<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 June 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 July 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>
June 30,
1997 December 31,
(Unaudited) 1996
------------ ------------
<S> <C> <C>
ASSETS
Cash and due from banks $ 2,981,415 $ 1,975,527
Federal funds sold and securities purchased under
agreements to resell 4,973,055 5,752,272
Investment securities - available for sale 10,375,321 9,213,248
Investment securities - held to maturity (market value of
$2,568,148 and $2,562,844 at June 30, 1997 and
Decemebr 31, 1996, respectively) 2,600,000 2,600,076
Loans 23,019,081 15,915,004
Less, allowance for loan losses 287,748 200,860
------------ ------------
Net loans 22,731,333 15,714,144
Property, furniture and equipment - net 3,000,996 2,544,140
Other assets 365,231 329,834
------------ ------------
Total assets $ 47,027,351 $ 38,129,241
============ ============
LIABILITIES
Deposits:
Non-interest bearing demand $ 6,598,284 $ 6,043,599
NOW and money market accounts 10,302,324 5,963,086
Savings 6,376,309 7,154,307
Time deposits less than $100,000 9,044,915 6,731,697
Time deposits $100,000 and over 7,280,198 5,008,135
------------ ------------
Total deposits 39,602,030 30,900,824
Securities sold under agreements to repurchase 1,165,000 923,400
Other borrowed money - demand note to US Treasury 159,479 299,559
Other liabilities 260,818 223,352
------------ ------------
Total liabilities 41,187,327 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 June 30, 1997 and December
31, 1996, respectively 689,677 688,077
Additional paid in capital 6,155,237 6,140,837
Accumulated deficit (939,149) (984,080)
Unrealized loss on securities available-for-sale (65,741) (62,728)
------------ ------------
Total shareholders' equity 5,840,024 5,782,106
------------ ------------
Total liabilities and shareholders' equity $ 47,027,351 $ 38,129,241
============ ============
</TABLE>
<PAGE> 4
FIRST COMMUNITY CORPORATION
STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
Six Six
Months Ended Months Ended
June 30, June 30,
1997 1996
(Unaudited) (Unaudited)
------------ ------------
<S> <C> <C>
Interest income:
Loans, including fees $ 913,310 $ 352,208
Investment securities - taxable 375,419 303,240
Federal funds sold and securities purchased
under resale agreements 126,520 62,278
---------- ----------
Total interest income 1,415,249 717,726
---------- ----------
Interest expense:
Deposits 590,366 281,063
Federal funds sold and securities sold under agreement
to repurchase 33,803 23,343
Other borrowed money 2,193 582
---------- ----------
Total interest expense 626,362 304,988
---------- ----------
Net interest income 788,887 412,738
Provision for loan losses 97,000 65,000
---------- ----------
Net interest income after provision for loan losses 691,887 347,738
---------- ----------
Non-interest income:
Deposit service charges 82,204 28,020
Mortgage origination fees 14,867 10,457
Other 19,605 6,911
---------- ----------
Total non-interest income 116,676 45,388
---------- ----------
Non-interest expense:
Salaries and employee benefits 415,794 340,498
Occupancy 58,300 79,188
Equipment 67,277 48,870
Marketing and public relations 42,028 18,707
Other 180,233 145,589
---------- ----------
Total non-interest expense 763,632 632,852
---------- ----------
Net income (loss) $ 44,931 $ (239,726)
========== ==========
Net income (loss) per share $ 0.07 $ (0.35)
========== ==========
</TABLE>
<PAGE> 5
FIRST COMMUNITY CORPORATION
STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
Three Three
Months Ended Months Ended
June 30, June 30,
1997 1996
(Unaudited) (Unaudited)
------------ ------------
<S> <C> <C>
Interest income:
Loans, including fees $ 502,086 $ 210,446
Investment securities - taxable 181,625 151,566
Federal funds sold and securities purchased
under resale agreements 78,281 30,436
--------- ---------
Total interest income 761,992 392,448
--------- ---------
Interest expense:
Deposits 323,493 152,949
Federal funds sold and securities sold under agreement
to repurchase 22,396 10,994
Other borrowed money 1,103 502
--------- ---------
Total interest expense 346,992 164,445
--------- ---------
Net interest income 415,000 228,003
Provision for loan losses 60,000 29,000
--------- ---------
Net interest income after provision for loan losses 355,000 199,003
--------- ---------
Non-interest income:
Deposit service charges 48,281 17,731
Mortgage origination fees 12,171 5,227
Other 10,452 3,469
--------- ---------
Total non-interest income 70,904 26,427
--------- ---------
Non-interest expense:
Salaries and employee benefits 215,943 168,854
Occupancy 29,411 38,217
Equipment 35,320 25,373
Marketing and public relations 25,558 9,447
Other 90,400 74,568
--------- ---------
Total non-interest expense 396,632 316,459
--------- ---------
Net income (loss) $ 29,272 $ (91,029)
========= =========
Net income (loss) per share $ 0.04 $ (0.13)
========= =========
</TABLE>
<PAGE> 6
FIRST COMMUNITY CORPORATION
STATEMENT OF CHANGES IN SHAREHOLDER'S EQUITY
SIX MONTHS ENDED JUNE 30, 1997
(UNAUDITED)
<TABLE>
<CAPTION>
Unrealized loss
Additional on Securites
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 44,931 44,931
Exercise stock options 1,600 14,400 16,000
Unrealized loss on securities
available-for-sale (3,013) (3,013)
-------- ---------- --------- -------- ----------
Balance June 30, 1997 $689,677 $6,155,237 $(939,149) $(65,741) $5,840,024
======== ========== ========= ======== ==========
</TABLE>
<PAGE> 7
FIRST COMMUNITY CORPORATION
STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
Six months ended June 30,
--------------------------
1997 1996
----------- -----------
<S> <C> <C>
Cash flows from operating activities:
Net income (loss) $ 44,931 $ (239,726)
Adjustments to reconcile net income (loss) to
net cash used in operating activities:
Depreciation 70,239 94,652
Premium amortization (Discount accretion) (4,941) (980)
Provision for loan losses 97,000 65,000
(Increase) decrease in other assets (35,397) (90,518)
Increase in accounts payable 37,466 106,439
----------- -----------
Net cash used in operating activities 209,298 (65,133)
----------- -----------
Cash flows form investing activities:
Purchase of investment securities available-for-sale (4,587,592) (5,654,146)
Maturity of investment securities available-for-sale 3,427,523 4,527,379
Purchase of investment securities held-to-maturity -- (1,400,312)
Maturity of investment securities held-to-maturity -- 1,000,000
Increase in loans (7,114,189) (6,635,410)
Proceeds from sale of fixed assets 50,000 --
Purchase of property and equipment (577,095) (472,188)
----------- -----------
Net cash used in investing activities (8,801,353) (8,634,677)
----------- -----------
Cash flows from financing activities:
Increase in deposit accounts 8,701,206 9,891,763
Proceeds from exercise of stock options 16,000 --
Increase (decrease) in securities sold under agreements to repurchase 241,600 (599,200)
Decrease in other borrowings (140,080) (49,861)
----------- -----------
Net cash provided from financing activities 8,818,726 9,242,702
----------- -----------
Net increase in cash and cash equivalents 226,671 542,892
Cash and cash equivalents at beginning
of period 7,727,799 4,853,213
----------- -----------
Cash and cash equivalents at end of period $ 7,954,470 $ 5,396,105
=========== ===========
Supplemental disclosure:
Cash paid during the period for:
Interest $ 587,521 $ 250,049
Non-cash investing and financing activities:
Unrealized gain (loss) on securities available-for-sale $ (3,013) $ (128,922)
</TABLE>
<PAGE> 8
FIRST COMMUNITY CORPORATION
NOTES TO FINANCIAL STATEMENTS
JUNE 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 intercompany 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 cost. The Company experienced its first
quarterly profit in the fourth quarter of 1996 and continued to reflect a profit
in the six months and three months ended June 30, 1997 of $44,931 and $29,272,
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
disucussed 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 Six Months Ended June 30, 1997 to the
Six Months Ended June 30, 1996:
Net Income (Loss)
The Company's net income was $44,931 for the six months ended June 30,
1997 as compared to a loss of $239,726 for the six months ended June 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 $20,226,134 for the six months ended June 30, 1996 as compared to
$37,383,637 for the six months ended June 30, 1997. This reflects an 84.5%
increase in the level average earning assets for the two periods. In addition,
net interest margin improved from 4.08% to 4.26% for the six months ended June
30,, 1996 and 1997, respectively. Non-interest income increased 157.1% to
$116,676 for the six months ended June 30, 1997 as compared to $45,388 for the
six months ended June 30, 1996. During these same periods non-interest expense
increased 20.7% to $763,632 for the six months ended June 30, 1997 as compared
to $632,852 for the six months ended June 30, 1996.
Net Interest Income
The table on page 14 shows yield and rate data for interest-bearing
balance sheet components during the six month periods ended June 30, 1997 and
1996, along with average balances and the related interest income and interest
expense amounts.
Net interest income was $788,887 during the six months ended June 30,
1997 as compared to $412,738 for the six months ended June 30, 1996. The net
interest margin was 4.26% for the six months ended June 30, 1997 as compared to
4.08% for the six months ended June 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 six months ended June 30, 1996
average loans accounted for 36.9% of earning assets whereas for the six months
ended June 30, 1997 they represented 52.6% of earning assets. Loans typically
provide a higher yield then the Banks alternative uses of these funds such as
securities and short-term overnight investments.
<PAGE> 10
ITEM 2. CONTINUED PAGE 2
Interest income during the six months ended June 30, 1997 was
$1,415,249 as compared to $717,726 for the six months ended June 30, 1996. The
average yield on earning assets during the first six months of 1997 was 7.63% as
compared to 7.10% during the same period of 1996. The largest component of
interest income for the six months ended June 30, 1997 was interest on loans and
amounted to $913,310 as compared to $352,208 for the comparable prior year
period. The overall yield on loans was 9.44% for the six months ended June 30,
1996 as compared to 9.37% for the six months months ended June 30, 1997. The
investment portfolio income increased $72,179 or 23.8% to $375,419 for the six
months ended June 30, 1997 as compared to $303,240 for the six months ended June
30, 1996. The increase in investment portfolio income is a result of the average
investment portfolio balance being $2,503,756 greater for the six month period
ended June 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 $64,242 or 103.2% to $126,520 for the six month period ended
June 30, 1997 as compared to $62,278 for the six month period ended June 30,
1996. Average short term overnight fund balances were 104.8% greater during the
six months ended June 30, 1997 as compared to the same period in the prior year.
Interest expense during the six months ended June 30, 1997 was $626,362 with an
average rate paid on interest-bearing liabilities of 4.29% as compared to
$304,988 and 4.30% during the six months ended June 30, 1996. The primary reason
for the increase in interest expense was that average interest-bearing
liabilities were $15,207,637 greater for the six months ended June 30, 1997 as
compared to the six months ended June 30, 1996.
Provision and Allowance for Loan Losses
The provision for loan losses was $97,000 and $65,000 for six months
ended June 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 1.25% at June 30, 1997. The Company had no nonperforming
loans at June 30, 1997. Charge-offs during six months ended June 30, 1997,
amounted to $10,112 as compared to $9,705 for the same period in the prior year.
Loans past due greater than 30 days amounted to $9,000 and there were no loans
greater than 60 days past due at June 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 addtional allocations to the
allowance will not be required.
Noninterest Income and Expense
Noninterest income during the six months ended June 30, 1997, was
$116,676 as compared to $45,388 for the six months ended June 30, 1996. This was
primarily a result of increased income from deposit service charges of $54,184
(193.4%), resulting from the increase
<PAGE> 11
ITEM 2. CONTINUED PAGE 3
in deposit balances during the comparable periods. Other income during the six
months ended June 30, 1997 was $19,605 as compared to $6,911 during the same
period in the prior year. This increase is primarily due to an increase in
cutomer check sales income of approximately $1,400 increases in bankcard fee
income of approximately $2,500 and increased loan late charge income of $3,800.
Noninterest expense amounted to $763,632 as compared to $632,852 during
the six months ended June 30, 1997 and 1996, respectively. Salary and employee
benefits increased $75,296 or 22.1% in the six months ended June 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 as compared to the
first quarter of 1996. Occupancy expense decreased from $79,188 for the six
months ended June 30, 1996 to $58,300 for the six months ended June 30, 1997.
This decrease is a result of reduced cost related to the move in the Lexington
office to the permanent facility. During the first quarter of 1996 the cost of
the temporary facility were being depreciated over a short time period and
resulted in higher depreciation expense during that period. Equipment expense
increased from $48,870 for the six months June 30, 1996 to $67,277 for the
six months ended June 30, 1997. This increase is primarily due to increased
maintenance contract expense of approximately $17,000 on computer hardware and
software equipment which was initially under warranty for the first twelve
months after being purchased. Marketing and public relations expense increased
by $23,321 or 124.7% in the six months ended June 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 $34,644 or 23.8% in the six
months ended June 30, 1997 compared to the same period in the prior year. An
increase in computer service bureau expense of $8,800, correspondent bank
charges of $2,900, supplies of $6,600 and contributions of $5,000 account for
the majority of the increase in other non-interest expense. The computer service
bureau expense, correspondent bank charges and supplies expense categories are
directly related to the numbers of accounts and the volume of activity, and have
increased due to the growth of the Bank for the six months ended June 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 June 30, 1997 to the
Three Months Ended June 30, 1996:
Net income for the second quarter of 1997 was $29,272 or $.04 per share
as compared to a loss of $91,029 or $.13 per share during the comparble period
in 1996. This improvement, as explained in the six months results, is due
to the significant increase in the level of earning assets during these two
periods. Average earning assets were $39,937,466 during the second quarter of
1997 as
<PAGE> 12
ITEM 2. CONTINUED PAGE 4
compared to $21,739,509 during the second quarter of 1996. The table on page 15
shows yield and rate data for interest-bearing balance sheet components during
the three month periods ended June 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 7.24% in the second quarter of 1996 to
7.65% in the second quarter of 1997. This increase is a result of loans
comprising 54.2% of earning assets during the second quarter of 1997 as compared
to 41.6% percent during the second quarter of 1996. The cost of interest bearing
liabilities was 4.25% in second quarter of 1996 as compared to 4.33% in the
second quarter of 1997. This increase is primarily due to an increase in the
rate paid on money market accounts during the second quarter of 1997, as a
result of a planned product campaign to promote these accounts.
Total non-interest income increased by $44,477 during the second
quarter of 1997 as compared to the comparable period in 1996. As explained in
the analysis of six 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 $12,171 during the
second quarter of 1997 as compared to $5,227 during the second quarter of 1996.
This increase is primarily a result of an increased emphasis on this source of
revenue as well as the introduction of a larger variety of products offered to
prospective customers.
Total non-interest expense increased by $80,173 in the second quarter
of 1997 as compared to the same quarter of 1996. This increase is primarily a
result of a $47,089 increase in salary and benefits expense and a $16,111
increase in marketing expense. As stated in the analysis of the six month
results the salary increase is a result of the addition of two full time and
one part time employees during the second quarter of 1997 as compared to the
second quarter of 1996. 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 $47,027,351 at June 30, 1997 as compared to $38,129,241
at December 31, 1996 an increase of $8,898,110 (23.3%). Loans grew by
$7,104,077 during the six months ended June 30, 1997 from $15,915,004 to
$23,019,081. This loan growth was funded by growth in deposits of $8,701,206
(28.2%) from $30,900,824 at December 31, 1996 to $39,602,030 at June 30, 1997.
The balance of the deposit growth was primarily used to fund an increase in
investment securities available-for-sale of $1,162,073 from $9,213,248 at
December 31, 1996 to $10,375,321 at June 30, 1997. The loan to deposit ratio at
June 30, 1997 was 57.4% 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.
<PAGE> 13
ITEM 2. CONTINUED PAGE 5
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 32.6% of total assets at June 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 for 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 June 30, 1997 the amount of certificates of
deposits of $100,000 or more represented 18.4% of total deposits. These
deposits are issued to local customers, many of which have other product
relationships with the Bank, and none 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 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 June 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
17.07%, 18.05% and 11.30%, respectively at June 30, 1997. This compares to
required OCC regulatory capital guidelines for Tier 1capital, 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> 14
FIRST COMMUNITY CORPORATION
YIELDS ON AVERAGE EARNING ASSETS AND RATES
ON AVERAGE INTEREST-BEARING LIABILITIES
<TABLE>
<CAPTION>
Six months ended June 30, 1997 Six months ended June 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 $19,665,301 913,310 9.37% $ 7,481,877 $352,208 9.44%
Securities:
Taxable 12,969,969 375,419 5.84% 10,466,213 303,240 5.81%
Federal funds sold and securities purchased
under agreements to resell 4,748,367 126,520 5.37% 2,318,044 62,278 5.39%
---------------------------------- -----------------------------------
Total earning assets 37,383,637 1,415,249 7.63% 20,266,134 717,726 7.10%
---------------------------------- -----------------------------------
Cash and due from banks 1,320,793 751,815
Premises and equipment 2,733,170 1,704,757
Other assets 323,334 235,048
Allowance for loan losses (231,822) (105,562)
----------- ------------
Total assets $41,529,112 $22,852,192
=========== ===========
LIABILITIES
Interest-bearing liabilities
Interest-bearing transaction accounts 3,756,939 27,896 1.50% 1,786,267 13,036 1.46%
Money market accounts 3,150,669 66,148 4.23% 1,473,233 23,716 3.23%
Savings deposits 6,504,897 124,669 3.86% 2,275,635 43,123 3.80%
Time deposits 14,365,942 371,653 5.22% 7,575,838 201,188 5.33%
Other short term borrowings 1,639,761 35,996 4.43% 1,099,598 23,925 4.36%
---------------------------------- -----------------------------------
Total interest-bearing liabilities 29,418,208 626,362 4.29% 14,210,571 304,988 4.30%
---------------------------------- -----------------------------------
Demand deposits 6,086,192 2,556,256
Other liabilities 242,901 144,544
Shareholders' equity 5,781,811 5,940,821
----------- -----------
Total liabilities and shareholders' equity $41,529,112 $22,852,192
=========== ===========
Net interest spread 3.34% 2.80%
Net interest income/margin $ 788,887 4.26% $412,738 4.08%
========== ========
</TABLE>
<PAGE> 15
FIRST COMMUNITY CORPORATION
YIELDS ON AVERAGE EARNING ASSETS AND RATES
ON AVERAGE INTEREST-BEARING LIABILITIES
<TABLE>
<CAPTION>
Three months ended June 30, 1997 Three months ended June 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 $21,653,245 502,086 9.30% $ 9,047,634 $210,446 9.33%
Securities:
Taxable 12,490,869 181,625 5.83% 10,418,863 151,566 5.83%
Federal funds sold and securities purchased
under agreements to resell 5,793,352 78,281 5.42% 2,273,012 30,436 5.37%
------------------------------ --------------------------------
Total earning assets 39,937,466 761,992 7.65% 21,739,509 392,448 7.24%
------------------------------ --------------------------------
Cash and due from banks 1,391,210 887,644
Premises and equipment 2,845,207 1,796,527
Other assets 337,205 229,392
Allowance for loan losses (250,921) (121,560)
----------- ===========
Total assets $44,260,167 $24,531,512
=========== ===========
LIABILITIES
Interest-bearing liabilities
Interest-bearing transaction accounts 4,249,611 15,855 1.50% 2,204,509 8,298 1.51%
Money market accounts 3,693,647 40,804 4.43% 1,427,619 11,356 3.19%
Savings deposits 6,751,383 65,113 3.87% 2,565,356 25,126 3.93%
Time deposits 15,400,565 201,721 5.25% 8,246,204 108,169 5.26%
Other short term borrowings 2,074,102 23,499 4.54% 1,078,707 11,496 4.27%
------------------------------ -------------------------------
Total interest-bearing liabilities 32,169,308 346,992 4.33% 15,522,395 164,445 4.25%
------------------------------ -------------------------------
Demand deposits 6,073,158 3,042,806
Other liabilities 239,642 157,102
Shareholders' equity 5,778,059 5,809,209
----------- -----------
Total liabilities and shareholders' equity $44,260,167 $24,531,512
=========== ===========
Net interest spread 3.33% 2.99%
Net interest income/margin $415,000 4.17% $228,003 4.21%
======== ========
</TABLE>
<PAGE> 16
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) On May 22, 1997, a former employee of the Company exercised
options for the Common Stock, resulting in the issuance of 1,600 shares of the
Common Stock. The options had an exercise price of $10 per share and thus the
Company received $16,000. The Common Stock issued pursuant to the exercise of
the options represent unregistered securities, which issuance was considered to
be exempt from registration under the Securities Act of 1933 pursuant to
Section 4(2) as a transaction by an issuer not involving any public offering.
(b) Not applicable
ITEM 3. DEFAULTS UPON SENIOR SECURITIES.
Not Applicable
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
The Annual Meeting of Shareholders was held on April 16, 1997.
The following five directors were elected at the meeting:
<TABLE>
<CAPTION>
VOTES
-------------------------------------
For Against/Withheld
--- ----------------
<S> <C> <C>
William L. Boyd, III 412,937 0
Chimin J. Chao 412,937 0
William A. Jordan 412,937 0
James C. Leventis 412,937 0
Loretta R. Whitehead 412,687 250
</TABLE>
The following twelve Directors term of office continued after the
meeting:
Richard K. Bogan, M.D. Geoge H. Fann, Jr.
Thomas C. Brown O. A. Ethridge
Robert G. Clawson W. James Kitchens
Michael C. Crapps Broadus Thompson
Hinton G. Davis Angelo L. Tsiantis
Anita B. Easter Mitchell Willoughby
<PAGE> 17
ITEM 5. OTHER INFORMATION.
None
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
(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).
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) *Denotes executive
compensation contract or arrangement.
27 Financial Data Schedule (for SEC use only)
(b) Reports on Form 8-K.
There were no reports on Form 8-K filed by the Company during
the quarter ended June 30, 1997
<PAGE> 18
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: August 12, 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 FOR THE SIX MONTHS ENDED JUNE 30, 1997 CONTAINED IN FORM 10QSB AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH 10QSB.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> JUN-30-1997
<CASH> 2,981,415
<INT-BEARING-DEPOSITS> 0
<FED-FUNDS-SOLD> 4,973,055
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 10,375,321
<INVESTMENTS-CARRYING> 2,600,000
<INVESTMENTS-MARKET> 2,568,148
<LOANS> 23,019,081
<ALLOWANCE> 287,748
<TOTAL-ASSETS> 47,027,351
<DEPOSITS> 39,602,030
<SHORT-TERM> 1,324,479
<LIABILITIES-OTHER> 260,818
<LONG-TERM> 0
0
0
<COMMON> 689,677
<OTHER-SE> 5,150,347
<TOTAL-LIABILITIES-AND-EQUITY> 47,027,351
<INTEREST-LOAN> 913,310
<INTEREST-INVEST> 375,419
<INTEREST-OTHER> 126,520
<INTEREST-TOTAL> 1,415,249
<INTEREST-DEPOSIT> 590,366
<INTEREST-EXPENSE> 626,362
<INTEREST-INCOME-NET> 788,887
<LOAN-LOSSES> 97,000
<SECURITIES-GAINS> 0
<EXPENSE-OTHER> 763,632
<INCOME-PRETAX> 44,931
<INCOME-PRE-EXTRAORDINARY> 44,931
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 44,931
<EPS-PRIMARY> 0.07
<EPS-DILUTED> 0
<YIELD-ACTUAL> 4.26
<LOANS-NON> 0
<LOANS-PAST> 0
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 200,860
<CHARGE-OFFS> 10,112
<RECOVERIES> 0
<ALLOWANCE-CLOSE> 287,748
<ALLOWANCE-DOMESTIC> 287,748
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
