PR Newswire | Oct 20, 2021 09:02AM EDT

and Cash Dividend

10/20 08:00 CDT

First Community Corporation Announces Record Earnings, Third Quarter Results and Cash Dividend LEXINGTON, S.C., Oct. 20, 2021

LEXINGTON, S.C., Oct. 20, 2021 /PRNewswire/ --

Highlights for Third Quarter of 2021

* Net income of $4.748 million, an increase of 79.0% year-over-year and 34.0% linked quarter. * Pre-tax pre-provision earnings of $6.115 million, up 41.8% year-over year and 32.0% linked quarter. * Diluted EPS of $0.63 per common share for the quarter and $1.53 year-to-date through September 30, 2021. * Total loans, excluding Paycheck Protection Program or PPP loans, increased during the third quarter by $41.3 million, an annualized growth rate of 19.9%. * Pure deposit growth, including customer cash management, during the third quarter of $44.7 million, an annualized growth rate of 14.6%. * Investment advisory line of business revenue of $1.040 million, an increase of 54.8% year-over-year and 8.7% linked quarter. * Net interest margin on a tax equivalent basis including PPP loans of 3.47%, excluding PPP loans 3.08% * Strong credit quality metrics with non-performing assets (NPAs) ratio of 0.10%, past due ratio of 0.03% and net loan recovery excluding overdrafts of $354 thousand during the third quarter, with a year-to-date net recovery of $259 thousand. * Cash dividend of $0.12 per common share, which is the 79th consecutive quarter of cash dividends paid to common shareholders.

Today, First Community Corporation (Nasdaq: FCCO), the holding company for First Community Bank, reported net income for the third quarter of 2021 of $4.748 million as compared to $2.652 million in the third quarter of 2020, an increase of 79.0%. Diluted earnings per common share were $0.63 for the third quarter of 2021 as compared to $0.35 for the third quarter of 2020. On a linked quarter basis, net income increased 34.0% from $3.543 million in the second quarter of 2021 and diluted earnings per common share increased from $0.47. Pre-tax pre-provision earnings or PTPPE in the third quarter of 2021 were $6.115 million compared to third quarter of 2020 PTPPE of $4.312 million and second quarter 2021 PTPPE of $4.632 million, an increase of 41.8% and 32.0% respectively.

Year-to-date through September 30, 2021 net income was $11.546 million compared to $6.663 million during the first nine months of 2020. Diluted earnings per share for the first nine months of 2021 were $1.53, compared to $0.89 during the same time period in 2020. Year-to-date through September 30, 2021 PTPPE were $15.070 million compared to $11.618 million during the first nine months of 2020, an increase of 29.7%.

Cash Dividend and Capital

The Board of Directors approved a cash dividend for the third quarter of 2021. The company will pay a $0.12 per share dividend to holders of the company's common stock. This dividend is payable November 16, 2021 to shareholders of record as of November 2, 2021. Mike Crapps, First Community President and CEO, commented, "Our entire board is pleased that our performance enables the company to continue its cash dividend for the 79th consecutive quarter."

On April 12, 2021, the Company announced that its Board of Directors approved the repurchase of up to 375,000 shares of its common stock, which represents approximately 5% of the Company's 7,540,332 shares outstanding as of September 30, 2021. Under the repurchase plan, the Company may repurchase shares from time to time. No share repurchases have been made under the plan as of September 30, 2021. Mr. Crapps noted, "This approved share repurchase plan provides us with some flexibility in managing capital going forward."

Each of the regulatory capital ratios for the bank exceed the well capitalized minimum levels currently required by regulatory statute. At September 30, 2021, the bank's regulatory capital ratios (Leverage, Tier I Risk Based and Total Risk Based) were 8.56%, 13.58%, and 14.74%, respectively. This compares to the same ratios as of September 30, 2020 of 8.95%, 12.96%, and 14.08%, respectively. As of September 30, 2021, the bank's Common Equity Tier I ratio was 13.58% compared to 12.96% at September 30, 2020. Further, the company's Tangible Common Equity to Tangible Assets ratio was 8.00% as of September 30, 2021 compared to 8.60% as of September 30, 2020.

Asset Quality / Allowance for Loan and Lease Losses

Asset quality metrics remained extremely strong as of September 30, 2021. The non-performing assets ratio for the third quarter was 0.10% of total assets and a total past due ratio of 0.03%. Net loan recoveries excluding overdrafts for the quarter were $354 thousand and the year-to-date through September 30, 2021 net recovery was $259 thousand. The ratio of classified loans plus OREO now stands at 6.5% of total bank regulatory risk-based capital as of September 30, 2021. The one large loan relationship previously discussed as negatively impacting these metrics was resolved during the quarter.

Balance Sheet

Total loans, excluding PPP loans, increased during the third quarter by $41.3 million which is an annualized growth rate of 19.9%. Non-PPP loan growth during the third quarter was the result of increased production and manageable levels of payoffs on a linked quarter basis. Commercial loan production was $70.5 million during the third quarter of 2021 compared to $61.1 million in the second quarter of 2021 and $46.1 million in the third quarter of 2020.

As of September 30, 2021, the bank had remaining $9.1 million in PPP loans and an additional $1.8 million in a related credit facility on the balance sheet. Mr. Crapps noted, "As a community bank committed to the success of local businesses, we were pleased to be able to support our customers with access to the PPP funding. We are now working with our customers through the SBA forgiveness process with $38.1 million forgiven in the third quarter of this year. By year end, we expect the remaining PPP loan portfolio on our balance sheet to be immaterial."

Total deposits were $1.334 billion at September 30, 2021 compared to $1.290 billion at June 30, 2021. Pure deposits, which are defined as total deposits less certificates of deposits, increased $45.4 million or 3.9% to $1.208 billion at September 30, 2021 from $1.162 billion at June 30, 2021. Securities sold under agreements to repurchase, which are related to customer cash management accounts or business sweep accounts, were $59.8 million at September 30, 2021, down slightly from $60.5 million at June 30, 2021. Costs of deposits decreased on a linked quarter basis to 0.12% in the third quarter of 2021 from 0.14% in the second quarter of the year. Cost of funds also decreased on a linked quarter basis to 0.15% in the third quarter of 2021 from 0.17% in the second quarter of the year. Mr. Crapps commented, "A strength of our bank has been and continues to be our low-cost deposit base. During 2021, we have continued to grow pure deposits while at the same time working to reduce our cost of deposits."

Revenue

Net Interest Income/Net Interest Margin

Net interest income increased $1.364 million or 12.3% to $12.456 million for the third quarter of 2021 compared to second quarter net interest income of $11.092 million. Year-over-year, net interest income increased $2.280 million or 22.4% from $10.176 million in the third quarter of 2020. Third quarter net interest margin, on a tax equivalent basis, was 3.47% compared to net interest margin of 3.20% in the second quarter. Third quarter net interest margin, excluding PPP loans, on a tax equivalent basis, was 3.08% compared to 3.11% in the second quarter. During the third quarter of 2021, the bank benefitted from $1.561 million in accretion of net deferred PPP loan fees due to the previously referenced reduction in PPP loans. Additionally, primarily due to the resolution of the previously mentioned loan relationship, the bank collected interest income of approximately $140 thousand this quarter.

Non-Interest Income

Total non-interest income increased 13.7% on a linked quarter basis, to $3.564 million in the third quarter of 2021 from $3.418 million in the second quarter. In the third quarter, the bank benefitted from other non-recurring non-interest income of $47 thousand from the collection of a summary judgment related to a loan charged off at a bank, which the company subsequently acquired. Year-over-year, non-interest income, adjusted for securities gains and losses and other non-recurring income, increased 2.2% from $3.440 million in the third quarter of 2020.

Revenues in the mortgage line of business were basically flat on a linked quarter basis at $1.147 million in the third quarter compared to $1.143 million in the second quarter of the year and down 18.2% year-over-year. Mortgage loan production decreased 4.5 % on a linked quarter and 43.3% year-over-year largely due to a large decrease in the number of refinance loans. Improvements in the gain-on-sale margin helped offset the lower production volume.

Revenue in the investment advisory line of business increased 54.8% year-over-year and 8.7% on a linked quarter with $1.040 million in the third quarter of 2021 compared to $672 thousand in the third quarter of 2020 and $957 thousand in the second quarter of 2021. Assets under management (AUM), were $588.6 million at September 30, 2021 up from $577.5 million at June 30, 2021 and $501.0 million at December 31,2020. Mr. Crapps commented, "Our strategy of multiple revenue streams continues to serve us well as we focus our efforts to accelerate growth in these lines of business. We are pleased with the activity and momentum in each of our business units."

Non-Interest Expense

Non-interest expense was $9.905 million in the third quarter of 2021, up just $27 thousand over the second quarter of 2021. As expected, Other expense, which was higher in the second quarter of the year due to some non-recurring expenses including legal fees associated with a loan relationship, was down $299 thousand on a linked quarter basis. During the third quarter, the bank received reimbursement of $153 thousand of these legal fees paid in the second quarter due to the resolution of the loan relationship. Salaries and benefits expense increased $446 thousand on a linked quarter basis, with nearly all of the increase attributable to two items, increased incentive plan accruals related to higher performance and results year-to-date and a lower credit for deferred loan costs in the third quarter. Marketing and public relations expense decreased $173 thousand due to a lighter media schedule during the summer months. FDIC insurance expense increased $43 thousand due to a higher assessment base and a higher assessment rate related to a decrease in the bank's leverage ratio due to an increase in assets.

About First Community Corporation

First Community Corporation stock trades on the NASDAQ Capital Market under the symbol "FCCO" and is the holding company for First Community Bank, a local community bank based in the Midlands of South Carolina. First Community Bank is a full-service commercial bank offering deposit and loan products and series, residential mortgage lending and financial planning/investment advisory services for businesses and consumers. First Community serves customers in the Midlands, Aiken, and Greenville, South Carolina markets as well as Augusta, Georgia. For more information, visit www.firstcommunitysc.com.

FORWARD-LOOKING STATEMENTS

This news release and certain statements by our management may contain "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, such as statements relating to future plans, goals, projections and expectations, and are thus prospective. Forward looking statements can be identified by words such as "anticipate", "expects", "intends", "believes", "may", "likely", "will" or other statements that indicate future periods. Such forward-looking statements are subject to risks, uncertainties, and other factors which could cause actual results to differ materially from future results expressed or implied by such forward-looking statements. Such risks, uncertainties and other factors, include, among others, the following: (1) competitive pressures among depository and other financial institutions may increase significantly and have an effect on pricing, spending, third-party relationships and revenues; (2) the strength of the United States economy in general and the strength of the local economies in which we conduct operations may be different than expected including, but not limited to, due to the negative impacts and disruptions resulting from the outbreak of the novel coronavirus, or COVID-19, on the economies and communities we serve, which has had and may continue to have an adverse impact on our business, operations, and performance, and could continue to have a negative impact on our credit portfolio, share price, borrowers, and on the economy as a whole both domestically and globally; (3) the rate of delinquencies and amounts of charge-offs, the level of allowance for loan loss, the rates of loan growth, or adverse changes in asset quality in our loan portfolio, which may result in increased credit risk-related losses and expenses; (4) changes in legislation, regulation, policies or administrative practices, whether by judicial, governmental, or legislative action, (5) adverse conditions in the stock market, the public debt markets and other capital markets (including changes in interest rate conditions) could have a negative impact on the company; (6) technology and cybersecurity risks, including potential business disruptions, reputational risks, and financial losses, associated with potential attacks on or failures by our computer systems and computer systems of our vendors and other third parties; and (7) risks, uncertainties and other factors disclosed in our most recent Annual Report on Form 10-K filed with the SEC, or in any of our Quarterly Reports on Form 10-Q or Current Reports on Form 8-K filed with the SEC since the end of the fiscal year covered by our most recently filed Annual Report on Form 10-K, which are available at the SEC's Internet site ( http://www.sec.gov).

Although we believe that the assumptions underlying the forward-looking statements are reasonable, any of the assumptions could prove to be inaccurate. We can give no assurance that the results contemplated in the forward-looking statements will be realized. The inclusion of this forward-looking information should not be construed as a representation by our company or any person that the future events, plans, or expectations contemplated by our company will be achieved. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise, except as required by law.

FIRST COMMUNITY CORPORATION

BALANCE SHEET DATA

(Dollars in thousands, except per sharedata)

As of

September 30, June 30, December 31, September 30,

2021 2021 2020 2020

Total $ 1,560,326 $ 1,514,973 $ 1,395,382 $ 1,381,804Assets

OtherShort-term 55,259 52,316 46,062 106,231Investmentsand CD's^1

Investment 515,260 470,669 361,919 295,525Securities

Loans Held 6,213 11,416 45,020 37,587for Sale

Loans

PaycheckProtection 9,109 47,229 42,242 49,799Program (PPP)Loans

Non-PPP 872,411 831,089 801,915 794,661Loans

Total Loans 881,520 878,318 844,157 844,460

Allowancefor Loan 11,025 10,638 10,389 10,113Losses

Goodwill 14,637 14,637 14,637 14,637

Other 959 1,011 1,120 1,188Intangibles

Total 1,333,568 1,289,883 1,189,413 1,173,551Deposits

SecuritiesSold Under 59,821 60,487 40,914 47,142Agreements toRepurchase

Federal HomeLoan Bank - - - -Advances

JuniorSubordinated 14,964 14,964 14,964 14,964Debt

Shareholders' 139,113 137,927 136,337 133,244Equity

Book Value $ $ $ $ Per Common 18.44 18.29 18.18 17.78Share

Tangible $ $ $ $ Book Value Per 16.37 16.22 16.08 15.67Common Share

Equity to 8.92% 9.10% 9.77% 9.64%Assets

TangibleCommon Equity 8.00% 8.16% 8.74% 8.60%to TangibleAssets

Loan to Deposit Ratio(Includes Loans Held for 66.57% 68.98% 74.76% 75.16%Sale)

Loan to Deposit Ratio(Excludes Loans Held for 66.10% 68.09% 70.97% 71.96%Sale)

Allowancefor Loan 1.25% 1.21% 1.23% 1.20%Losses/Loans

RegulatoryCapitalRatios(Bank):

Leverage 8.56% 8.48% 8.84% 8.95%Ratio

Tier 1 13.58% 13.52% 12.83% 12.96%Capital Ratio

Total 14.74% 14.66% 13.94% 14.08%Capital Ratio

CommonEquity Tier 1 13.58% 13.52% 12.83% 12.96%Capital Ratio

Tier 1 $ $ $ $ Regulatory 129,741 125,732 120,385 117,700Capital

Total $ $ $ $ Regulatory 140,766 136,370 130,774 127,813Capital

Common $ $ $ $ Equity Tier 1 129,741 125,732 120,385 117,700Capital

^1 Includes federal funds sold, securities sold under agreement to resell andinterest-bearing deposits

Average Three months ended Nine months endedBalances:

September 30, September 30,

2021 2020 2021 2020

Average $ 1,542,820 $ 1,345,109 $ 1,495,657 $ 1,263,865Total Assets

AverageLoans(Includes 893,888 868,096 891,987 815,724Loans Held forSale)

AverageEarning 1,440,961 1,248,607 1,395,123 1,165,980Assets

Average 1,312,565 1,136,977 1,268,965 1,055,778Deposits

AverageOther 77,840 63,312 77,179 67,504Borrowings

AverageShareholders' 140,404 131,737 137,087 127,388Equity

Asset As of Quality:

September 30, June 30, March 30, December 31, September 30,

2021 2021 2021 2020 2020

Loan RiskRating byCategory (Endof Period)

Special $ $ $ $ $ Mention 2,851 3,085 3,507 7,757 4,977

Substandard 7,992 11,707 12,136 7,810 5,082

Doubtful - - - - -

Pass 870,677 863,526 853,423 828,590 834,401

$ $ $ $ $ 881,520 878,318 869,066 844,157 844,460

NonperformingAssets

Non-accrual $ $ $ $ $ Loans 359 3,986 4,521 4,562 1,656

Other RealEstate Ownedand 1,165 1,182 1,076 1,201 1,313RepossessedAssets

AccruingLoans Past Due - 4,165 - 1,260 3490 Days orMore

Total $ $ $ $ $ Nonperforming 1,524 9,333 5,597 7,023 3,003Assets

Accruing $ $ $ $ $ Trouble Debt 1,474 1,510 1,515 1,552 1,568Restructurings

Three months ended Nine months ended

September 30, September 30,

2021 2020 2021 2020

Loans $ $ $ $ Charged-off - 8 127 24

Overdrafts 20 17 39 49Charged-off

Loan (354) (126) (386) (146)Recoveries

Overdraft (4) (14) (23) (26)Recoveries

Net $ $ $ $ Charge-offs (338) (115) (243) (99)(Recoveries)

NetCharge-offs -0.15% -0.05% -0.04% -0.02%to AverageLoans^2

^2 Annualized

FIRST COMMUNITY CORPORATION

INCOME STATEMENT DATA

(Dollars in thousands, except per share data)

Three months ended Three months ended Three months ended Nine months ended

September 30, June 30, March 31, September 30,

2021 2020 2021 2020 2021 2020 2021 2020

Interest income $ 12,982 $ 10,976 $ 11,664 $ 10,666 $ 11,218 $ 10,710 $ 35,864 $ 32,352

Interest expense 526 800 572 923 651 1,293 1,749 3,016

Net interest income 12,456 10,176 11,092 9,743 10,567 9,417 34,115 29,336

Provision for loan 49 1,062 168 1,250 177 1,075 394 3,387losses

Net interest income 12,407 9,114 10,924 8,493 10,390 8,342 33,721 25,949after provision

Non-interest income

Deposit service 257 242 212 210 246 399 715 851charges

Mortgage banking 1,147 1,403 1,143 1,572 990 982 3,280 3,957income

Investment advisoryfees and non-deposit 1,040 672 957 671 877 634 2,874 1,977commissions

Gain (loss) on sale of - 99 - - - - - 99securities

Gain (loss) on sale of 13 141 - - 77 6 90 147other assets

Non-recurring BOLI - 311 - - - - - 311income

Other non-recurring 47 - - - 100 147income

Other 1,060 982 1,106 934 1,006 907 3,172 2,823

Total non-interest 3,564 3,850 3,418 3,387 3,296 2,928 10,278 10,165income

Non-interest expense

Salaries and employee 6,394 6,087 5,948 5,840 5,964 5,653 18,306 17,580benefits

Occupancy 743 736 734 679 730 643 2,207 2,058

Equipment 336 318 338 298 275 318 949 934

Marketing and public 140 342 313 247 396 354 849 943relations

FDIC assessment 189 137 146 88 169 42 504 267

Other real estate 58 79 55 40 29 35 142 154expenses

Amortization of 52 95 52 95 57 105 161 295intangibles

Other 1,993 1,920 2,292 1,844 1,920 1,888 6,205 5,652

Total non-interest 9,905 9,714 9,878 9,131 9,540 9,038 29,323 27,883expense

Income before taxes 6,066 3,250 4,464 2,749 4,146 2,232 14,676 8,231

Income tax expense 1,318 598 921 532 891 438 3,130 1,568

Net income $ 4,748 $ 2,652 $ 3,543 $ 2,217 $ 3,255 $ 1,794 $ 11,546 $ 6,663

Per share data

Net income, basic $ 0.63 $ 0.36 $ 0.47 $ 0.30 $ 0.44 $ 0.24 $ 1.54 $ 0.90

Net income, diluted $ 0.63 $ 0.35 $ 0.47 $ 0.30 $ 0.43 $ 0.24 $ 1.53 $ 0.89

Average number of shares 7,498,832 7,457,750 7,485,625 7,435,933 7,475,522 7,427,257 7,486,746 7,440,376outstanding - basic

Average number of shares 7,555,998 7,481,568 7,537,179 7,465,212 7,522,568 7,472,956 7,540,332 7,474,906outstanding - diluted

Shares outstanding 7,544,374 7,492,908 7,539,587 7,486,151 7,524,944 7,462,247 7,544,374 7,492,908period end

Return on average assets 1.22% 0.78% 0.94% 0.70% 0.92% 0.61% 1.03% 0.70%

Return on average common 13.42% 8.01% 10.51% 7.03% 9.74% 5.84% 11.26% 6.99%equity

Return on average common 15.10% 9.11% 11.89% 8.04% 11.01% 6.72% 12.71% 7.99%tangible equity

Net interest margin (non 3.43% 3.24% 3.17% 3.35% 3.20% 3.52% 3.27% 3.36%taxable equivalent)

Net interest margin 3.47% 3.28% 3.20% 3.38% 3.23% 3.55% 3.30% 3.39%(taxable equivalent)

Efficiency ratio^1 61.56% 71.53% 67.50% 69.00% 69.16% 72.79% 65.87% 71.07%

^1 Calculated by dividing non-interest expense by net interest income on taxequivalent basis and non interest income, excluding gain on sale of otherassets and other non-recurring noninterest income.

FIRST COMMUNITY CORPORATION

Yields on Average Earning Assets and

Rates on Average Interest-Bearing Liabilities

Three months ended September 30, 2021 Three months ended September 30, 2020

Average Interest Yield/ Average Interest Yield /

Balance Earned/Paid Rate Balance Earned/Paid Rate

Assets

Earning assets

Loans

PPP loans $ 31,936 $ 1,646 20.45% $ 49,203 $ 360 2.91%

Non-PPP 861,952 9,310 4.29% 818,893 9,048 4.40%loans

Total loans 893,888 10,956 4.86% 868,096 9,408 4.31%

Securities 488,526 1,995 1.62% 299,858 1,525 2.02%

Othershort-term 58,547 31 0.21% 80,653 43 0.21%investments andCD's

Total earning 1,440,961 12,982 3.57% 1,248,607 10,976 3.50%assets

Cash and due 24,903 15,568from banks

Premises and 33,747 34,721equipment

Goodwill andother 15,621 15,872intangibles

Other assets 38,376 39,751

Allowance for (10,788) (9,410)loan losses

Total assets $ 1,542,820 $ 1,345,109

Liabilities

Interest-bearingliabilities

Interest-bearing $ 306,108 $ 43 0.06% $ 256,990 $ 57 0.09%transactionaccounts

Money market 278,958 109 0.16% 228,502 146 0.25%accounts

Savings 139,540 20 0.06% 117,818 18 0.06%deposits

Time deposits 157,485 231 0.58% 166,070 438 1.05%

Other 77,840 123 0.63% 63,312 141 0.89%borrowings

Totalinterest-bearing 959,931 526 0.22% 832,692 800 0.38%liabilities

Demand deposits 430,474 367,597

Other 12,011 13,083liabilities

Shareholders' 140,404 131,737equity

Totalliabilities and $ 1,542,820 $ 1,345,109shareholders'equity

Cost ofdeposits, 0.12% 0.23%including demanddeposits

Cost of funds,including demand 0.15% 0.27%deposits

Net interest 3.35% 3.12%spread

Net interestincome/margin - $ 10,810 3.04% $ 9,816 3.26%excluding PPPloans

Net interestincome/margin - $ 12,456 3.43% $ 10,176 3.24%including PPPloans

Net interest income/margin (tax $ 10,939 3.08% $ 9,922 3.29%equivalent) - excl. PPP loans

Net interest income/margin (tax $ 12,585 3.47% $ 10,282 3.28%equivalent) - incl. PPP loans

FIRST COMMUNITY CORPORATION

Yields on Average Earning Assets and

Rates on Average Interest-Bearing Liabilities

Nine months ended September 30, 2021 Nine months ended September 30, 2020

Average Interest Yield Average Interest Yield / /

Balance Earned/Paid Rate Balance Earned/Paid Rate

Assets

Earning assets

Loans

PPP loans $ 47,605 $ 3,086 8.67% $ 27,088 $ 577 2.85%

Non-PPP 844,382 27,061 4.28% 788,636 26,677 4.52%loans

Total loans 891,987 30,147 4.52% 815,724 27,254 4.46%

Securities 431,332 5,623 1.74% 293,724 4,862 2.21%

Othershort-term 71,804 94 0.18% 56,532 236 0.56%investments andCD's

Total earning 1,395,123 35,864 3.44% 1,165,980 32,352 3.71%assets

Cash and due 22,844 15,142from banks

Premises and 34,065 34,853equipment

Goodwill andother 15,673 15,967intangibles

Other assets 38,581 39,975

Allowance for (10,629) (8,052)loan losses

Total assets $ 1,495,657 $ 1,263,865

Liabilities

Interest-bearingliabilities

Interest-bearing $ 296,430 152 0.07% $ 235,346 220 0.12%transactionaccounts

Money market 267,143 359 0.18% 210,212 674 0.43%accounts

Savings 132,700 58 0.06% 110,095 65 0.08%deposits

Time deposits 158,969 801 0.67% 167,150 1,456 1.16%

Other 77,179 379 0.66% 67,504 601 1.19%borrowings

Totalinterest-bearing 932,421 1,749 0.25% 790,307 3,016 0.51%liabilities

Demand deposits 413,723 332,975

Other 12,426 13,195liabilities

Shareholders' 137,087 127,388equity

Totalliabilities and $ 1,495,657 $ 1,263,865shareholders'equity

Cost ofdeposits, 0.14% 0.31%including demanddeposits

Cost of funds,including demand 0.17% 0.36%deposits

Net interest 3.19% 3.20%spread

Net interest income/margin - $ 31,029 3.08% $ 28,759 3.37%excluding PPP loans

Net interest income/margin - 34,115 3.27% 29,336 3.36%including PPP loans

Net interest income/margin (tax $ 31,389 3.11% $ 29,046 3.41%equivalent) - excl. PPP loans

Net interest income/margin (tax $ 34,475 3.30% $ 29,623 3.39%equivalent) - incl. PPP loans

The tables below provide a reconciliation of non-GAAP measures to GAAP for the periods indicated:

June 30, December 31, September 30, September 30,

Tangible book value per common share 2021 2021 2020 2020

Tangible common equity per common $ 16.37 $ 16.22 $ 16.08 $ 15.67share (non-GAAP)

Effect to adjust for intangible 2.07 2.07 2.10 2.11assets

Book value per common share (GAAP) $ 18.44 $ 18.29 $ 18.18 $ 17.78

Tangible common shareholders' equityto tangible assets

Tangible common equity to tangible 8.00 % 8.16 % 8.74 % 8.60 %assets (non-GAAP)

Effect to adjust for intangible 0.92 % 0.94 % 1.03 % 1.04 %assets

Common equity to assets (GAAP) 8.92 % 9.10 % 9.77 % 9.64 %

Return on average tangible common equity Three months ended Three months ended Three months ended Nine months ended September 30, June 30, March 31, September 30,

2021 2020 2021 2020 2021 2020 2021 2020

Return on average tangible common equity 15.10 % 9.11 % 11.89 % 8.04 % 11.01 % 6.72 % 12.71 % 7.99 %(non-GAAP)

Effect to adjust for intangible assets (1.68) % (1.10) % (1.38) % (1.01) % (1.27) % (0.88) % (1.45) % (1.00) %

Return on average common equity (GAAP) 13.42 % 8.01 % 10.51 % 7.03 % 9.74 % 5.84 % 11.26 % 6.99 %

Three months ended Nine months ended

September June September September 30, 30, 30, 30,

Pre-tax, pre-provision earnings 2021 2021 2020 2021 2020

Pre-tax, pre-provision earnings $ 6,115 $ 4,632 $ 4,312 $ 15,070 $ 11,618(non-GAAP)

Effect to adjust for pre-tax, (1,367) (1,089) (1,660) (3,524) (4,955)pre-provision earnings

Net Income (GAAP) $ 4,748 $ 3,543 $ 2,652 $ 11,546 $ 6,663

Three months ended Nine months ended

September 30, September 30,

Net interest margin excluding PPP Loans 2021 2020 2021 2020

Net interest margin excluding PPP loans 3.04% 3.26% 3.08% 3.37%(non-GAAP)

Effect to adjust for PPP loans 0.39 (0.02) 0.19 (0.01)

Net interest margin (GAAP) 3.43% 3.24% 3.27% 3.36%

Three months ended Nine months ended

September 30, September 30,

Net interest margin on a tax-equivalent 2021 2020 2021 2020basis excluding PPP Loans

Net interest margin on a tax-equivalent 3.08% 3.29% 3.11% 3.41%basis excluding PPP loans (non-GAAP)

Effect to adjust for PPP loans 0.39 (0.01) 0.19 (0.02)

Net interest margin on a tax equivalent 3.47% 3.28% 3.30% 3.39%basis (GAAP)

Annualized June 30, Growth September 30, Growth

Loans and loan growth 2021 2021 Dollars Rate

Non-PPP Loans andRelated Credit $ 870,608 829,086 41,522 19.9 %Facilities (non-GAAP)

PPP Related Credit 1,803 2,003 (200) (39.6) %Facilities

Non-PPP Loans (non-GAAP) $ 872,411 $ 831,089 $ 41,322 19.7 %

PPP Loans 9,109 47,229 (38,120) (320.2) %

Total Loans (GAAP) $ 881,520 $ 878,318 $ 3,202 1.4 %

Annualized December 31, Growth September 30, Growth

Loans and loan growth 2021 2020 Dollars Rate

Non-PPP Loans andRelated Credit $ 870,608 796,727 73,881 12.4 %Facilities (non-GAAP)

PPP Related Credit 1,803 5,188 (3,385) (87.2) %Facilities

Non-PPP Loans $ 872,411 $ 801,915 $ 70,496 11.8 %(non-GAAP)

PPP Loans 9,109 42,242 (33,133) (104.9) %

Total Loans (GAAP) $ 881,520 $ 844,157 $ 37,363 5.9 %

Certain financial information presented above is determined by methods other than in accordance with generally accepted accounting principles ("GAAP"). These non-GAAP financial measures include "Tangible book value per common share," "Tangible common shareholders' equity to tangible assets," "Return on average tangible common equity," "Pre-tax, pre-provision earnings," "Net interest margin excluding PPP Loans," "Net interest margin on a tax-equivalent basis excluding PPP Loans," "Non-PPP Loans and Related Credit Facilities," and "Non-PPP Loans."

* "Tangible book value per common share" is defined as total equity reduced by recorded intangible assets divided by total common shares outstanding. * "Tangible common shareholders' equity to tangible assets" is defined as total common equity reduced by recorded intangible assets divided by total assets reduced by recorded intangible assets. * "Return on average tangible common equity" is defined as net income on an annualized basis divided by average total equity reduced by average recorded intangible assets. * "Pre-tax, pre-provision earnings" is defined as net interest income plus non-interest income, reduced by non-interest expense. * "Net interest margin excluding PPP Loans" is defined as annualized net interest income less annualized interest income on PPP Loans divided by average earning assets less the average balance of PPP Loans. * "Net interest margin on a tax-equivalent basis excluding PPP Loans" is defined as annualized net interest income on a tax-equivalent basis less annualized interest income on PPP Loans divided by average earning assets less the average balance of PPP Loans. * "Non-PPP Loans and Related Credit Facilities" is defined as Total Loans less PPP Related Credit Facilities and PPP Loans. * "Non-PPP Loans" is defined as Total Loans less PPP Loans. * "Non-PPP Loans and Related Credit Facilities Growth - Dollars" is calculated by taking the difference between two time periods compared for Total Loans less PPP Loans and PPP Related Credit Facilities. "Non-PPP Loans and Related Credit Facilities - Annualized Growth Rate" is calculated by (i) dividing "Non-PPP Loans and Related Credit Facilities Loan Growth - Dollars" by the number of days between the two time periods compared (ii) times the number of days in the year (iii) divided by the prior time period Non-PPP Loans and Related Credit Facilities balance. * "Non-PPP Loans Growth - Dollars" is calculated by taking the difference between two time periods compared for Total Loans less PPP Loans. "Non-PPP Loans - Annualized Growth Rate" is calculated by (i) dividing "Non-PPP Loans Loan Growth - Dollars" by the number of days between the two time periods compared (ii) times the number of days in the year (iii) divided by the prior time period Non-PPP Loans balance.

Our management believes that these non-GAAP measures are useful because they enhance the ability of investors and management to evaluate and compare our operating results from period-to-period in a meaningful manner. Non-GAAP measures have limitations as analytical tools, and investors should not consider them in isolation or as a substitute for analysis of the company's results as reported under GAAP.

View original content to download multimedia: https://www.prnewswire.com/news-releases/first-community-corporation-announces-record-earnings-third-quarter-results-and-cash-dividend-301404458.html

SOURCE First Community Corporation