<PAGE> 1
U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-QSB
(Mark One)
X Quarterly report under Section 13 or 15(d) of the Securities Exchange
- ----- Act of 1934 for the quarterly period ended September 30, 1997
Transition report under Section 13 or 15(d) of the Exchange Act for
- ----- the transition period from to
----------------- -------------------
Commission File No. 33-86258
FIRST COMMUNITY CORPORATION
---------------------------
(Exact Name of Small Business Issuer as Specified in its Charter)
South Carolina 57-1010751
-------------- ----------
(State of Incorporation) (I.R.S. Employer Identification)
5455 Sunset Boulevard, Lexington, South Carolina 29072
------------------------------------------------------
(Address of Principal Executive Offices)
(803) 951-2265
--------------
(Issuer's Telephone Number, Including Area Code)
-----------------------------------------------------------------
(Former Name, Former Address and Former Fiscal Year, if
Changed Since Last Report)
Check whether the issuer: (1) filed all reports required to be filed
by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for
such shorter period that the registrant was required to file such reports), and
(2) has been subject to such filing requirements for the past 90 days.
Yes X No
--- ---
State the number of shares outstanding of each of the issuer's classes
of common equity, as of the latest practicable date:
689,677 shares of common stock, par value $1.00 per share, were issued
and outstanding as of October 31, 1997.
Transitional Small Business Disclosure Format (check one): Yes No X
--- ---
<PAGE> 2
PART I
FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS.
The financial statements of First Community Corporation (the
"Company") are set forth in the following pages.
<PAGE> 3
FIRST COMMUNITY CORPORATION
BALANCE SHEETS
<TABLE>
<CAPTION>
September 30,
1997 December 31,
(Unaudited) 1996
------------------ ---------------
<S> <C> <C>
ASSETS
Cash and due from banks $ 1,757,799 $ 1,975,527
Federal funds sold and securities purchased under
agreements to resell 2,560,887 5,752,272
Investment securities - available for sale 10,927,914 9,213,248
Investment securities - held to maturity (market value of $2,593,133 and
$2,562,844 at September 30, 1997 and
December 31, 1996, respectively) 2,600,000 2,600,076
Loans 27,220,210 15,915,004
Less, allowance for loan losses 349,652 200,860
------------ ------------
Net loans 26,870,558 15,714,144
Property, furniture and equipment - net 3,008,311 2,544,140
Other assets 342,111 329,834
------------ ------------
Total assets $ 48,067,580 $ 38,129,241
============ ============
LIABILITIES
Deposits:
Non-interest bearing demand $ 7,192,023 $ 6,043,599
NOW and money market accounts 10,662,677 5,963,086
Savings 6,125,375 7,154,307
Time deposits less than $100,000 9,738,371 6,731,697
Time deposits $100,000 and over 6,332,304 5,008,135
------------ ------------
Total deposits 40,050,750 30,900,824
Securities sold under agreements to repurchase 1,571,700 923,400
Other borrowed money - demand note to US Treasury 124,054 299,559
Other liabilities 342,714 223,352
------------ ------------
Total liabilities 42,089,218 32,347,135
------------ ------------
SHAREHOLDERS' EQUITY
Common stock, par value $1.00 per share; 10,000,000 shares authorized; issued
and outstanding 689,677 and 688,077 at September 30, 1997 and December
31, 1996, respectively 689,677 688,077
Additional paid in capital 6,155,237 6,140,837
Accumulated deficit (867,905) (984,080)
Unrealized gain (loss) on securities available-for-sale 1,353 (62,728)
------------ ------------
Total shareholders' equity 5,978,362 5,782,106
------------ ------------
Total liabilities and shareholders' equity $ 48,067,580 $ 38,129,241
============ ============
</TABLE>
<PAGE> 4
FIRST COMMUNITY CORPORATION
STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
Nine Nine
Months Ended Months Ended
September 30, September 30,
1997 1996
(Unaudited) (Unaudited)
----------------- -----------------
<S> <C> <C>
Interest income:
Loans, including fees $ 1,501,475 $ 630,878
Investment securities - taxable 579,142 467,428
Federal funds sold and securities purchased
under resale agreements 188,377 92,667
----------- ----------
Total interest income 2,268,994 1,190,973
----------- ----------
Interest expense:
Deposits 951,694 472,433
Federal funds sold and securities sold under agreement
to repurchase 49,653 35,525
Other borrowed money 3,344 1,431
----------- ----------
Total interest expense 1,004,691 509,389
----------- ----------
Net interest income 1,264,303 681,584
Provision for loan losses 158,860 98,000
----------- ----------
Net interest income after provision for loan losses 1,105,443 583,584
----------- ----------
Non-interest income:
Deposit service charges 121,821 50,976
Mortgage origination fees 28,458 18,459
Other 33,751 12,480
----------- ----------
Total non-interest income 184,030 81,915
----------- ----------
Non-interest expense:
Salaries and employee benefits 633,671 519,769
Occupancy 85,282 106,300
Equipment 103,784 75,368
Marketing and public relations 72,728 26,115
Other 277,833 223,475
----------- ----------
Total non-interest expense 1,173,298 951,027
----------- ----------
Net income (loss) $ 116,175 $ (285,528)
=========== ==========
Net income (loss) per share $ 0.17 $ (0.41)
=========== ==========
</TABLE>
<PAGE> 5
FIRST COMMUNITY CORPORATION
STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
Three Three
Months Ended Months Ended
September 30, September 30,
1997 1996
(Unaudited) (Unaudited)
----------------- -----------------
<S> <C> <C>
Interest income:
Loans, including fees $ 588,165 $ 278,670
Investment securities - taxable 203,723 164,188
Federal funds sold and securities purchased
under resale agreements 61,857 30,389
--------- ---------
Total interest income 853,745 473,247
--------- ---------
Interest expense:
Deposits 361,328 191,370
Federal funds sold and securities sold under agreement
to repurchase 15,850 12,182
Other borrowed money 1,151 849
--------- ---------
Total interest expense 378,329 204,401
--------- ---------
Net interest income 475,416 268,846
Provision for loan losses 61,860 33,000
--------- ---------
Net interest income after provision for loan losses 413,556 235,846
--------- ---------
Non-interest income:
Deposit service charges 39,617 22,956
Mortgage origination fees 13,591 8,002
Other 14,146 5,569
--------- ---------
Total non-interest income 67,354 36,527
--------- ---------
Non-interest expense:
Salaries and employee benefits 217,877 179,271
Occupancy 26,982 27,112
Equipment 36,507 26,498
Marketing and public relations 30,700 7,408
Other 97,600 77,886
--------- ---------
Total non-interest expense 409,666 318,175
--------- ---------
Net income (loss) $ 71,244 $ (45,802)
========= =========
Net income (loss) per share $ 0.10 $ (0.07)
========= =========
</TABLE>
<PAGE> 6
FIRST COMMUNITY CORPORATION
STATEMENT OF CHANGES IN SHAREHOLDER'S EQUITY
NINE MONTHS ENDED SEPTEMBER 30, 1997
(UNAUDITED)
<TABLE>
<CAPTION>
Unrealized Gain
Additional on Securities
Common Paid-in Accumulated Available for
Stock Capital Deficit Sale Total
-------------- -------------- ------------ --------------- ---------------
<S> <C> <C> <C> <C> <C>
Balance December 31, 1996 $ 688,077 $ 6,140,837 $ (984,080) $ (62,728) $ 5,782,106
Net income 116,175 116,175
Exercise stock options 1,600 14,400 16,000
Unrealized gain (loss) on
securities available-for-sale 64,081 64,081
--------- ----------- ---------- --------- -----------
Balance September 30, 1997 $ 689,677 $ 6,155,237 $ (867,905) $ 1,353 $ 5,978,362
========= =========== ========== ========= ===========
</TABLE>
<PAGE> 7
FIRST COMMUNITY CORPORATION
STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
Nine months ended September 30,
------------------------------------
1997 1996
--------------- -----------
<S> <C> <C>
Cash flows from operating activities:
Net income (loss) $ 116,175 $ (285,528)
Adjustments to reconcile net income (loss) to
net cash used in operating activities:
Depreciation 103,227 134,071
Premium amortization (Discount accretion) (50,457) (2,396)
Provision for loan losses 158,860 98,000
(Increase) decrease in other assets (12,277) (94,073)
Increase in accounts payable 119,362 118,739
----------- -----------
Net cash used in operating activities 434,890 (31,187)
----------- -----------
Cash flows form investing activities:
Purchase of investment securities available-for-sale (5,586,967) (7,418,434)
Maturity of investment securities available-for-sale 3,986,915 4,947,337
Purchase of investment securities held-to-maturity - (1,400,312)
Maturity of investment securities held-to-maturity - 1,000,000
Increase in loans (11,315,274) (9,747,253)
Proceeds from sale of fixed assets 50,000 -
Purchase of property and equipment (617,398) (910,927)
----------- -----------
Net cash used in investing activities (13,482,724) (13,529,589)
----------- -----------
Cash flows from financing activities:
Increase in deposit accounts 9,149,926 13,296,524
Proceeds from exercise of stock options 16,000 -
Increase (decrease) in securities sold under agreements to repurchase 648,300 (472,200)
Decrease in other borrowings (175,505) (57,442)
----------- -----------
Net cash provided from financing activities 9,638,721 12,766,882
----------- -----------
Net increase in cash and cash equivalents (3,409,113) (793,894)
Cash and cash equivalents at beginning
of period 7,727,799 4,853,213
----------- -----------
Cash and cash equivalents at end of period $ 4,318,686 $ 4,059,319
=========== ===========
Supplemental disclosure:
Cash paid during the period for:
Interest $ 910,133 $ 418,295
Non-cash investing and financing activities:
Unrealized gain (loss) on securities available-for-sale $ 64,081 $ (94,073)
</TABLE>
<PAGE> 8
FIRST COMMUNITY CORPORATION
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 1997
Note 1 - Basis of Presentation
The consolidated financial statements include the accounts of First
Community Corporation and its wholly owned subsidiary First Community
Bank, N.A. All material inter-company transactions are eliminated in
consolidation. In the opinion of management, the unaudited financial
statements reflect all adjustments necessary for a fair presentation
of the balance sheet and results of operations for the periods
presented.
<PAGE> 9
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS
First Community Corporation (the Company) is a one bank holding
company which was incorporated in South Carolina on November 2, 1994 and from
that date through August 16, 1995, the Company was a development stage company.
First Community Bank N.A. (the "Bank"), the Company's only subsidiary, began
operations on August 17, 1995. The Company expected to experience losses until
the Bank grew its assets to a point where the assets generated revenue from
operations which exceeded the Bank's fixed costs. The Company experienced its
first quarterly profit in the fourth quarter of 1996 and continued to reflect a
profit in the nine months and three months ended September 30, 1997 of $116,175
and $71,245, respectively.
The following discussion contains forward-looking statements that
involve risks and uncertainties. The Company's actual results may differ
materially from the results discussed in the forward-looking statements, and
the Company's operating performance each quarter is subject to various risks
and uncertainties that are discussed in detail in the Company's filings with
the Securities and Exchange Commission, including the "Risk Factors" section in
the Company's Registration Statement on Form S-1 (Registration Number 33-86258)
as filed with and declared effective by the Securities and Exchange Commission.
Comparison of Results of Operations for Nine Months Ended September
30, 1997 to the Nine Months Ended September 30, 1996:
Net Income (Loss)
The Company's net income was $116,175 for the nine months ended
September 30, 1997 as compared to a loss of $285,528 for the nine months ended
September 30, 1996. This improvement in earnings reflect the continued growth
in the level of earning assets since the Bank commenced operations. The level
of average earning assets was $21,997,187 for the nine months ended September
30, 1996 as compared to $39,336,171 for the nine months ended September 30,
1997. This reflects an 78.8% increase in the level average earning assets for
the two periods. In addition, net interest margin improved from 4.13% to 4.30%
for the nine months ended September 30, 1996 and 1997, respectively.
Non-interest income increased 125.7% to $184,030 for the nine months ended
September 30, 1997 as compared to $81,915 for the nine months ended September
30, 1996. During these same periods, non-interest expense increased 23.3% to
$1,173,298 for the nine months ended September 30, 1997 as compared to $951,027
for the nine months ended September 30, 1996.
Net Interest Income
The table on page 15 shows yield and rate data for interest-bearing
balance sheet components during the nine month periods ended September 30, 1997
and 1996, along with average balances and the related interest income and
interest expense amounts.
<PAGE> 10
ITEM 2. CONTINUED PAGE 2
Net interest income was $1,264,303 during the nine months ended September 30,
1997 as compared to $681,584 for the nine months ended September 30, 1996. The
net interest margin was 4.30% for the nine months ended September 30, 1997 as
compared to 4.13% for the nine months ended September 30, 1996. This
improvement of net interest income is a result of the increase of the level of
earning assets as well as the change in the mix of earning assets. For the nine
months ended September 30, 1996 average loans accounted for 40.9% of earning
assets whereas for the nine months ended September 30, 1997 they represented
54.8% of earning assets. Loans typically provide a higher yield then the Bank's
alternative uses of these funds such as securities and short-term overnight
investments.
Interest income during the nine months ended September 30, 1997 was
$2,268,994 as compared to $1,190,973 for the nine months ended September 30,
1996. The average yield on earning assets during the first nine months of 1997
was 7.71% as compared to 7.21% during the same period of 1996. The largest
component of interest income for the nine months ended September 30, 1997 was
interest on loans and amounted to $1,501,475 as compared to $630,878 for the
comparable prior year period. The overall yield on loans was 9.33% for the nine
months ended September 30, 1996 as compared to 9.31% for the nine months ended
September 30, 1997.
The investment portfolio income increased $111,714, or 23.9%, to $579,142 for
the nine months ended September 30, 1997 as compared to $467,428 for the nine
months ended September 30, 1996. The increase in investment portfolio income is
a result of the average investment portfolio balance being $2,432,834 greater
for the nine month period ended September 30, 1997 as compared to the same
period in the prior year. Interest on overnight federal funds sold and
securities purchased under agreements to resell increased $95,710 or 103.3%, to
$188,377 for the nine month period ended September 30, 1997 as compared to
$92,667 for the nine month period ended September 30, 1996. Average short term
overnight fund balances were 102.8% greater during the nine months ended
September 30, 1997 as compared to the same period in the prior year.
Interest expense during the nine months ended September 30, 1997 was $1,004,691
with an average rate paid on interest-bearing liabilities of 4.30% as compared
to $681,584 and 4.29% during the nine months ended September 30, 1996. The
primary reason for the increase in interest expense was that average
interest-bearing liabilities were $15,441,408 greater for the nine months ended
September 30, 1997 as compared to the nine months ended September 30, 1996.
Provision and Allowance for Loan Losses
The provision for loan losses was $158,860 and $98,000 for nine months
ended September 30, 1997 and 1996, respectively, and reflects management's
estimate of the amount necessary to maintain the allowance for loan losses at a
level believed to be adequate in relation to the current size, mix and quality
of the portfolio. The Company's allowance for loan losses as a percentage of
its period-end loans was 1.28% at September 30, 1997. The Company had no
<PAGE> 11
ITEM 2. CONTINUED PAGE 3
nonperforming loans at September 30, 1997. Charge-offs during nine months
ended September 30, 1997, amounted to $12,825 as compared to $9,705 for the
same period in the prior year. Recoveries during the nine months ended
September 30, 1997 amounted to $2,757. Loans past due 30 days through 89 days
amounted to $10,019 and loans greater than 90 days past due amounted to $2,355
at September 30, 1997.
The loan portfolio is periodically reviewed to evaluate the
outstanding loans and to measure both the performance of the portfolio and the
adequacy of the allowance for loan losses. This analysis includes a review of
delinquency trends, actual losses, and internal credit ratings. Management's
judgment as to the adequacy of the allowance is based upon a number of
assumptions about future events which it believes to be reasonable, but which
may or may not be reasonable. However, because of the inherent uncertainty of
assumptions made during the evaluation process, there can be no assurance that
loan losses in future periods will not exceed the allowance for loan losses or
that additional allocations to the allowance will not be required.
Noninterest Income and Expense
Noninterest income during the nine months ended September 30, 1997 was
$184,030 as compared to $81,915 for the nine months ended September 30, 1996.
This was primarily a result of increased income from deposit service charges of
$70,845 (139.0%), resulting from the increase deposit balances during the
comparable periods. Other income during the nine months ended September 30,
1997 was $33,751 as compared to $12,480 during the same period in the prior
year. This increase is primarily due to an increase in customer check sales
income of approximately $1,700 increases in bankcard fee income of
approximately $3,600 and increased loan late charge income of $8,300.
Noninterest expense amounted to $1,173,298 as compared to $951,027
during the nine months ended September 30, 1997 and 1996, respectively. Salary
and employee benefits increased $113,902 or 21.9% in the nine months ended
September 30, 1997 as compared to the comparable period in 1996. This increase
results from normal merit increases as well as the addition of two full time
equivalent and one part time equivalent employees during the first quarter of
1997. Occupancy expense decreased from $106,300 for the nine months ended
September 30, 1996 to $85,282 for the nine months ended September 30, 1997.
This decrease is a result of reduced cost related to the move of the Lexington
office in August of 1996 and the move of the Forest Acres office in June 1997
to permanent facilities. Prior to moving into permanent facilities the cost of
the temporary facilities were being depreciated over a short time period and
resulted in higher depreciation expense during the comparable periods.
Equipment expense increased from $75,368 for the nine months ended September
30, 1996 to $103,784 for the nine months ended September 30, 1997. This
increase is primarily due to increased maintenance contract expense of
approximately $22,089 on computer hardware and software equipment which was
initially under warranty for the first twelve months after being purchased.
<PAGE> 12
ITEM 2. CONTINUED PAGE 4
Marketing and public relations expense increased by $46,613 or 178.5% in the
nine months ended ended September 30, 1997 as compared to the comparable period
in the prior year. This increase is a result of planned increases in
advertising and marketing during the Bank's second full year of operations.
Other non-interest expense increased $54,358 or 24.3 % in the nine months ended
September 30, 1997 compared to the same period in the prior year. An increase
in computer service bureau expense of $6,500, correspondent bank charges of
$8,300 postage of $4,900 and contributions of $6,800 account for the majority
of the increase in other non-interest expense. The computer service bureau
expense, postage and correspondent bank charges are directly related to the
number of accounts and the volume of activity, and have increased due to the
growth of the Bank for the nine months ended September 30, 1997 as compared to
the same period in the prior year. Contributions expense has increased as a
result of management determining to keep this expense to a very minimum during
the period the Company was experiencing operating losses during the initial
stages of operations.
Comparison of Results of Operations for Three Months Ended September 30, 1997
to the Three Months Ended September 30, 1996:
Net income for the third quarter of 1997 was $71,245 or $.10 per
share, as compared to a loss of $45,802, or $.07 per share, during the
comparable period in 1996. This improvement, as explained in the nine months
results, is due to the significant increase in the level of earning assets
during these two periods. Average earning assets were $43,177,565 during the
third quarter of 1997 as compared to $25,421,662 during the third quarter of
1996. The table on page 16 shows yield and rate data for interest-bearing
balance sheet components during the three month periods ended September 30,
1997 and 1996, along with average balances and the related interest income and
interest expense amounts. The yield on average earning assets increased from
7.39% in the third quarter of 1996 to 7.84% in the third quarter of 1997. This
increase is a result of loans comprising 58.6% of earning assets during the
third quarter of 1997 as compared to 47.3% percent during the third quarter of
1996. The cost of interest bearing liabilities was 4.27% in third quarter of
1996 as compared to 4.30% in the third quarter of 1997.
Total non-interest income increased by $30,827 during the third
quarter of 1997 as compared to the same period in 1996. As explained in the
analysis of nine month results, the increase is primarily due to increased fees
related to deposit and loan balances and related activity charges. The Company
originates mortgage loans which are closed in the name of a third party for
which the Company receives a fee. These fees amounted to $13,591 during the
third quarter of 1997 as compared to $8,002 during the third quarter of 1996.
Total non-interest expense increased by $91,490 in the third quarter
of 1997 as compared to the same quarter of 1996. This increase is primarily a
result of a $38,606 increase in salary and benefits expense and a $23,292
increase in marketing expense. As stated in the analysis of the nine month
results, the salary increase is a result of the addition of two full time and
one part
<PAGE> 13
ITEM 2. CONTINUED PAGE 5
time employees during the second quarter of 1997. The increase in marketing
expense is a result of planned increases in advertising during the second full
year of the Company's operation.
Financial Position
Assets totaled $48,067,580 at September 30, 1997 as compared to
$38,129,241 at December 31, 1996 an increase of $8,898,110 (26.1%). Loans grew
by $11,305,206 during the nine months ended September 30, 1997 from $15,915,004
to $27,220,210. This loan growth was funded by growth in deposits of $9,149,926
(29.6%) from $30,900,824 at December 31, 1996 to $40,050,750 at September 30,
1997. The balance of the loan growth was funded by a decrease in federal funds
sold and securities purchased under agreements to resell of $3,191,385 from
$5,752,272 at December 31, 1996 to $2,560,887 at September 30, 1997. The loan
to deposit ratio at September 30, 1997 was 68.0% as compared to 50.9% at
December 31, 1996. It is anticipated that this ratio will continue to increase
as management invests more of the Bank's assets in the higher earning loan
portfolio as compared to the investment portfolio.
The Company's management closely monitors and seeks to maintain
appropriate levels of interest earning assets and interest bearing liabilities
so that maturities of assets are such that adequate funds are provided to meet
customer withdrawals and demand. Management expects asset and liability growth
to continue at a rapid pace during the coming months, with the growth tapering
off to a slower, more deliberate and controllable pace over the longer term,
and believes capital should continue to be adequate.
Liquidity and Capital Resources
Management believes that the Company's liquidity remains adequate to
meet operating and loan funding requirements. Federal funds sold and investment
securities available-for sale represent 28.1% of total assets at September 30,
1997. Management believes that its existing stable base of core deposits along
with continued growth in this deposit base will enable the Company to meet its
long term and short term liquidity needs successfully. These needs include the
ability to respond to short-term demand for funds caused by the withdrawal of
deposits, maturity of repurchase agreements, extensions of credit, and the
payment of operating expenses. Sources of liquidity in addition to deposit
gathering activities include maturing loans and investments, purchase of
federal funds from other financial institutions, and selling securities under
agreements to repurchase. The Company monitors closely the level of large
certificates of deposits in amounts of $100,000 or more as they tend to be
extremely sensitive to interest rate levels, and thus less reliable sources of
funding for liquidity purposes. At September 30, 1997 the amount of
certificates of deposits of $100,000 or more represented 15.8% of total
deposits. These deposits are issued to local customers, many of which have
other product relationships with the Bank, and none of these deposits are
brokered deposits. Management is not aware of any trends, events or
uncertainties that may result in a significant adverse effect on the Company's
<PAGE> 14
ITEM 2. CONTINUED PAGE 6
liquidity position. However, no assurances can be given in this regard, as
rapid growth, deterioration in loan quality, and poor earnings, or a
combination of these factors, could change the Company's liquidity position in
a relatively short period of time.
The capital needs of the Company have been primarily met to date through the
initial common stock offering which raised approximately $6.8 million. This
capital was sufficient to fund the activities of the Bank during the initial
stages of operations and has allowed the Bank to remain a "well capitalized"
institution until sufficient income was generated from operations to fund its
activities on an on-going basis. Shareholders' equity was 12.4% of total assets
at September 30, 1997 as compared to 15.2% at December 31, 1996. The Bank's
risked-based capital ratios of Tier 1, total capital, and leverage ratio were
15.4%, 16.4%, and 10.8%, respectively, at September 30, 1997. This compares to
required OCC regulatory capital guidelines for Tier 1 capital, total capital,
and leverage capital ratios of 4.0%, 8.0%, and 3.0%, respectively. The Company
will be required by the Federal Reserve to meet the same guidelines once its
consolidated total assets exceed $150 million.
<PAGE> 15
FIRST COMMUNITY CORPORATION
YIELDS ON AVERAGE EARNING ASSETS AND RATES
ON AVERAGE INTEREST-BEARING LIABILITIES
<TABLE>
<CAPTION>
Nine months ended September 30, 1997 Nine months ended September 30, 1996
--------------------------------------- --------------------------------------
Average Interest Yield/ Average Interest Yield/
Balance Earned/Paid Rate Balance Earned/Paid Rate
<S> <C> <C> <C> <C> <C> <C>
ASSETS
Earning assets
Loans $ 21,567,447 1,501,475 9.31% $ 9,008,025 $ 630,878 9.33%
Securities:
Taxable 13,116,452 579,142 5.90% 10,683,618 467,428 5.83%
Federal funds sold and securities purchased
under agreements to resell 4,652,272 188,377 5.41% 2,305,544 92,667 5.35%
-------------------------------------- ------------------------------------
Total earning assets 39,336,171 2,268,994 7.71% 21,997,187 1,190,973 7.21%
-------------------------------------- ------------------------------------
Cash and due from banks 1,363,489 807,034
Premises and equipment 2,829,250 1,863,068
Other assets 329,083 247,269
Allowance for loan losses (258,052) (117,859)
============ ===========
Total assets $ 43,599,941 $24,796,699
============ ===========
LIABILITIES
Interest-bearing liabilities
Interest-bearing transaction accounts 4,280,279 46,566 1.45% 2,057,921 22,841 1.48%
Money market accounts 4,212,618 140,266 4.45% 1,422,731 34,343 3.22%
Savings deposits 6,287,824 180,714 3.84% 3,058,189 91,499 3.99%
Time deposits 14,892,483 584,148 5.24% 8,139,916 323,750 5.30%
Other short term borrowings 1,583,715 52,997 4.47% 1,136,754 36,956 4.33%
-------------------------------------- ------------------------------------
Total interest-bearing liabilities 31,256,919 1,004,691 4.30% 15,815,511 509,389 4.29%
-------------------------------------- ------------------------------------
Demand deposits 6,262,052 2,941,724
Other liabilities 266,097 165,717
Shareholders' equity 5,814,873 5,873,747
============ ===========
Total liabilities and shareholders'
equity $ 43,599,941 $24,796,699
============ ===========
Net interest spread 3.41% 2.92%
Net interest income/margin $1,264,303 4.30% $ 681,584 4.13%
========== =========
</TABLE>
<PAGE> 16
FIRST COMMUNITY CORPORATION
YIELDS ON AVERAGE EARNING ASSETS AND RATES
ON AVERAGE INTEREST-BEARING LIABILITIES
<TABLE>
<CAPTION>
Three months ended September 30, 1997 Three months ended September 30, 1996
------------------------------------- ------------------------------------
Average Interest Yield/ Average Interest Yield/
Balance Earned/Paid Rate Balance Earned/Paid Rate
<S> <C> <C> <C> <C> <C> <C>
ASSETS
Earning assets
Loans $ 25,309,712 588,165 9.22% $12,027,143 $ 278,670 9.19%
Securities:
Taxable 13,404,639 203,723 6.03% 11,113,702 164,188 5.86%
Federal funds sold and securities purchased
under agreements to resell 4,463,214 61,857 5.50% 2,280,817 30,389 5.29%
----------------------------------- ----------------------------------
Total earning assets 43,177,565 853,745 7.84% 25,421,662 473,247 7.39%
------------------------------------- ----------------------------------
Cash and due from banks 1,447,488 916,272
Premises and equipment 3,018,275 2,176,247
Other assets 340,397 271,447
Allowance for loan losses (309,656) (142,186)
============= ===========
Total assets $ 47,674,069 $28,643,442
============= ===========
LIABILITIES
Interest-bearing liabilities
Interest-bearing transaction accounts 5,309,895 18,670 1.39% 2,595,324 9,805 1.50%
Money market accounts 6,301,887 74,118 4.67% 1,322,824 10,627 3.19%
Savings deposits 5,860,754 56,045 3.79% 4,606,285 48,376 4.17%
Time deposits 15,928,394 212,495 5.29% 9,255,808 122,562 5.25%
Other short term borrowings 1,473,450 17,001 4.58% 1,210,258 13,031 4.27%
----------------------------------- ----------------------------------
Total interest-bearing liabilities 34,874,380 378,329 4.30% 18,990,499 204,401 4.27%
----------------------------------- ----------------------------------
Demand deposits 6,608,039 3,704,280
Other liabilities 311,730 207,605
Shareholders' equity 5,879,920 5,741,058
============= ===========
Total liabilities and shareholders' equity $ 47,674,069 $28,643,442
============= ===========
Net interest spread 3.54% 3.12%
Net interest income/margin $ 475,416 4.37% $ 268,846 4.20%
========= =========
</TABLE>
<PAGE> 17
PART II
OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS.
There are no material pending legal proceedings to which the Company
or any of its subsidiaries is a party or of which any of their property is the
subject.
ITEM 2. CHANGES IN SECURITIES.
(a) Not applicable
(b) Not applicable
ITEM 3. DEFAULTS UPON SENIOR SECURITIES.
Not Applicable
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
There were no matters submitted to security holders for a vote during
the three months ended September 30, 1997
ITEM 5. OTHER INFORMATION.
None
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
<TABLE>
<S> <C>
(a) The following documents are filed as part of this report:
3.1 Amended and Restated Articles of Incorporation
(incorporated by reference to Exhibit 3.1 to the
Company's Registration Statement No. 33-86258 on
Form S-1).
3.2 Bylaws (incorporated by reference to Exhibit 3.2 to
the Company's Registration Statement No. 33-86258 on
Form S-1).
4.1 Provisions in the Company's Articles of
Incorporation and Bylaws defining the rights of
holders of the Company's Common Stock (incorporated
by reference to Exhibit 4.1 to the Company's
Registration Statement No. 33-86258 on Form S-1).
</TABLE>
<PAGE> 18
<TABLE>
<S> <C>
10.1 Employment Agreement dated June 1, 1994, by and
between Michael C. Crapps and the Company
(incorporated by reference to Exhibit 10.1 to the
Company's Registration Statement No. 33-86258 on
Form S-1).*
10.2 Employment Agreement dated June 1, 1994, by and
between James C. Leventis and the Company
(incorporated by reference to Exhibit 10.2 to the
Company's Registration Statement No. 33-86258 on
Form S-1).*
10.3 Construction agreement dated January 11, 1996 by and
between the Bank and Summerfield Associates, Inc. to
build permanent banking facility in Lexington, South
Carolina (incorporated by reference to Exhibit 10.3
to the Company's Annual Report for fiscal year ended
December 31, 1995 on Form 10-KSB).
10.4 Contract of sale of real estate dated August 1, 1994
between First Community Bank (In Organization) and
Three Seventy-Eight Company, Inc. (Incorporated by
reference to the Company's Registration Statement
No. 33-86258 on Form S-1).
10.5 Contract of sale of real estate dated July 28, 1994,
between First Community Bank (In Organization) and
the Crescent Partnership (Incorporated by reference
to the Company's Registration Statement No. 33-86258
on Form S-1).
10.6 First Community Corporation 1996 Stock Option Plan
(Incorporated by reference to Exhibit 10.6 to the
Company's Annual Report for fiscal year ended
December 31, 1995 on Form 10-KSB).
10.7 Construction Agreement dated November 7, 1996 by
and between the Bank and Summerfield Associates,
Inc. To build a banking facility in Forest Acres,
South Carolina. (Incorporated by reference to the
Company's 1996 Annual Report on Form 10 KSB).
27 Financial Data Schedule (SEC use only).
</TABLE>
*Denotes executive compensation contract or arrangement.
(b) Reports on Form 8-K.
There were no reports on Form 8-K filed by the Company during
the quarter ended September 30, 1997
<PAGE> 19
SIGNATURES
In accordance with the requirements of the Exchange Act, the
registrant caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
FIRST COMMUNITY CORPORATION
---------------------------
(REGISTRANT)
Date: November 13, 1997 By: /s/ Michael C. Crapps
------------------ ---------------------------------------
Michael C. Crapps
President and Chief Executive Officer
By: /s/ Joseph G. Sawyer
---------------------------------------
Joseph G. Sawyer
Senior Vice President, Principal Financial
Officer
<TABLE> <S> <C>
<ARTICLE> 9
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM FINANCIAL
STATEMENTS OF FIRST COMMUNITY CORP FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1997,
CONTAINED IN FORM 10-QSB AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
FORM 10-QSB.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> SEP-30-1997
<CASH> 1,757,799
<INT-BEARING-DEPOSITS> 0
<FED-FUNDS-SOLD> 2,560,887
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 10,927,714
<INVESTMENTS-CARRYING> 2,600,000
<INVESTMENTS-MARKET> 2,593,133
<LOANS> 27,220,210
<ALLOWANCE> 349,652
<TOTAL-ASSETS> 48,067,580
<DEPOSITS> 40,050,750
<SHORT-TERM> 1,695,754
<LIABILITIES-OTHER> 342,714
<LONG-TERM> 0
0
0
<COMMON> 689,677
<OTHER-SE> 5,288,685
<TOTAL-LIABILITIES-AND-EQUITY> 48,067,580
<INTEREST-LOAN> 1,501,475
<INTEREST-INVEST> 579,142
<INTEREST-OTHER> 188,377
<INTEREST-TOTAL> 2,268,994
<INTEREST-DEPOSIT> 951,694
<INTEREST-EXPENSE> 1,004,691
<INTEREST-INCOME-NET> 1,264,303
<LOAN-LOSSES> 158,860
<SECURITIES-GAINS> 0
<EXPENSE-OTHER> 1,173,298
<INCOME-PRETAX> 116,175
<INCOME-PRE-EXTRAORDINARY> 116,175
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 116,175
<EPS-PRIMARY> .17
<EPS-DILUTED> 0
<YIELD-ACTUAL> 4.30
<LOANS-NON> 0
<LOANS-PAST> 2,355
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 200,860
<CHARGE-OFFS> 12,825
<RECOVERIES> 2,757
<ALLOWANCE-CLOSE> 349,652
<ALLOWANCE-DOMESTIC> 349,652
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
