First Community Corporation, the holding company for First Community Bank, reported net income for the first quarter of 2018 of $2.71 million as compared to $1.76 million in the first quarter of 2017.  Diluted earnings per common share were $0.35 for the first quarter of 2018 as compared to $0.26 for the first quarter of 2017.

First Community President and CEO, Mike Crapps, commented, "We are thrilled with the performance across all metrics and lines of business.  Led by tremendous loan growth of $21.8 million in the first quarter, an annualized growth rate of 13.5%, the momentum has continued from the strong fourth quarter of 2017 which had $18.2 million in organic loan growth, a 12.5% annualized growth rate.  Growth in pure deposits continues to be an area of strength for our company as well with $32.1 million in growth in the first quarter, a 17.2% annualized growth rate.  This growth is coupled with continued excellent credit quality and strong growth in net interest margin.  In addition we are pleased with the performance of our mortgage and financial planning areas as we continue to leverage these lines of business." 

During the quarter, the bank opened a new banking office in downtown Augusta, Georgia at 771 Broad Street. In addition, the bank has since filed an application with regulators to open an additional banking office in Evans, Georgia.  As reported previously, the bank also plans to continue expansion in the Upstate of South Carolina with a search underway for a banking office location in the downtown Greenville area.    

Cash Dividend and Capital

The Board of Directors has approved a cash dividend for the first quarter of 2018.  The company will pay a $0.10 per share dividend to holders of the company's common stock.  This dividend is payable May 14, 2018 to shareholders of record as of April 30, 2018.  Mr. Crapps commented, "Our entire board is pleased that our performance enables the company to continue its cash dividend for the 65^th consecutive quarter." 

Each of the regulatory capital ratios (Leverage, Tier I Risk Based and Total Risk Based) exceed the well capitalized minimum levels currently required by regulatory statute.  At March 31, 2018, the company's regulatory capital ratios (Leverage, Tier I Risk Based and Total Risk Based) were 10.18%, 13.90%, and 14.69%, respectively.  This compares to the same ratios as of March 31, 2017 of 10.21%, 14.66%, and 15.51%, respectively.  Additionally, the regulatory capital ratios for the company's wholly owned subsidiary, First Community Bank, were 9.74%, 13.31%, and 14.10%, respectively, as of March 31, 2018.  Further, the company's ratio of tangible common equity to tangible assets was 8.40% as of March 31, 2018.  As of March 31, 2018, the Common Equity Tier One ratio is 12.00% for the company and 13.31% for the bank.  

Asset Quality

Key credit quality metrics continue to be excellent.  There was a net loan recovery for the quarter of $21 thousand.  The non-performing assets ratio, at 0.47% of total assets, is an area of strength for the company and is a decrease from 0.51% at December 31, 2017.  Non-accrual loans decreased 8.4% on a linked quarter basis to $3.1 million.  Other Real Estate Owned (OREO) balances remained relatively flat during the quarter at $1.9 million.  The ratio of classified loans plus OREO now stands at 8.34% of total regulatory risk-based capital as of March 31, 2018 down from 8.86% at December 31, 2017.  Loans past due 30-89 days were $3.3 million or 0.49% of loans this quarter. 

Revenue

Net Interest Income/Net Interest Margin

Net interest income was $8.534 million for the first quarter of 2018, an increase on a linked quarter basis of $476 thousand or 5.9%  compared to fourth quarter 2017 net interest income of $8.058 million.  Year-over-year, net interest income increased $1.473 million or 20.9% compared to first quarter 2017 net interest income of $7,061.  First quarter 2018 net interest margin, on a tax equivalent basis, was 3.66%, an increase compared to the net interest margin of 3.54% in the fourth quarter of 2017 and 3.52% in the first quarter of 2017. 

Non-Interest Income

Non-interest income, adjusted for securities gains and losses and the early extinguishment of debt, was $2.733 million in the first quarter of 2018, an increase of $189 thousand or 7.4% on a linked quarter basis compared to non-interest income adjusted for securities gains and the loss on the early extinguishment of debt of $2.544 million in the fourth quarter of 2017.  Year-over-year, non-interest income increased $751 thousand or 37.9% compared to $1.982 million in the first quarter of 2017.  Income from the mortgage line of business was $951 thousand in the first quarter of 2018, an increase of $281 thousand or 41.9% year-over-year and $123 thousand or 14.9% on a linked quarter basis.  Income from the financial planning and investment advisory line of business was $383 thousand for the quarter, flat on a linked quarter basis and an increase of $125 thousand or 48.4% year-over-year.  Total assets under management in this unit are $271.5 million at March 31, 2018 compared to $214.0 million at March 31, 2017, an increase year-over-year of $57.5 million or 26.9%.

Non-Interest Expense

Non-interest expense decreased on a linked quarter basis to $7.6 million from $8.4 million in the fourth quarter of 2017.  The majority of the decrease was in merger expenses related to the acquisition of Cornerstone National Bank and in marketing expense which was lower in the first quarter due to a planned delay in media advertising which began in March.  Income tax expense was positively impacted in the first quarter of 2018 by the Tax Cuts and Jobs Act of 2017.

First Community Corporation common 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 operates twenty banking offices located in the Midlands, Upstate and Aiken, South Carolina and Augusta, Georgia.  The bank also has two other lines of business, First Community Bank Mortgage and First Community Financial Consultants, a financial planning/investment advisory division.