10-Q 1 form10q-111405.htm 111405

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q

(Mark One)  

[X] Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for the
  quarterly period ended:   September 30, 2005

[   ] Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for the transition period
from ___________ to _____________

Commission file number 000-28344

FIRST COMMUNITY CORPORATION
(Exact name of registrant as specified in its charter)

               South Carolina                                   57-1010751               
(State of Incorporation)     (I.R.S. Employer Identification No.)

5455 Sunset Boulevard, Lexington, South Carolina 29072
(Address of Principal Executive Offices)

(803) 951-2265
(Registrant's Telephone Number, Including Area Code)

(Former Name, Former Address and Former Fiscal Year, if Changed Since Last Report)

        Indicated by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 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      

        Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act).
Yes        No  X  

        Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Yes        No  X  

        Indicate the number of shares outstanding of each of the issuer’s classes of common equity, as of the latest practicable date:

2,846,978 shares of common stock, par value $1.00 per share, were issued and outstanding as of October 31, 2005

TABLE OF CONTENTS

PART I – FINANCIAL INFORMATION
Item 1.  Financial Statements.
                    Consolidated Balance Sheets
                    Consolidated Statements of Income
                    Consolidated Statements of Shareholders' Equity and Comprehensive Income (loss)
                    Consolidated Statements of Cash Flows
                    Notes to Consolidated Financial Statements
Item 2.  Managements Discussion and Analysis of Financial Condition and Results of Operations
Item 3.  Quantitative and Qualitative Disclosures About Market Risk
Item 4.  Controls and Procedures

PART II – OTHER INFORMATION
Item 1.  Legal Proceedings
Item 2.  Unregistered Sales of Equity Securities and Use of Proceeds
Item 3.  Defaults Upon Securities
Item 4.  Submission of Matters to a Vote of Security Holders
Item 5.  Other Information
Item 6.  Exhibits
INDEX TO EXHIBITS
SIGNATURES



2

PART 1 – FINANCIAL INFORMATION
Item 1.  Financial Statements

FIRST COMMUNITY CORPORATION
CONSOLIDATED BALANCE SHEETS

September 30, December 31,
2005
2004
                                    ASSETS            
Cash and due from banks     $ 9,786,540   $ 9,391,494  
Interest-bearing bank balances       226,348     803,426  
Federal funds sold and securities purchased under            
  agreements to resell       5,005,234     9,130,725  
Investment securities - available for sale       176,525,647     190,010,307  
Investment securities - held-to-maturity ( market value of            
  $5,802,304 and $6,147,698 at September 30, 2005 and            
  December 31, 2004, respectively)       5,720,222     6,015,745  
Loans       211,052,057     186,771,344  
Less, allowance for loan losses       2,715,012     2,763,988  
   Net loans       208,337,045     184,007,356  
Property, furniture and equipment - net       14,824,510     14,313,090  
Goodwill       24,256,020     24,256,020  
Intangible assets       2,915,760     3,361,815  
Other assets       15,936,960     14,416,034  
    Total assets     $ 463,534,286   $ 455,706,012  
LIABILITIES            
Deposits:            
  Non-interest bearing demand     $ 57,376,974   $ 49,519,816  
  NOW and money market accounts       89,968,924     98,846,828  
  Savings       32,795,163     35,370,267  
  Time deposits less than $100,000       100,242,197     100,629,304  
  Time deposits $100,000 and over       55,452,687     52,698,069  
     Total deposits       335,835,945     337,064,284  
Securities sold under agreements to repurchase       12,861,700     7,549,900  
Federal Home Loan Bank Advances       45,446,715     42,452,122  
Long-term debt, trust preferred securities       15,464,000     15,464,000  
Other borrowed money       159,680     184,593  
Other liabilities       2,888,830     2,528,424  
    Total liabilities       412,656,870     405,243,323  
            SHAREHOLDERS' EQUITY            
Preferred stock, par value $1.00 per share; 10,000,000            
      shares authorized; none issued and outstanding            
Common stock, par value $1.00 per share; 10,000,000 shares            
    shares authorized; issued and outstanding 2,841,728 at            
   September 30, 2005 and 2,788,902 at December 31, 2004       2,841,728     2,788,902  
Additional paid in capital       42,284,777     41,832,090  
Retained earnings       8,528,512     6,712,849  
Unrealized loss on securities available-for-sale       (2,777,601 )   (871,152 )
    Total shareholders' equity       50,877,416     50,462,689  
    Total liabilities and shareholders' equity     $ 463,534,286   $ 455,706,012  

3

FIRST COMMUNITY CORPORATION
CONSOLIDATED STATEMENTS OF INCOME

Nine Months Ended Nine Months Ended
September 30, 2005 September 30, 2004
(Unaudited)
(Unaudited)
Interest income:            
  Loans, including fees     $ 9,787,455   $ 6,195,367  
  Investment securities       5,583,709     1,641,388  
  Federal funds sold and securities purchased            
    under resale agreements       139,371     171,511  
  Other       32,401     846  
       Total interest income       15,542,936     8,009,112  
Interest expense:            
  Deposits       3,959,893     1,681,577  
  Federal funds sold and securities sold under agreement            
   to repurchase       165,237     21,846  
  Other borrowed money       1,782,072     108,724  
      Total interest expense       5,907,202     1,812,147  
Net interest income       9,635,734     6,196,965  
Provision for loan losses       217,000     170,000  
Net interest income after provision for loan losses       9,418,734     6,026,965  
Non-interest income:            
  Deposit service charges       922,194     596,113  
  Mortgage origination fees       284,337     203,282  
  Gain on sale of securities       188,418     -  
  Other       756,614     422,296  
      Total non-interest income       2,151,563     1,221,691  
Non-interest expense:            
  Salaries and employee benefits       4,663,773     2,764,684  
  Occupancy       567,745     318,053  
  Equipment       936,710     678,035  
  Marketing and public relations       255,800     235,066  
  Amortization of intangibles       446,056     133,585  
  Other       1,697,311     1,076,662  
      Total non-interest expense       8,567,395     5,206,085  
Income before taxes       3,002,902     2,042,571  
Income taxes       764,155     696,850  
      Net income     $ 2,238,747   $ 1,345,721  
Basic earnings per common share     $ 0.79   $ 0.84  
Diluted earnings per common share     $ 0.76   $ 0.80  

4

FIRST COMMUNITY CORPORATION
CONSOLIDATED STATEMENTS OF INCOME

Three Months Ended Three Months Ended
September 30, 2005 September 30, 2004
(Unaudited)
(Unaudited)
Interest Income:            
  Loans, including fees     $ 3,494,563   $ 2,160,088  
  Investment securities       1,897,386     597,951  
  Federal funds sold and securities purchased            
    under resale agreements       32,801     80,582  
  Other       9,386     11,690  
       Total interest income       5,434,136     2,850,311  
Interest expense:            
  Deposits       1,507,203     620,465  
  Federal funds sold and securities sold under            
   agreement to repurchase       81,600     9,467  
  Other borrowed money       638,939     53,314  
      Total interest expense       2,227,742     683,246  
Net interest income       3,206,394     2,167,065  
Provision for loan losses       79,000     40,000  
Net interest income after provision for loan losses       3,127,394     2,127,065  
Non-interest income:            
  Deposit service charges       335,735     199,838  
  Mortgage origination fees       113,552     70,855  
  Other       332,301     149,702  
      Total non-interest income       781,588     420,395  
Non-interest expense:            
  Salaries and employee benefits       1,633,433     965,274  
  Occupancy       195,369     110,186  
  Equipment       285,643     232,636  
  Marketing and public relations       84,636     54,292  
  Amortization of intangibles       148,685     44,528  
  Other       566,433     393,222  
      Total non-interest expense       2,914,199     1,800,138  
Income before tax       994,783     747,322  
Income tax       243,125     254,050  
     Net income     $ 751,658   $ 493,272  
Basic earnings per common share     $ 0.26   $ 0.31  
Diluted earnings per common share     $ 0.25   $ 0.29  

5

FIRST COMMUNITY CORPORATION
Statement of Changes in Shareholder’s Equity and Comprehensive Income (Loss)
Nine Months ended September 30, 2005 and September 30, 2004

Accumulated
Additional Other
Shares Common Paid-in Retained Comprehensive
Issued
Stock
Capital
Earnings
Income (l