First Community (FCCO) Q2 2024 earnings summary

Executive summary

• Net income for Q2 2024 was $3.3 million ($0.42 diluted EPS), up 25.7% sequentially but down slightly year-over-year, with YTD net income at $5.9 million ($0.76 diluted EPS), reflecting higher provision for credit losses and non-interest expense, offset by higher net interest and non-interest income, and lower tax expense.

• Total assets grew 3.1% since year-end to $1.9 billion, driven by loan growth and higher interest-bearing bank balances.

• Net interest margin (tax equivalent) expanded to 2.93% in Q2 2024, up 14 basis points from Q1 2024 but down 8 basis points year-over-year.

• Board approved an increased cash dividend of $0.15 per share for Q2 2024, marking the 90th consecutive quarter of dividends.

• Announced a $7.1 million share repurchase plan, representing 5.3% of total shareholders' equity; no shares repurchased yet under the new plan.

Financial highlights

• Net interest income for Q2 2024 increased to $12.7 million, up 4.6% year-over-year and from Q1 2024, with net interest margin at 2.92%.

• Provision for credit losses was $454,000 in Q2 2024, up from $186,000 in Q2 2023, mainly due to loan growth and changes in portfolio life.

• Non-interest income rose to $3.642 million in Q2 2024, a 14.4% increase from Q1 2024 and 19.4% year-over-year, led by mortgage banking and investment advisory fees.

• Non-interest expense increased to $11.843 million in Q2 2024, primarily from higher salaries, FDIC assessments, and other real estate expense.

• Allowance for credit losses on loans was $12.9 million (1.09% of loans) at June 30, 2024.

Outlook and guidance

• Management expects to remain well-capitalized and maintain strong liquidity and capital positions for at least the next 12 months.

• The company anticipates continued focus on growing core deposits, managing funding costs, and maintaining asset quality amid a high interest rate environment.

• The share repurchase plan and cost savings from the Augusta, GA office closure provide flexibility for future capital management.

• No material changes to risk factors or forward-looking statements since the last annual report.