Breaking Down First Community Corporation (FCCO) Financial Health: Key Insights for Investors

Are you looking to diversify your investment portfolio with community bank stocks? Or perhaps you're already invested in First Community Corporation (FCCO) and want to ensure your investment is still sound? With a 34% return over the past year and trading near its 52-week high at $26.48, FCCO has demonstrated strong momentum. But what do the numbers really say about its financial health? Keep reading to explore key insights into FCCO's performance, including a net income of $13.955 million for the full year 2024, a significant deposit growth of 10.9%, and excellent asset quality metrics.

First Community Corporation (FCCO) Revenue Analysis

Analyzing First Community Corporation's (FCCO) financial health requires a detailed look into its revenue streams, growth, and segment contributions. Understanding these elements provides investors with key insights into the company's stability and potential.

Based on the most recent fiscal year data from 2024, First Community Corporation's revenue streams can be broken down to understand where the company's income is primarily generated.

• Net Interest Income: This is a crucial component, representing the difference between the revenue generated from interest-bearing assets (like loans) and the expenses associated with interest-bearing liabilities (like deposits).
• Non-Interest Income: This includes various fees and service charges, income from fiduciary activities, and other operational income sources.

Year-over-year revenue growth is a critical indicator of FCCO's performance. Examining historical trends allows for an informed perspective on whether the company is expanding, maintaining stability, or facing contraction.

To illustrate, let's consider a hypothetical but realistic scenario based on available financial data and trends:

Suppose First Community Corporation reported a total revenue of $150 million for the fiscal year 2023. For the fiscal year 2024, the reported revenue increased to $165 million. This reflects a year-over-year revenue growth rate of 10%.

Here’s a breakdown of how different business segments hypothetically contribute to the overall revenue, based on typical banking operations:

• Commercial Banking: Contributes approximately 60% of the total revenue, driven by loans to businesses and related services.
• Retail Banking: Accounts for about 30%, derived from consumer loans, deposit accounts, and transaction fees.
• Wealth Management: Makes up the remaining 10%, generated from managing assets, providing financial advice, and selling investment products.

Significant changes in revenue streams often signal strategic shifts or responses to market dynamics. Analyzing these changes helps investors understand the direction and adaptability of First Community Corporation.

Below is a sample table illustrating the hypothetical revenue contribution from different segments:

Understanding these revenue dynamics is crucial for investors. For more in-depth analysis, you can explore: Breaking Down First Community Corporation (FCCO) Financial Health: Key Insights for Investors.

First Community Corporation (FCCO) Profitability Metrics

Analyzing First Community Corporation's (FCCO) profitability involves looking at several key metrics that reveal how efficiently the company is operating and generating profits. These metrics include gross profit, operating profit, and net profit margins. By examining these figures, investors can gain insight into FCCO's financial health and its ability to sustain and grow its earnings.

Gross profit is the revenue a company makes after deducting the costs associated with producing and selling its products or services. The gross profit margin, calculated as gross profit divided by revenue, indicates how efficiently FCCO manages its production costs. A higher gross profit margin suggests that the company can control its costs effectively. Operating profit, on the other hand, is the profit earned from the company's core business operations, before interest and taxes. The operating profit margin, calculated as operating profit divided by revenue, reflects the company's ability to generate profit from its operations, taking into account both production costs and operating expenses. Net profit is the profit remaining after all expenses, including interest and taxes, have been deducted from revenue. The net profit margin, calculated as net profit divided by revenue, represents the percentage of revenue that ultimately becomes profit for the company. A higher net profit margin indicates that the company is efficient in managing all its expenses.

Trends in FCCO’s profitability over time can provide valuable insights. Consistent improvement in profit margins suggests effective management strategies and operational efficiencies. However, declining margins may signal rising costs, increased competition, or other challenges. Comparing FCCO's profitability ratios with industry averages is crucial for assessing its relative performance. If FCCO's margins are higher than the industry average, it could indicate a competitive advantage. Conversely, lower margins may suggest areas where the company needs to improve.

Operational efficiency is a critical driver of profitability. Effective cost management and favorable gross margin trends are indicative of a well-managed company. Investors should monitor these aspects closely to gauge FCCO's ability to maintain and enhance its profitability. Here are some key areas to consider:

• Cost of Goods Sold (COGS): Monitoring the costs directly tied to production can reveal how efficiently FCCO manages its resources.
• Operating Expenses: Keeping an eye on administrative and selling expenses can highlight areas where FCCO might be able to cut costs and improve profitability.
• Gross Margin Trends: Analyzing the trends in gross margin helps investors understand if FCCO is improving its production efficiency.

For additional insights into the company's values and long-term goals, consider exploring Mission Statement, Vision, & Core Values of First Community Corporation (FCCO).

First Community Corporation (FCCO) Debt vs. Equity Structure

Understanding how First Community Corporation (FCCO) manages its debt and equity is crucial for assessing its financial strategy and risk profile. This involves looking at the levels of debt, key ratios like debt-to-equity, and any recent financing activities.

As of December 31, 2024, First Community Corporation (FCCO) reported the following debt details:

• Total long-term debt: $47.23 million
• Total short-term debt: $1.5 million

The debt-to-equity ratio is a key metric to evaluate FCCO's financial leverage. As of December 31, 2024, FCCO's debt-to-equity ratio is approximately 0.20. This ratio is calculated by dividing the total liabilities by shareholders equity. This indicates that FCCO uses a relatively modest amount of debt compared to equity to finance its operations.

Here's a breakdown of FCCO's liabilities and equity as of December 31, 2024:

It’s also important to consider how FCCO’s debt-to-equity ratio compares to industry standards. The banking industry generally has moderate leverage, but specific comparisons would require analyzing peer institutions. A ratio of 0.20 suggests FCCO is conservatively financed relative to some of its peers, implying a lower risk profile from a leverage perspective.

Recent activities, such as new debt issuances or refinancing, can significantly impact the company’s capital structure. Reviewing recent financial statements and SEC filings would provide insights into any changes in FCCO’s debt profile. For instance, any recent credit ratings can offer an external assessment of FCCO's ability to manage its debt.

Balancing debt and equity is essential for sustainable growth. FCCO's approach to funding reflects its strategic decisions regarding risk and return. While debt can provide leverage and potentially increase returns on equity, it also introduces financial risk. Equity, on the other hand, provides a stable capital base without the obligation of fixed payments. The current debt-to-equity ratio suggests a balanced approach, leaning towards a more equity-based funding strategy.

To delve deeper into who is investing in First Community Corporation (FCCO) and their motivations, check out: Exploring First Community Corporation (FCCO) Investor Profile: Who’s Buying and Why?

First Community Corporation (FCCO) Liquidity and Solvency

Assessing a company's financial health involves a close look at its liquidity and solvency. Liquidity refers to the ability of a company to meet its short-term obligations, while solvency indicates its ability to meet long-term obligations. For investors in First Community Corporation (FCCO), understanding these aspects is crucial for informed decision-making. You can also check Mission Statement, Vision, & Core Values of First Community Corporation (FCCO).

Here's a breakdown of key areas to consider:

Assessing First Community Corporation's Liquidity:

• Current and Quick Ratios: These ratios provide a snapshot of First Community Corporation's ability to cover its short-term liabilities with its short-term assets. While specific current and quick ratios were not available in the provided search results, these metrics are fundamental in assessing liquidity positions.
• Analysis of Working Capital Trends: Examining the trend of working capital (current assets minus current liabilities) helps to understand the company's operational efficiency and short-term financial health.
• Cash Flow Statements Overview:
• Analyzing cash flow trends from operating, investing, and financing activities provides insights into how First Community Corporation generates and uses cash.
• Operating Activities: This reflects the cash generated from the company's core business operations.
• Investing Activities: This shows cash flow related to the purchase and sale of long-term assets.
• Financing Activities: This involves cash flow from debt, equity, and dividends.

Key figures from the cash flow statement for the year 2024:

Any potential liquidity concerns or strengths would be identified through a detailed review of these cash flow trends.

Capital Ratios:

First Community Corporation's capital ratios, which reflect its financial strength, are as follows:

• As of December 31, 2024, the bank's regulatory capital ratios were:
  • Leverage Ratio: 8.40%
  • Tier I Risk Based Ratio: 12.87%
  • Total Risk Based Ratio: 13.94%
  • Common Equity Tier I Ratio: 12.87% compared to 12.53% at December 31, 2023.

The tangible common equity to tangible assets ratio (TCE) was 6.66% as of December 31, 2024, compared to 6.39% as of December 31, 2023. The tangible book value (TBV) per share increased to $16.93 as of December 31, 2024, from $15.23 as of December 31, 2023.

Asset Quality:

First Community Corporation's asset quality remains strong. Key indicators include:

• Non-performing assets (NPAs) were 0.04% of total assets at December 31, 2024, amounting to $810 thousand.
• The past due ratio for all loans was 0.05% at year-end 2024.
• Net charge-offs for 2024 were $65 thousand.

The ratio of classified loans plus OREO stood at 1.06% of total bank regulatory risk-based capital as of December 31, 2024, compared to 1.24% at the end of 2023.

First Community Corporation (FCCO) Valuation Analysis

Determining whether First Community Corporation (FCCO) is overvalued or undervalued requires a look at several key financial metrics. Here's an overview of valuation indicators, stock performance, and analyst sentiment:

Valuation Ratios:

• Price-to-Earnings (P/E) Ratio: As of January 10, 2025, FCCO's P/E ratio is 13.1. This is above the 3-year average of 10.91 and the 5-year average of 11.1, but below the 10-year average of 14.18.
• Price-to-Book (P/B) Ratio: The P/B ratio as of March 21, 2025, is 1.18, a -5.01% change from its 12-month average of 1.24.
• Enterprise Value-to-EBITDA (EV/EBITDA): One source lists the EV/EBITDA as 6.6. Another source lists the Exit EBITDA Multiple (EV/EBITDA) as 8.747.

Stock Price Trends:

• First Community (FCCO) has seen a price change of -11.08% so far this year.
• As of April 14, the stock price was $20.98.
• The 52-week high is $27.96, while the 52-week low is $15.40.

Dividend Information:

• Dividend Yield: The forward dividend yield is approximately 2.86%.
• Annual Payout: The annual payout is $0.60 per share.
• Payout Ratio: The payout ratio is 32.34%.
• Dividend Growth: The company has increased its dividend 3 times in the past five years, with an average annual increase of 5.61%.

Analyst Consensus:

• The consensus rating from analysts is 'Buy'.
• Out of 5 analysts, 40% recommend a Strong Buy, 0% recommend Buy, and 60% suggest Holding.
• The average analyst price target is $29.33.

Additional Data:

For further insights, read Breaking Down First Community Corporation (FCCO) Financial Health: Key Insights for Investors.

First Community Corporation (FCCO) Risk Factors

Understanding the risk factors that First Community Corporation (FCCO) faces is crucial for investors looking to assess the bank's financial health and future prospects. These risks can be both internal and external, impacting the company's operations, financial performance, and strategic objectives.

Here's an overview of key risks impacting First Community Corporation’s (FCCO) financial health:

• Industry Competition: The financial services industry is highly competitive. FCCO faces competition from other community banks, regional banks, and larger national banks, as well as non-bank financial service providers. Increased competition can put pressure on interest rates, reduce loan volumes, and increase costs, thereby impacting profitability.
• Regulatory Changes: Banks are subject to extensive regulation at both the federal and state levels. Changes in regulations, such as capital requirements, lending restrictions, or consumer protection laws, can significantly affect FCCO's operations and compliance costs.
• Market Conditions: Economic downturns, changes in interest rates, and fluctuations in real estate values can all impact FCCO's financial performance. For example, rising interest rates can reduce demand for loans, while declining real estate values can increase the risk of loan defaults.

Operational, financial, and strategic risks highlighted in recent earnings reports or filings may include:

• Credit Risk: The risk that borrowers will default on their loans is a primary concern for any bank. FCCO needs to carefully manage its credit risk by implementing sound underwriting standards, diversifying its loan portfolio, and closely monitoring loan performance.
• Interest Rate Risk: Changes in interest rates can affect a bank's net interest income, which is the difference between the income it earns on loans and the interest it pays on deposits. FCCO needs to manage its exposure to interest rate risk by carefully matching the maturities of its assets and liabilities.
• Liquidity Risk: The risk that a bank will not have enough cash to meet its obligations is known as liquidity risk. FCCO needs to maintain adequate liquidity by holding sufficient cash reserves and having access to stable funding sources.
• Cybersecurity Risk: Banks are increasingly vulnerable to cyberattacks, which can result in financial losses, reputational damage, and regulatory penalties. FCCO needs to invest in robust cybersecurity measures to protect its systems and data.

Mitigation strategies or plans (if available):

While specific mitigation strategies are subject to change and are detailed in First Community Corporation's (FCCO) filings, banks generally employ several common strategies to manage these risks:

• Diversification: Diversifying the loan portfolio across different industries and geographic regions can reduce credit risk.
• Hedging: Using financial instruments to hedge against interest rate risk can help stabilize net interest income.
• Stress Testing: Conducting regular stress tests to assess the bank's ability to withstand adverse economic conditions can help identify vulnerabilities and improve risk management practices.
• Compliance Programs: Implementing robust compliance programs to ensure adherence to all applicable laws and regulations can help mitigate regulatory risk.

For more insights into First Community Corporation's (FCCO) financial health, you can explore: Breaking Down First Community Corporation (FCCO) Financial Health: Key Insights for Investors

First Community Corporation (FCCO) Growth Opportunities

First Community Corporation (FCCO) has demonstrated steady growth since its establishment in 1995. The company operates First Community Bank, offering services across South Carolina and northeast Georgia. FCCO's growth is supported by several key factors:

• Strategic Initiatives: FCCO focuses on expanding its regional footprint and enhancing banking technology to improve customer service and operational efficiency.
• Community Engagement: The company builds its reputation on understanding the unique needs of the markets it serves, ensuring tailored and responsive financial solutions.
• Risk Management: FCCO maintains a prudent approach to risk management, minimizing non-performing assets and safeguarding deposits to support long-term financial stability.

Here's a detailed look at the growth prospects for FCCO:

Analysis of Key Growth Drivers:

• Product Innovations: FCCO provides a comprehensive suite of commercial and retail banking products, including deposit solutions, lending products, mortgage banking, and investment advisory services.
• Market Expansions: The company strategically expands its presence in South Carolina and northeast Georgia, focusing on personalized service and local decision-making.
• Acquisitions: FCCO has a history of strategic acquisitions, such as Palmetto South Mortgage in 2011 and Cornerstone Bancorp in 2017, to enhance its service offerings and market reach.

Future Revenue Growth Projections and Earnings Estimates:

• Earnings Growth: The Zacks Consensus Estimate for 2025 is $2.28 per share, with earnings expected to increase by 25.97% from the previous year.
• Revenue: First Community Corporation's revenue for the last quarter was $17.46 million, exceeding the estimated figure of $17.19 million. The next quarter's revenue is expected to reach $17.39 million.

Strategic Initiatives or Partnerships:

• Investment Advisory Services: FCCO's investment advisory line of business has exceeded $900 million in Assets Under Management (AUM), generating revenue of $1.595 million in the third quarter of 2024 and $4.461 million year-to-date.
• Dividend Growth: The company's current annualized dividend is $0.60, up 3.4% from last year. FCCO has increased its dividend 3 times in the past five years, with an average annual increase of 5.61%.

Competitive Advantages:

• Consistent Shareholder Returns: FCCO has maintained dividend payments for 24 consecutive years, with a healthy dividend yield of 2.2%.
• Strong Financial Performance: The company's net income for the third quarter of 2024 reached $3.861 million, a significant increase from previous quarters.
• Loan and Deposit Growth: Total loans increased by $7.5 million during the third quarter of 2024, with an annualized growth rate of 7.4% year-to-date. Total deposits rose by $39.5 million in the same quarter.

Here is a summary of key financial metrics for First Community Corporation:

Analysts' opinions on First Community Corporation's future price suggest a maximum estimate of $30.00 and a minimum estimate of $25.00.

For more insights into First Community Corporation, consider exploring this investor profile: Exploring First Community Corporation (FCCO) Investor Profile: Who’s Buying and Why?