risk / Reward Optimization Risk Management 21 FOUNDATIONAL FRANCHISE VALUE
Slide 22: Risk Management
Risk Management 22 FOUNDATIONAL FRANCHISE VALUE
Slide 23: Technology
Technology 23 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 24: 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 25: Performance
PERFORMANCE The Local Bank for Local Business
Slide 26: Loan Portfolio
PERFORMANCE LTM Growth = 10.5% 2 1 Includes PPP and related LOC to SBA partner. 2 Excludes PPP and related LOC to SBA partner. CRE as a % of RBC = 261.1% Yield 4.75% 4.36% 4.29% 4.16% 12/31/2019 12/31/2020 12/31/2021 6/30/2022 $863.7 26 Loan Portfolio (millions) Composition 6/30/22 $916.3 (4 th Quar
Slide 27: Investment Portfolio
Investment Portfolio Yield 2.49% 1.98% 1.56% 1.47% (4 th Quarter for 2019 - 2021, and 2 nd Quarter for 2022) Effective Duration AFS - 2.84 HTM - 5.76 (millions) 27 PERFORMANCE Composition 6/30/22 $288.8 $361.9 $566.6 $572.9
Slide 28: Net Interest Income / NIM (FTE)
Net Interest Income / NIM (FTE) PERFORMANCE 28 Net interest Income (Millions) $36.8 $40.0 2 $45.3 2 1 Net - interest margin (FTE) – 4 th quarter for 2019 - 2021, and 2 nd Quarter for 2022. 2 Includes accretion of PPP deferred fees of $738 thousand 2020, $3.0 million in 2021, and $44 thousand in 1H22
Slide 29: Financial Planning / Investment Advisory AUM
Financial Planning / Investment Advisory Services AUM (millions) 29 PERFORMANCE
Slide 30: Investment Advisory Revenue and Pre-Tax Income
Financial Planning / Investment Advisory Services Revenue and Pre - Tax Income (thousands) 30 PERFORMANCE
Slide 31: Residential Mortgage Banking Production
31 Residential Mortgage Banking Production (millions) PERFORMANCE
Slide 32: Mortgage Banking Gain on Sale and Revenue
Residential Mortgage Banking Gain on Sale Mortgage Banking Revenue (millions) 32 PERFORMANCE
Slide 33: 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 40.
Slide 34: Tangible Book Value
Tangible Book Value 1 1 See Non - GAAP reconciliation on page 39. 34 PERFORMANCE Tangible Book Value Tangible Book Value (ex. AOCI)
Slide 35: Dividend
Dividend 35 PERFORMANCE 1 This compares to 1H2021 of $0.24. On 4/20/22, announced a share repurchase authorization of 375,000 shares (5% of the outstanding shares). 1
Slide 36: What's Ahead
WHAT’S AHEAD Impacting Lives for Success and Significance
Slide 37: What's Ahead: Near Term and Longer Term Targets
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 38: 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 39: Non-GAAP Reconciliation
NON - GAAP RECONCILIATION 39 The tables below provides a reconciliation of non - GAAP measures to GAAP for each of the periods presented:
Slide 40: Non-GAAP Reconciliation
NON - GAAP RECONCILIATION 40 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 41: First Community Corporation
§) First Community Corporation