LEXINGTON, S.C., Oct. 21, 2026 /PRNewswire/ -- Today, First Community Corporation (Nasdaq: FCCO), the holding company for First Community Bank, announced earnings and discussed the results of operations and the company's activities during the third quarter of 2026.

Highlights for the third quarter of 2026 include:

• Net income of $8.044 million during the third quarter of 2026, an increase of 54.9% year-over-year and 5.9% on a linked quarter basis.  Net income excluding the after-tax effect of merger expenses¹ during the third quarter of 2026 of $8.123 million, an increase of 44.3% year-over-year and 1.8%, on a linked quarter basis. 
• Net income for the nine months ended September 30, 2026 of $21.137 million, a 47.0% increase over the same time period in 2025.  Net income for the nine months ended September 30, 2026, excluding the after-tax effect of merger expenses¹, of $22.857 million, an increase of 52.5% year-over-year. 
• Diluted EPS of $0.85 per common share during the third quarter of 2026, an increase of 26.9% year-over-year and 6.3% on a linked quarter basis. Diluted EPS for the third quarter of 2026, excluding the after-tax effect of merger expenses¹ of $0.86, an increase of 19.4% year-over-year and 2.4% on a linked quarter basis.
• Diluted EPS of $2.24 per common share for the nine months ended September 30, 2026, an increase of 21.1% over the same time period in 2025.  Diluted EPS excluding the after-tax effect of merger expenses¹ of $2.42 for the nine months ended September 30, 2026, an increase of 25.4% over the same time period in 2025. 
• Net interest margin, on a tax equivalent basis, of 3.59%, an expansion of eight basis points compared to the second quarter of 2026.  This is the tenth consecutive quarter of margin expansion.
• Total loans were $1.610 billion at September 30, 2026 with growth of $32.1 million during the quarter, an annualized growth rate of 8.1%.  Year-to-date loan growth through September 30, 2026 is $299.4 million.  This growth includes $195.7 million related to the acquisition of Signature Bank of Georgia.  Excluding the impact of the day one Signature Bank acquisition balances, organic loan growth was $103.7 million during the first nine months of 2026 which represents a 10.6% annualized growth rate.
• Shareholders equity to total assets was 9.74% at September 30, 2026, compared to 8.14% at December 31, 2025.  Capital ratios including the Tangible Common Shareholders' Equity to Tangible Assets¹ (TCE) and the Leverage ratio increased to 8.50% and 9.52%, respectively, from 7.47% and 8.66%, respectively, at December 31, 2025.
• Key credit quality metrics continue to be strong with net charge-offs, including overdrafts, during the third quarter of 2026 of $9 thousand; net loan recoveries, excluding overdrafts, during the quarter of $5 thousand; non-performing assets of 0.04%; and past due loans of 0.27% at September 30, 2026.
• Investment advisory revenue of $2.605 million, an increase of 39.9% year-over-year and 14.0% on a linked quarter basis.  Year to date investment advisory revenue of $7.162 million, an increase of 32.2% over the same time period in 2025.  Assets under management (AUM) were $1.404 billion at September 30, 2026, compared to $1.378 billion at June 30, 2026, $1.170 billion at December 31, 2025, and $1.103 billion at September 30, 2025. 
• Cash dividend of $0.17 per common share, the 99^th consecutive quarter of cash dividends paid to common shareholders.

Earnings

Net income for the third quarter of 2026 was $8.044 million with diluted earnings per common share of $0.85.  This compares to net income and diluted earnings per common share of $5.192 million and $0.67, respectively, year-over-year and $7.595 million and $0.80, respectively, on a linked quarter basis.  Net income excluding the after-tax effect of merger expenses¹ was $8.123 million, an increase of 44.3% year-over-year and 1.8%, on a linked quarter basis.  Diluted EPS excluding the after-tax effect of merger expenses¹ was $0.86, an increase of 19.4% year-over-year and 2.4% on a linked quarter basis. Results reported include the impact of the acquisition of Signature Bank of Georgia, which closed on January 8, 2026.

Year-to-date through September 30, 2026, net income was $21.137 million compared to $14.375 million during the first nine months of 2025. Diluted earnings per share for the first nine months of 2026 were $2.24 compared to $1.85 during the same time period in 2025.  Net income year-to-date, excluding the after-tax effect of merger expenses¹, was $22.857 million, an increase of 52.5% year-over-year.  Diluted EPS year-to-date, excluding the after-tax effect of merger expenses¹, was $2.42, an increase of 25.4% year-over-year. Results reported include the impact of the acquisition of Signature Bank of Georgia, which closed on January 8, 2026.

Cash Dividend and Capital

The Board of Directors has approved a cash dividend for the third quarter of 2026 of $0.17 per common share.  This dividend is payable on November 17, 2026 to shareholders of record of the company's common stock as of November 3, 2026.  First Community Corporation CEO and President, Mike Crapps commented, "The entire board is pleased that our performance enables the company to continue its cash dividend for the 99^th consecutive quarter." 

Each of the regulatory capital ratios for the bank exceeds the well capitalized levels under applicable regulatory requirements. At September 30, 2026, the bank's regulatory capital ratios, Leverage, Tier 1 Risk Based and Total Risk Based, were 9.52%, 13.23%, and 14.37%, respectively.  This compares to the same ratios as of September 30, 2025 of 8.55%, 13.10%, and 14.15%, respectively. As of September 30, 2026, the bank's Common Equity Tier 1 ratio was 13.23% compared to 13.10% at September 30, 2025.  The company's shareholders' equity to total assets was 9.74% at September 30, 2026 compared to 8.14% at December 31, 2025 and 7.82% as of September 30, 2025.  The company's tangible common shareholders' equity to tangible assets¹ (TCE) was 8.50% at September 30, 2026 compared to 7.47% at December 31, 2025 and 7.15% as of September 30, 2025. 

Book value per common share was $24.49 at September 30, 2026, compared to $21.78 at December 31, 2025, and $21.01 at September 30, 2025.  Tangible Book Value (TBV) per share¹ increased during the quarter to $21.09 per share at September 30, 2026, from $19.84 per share as of December 31, 2025, and $19.06 per share at September 30, 2025. 

On May 7, 2026, the company announced that it had approved a plan to utilize up to $7.5 million of capital to repurchase shares of the company's common stock, which represents approximately 3.3% of total shareholders' equity as of September 30, 2026.  Under the repurchase plan, the company may repurchase shares from time to time, through May 7, 2027.  While the company did not repurchase any shares during the third quarter of 2026, the repurchase plan provides capital management opportunities for the company in the future. 

Loan Portfolio Quality/Allowance for Credit Losses

We believe the company's asset quality remains strong.  The non-performing assets (NPAs) were 0.04% of total assets at September 30, 2026, with $990 thousand in NPAs, which compares to 0.04% and $887 thousand, respectively, at June 30, 2026.  The past due ratio for all loans was 0.27% at September 30, 2026 compared to 0.26% at June 30, 2026.  During the third quarter of 2026, the bank had net charge-offs, including overdrafts, of $9 thousand and net loan recoveries, excluding overdrafts, of $5 thousand.  Year-to-date through September 30, 2026, the company had net charge-offs, including overdrafts, of $35 thousand and net loan recoveries, excluding overdrafts, of $12 thousand. The ratio of classified loans plus Other Real Estate Owned (OREO) is 2.45% of total bank regulatory risk-based capital at September 30, 2026, and substandard loans were $5.9 million at September 30, 2026 compared to $1.3 million at December 31, 2025.  The provision for credit losses was $193 thousand in the third quarter of 2026, and the allowance for credit losses on loans was $18.703 million, or 1.16% of total loans at September 30, 2026.   

Balance Sheet  

Total loans increased during the third quarter of 2026 by $32.1 million to $1.610 billion at September 30, 2026, a linked quarter annualized growth rate of 8.1%. Commercial loan production was $53.3 million during the third quarter of 2026. There were also advances of unfunded commercial construction loans of $17.9 million during the third quarter of 2026.  Offsetting some of this loan growth were loan payoffs and paydowns in the third quarter of 2026 which were down approximately 16.9% compared to the second quarter of 2026. 

The yield on the loan portfolio was 6.08% in the third quarter of 2026 as compared to 6.02% in the second quarter of 2026.  Purchase accounting amortization on the acquired Signature Bank of Georgia loan portfolio resulted in amortization expense of $143 thousand during the third quarter of 2026, thus reducing the loan portfolio yield by 0.04% during the third quarter.  This compares to amortization expense of $178 thousand in the second quarter of the year and $437 thousand in the first quarter of the year, which reduced the loan portfolio yield by 0.05% and 0.12%, respectively.

Total deposits were $2.005 billion at September 30, 2026 compared to $2.025 billion at June 30, 2026.  Securities sold under agreements to repurchase, which are related to customer cash management accounts or business sweep accounts, were $101.5 million at September 30, 2026 compared to $96.5 million at June 30, 2026. Average total deposits plus securities sold under agreements to repurchase were basically flat in the third quarter at $2.119 billion as compared to $2.120 billion in the second quarter.  Pure deposits, which are defined as total deposits less certificates of deposit, were $1.695 billion at September 30, 2026 compared to $1.702 billion at June 30, 2026.  Average pure deposits were basically flat in the third quarter at $1.699 billion as compared to $1.697 billion in the second quarter of the year.  Non-interest-bearing deposits were $534.1 million or 26.6% of total deposits at September 30, 2026 compared to $527.9 million or 26.1% of total deposits at June 30, 2026.  The average balance per customer deposit account as of September 30, 2026 was $33,893, with the average balance per consumer account of $17,657 and per non-consumer account of $72,690. We believe these metrics reflect the granularity and the quality of the bank's deposit franchise.  Cost of deposits remained unchanged from the second quarter of 2026 at 1.76% in the third quarter of 2026.  Cost of funds also remained unchanged on a linked quarter basis at 1.82% in the third quarter of 2026. 

The bank has other short-term investments, primarily interest-bearing cash at the Federal Reserve Bank, of $107.5 million at September 30, 2026 compared to $130.5 million at June 30, 2026.  The investment portfolio was $516.0 million at September 30, 2026 compared to $510.8 million at June 30, 2026.  The yield increased to 3.36% during the third quarter of 2026 as compared to 3.33% in the second quarter of 2026.  The effective duration of the total investment portfolio is 3.5 at September 30, 2026.  Accumulated Other Comprehensive Loss (AOCL) was $22.9 million at September 30, 2026 compared to $18.2 million at June 30, 2026, with the increase attributable to an increase in market interest rates.

Net Interest Income/Net Interest Margin

Net interest income was $20.238 million in the third quarter of 2026 compared to $19.501 million in the second quarter of 2026 and $15.994 million in the third quarter of 2025.  Year-to-date net interest income is $58.108 million compared to $45.708 million during the first nine months of 2025.  The net interest margin, on a tax equivalent basis, was 3.59% for the third quarter of 2026 compared to 3.51% in the second quarter of 2026 and 3.27% in the third quarter of 2025.  This tenth consecutive quarter of margin expansion was driven by a combination of factors including improved loan portfolio yield, the growth in the loan portfolio which resulted in a better earning asset mix, while cost of deposits and cost of funds remained unchanged.  Loans as a percent of earning assets were 71.9% at September 30, 2026 compared to 70.7% at June 30, 2026.  Purchase accounting amortization on the acquired Signature Bank of Georgia loan portfolio resulted in amortization expense of $143 thousand during the third quarter of 2026, thus reducing net interest margin by 0.03% during the quarter.  This compares to amortization expense of $178 thousand in the second quarter of the year and $437 thousand in the first quarter of the year, which reduced net interest margin by 0.03% and 0.08%, respectively.  Cost of deposits and cost of funds remained unchanged on a linked quarter basis at 1.76% and 1.82%, respectively.  

Non-Interest Income

Non-interest income for the third quarter of 2026 was $5.988 million, compared to $5.637 million in the second quarter of 2026 and $4.469 million in the third quarter of 2025, an increase of 6.2% and 34.0%, respectively. Third quarter 2026 non-interest income includes $797 thousand of non-recurring income related to an SBA loan settlement gain on an SBA loan that was previously charged off by Signature Bank of Georgia prior to its acquisition by First Community. Year-to-date non-interest income was $16.415 million as of September 30, 2026 compared to $12.657 million during the first nine months of 2025, an increase of 29.7%.

Total production in the mortgage line of business in the third quarter of 2026 was $45.9 million which was comprised of $23.0 million in fixed rate loans sold in the secondary market, $7.6 million in adjustable rate mortgages (ARMs), and $15.3 million in construction loans.  Total fee revenue in the mortgage line of business was $614 thousand in the third quarter of 2026, which includes $608 thousand associated with the fixed rate loans sold in the secondary market with a gain-on-sale margin of 2.65%.  This compares to production year-over-year of $51.6 million which was comprised of $32.0 million in fixed rate loans sold in the secondary market, $4.2 million in ARMs, and $15.4 million in construction loans during the third quarter of 2025.  Fee revenue associated with the fixed rate loans sold in the secondary market in the third quarter of 2025 was $931 thousand with a gain-on-sale margin of 2.91%.  

Revenue from the financial planning and investment advisory line of business was $2.605 million for the third quarter of 2026 compared to $2.286 million in the second quarter of 2026 and $1.862 million in the third quarter of 2025.  Assets Under Management (AUM) were $1.404 billion at September 30, 2026, compared to $1.378 billion at June 30, 2026, and $1.103 billion at September 30, 2025. 

Total fee revenue from the Government Guaranteed Lending line of business was $534 thousand in the third quarter of 2026 compared to $704 thousand in the second quarter of the year.  Production in this line of business in the third quarter of 2026 included $16.480 million in SBA loans compared to the second quarter of the year with production of $16.140 million in SBA loans.  During the third quarter of 2026, the company sold $5.10 million in loans, which resulted in a premium of $426 thousand and a gain-on-sale margin of 8.36%.  This compares to the second quarter of the year with $8.94 million in loans sold for a premium of $671 thousand and a gain-on-sale margin of 7.50%.   

Non-Interest Expense

Non-interest expense was $15.630 million in the third quarter of 2026 compared to $15.273 million in the second quarter of the year.  Marketing and public relations expenses were up $245 thousand on a linked quarter basis due to the planned expansion of media buys during the third quarter. Other expenses were up $341 thousand in the third quarter which was primarily driven by the previously disclosed reversal of a merger related accrual in the amount of $270 thousand in the second quarter of the year.  On a linked quarter, Merger expense was down $399 thousand to only $104 thousand in the third quarter.  In addition, during the third quarter, there was an $86 thousand write down in Other Real Estate (ORE), which leaves a balance of only $83 thousand in total ORE for the bank remaining as of September 30, 2026.   

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 services, residential mortgage lending, financial planning/investment advisory services, and SBA/USDA lending.  First Community serves customers in the Midlands, Aiken, Upstate and Piedmont Regions of South Carolina as well as Augusta and Atlanta, Georgia.  For more information, visit www.firstcommunitybankers.com.

FORWARD-LOOKING STATEMENT
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", "plans", "positions", "future", "forward", or other statements that indicate future periods.  Forward-looking statements are subject to risks, uncertainties, or other factors that could cause actual results to differ materially from those anticipated.  Such risks, uncertainties and other factors, include, among others, the following: (1) the risk that anticipated cost savings or other expected benefits of the acquisition of Signature Bank of Georgia may not be realized; (2) potential disruption to client or employee relationships as a result of the acquisition of Signature Bank of Georgia; (3) competitive pressures among depository and other financial institutions may increase significantly and have an effect on pricing, spending, third-party relationships and revenues; (4) 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; (5) the rate of delinquencies and amounts of charge-offs, the level of allowance for credit 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; (6) changes in legislation, regulation, policies or administrative practices, whether by judicial, governmental, or legislative action; (7) adverse conditions in the stock market, the public debt markets and other capital markets (including changes in interest rate conditions), which could continue to have a negative impact on the company; (8) changes in interest rates, which have and may continue to affect our deposit and funding costs, net income, prepayment penalty income, mortgage banking income, and other future cash flows, or the market value of our assets, including our investment securities; (9) 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; (10) elevated inflation which causes adverse risk to the overall economy, and could indirectly pose challenges to our customers and to our business; (11) any increases in FDIC assessment which has increased, and may continue to increase, our cost of doing business; (12) the adverse effects of events beyond our control that may have a destabilizing effect on financial markets and the economy, such as epidemics and pandemics, war or terrorist activities, essential utility outages, government shutdowns, deterioration in the global economy, instability in the credit markets, disruptions in our customers' supply chains or disruptions in transportation; (13) risks associated with the planned and previously announced leadership transition, including the ability to retain key employees, maintain client relationships, and successfully integrate new executive responsibilities; and (14) 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.

 

 

 

 

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

 

 

 

 

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 income excluding the after-tax effect of merger expenses," "Diluted earnings per common share excluding the after-tax effect of merger expenses." 

• "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 income excluding the after-tax effect of merger expenses" is defined as net income plus merger expenses less income taxes on merger expenses.  For purposes of our non-GAAP reconciliation, deductible merger expenses were tax-effected at our marginal tax rate of 23.84%, while non-deductible merger-related costs were tax-effected at 0%. The after-tax adjustment represents the combination of these two components.
• "Diluted earnings per common share excluding the after-tax effect of merger expenses" is defined as ((net income plus merger expenses less income taxes on merger expenses) divided by the average number of diluted shares outstanding).  For purposes of our non-GAAP reconciliation, deductible merger expenses were tax-effected at our marginal tax rate of 23.84%, while non-deductible merger-related costs were tax-effected at 0%. The after-tax adjustment represents the combination of these two components.

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.

 

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SOURCE First Community Corporation