# EDGAR Filing Document

**Accession Number:** 0000932781
**File Stem:** 0001552781-23-000019
**Filing Date:** 2023-1
**Character Count:** 53901
**Document Hash:** 892d2eb4e7f9edc4a79099644ce17a9a
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0001552781-23-000019.hdr.sgml**: 20230118

**ACCESSION NUMBER**: 0001552781-23-000019

**CONFORMED SUBMISSION TYPE**: 8-K

**PUBLIC DOCUMENT COUNT**: 14

**CONFORMED PERIOD OF REPORT**: 20230118

**ITEM INFORMATION**: Results of Operations and Financial Condition

**ITEM INFORMATION**: Financial Statements and Exhibits

**FILED AS OF DATE**: 20230118

**DATE AS OF CHANGE**: 20230118

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** FIRST COMMUNITY CORP /SC/
- **CENTRAL INDEX KEY:** 0000932781
- **STANDARD INDUSTRIAL CLASSIFICATION:** STATE COMMERCIAL BANKS [6022]
- **IRS NUMBER:** 571010751
- **STATE OF INCORPORATION:** SC
- **FISCAL YEAR END:** 1231

**FILING VALUES:**
- **FORM TYPE:** 8-K
- **SEC ACT:** 1934 Act
- **SEC FILE NUMBER:** 000-28344
- **FILM NUMBER:** 23534456

**BUSINESS ADDRESS:**
- **STREET 1:** 5455 SUNSET BLVD
- **CITY:** LEXINGTON
- **STATE:** SC
- **ZIP:** 29072
- **BUSINESS PHONE:** 8032538875

?xml version="1.0" encoding="utf-8"?

**UNITED STATES**

**SECURITIES AND EXCHANGE COMMISSION**

**WASHINGTON, D.C. 20549**

 **FORM 8-K**

**CURRENT REPORT** 

**PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934**

Date of Report (Date of earliest event reported): <u>January 18, 2023</u>

 **First Community Corporation**

(Exact name of registrant as specified in its charter)

South Carolina

(State or other jurisdiction of incorporation)

---

| | |
|:---|:---|
| 000-28344 | 57-1010751 |
| (Commission File Number) | (IRS Employer Identification No.) |
| 5455 Sunset Blvd, Lexington, South Carolina | 29072 |
| (Address of principal executive offices) | (Zip Code) |

---

(803) 951-2265

(Registrant's telephone number, including area code)

Not Applicable

(Former name or former address, if changed since last report.)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

□ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

□ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

□ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

□ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

---

| | | |
|:---|:---|:---|
| &nbsp;&nbsp;Title of each class | &nbsp;&nbsp;Trading Symbol(s) | &nbsp;&nbsp;Name of exchange on which registered |
| &nbsp;&nbsp;Common stock, par value $1.00 per share | &nbsp;&nbsp;FCCO | &nbsp;&nbsp;The Nasdaq Stock Market |

---

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company □

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. □

**Item 2.02. Results of Operations and Financial Condition.** 

On January 18, 2023, First Community Corporation (the "Company"), holding company for First Community Bank, issued a press release announcing its financial results for the period ended December 31, 2022. The Company announced that the Board of Directors has approved a cash dividend for the fourth quarter of 2022. The Company will pay a $0.14 per share dividend to holders of the Company's common stock. This dividend is payable on February 14, 2023 to shareholders of record as of January 31, 2023.

A copy of the press release is attached hereto as Exhibit 99.1.

FORWARD-LOOKING STATEMENTS

Certain statements in this report 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" or other statements that indicate future periods. Such forward-looking statements are subject to risks, uncertainties, and other factors which could cause actual results to differ materially from future results expressed or implied by such forward-looking statements. Such risks, uncertainties and other factors, include, among others, the following: (1) competitive pressures among depository and other financial institutions may increase significantly and have an effect on pricing, spending, third-party relationships and revenues; (2) 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, including, but not limited to, due to the negative impacts and disruptions resulting from the outbreak of the novel coronavirus, or COVID-19, on the economies and communities we serve, which may continue to have an adverse impact on our business, operations and performance, and could continue to have a negative impact on our credit portfolio, share price, borrowers, and on the economy as a whole, both domestically and globally; (3) the rate of delinquencies and amounts of charge-offs, the level of allowance for loan 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; (4) changes in legislation, regulation, policies, or administrative practices, whether by judicial, governmental, or legislative action; (5) adverse conditions in the stock market, the public debt markets and other capital markets (including changes in interest rate conditions) could continue to have a negative impact on the company; (6) 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; and (7) 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.

**Item 9.01. Financial Statements and Exhibits.**

**(d) Exhibits**

---

| | |
|:---|:---|
| **<u>Item</u>** | **<u>Exhibits</u>** |
| 99.1 | [Earnings Press Release for the period ended December 31, 2022.](e23022_ex99-1.htm) |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document). |

---

**SIGNATURES**

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

---

| | |
|:---|:---|
| **FIRST COMMUNITY CORPORATION** | **FIRST COMMUNITY CORPORATION** |
| By: | /s/ D. Shawn Jordan |
| Name: | D. Shawn Jordan |
| Title: | Chief Financial Officer |

---

Dated: January 18, 2023

## Exhibit 99.1

**Exhibit 99.1**

---

| | |
|:---|:---|
| ![](e23022001.jpg) |  |
|  | *News Release* |
|  | ***For Release January 18, 2023*** |
|  | ***9:00 A.M.*** |

---

Contact: D. Shawn Jordan, Executive Vice President & Chief Financial Officer or <br> Robin D. Brown, Executive Vice President & Chief Marketing Officer <br> (803) 951- 2265

**First Community Corporation Announces Fourth Quarter and Year End 2022 Results and Increased Cash Dividend** 

**Lexington, SC – January 18, 2023** 

**<u>Highlights</u>**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;· Diluted
 EPS of $0.53 per common share for the fourth quarter of 2022 and $1.92 per common share for
 the year of 2022.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;· Net
 income of $14.613 million for the year of 2022 compared to $15.465 million in 2021.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;· Pre-tax
 pre-provision earnings of $18.259 million for the year of 2022, compared to $19.982 million
 for the year of 2021. Total revenue on Paycheck Protection Program (PPP) loans for 2022 was
 $49 thousand compared to $3.340 million for the year of 2021.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;· Net
 income of $4.043 million for the fourth quarter of 2022, up 3.2% year-over-year and 2.3%
 from the linked quarter.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;· Pre-tax
 pre-provision earnings of $5.184 million for the fourth quarter of 2022, up 5.5% year-over
 year and 2.7% on a linked quarter. Revenue related to PPP loans was $1 thousand in the fourth
 quarter of 2022 compared to $254 thousand in the fourth quarter of 2021.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;· Pure
 (non-CD) deposit growth, including customer cash management accounts, of $58.3 million during
 the year of 2022, a 4.5% growth rate.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;· Total
 loan growth of $117.2 million or 13.6% during the year of 2022 and $30.6 million or 3.2%
 during the fourth quarter of the year, an annualized growth rate of 12.8%.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;· Key
 credit quality metrics continue to be strong with 2022 net loan recoveries of $361 thousand,
 non-performing assets of 0.35%, and past due loans of 0.06% at year-end 2022.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;· Investment
 advisory revenue of $1.033 million for the fourth quarter of 2022 and $4.479 million for
 the year of 2022, an increase of 12.1% year-over-year. Assets under management (AUM) were
 $558.8 million at December 31, 2022, up from $529.5 at September 30, 2022.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;· Increased
 cash dividend of $0.14 per common share, the 84<sup>th</sup> consecutive quarter of cash
 dividends paid to common shareholders.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;· Full-service
 banking office opened in Rock Hill, South Carolina

Today, First Community Corporation (Nasdaq: FCCO), the holding company for First Community Bank, reported net income for the fourth quarter and year end of 2022. Net income for the fourth quarter of 2022 was $4.043 million and diluted earnings per common share were $0.53 compared to $3.919 million and $0.52 in the fourth quarter of 2021 and $3.951 million and $0.52 in the third quarter of 2022, an increase in net income of 3.2% year-over-year and 2.3% on a linked quarter basis. Pre-tax pre-provision earnings (PTPPE) in the fourth quarter of 2022 were $5.184 million compared to fourth quarter of 2021 PTPPE of $4.912 million and third quarter 2022 PTPPE of $5.050 million, an increase of 5.5% year-over-year and 2.7% on a linked quarter. Income related to PPP loans, including interest and deferred fees, was $1 thousand in the fourth quarter of 2022 compared to $254 thousand in the fourth quarter of 2021.

For the year ended December 31, 2022, net income was $14.613 million compared to $15.465 million in 2021. Diluted earnings per common share were $1.92 for 2022 compared to $2.05 in 2021. For the year ended December 31, 2022 PTPPE were $18.259 million compared to $19.982 million for the year ended December 31, 2021. It should be noted that total income related to interest and deferred fees on PPP loans for 2022 was $49 thousand compared to $3.340 million for the year of 2021.

**<u>Cash Dividend and Capital</u>**

The Board of Directors has approved an increased cash dividend for the fourth quarter of 2022 of $0.14 per common share. This dividend is payable on February 14, 2023 to shareholders of record of the company's common stock as of January 31, 2023. First Community President and CEO, Mike Crapps commented, "The entire board is pleased that our performance enables the company to increase our cash dividend which has continued uninterrupted for 84 consecutive quarters."

As previously announced, the company's Board of Directors has approved a share repurchase plan that provides for the repurchase of up to 375,000 shares of its common stock, which represents approximately 5% of the company's 7,577,912 shares outstanding on December 31, 2022. Under the repurchase plan, the company may repurchase shares from time to time. No shares have been repurchased under this plan.

Each of the regulatory capital ratios for the bank exceed the well capitalized minimum levels currently required by regulatory statute. At December 31, 2022, the bank's regulatory capital ratios (Leverage, Tier I Risk Based and Total Risk Based) were 8.63%, 13.45%, and 14.49%, respectively. This compares to the same ratios as of December 31, 2021 of 8.45%, 13.97%, and 15.15%, respectively. As of December 31, 2022, the bank's Common Equity Tier One ratio was 13.45% compared to 13.97% at December 31, 2021. Further, the company's Tangible Common Equity to Tangible Assets (TCE) ratio was 6.21% as of December 31, 2022 compared to 6.03% at September 30, 2022 and 8.00% as of December 31, 2021. The TCE ratio, excluding the Accumulated Other Comprehensive Loss (AOCL), increased during the fourth quarter to 8.01% compared to 7.90% as of September 30, 2022 and 7.80% at December 31, 2021.

Tangible Book Value (TBV) per share increased during the quarter from $13.03 per share as of September 30, 2022 to $13.59 per share as of December 31, 2022. Excluding AOCL, TBV per share increased in the quarter from $17.43 per share as of September 30, 2022 to $17.86 per share as of December 31, 2022.

**<u>Asset Quality</u>**

The company's asset quality remains strong. The non-performing assets were 0.35% of total assets at December 31, 2022 compared to 0.36% at September 30, 2022. Non-performing assets were $5.8 million at year-end 2022, relatively flat on a linked quarter. The past due ratio for all loans was 0.06% at year-end 2022, compared to 0.04% at September 30, 2022. During the fourth quarter of 2022 the bank experienced net loan recoveries of $13 thousand, with overall net loan recoveries for the year of 2022 of $361 thousand. The ratio of classified loans plus OREO now stands at 4.47% of total bank regulatory risk-based capital as of December 31, 2022 compared to 4.90% on a linked quarter and 6.27% at the end of 2021.

**<u>Balance Sheet</u>**

Total loans increased during the fourth quarter of 2022 by $30.6 million which is an annualized growth rate of 12.8%. Year-to-date through December 31, 2022, loan growth was $117.2 million which is a 13.6% annual growth rate. Commercial loan production was $51.8 million during the fourth quarter of 2022 and $257.9 million for the year of 2022. First Community Bank President Ted Nissen noted, "New loan production was lower in the fourth quarter of 2022; however, draws on unfunded commercial construction loans were up significantly during the quarter which contributed to the overall growth in loan outstandings. As we move into 2023, we expect some softening of loan demand which will likely be offset somewhat by lower payoffs."

At December 31, 2022, total deposits were $1.385 billion compared to $1.361 billion at December 31, 2021, an annual growth rate of 1.8%. Pure deposits, which are defined as total deposits less certificates of deposits, increased $44.0 million, during 2022 to $1.281 billion at December 31, 2022 from $1.237 billion at December 31, 2021, a 3.6 % annual growth rate. Securities sold under agreements to repurchase, which are related to customer cash management accounts or business sweep accounts, increased 26.8% during 2022, to $68.7 million at December 31, 2022 from $54.2 million at December 31, 2021. During the fourth quarter of 2022, total deposits decreased to $1.385 billion at December 31, 2022 compared to $1.436 billion at September 30, 2022. Pure deposits were $1.281 billion at December 31, 2022 compared to $1.326 billion at September 30, 2022. Securities sold under agreements to repurchase were $68.7 million at December 31, 2022 compared to $73.7 million at September 30, 2022. Costs of deposits increased on a linked quarter basis to 0.25% in the fourth quarter from 0.09% in the third quarter of 2022. Cost of funds also increased on a linked quarter basis to 0.43% in the fourth quarter of 2022 from 0.14% in the third quarter of the year. Mr. Crapps commented, "A strength of our bank has been our low cost deposit base. During the fourth quarter of 2022, we began to experience pressure on interest rates for interest bearing deposits as a result of the rapidly rising rate environment, although we were able to lag those increases earlier in the year. As expected, total deposits declined during this period of quantitative tightening. Since June 30, 2022, total deposits have decreased by 5.7% ($83.6 million). We have augmented our funding with short term borrowings."

**<u>Revenue</u>**

**Net Interest Income/Net Interest Margin**

Net interest income for the year of 2022 increased 5.9% to $47.9 million compared to $45.3 million for the year of 2021. On a linked quarter basis, net interest income increased to $13.4 million in the fourth quarter of 2022 from $12.8 million in the third quarter of the year, an increase of 4.5%. The net interest margin, on a taxable equivalent basis, was 3.42% for the fourth quarter of 2022 compared to 3.29% in the third quarter of the year.

**Non-Interest Income**

Total non-interest income was $2.513 million in the fourth quarter of 2022 compared to $2.673 million in the third quarter of the year and $3.626 million in the fourth quarter of 2021. Total non-interest income, for the year of 2022 was $11.569 million, compared to 2021 non-interest income of $13.904 million.

Gain on sale revenues in the mortgage line of business were $290 thousand in the fourth quarter of 2022 unchanged on a linked quarter and down from $1.039 million year-over-year. Total gain-on-sale revenues for the mortgage line of business in 2022 were $1.900 million compared to $4.319 million for the year of 2021. Total mortgage loan production decreased 37.7% in 2022 compared to 2021. Mr. Crapps noted, "The year of 2022 was extremely challenging for the mortgage industry and our mortgage line of business. Production in 2022 has been impacted by rapidly rising rates and low housing inventory and a 53% reduction in refinance activity compared to 2021. As we have previously disclosed, our bank began to market an Adjustable Rate Mortgage (ARM) loan product to provide borrowers with an alternative to fixed rate mortgage loans during the year. As these loans are being held on our balance sheet, the result is additive to loan growth but results in less gain-on-sale fee revenue. We have also increased focus on construction lending where demand has remained more constant."

Mr. Crapps continued, "Although still strong, revenue in our financial planning and investment advisory line of business and related AUM have been affected by the stock market performance during 2022." Revenue in the investment advisory line of business was $1.033 million in the fourth quarter of 2022 compared to $1.053 million in the third quarter of 2022 and $1.121 million in the fourth quarter of 2021. Total revenue in 2022 was $4.479 million compared to $3.995 million in 2021, an increase of 12.1% year-over-year. AUM ended 2022 at $558.8 million compared to $529.5 million at September 30, 2022 and $650.9 million at year-end 2021.

**<u>Non-Interest Expense</u>**

Total non-interest expense was $10.694 million, up $277 thousand over non-interest expense in the third quarter of 2022. Salaries and benefits expense was up $317 thousand on a linked quarter basis, primarily due to increased incentive accruals for greater than target performance and the acquisition of additional mortgage lenders in the third quarter and higher mortgage production in the fourth quarter. There was an increase in marketing and public relations expenses of $126 thousand in the fourth quarter related to more frequent media placements and the development and production of new marketing initiatives. Other real estate expenses were up $194 thousand on a linked quarter basis due to a write down on an OREO property and the accrued real estate taxes for a non-accrual loan. These expense increases were offset by a decrease in Other expense of $311 thousand during the fourth quarter, a more typical level compared to the third quarter which had higher fees related to some legal, professional, recruiting, and consulting expenses.

**<u>Other</u>**

On October 20, 2022, the company opened a full-service banking office in Rock Hill, South Carolina. Earlier in 2022, the Company entered this market with the launch of a Loan Production Office.

**<u>About First Community Corporation</u>**

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 and financial planning/investment advisory services for businesses and consumers. First Community serves customers in the Midlands, Aiken, Upstate and Piedmont Regions of South Carolina as well as Augusta, Georgia. For more information, visit <u>www.firstcommunitysc.com</u>.

FORWARD-LOOKING STATEMENTS

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" or other statements that indicate future periods. Such forward-looking statements are subject to risks, uncertainties, and other factors which could cause actual results to differ materially from future results expressed or implied by such forward-looking statements. Such risks, uncertainties and other factors, include, among others, the following: (1) competitive pressures among depository and other financial institutions may increase significantly and have an effect on pricing, spending, third-party relationships and revenues; (2) 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 including, but not limited to, due to the negative impacts and disruptions resulting from the outbreak of the novel coronavirus, or COVID-19, on the economies and communities we serve, which has had and may continue to have an adverse impact on our business, operations, and performance, and could continue to have a negative impact on our credit portfolio, share price, borrowers, and on the economy as a whole both domestically and globally; (3) the rate of delinquencies and amounts of charge-offs, the level of allowance for loan 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; (4) changes in legislation, regulation, policies or administrative practices, whether by judicial, governmental, or legislative action, (5) adverse conditions in the stock market, the public debt markets and other capital markets (including changes in interest rate conditions) could continue to have a negative impact on the company; (6) 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; and (7) 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.

###

**FIRST COMMUNITY CORPORATION**

**BALANCE SHEET DATA**

**(Dollars in thousands, except per share data)**

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | As of | As of | As of | As of | As of |
|  | December 31,<br>2022 | September 30,<br>2022 | June 30,<br>2022 | March 31,<br>2022 | December 31,<br>2021 |
| Total Assets | $1672946 | $1651829 | $1684824 | $1652279 | $1584508 |
| Other Short-term Investments and CD's<sup>1</sup> | 12937 | 17244 | 76918 | 68169 | 47049 |
| Investment Securities |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Investments Held-to-Maturity | 228701 | 233301 | 233730 |  |  |
| &nbsp;&nbsp;&nbsp;Investments Available-for-Sale | 331862 | 338350 | 337254 | 577820 | 564839 |
| &nbsp;&nbsp;&nbsp;Other Investments at Cost | 4191 | 1929 | 1929 | 1879 | 1785 |
| Total Investment Securities | 564754 | 573580 | 572913 | 579699 | 566624 |
| Loans Held for Sale | 1779 | 1758 | 4533 | 12095 | 7120 |
| Loans |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Paycheck Protection Program (PPP) Loans | 219 | 238 | 250 | 269 | 1467 |
| &nbsp;&nbsp;&nbsp;Non-PPP Loans | 980638 | 949972 | 916082 | 875528 | 862235 |
| Total Loans | 980857 | 950210 | 916332 | 875797 | 863702 |
| Allowance for Loan Losses | 11336 | 11315 | 11220 | 11063 | 11179 |
| Goodwill | 14637 | 14637 | 14637 | 14637 | 14637 |
| Other Intangibles | 761 | 801 | 840 | 879 | 919 |
| Total Deposits | 1385382 | 1436256 | 1468975 | 1430748 | 1361291 |
| Securities Sold Under Agreements to Repurchase | 68743 | 73659 | 71800 | 68060 | 54216 |
| Federal Funds Purchased | 22000 |  |  |  |  |
| Federal Home Loan Bank Advances | 50000 |  |  |  |  |
| Junior Subordinated Debt | 14964 | 14964 | 14964 | 14964 | 14964 |
| Shareholders' Equity | 118361 | 114145 | 117592 | 125380 | 140998 |
| Book Value Per Common Share | $15.62 | $15.07 | $15.54 | $16.59 | $18.68 |
| Tangible Book Value Per Common Share | $13.59 | $13.03 | $13.50 | $14.53 | $16.62 |
| Tangible Book Value Per Common Share excluding Accumulated Other Comprehensive Income (Loss) | $17.86 | $17.43 | $17.00 | $16.52 | $16.18 |
| Equity to Assets | 7.08% | 6.91% | 6.98% | 7.59% | 8.90% |
| Tangible Common Equity to Tangible Assets (TCE Ratio) | 6.21% | 6.03% | 6.12% | 6.71% | 8.00% |
| TCE Ratio excluding Accumulated Other Comprehensive Income (Loss) | 8.01% | 7.90% | 7.59% | 7.56% | 7.80% |
| Loan to Deposit Ratio (Includes Loans Held for Sale) | 70.93% | 66.28% | 62.69% | 62.06% | 63.97% |
| Loan to Deposit Ratio (Excludes Loans Held for Sale) | 70.80% | 66.16% | 62.38% | 61.21% | 63.45% |
| Allowance for Loan Losses/Loans | 1.16% | 1.19% | 1.22% | 1.26% | 1.29% |
| Regulatory Capital Ratios (Bank): |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Leverage Ratio | 8.63% | 8.53% | 8.34% | 8.43% | 8.45% |
| &nbsp;&nbsp;&nbsp;Tier 1 Capital Ratio | 13.45% | 13.42% | 13.47% | 13.89% | 13.97% |
| &nbsp;&nbsp;&nbsp;Total Capital Ratio | 14.49% | 14.49% | 14.57% | 15.03% | 15.15% |
| &nbsp;&nbsp;&nbsp;Common Equity Tier 1 Capital Ratio | 13.45% | 13.42% | 13.47% | 13.89% | 13.97% |
| &nbsp;&nbsp;&nbsp;Tier 1 Regulatory Capital | $145578 | $142305 | $137910 | $135555 | $132918 |
| &nbsp;&nbsp;&nbsp;Total Regulatory Capital | $156914 | $153620 | $149130 | $146618 | $144097 |
| &nbsp;&nbsp;&nbsp;Common Equity Tier 1 Capital | $145578 | $142305 | $137910 | $135555 | $132918 |

---

<sup>1</sup> Includes federal funds sold and interest-bearing deposits

**FIRST COMMUNITY CORPORATION**

**BALANCE SHEET DATA**

**(Dollars in thousands, except per share data)**

---

| | | | | |
|:---|:---|:---|:---|:---|
| **Average Balances:** | Three months ended | Three months ended | Twelve months ended | Twelve months ended |
|  | December 31, | December 31, | December 31, | December 31, |
|  | 2022 | 2021 | 2022 | 2021 |
| &nbsp;&nbsp;&nbsp;Average Total Assets | $1677109 | $1593657 | $1652946 | $1520358 |
| &nbsp;&nbsp;&nbsp;Average Loans (Includes Loans Held for Sale) | 969015 | 880026 | 920379 | 888973 |
| &nbsp;&nbsp;&nbsp;Average Investment Securities | 568833 | 532392 | 570552 | 456805 |
| &nbsp;&nbsp;&nbsp;Average Short-term Investments and CDs | 24869 | 78089 | 50450 | 73387 |
| &nbsp;&nbsp;&nbsp;Average Earning Assets | 1562717 | 1490507 | 1541381 | 1419165 |
| &nbsp;&nbsp;&nbsp;Average Deposits | 1416915 | 1363235 | 1417618 | 1292727 |
| &nbsp;&nbsp;&nbsp;Average Other Borrowings | 131470 | 77098 | 100722 | 77158 |
| &nbsp;&nbsp;&nbsp;Average Shareholders' Equity | 115480 | 140180 | 121881 | 137866 |

---

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **Asset Quality:** | As of | As of | As of | As of | As of |
|  | December 31, | September 30, | June 30, | March 31, | December 31, |
|  | 2022 | 2022 | 2022 | 2022 | 2021 |
| Loan Risk Rating by Category (End of Period) |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Special Mention | $557 | $596 | $684 | $1668 | $1626 |
| &nbsp;&nbsp;&nbsp;Substandard | 6082 | 6539 | 6710 | 7849 | 7872 |
| &nbsp;&nbsp;&nbsp;Doubtful |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Pass | 974218 | 943075 | 908938 | 866280 | 854204 |
|  | $980857 | $950210 | $916332 | $875797 | $863702 |
| Nonperforming Assets |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Non-accrual Loans | $4895 | $4875 | $4351 | $148 | $250 |
| &nbsp;&nbsp;&nbsp;Other Real Estate Owned and Repossessed Assets | 934 | 984 | 984 | 1146 | 1165 |
| &nbsp;&nbsp;&nbsp;Accruing Loans Past Due 90 Days or More | 2 | 30 |  | 174 |  |
| Total Nonperforming Assets | $5831 | $5889 | $5335 | $1468 | $1415 |
| Accruing Trouble Debt Restructurings | $88 | $91 | $125 | $1393 | $1444 |

---

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | Three months ended | Three months ended | Twelve months ended | Twelve months ended |
|  | December 31, | December 31, | December 31, | December 31, |
|  | 2022 | 2021 | 2022 | 2021 |
| &nbsp;&nbsp;&nbsp;Loans Charged-off | $— | $5 | $4 | $132 |
| &nbsp;&nbsp;&nbsp;Overdrafts Charged-off | 21 | 10 | 64 | 50 |
| &nbsp;&nbsp;&nbsp;Loan Recoveries | (13) | (223) | (365) | (610) |
| &nbsp;&nbsp;&nbsp;Overdraft Recoveries | (4) | (5) | (12) | (27) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net Charge-offs (Recoveries) | $4 | $(213) | $(309) | $(455) |
| Net Charge-offs / (Recoveries) to Average Loans<sup>2</sup> | 0.00% | (0.10%) | (0.03%) | (0.05%) |

---

<sup>2</sup> Annualized

**FIRST COMMUNITY CORPORATION**

**INCOME STATEMENT DATA**

**(Dollars in thousands, except per share data)**

---

| | | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | Three months ended | Three months ended | Three months ended | Three months ended | Three months ended | Three months ended | Three months ended | Three months ended | Twelve months ended | Twelve months ended |
|  | December 31, | December 31, | September 30, | September 30, | June 30, | June 30, | March 31, | March 31, | December 31, | December 31, |
|  | 2022 | 2021 | 2022 | 2021 | 2022 | 2021 | 2022 | 2021 | 2022 | 2021 |
| Interest income | $15057 | $11656 | $13352 | $12982 | $11513 | $11664 | $11195 | $11218 | $51117 | $47520 |
| Interest expense | 1692 | 492 | 558 | 526 | 462 | 572 | 462 | 651 | 3174 | 2241 |
| Net interest income | 13365 | 11164 | 12794 | 12456 | 11051 | 11092 | 10733 | 10567 | 47943 | 45279 |
| Provision for (release of) loan losses | 25 | (59) | 18 | 49 | (70) | 168 | (125) | 177 | (152) | 335 |
| Net interest income after provision | 13340 | 11223 | 12776 | 12407 | 11121 | 10924 | 10858 | 10390 | 48095 | 44944 |
| Non-interest income |  |  |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Deposit service charges | 190 | 262 | 243 | 257 | 262 | 212 | 265 | 246 | 960 | 977 |
| &nbsp;&nbsp;&nbsp;Mortgage banking income | 290 | 1039 | 290 | 1147 | 481 | 1143 | 839 | 990 | 1900 | 4319 |
| &nbsp;&nbsp;&nbsp;Investment advisory fees and non-deposit commissions | 1033 | 1121 | 1053 | 1040 | 1195 | 957 | 1198 | 877 | 4479 | 3995 |
| &nbsp;&nbsp;&nbsp;Gain (loss) on sale of other assets | (74) | 103 |  | 13 | (45) |  |  | 77 | (119) | 193 |
| &nbsp;&nbsp;&nbsp;Other non-recurring income | (2) | 24 |  | 47 | 5 |  | 4 | 100 | 7 | 171 |
| &nbsp;&nbsp;&nbsp;Other | 1076 | 1077 | 1087 | 1060 | 1111 | 1106 | 1068 | 1006 | 4342 | 4249 |
| Total non-interest income | 2513 | 3626 | 2673 | 3564 | 3009 | 3418 | 3374 | 3296 | 11569 | 13904 |
| Non-interest expense |  |  |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Salaries and employee benefits | 6690 | 6188 | 6373 | 6394 | 6175 | 5948 | 6119 | 5964 | 25357 | 24494 |
| &nbsp;&nbsp;&nbsp;Occupancy | 725 | 740 | 786 | 743 | 786 | 734 | 705 | 730 | 3002 | 2947 |
| &nbsp;&nbsp;&nbsp;Equipment | 351 | 347 | 331 | 336 | 329 | 338 | 332 | 275 | 1343 | 1296 |
| &nbsp;&nbsp;&nbsp;Marketing and public relations | 289 | 324 | 163 | 140 | 446 | 313 | 361 | 396 | 1259 | 1173 |
| &nbsp;&nbsp;&nbsp;FDIC assessment | 112 | 114 | 121 | 189 | 105 | 146 | 130 | 169 | 468 | 618 |
| &nbsp;&nbsp;&nbsp;Other real estate expenses | 213 | (37) | 19 | 58 | 29 | 55 | 47 | 29 | 308 | 105 |
| &nbsp;&nbsp;&nbsp;Amortization of intangibles | 40 | 40 | 39 | 52 | 40 | 52 | 39 | 57 | 158 | 201 |
| &nbsp;&nbsp;&nbsp;Other | 2274 | 2162 | 2585 | 1993 | 2278 | 2292 | 2221 | 1920 | 9358 | 8367 |
| Total non-interest expense | 10694 | 9878 | 10417 | 9905 | 10188 | 9878 | 9954 | 9540 | 41253 | 39201 |
| Income before taxes | 5159 | 4971 | 5032 | 6066 | 3942 | 4464 | 4278 | 4146 | 18411 | 19647 |
| Income tax expense | 1116 | 1052 | 1081 | 1318 | 812 | 921 | 789 | 891 | 3798 | 4182 |
| Net income | $4043 | $3919 | $3951 | $4748 | $3130 | $3543 | $3489 | $3255 | $14613 | $15465 |
| Per share data |  |  |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Net income, basic | $0.54 | $0.52 | $0.52 | $0.63 | $0.42 | $0.47 | $0.46 | $0.44 | $1.94 | $2.06 |
| &nbsp;&nbsp;&nbsp;Net income, diluted | $0.53 | $0.52 | $0.52 | $0.63 | $0.41 | $0.47 | $0.46 | $0.43 | $1.92 | $2.05 |
| Average number of shares outstanding - basic | 7537227 | 7503835 | 7531104 | 7498832 | 7526284 | 7485625 | 7518375 | 7475522 | 7527496 | 7491053 |
| Average number of shares outstanding - diluted | 7619524 | 7564909 | 7607909 | 7555998 | 7607349 | 7537179 | 7594840 | 7522568 | 7609487 | 7548840 |
| Shares outstanding period end | 7577912 | 7548638 | 7572517 | 7544374 | 7566633 | 7539587 | 7559760 | 7524944 | 7577912 | 7548638 |
| Return on average assets | 0.96% | 0.98% | 0.94% | 1.22% | 0.76% | 0.94% | 0.87% | 0.92% | 0.88% | 1.02% |
| Return on average common equity | 13.89% | 11.09% | 13.17% | 13.42% | 10.82% | 10.51% | 10.31% | 9.74% | 11.99% | 11.22% |
| Return on average tangible common equity | 16.03% | 12.48% | 15.14% | 15.10% | 12.48% | 11.89% | 11.63% | 11.01% | 13.73% | 12.65% |
| Net interest margin (non taxable equivalent) | 3.39% | 2.97% | 3.26% | 3.43% | 2.90% | 3.17% | 2.87% | 3.20% | 3.11% | 3.19% |
| Net interest margin (taxable equivalent) | 3.42% | 3.01% | 3.29% | 3.47% | 2.93% | 3.20% | 2.91% | 3.23% | 3.14% | 3.23% |
| Efficiency ratio<sup>1</sup> | 66.53% | 66.74% | 66.78% | 61.56% | 71.60% | 67.50% | 69.93% | 69.16% | 68.60% | 66.09% |

---

<sup>1</sup> Calculated by dividing non-interest expense by net interest income on tax equivalent basis and non interest income, excluding gain on sale of other assets and other non-recurring noninterest income.

**FIRST COMMUNITY CORPORATION**

**Yields on Average Earning Assets and** 

**Rates on Average Interest-Bearing Liabilities**

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | Three months ended December 31, 2022 | Three months ended December 31, 2022 | Three months ended December 31, 2022 | Three months ended December 31, 2021 | Three months ended December 31, 2021 | Three months ended December 31, 2021 |
|  | Average<br>Balance | Interest<br>Earned/Paid | Yield/<br>Rate | Average<br>Balance | Interest<br>Earned/Paid | Yield/<br>Rate |
| **Assets** |  |  |  |  |  |  |
| Earning assets |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Loans |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;PPP loans | $228 | $1 | 1.74% | $4882 | $254 | 20.64% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Non-PPP loans | 968787 | 10826 | 4.43% | 875144 | 9269 | 4.20% |
| &nbsp;&nbsp;&nbsp;Total loans | 969015 | 10827 | 4.43% | 880026 | 9523 | 4.29% |
| &nbsp;&nbsp;&nbsp;Non-taxable securities | 52561 | 385 | 2.91% | 54399 | 400 | 2.92% |
| &nbsp;&nbsp;&nbsp;Taxable securities | 516272 | 3599 | 2.77% | 477993 | 1696 | 1.41% |
| &nbsp;&nbsp;&nbsp;Int bearing deposits in other banks | 24869 | 246 | 3.92% | 78081 | 37 | 0.19% |
| &nbsp;&nbsp;&nbsp;Fed funds sold |  |  | NA | 8 |  | 0.00% |
| Total earning assets | 1562717 | 15057 | 3.82% | 1490507 | 11656 | 3.10% |
| Cash and due from banks | 26260 |  |  | 26113 |  |  |
| Premises and equipment | 31926 |  |  | 32932 |  |  |
| Goodwill and other intangibles | 15418 |  |  | 15575 |  |  |
| Other assets | 52102 |  |  | 39639 |  |  |
| Allowance for loan losses | (11314) |  |  | (11109) |  |  |
| Total assets | $1677109 |  |  | $1593657 |  |  |
| **Liabilities** |  |  |  |  |  |  |
| Interest-bearing liabilities |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Interest-bearing transaction accounts | $334724 | $135 | 0.16% | $325007 | $44 | 0.05% |
| &nbsp;&nbsp;&nbsp;Money market accounts | 304784 | 559 | 0.73% | 290401 | 112 | 0.15% |
| &nbsp;&nbsp;&nbsp;Savings deposits | 162876 | 37 | 0.09% | 141745 | 20 | 0.06% |
| &nbsp;&nbsp;&nbsp;Time deposits | 135882 | 144 | 0.42% | 155333 | 194 | 0.50% |
| &nbsp;&nbsp;&nbsp;Fed funds purchased | 5674 | 51 | 3.57% |  |  | NA |
| &nbsp;&nbsp;&nbsp;Securities sold under agreements to repurchase | 73310 | 148 | 0.80% | 62134 | 19 | 0.12% |
| &nbsp;&nbsp;&nbsp;Other short-term debt | 37522 | 370 | 3.91% |  |  | NA |
| &nbsp;&nbsp;&nbsp;Other long-term debt | 14964 | 248 | 6.58% | 14964 | 103 | 2.73% |
| Total interest-bearing liabilities | 1069736 | 1692 | 0.63% | 989584 | 492 | 0.20% |
| Demand deposits | 478649 |  |  | 450749 |  |  |
| Other liabilities | 13244 |  |  | 13144 |  |  |
| Shareholders' equity | 115480 |  |  | 140180 |  |  |
| Total liabilities and shareholders' equity | $1677109 |  |  | $1593657 |  |  |
| Cost of deposits, including demand deposits |  |  | 0.25% |  |  | 0.11% |
| Cost of funds, including demand deposits |  |  | 0.43% |  |  | 0.14% |
| Net interest spread |  |  | 3.19% |  |  | 2.90% |
| Net interest income/margin - excluding PPP loans |  | $13364 | 3.39% |  | $10910 | 2.91% |
| Net interest income/margin - including PPP loans |  | $13365 | 3.39% |  | $11164 | 2.97% |
| Net interest income/margin (tax equivalent) - excl. PPP loans |  | $13485 | 3.42% |  | $11047 | 2.95% |
| Net interest income/margin (tax equivalent) - incl. PPP loans |  | $13486 | 3.42% |  | $11301 | 3.01% |

---

**FIRST COMMUNITY CORPORATION**

**Yields on Average Earning Assets and**

**Rates on Average Interest-Bearing Liabilities**

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | Twelve months ended December 31, 2022 | Twelve months ended December 31, 2022 | Twelve months ended December 31, 2022 | Twelve months ended December 31, 2021 | Twelve months ended December 31, 2021 | Twelve months ended December 31, 2021 |
|  | Average<br>Balance | Interest<br>Earned/Paid | Yield/<br>Rate | Average<br>Balance | Interest<br>Earned/Paid | Yield/<br>Rate |
| **Assets** |  |  |  |  |  |  |
| Earning assets |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Loans |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;PPP loans | $336 | $49 | 14.58% | $36837 | $3340 | 9.07% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Non-PPP loans | 920043 | 39185 | 4.26% | 852136 | 36331 | 4.26% |
| &nbsp;&nbsp;&nbsp;Total loans | 920379 | 39234 | 4.26% | 888973 | 39671 | 4.46% |
| &nbsp;&nbsp;&nbsp;Non-taxable securities | 52501 | 1525 | 2.90% | 54771 | 1564 | 2.86% |
| &nbsp;&nbsp;&nbsp;Taxable securities | 518051 | 9725 | 1.88% | 402034 | 6155 | 1.53% |
| &nbsp;&nbsp;&nbsp;Int bearing deposits in other banks | 50435 | 633 | 1.26% | 72823 | 130 | 0.18% |
| &nbsp;&nbsp;&nbsp;Fed funds sold | 15 |  | 0.00% | 564 |  | 0.00% |
| Total earning assets | 1541381 | 51117 | 3.32% | 1419165 | 47520 | 3.35% |
| Cash and due from banks | 27034 |  |  | 23668 |  |  |
| Premises and equipment | 32274 |  |  | 33780 |  |  |
| Goodwill and other intangibles | 15476 |  |  | 15649 |  |  |
| Other assets | 48031 |  |  | 38846 |  |  |
| Allowance for loan losses | (11250) |  |  | (10750) |  |  |
| Total assets | $1652946 |  |  | $1520358 |  |  |
| **Liabilities** |  |  |  |  |  |  |
| Interest-bearing liabilities |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Interest-bearing transaction accounts | $336115 | $273 | 0.08% | $303633 | $196 | 0.06% |
| &nbsp;&nbsp;&nbsp;Money market accounts | 308473 | 943 | 0.31% | 273005 | 471 | 0.17% |
| &nbsp;&nbsp;&nbsp;Savings deposits | 157626 | 102 | 0.06% | 134980 | 78 | 0.06% |
| &nbsp;&nbsp;&nbsp;Time deposits | 146112 | 531 | 0.36% | 158053 | 995 | 0.63% |
| &nbsp;&nbsp;&nbsp;Fed funds purchased | 1496 | 53 | 3.54% |  |  | NA |
| &nbsp;&nbsp;&nbsp;Securities sold under agreements to repurchase | 74805 | 227 | 0.30% | 62194 | 85 | 0.14% |
| &nbsp;&nbsp;&nbsp;Other short-term debt | 9457 | 370 | 3.91% |  |  | NA |
| &nbsp;&nbsp;&nbsp;Other long-term debt | 14964 | 675 | 4.51% | 14964 | 416 | 2.78% |
| Total interest-bearing liabilities | 1049048 | 3174 | 0.30% | 946829 | 2241 | 0.24% |
| Demand deposits | 469292 |  |  | 423056 |  |  |
| Other liabilities | 12725 |  |  | 12607 |  |  |
| Shareholders' equity | 121881 |  |  | 137866 |  |  |
| Total liabilities and shareholders' equity | $1652946 |  |  | $1520358 |  |  |
| Cost of deposits, including demand deposits |  |  | 0.13% |  |  | 0.13% |
| Cost of funds, including demand deposits |  |  | 0.21% |  |  | 0.16% |
| Net interest spread |  |  | 3.01% |  |  | 3.11% |
| Net interest income/margin - excluding PPP loans |  | $47894 | 3.11% |  | $41939 | 3.03% |
| Net interest income/margin - including PPP loans |  | $47943 | 3.11% |  | $45279 | 3.19% |
| Net interest income/margin (tax equivalent) - excl. PPP loans |  | $48406 | 3.14% |  | $42436 | 3.07% |
| Net interest income/margin (tax equivalent) - incl. PPP loans |  | $48455 | 3.14% |  | $45776 | 3.23% |

---

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

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | December 31, | September 30, | June 30, | March 31, | December 31, |
| **Tangible book value per common share** | 2022 | 2022 | 2022 | 2022 | 2021 |
| Tangible common equity per common share (non-GAAP) | $13.59 | $13.03 | $13.50 | $14.53 | $16.62 |
| Effect to adjust for intangible assets | 2.03 | 2.04 | 2.04 | 2.06 | 2.06 |
| Book value per common share (GAAP) | $15.62 | $15.07 | $15.54 | $16.59 | $18.68 |
| **Tangible common shareholders' equity to tangible assets** |  |  |  |  |  |
| Tangible common equity to tangible assets (non-GAAP) | 6.21% | 6.03% | 6.12% | 6.71% | 8.00% |
| Effect to adjust for intangible assets | 0.87% | 0.88% | 0.86% | 0.88% | 0.90% |
| Common equity to assets (GAAP) | 7.08% | 6.91% | 6.98% | 7.59% | 8.90% |
| **Tangible book value per common share excluding** | December 31, | September 30, | June 30, | March 31, | December 31, |
| **accumulated other comprehensive income (loss)** | 2022 | 2022 | 2022 | 2022 | 2021 |
| Tangible common equity per common share excluding accumulated other comprehensive income (loss) (non-GAAP) | $17.86 | $17.43 | $17.00 | $16.52 | $16.18 |
| Effect to adjust for intangible assets and accumulated other comprehensive income (loss) | (2.24) | (2.36) | (1.46) | 0.07 | 2.50 |
| Book value per common share (GAAP) | $15.62 | $15.07 | $15.54 | $16.59 | $18.68 |
| **Tangible common shareholders' equity to tangible assets excluding accumulated other comprehensive income (loss)** |  |  |  |  |  |
| Tangible common equity to tangible assets excluding accumulated other comprehensive income (loss) (non-GAAP) | 8.01% | 7.90% | 7.59% | 7.56% | 7.80% |
| Effect to adjust for intangible assets and accumulated other comprehensive income (loss) | (0.93)% | (0.99)% | (0.61)% | 0.03% | 1.10% |
| Common equity to assets (GAAP) | 7.08% | 6.91% | 6.98% | 7.59% | 8.90% |

---

---

| | | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| Return on average tangible | Three months ended | Three months ended | Three months ended | Three months ended | Three months ended | Three months ended | Three months ended | Three months ended | Twelve months ended | Twelve months ended |
| common equity | December 31, | December 31, | September 30, | September 30, | June 30, | June 30, | March 31, | March 31, | December 31, | December 31, |
|  | 2022 | 2021 | 2022 | 2021 | 2022 | 2021 | 2022 | 2021 | 2022 | 2021 |
| Return on average tangible common equity (non-GAAP) | 16.03% | 12.48% | 15.14% | 15.10% | 12.48% | 11.89% | 11.63% | 11.01% | 13.73% | 12.65% |
| Effect to adjust for intangible assets | (2.14)% | (1.39)% | (1.97)% | (1.68)% | (1.66)% | (1.38)% | (1.32)% | (1.27)% | (1.74)% | (1.43)% |
| Return on average common equity (GAAP) | 13.89% | 11.09% | 13.17% | 13.42% | 10.82% | 10.51% | 10.31% | 9.74% | 11.99% | 11.22% |

---

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | Three months ended | Three months ended | Three months ended | Twelve months ended | Twelve months ended |
|  | December 31, | September 30, | December 31, | December 31, | December 31, |
| **Pre-tax, pre-provision earnings** | 2022 | 2022 | 2021 | 2022 | 2021 |
| Pre-tax, pre-provision earnings (non-GAAP) | $5184 | $5050 | $4912 | $18259 | $19982 |
| Effect to adjust for pre-tax, pre-provision earnings | (1141) | (1099) | (993) | (3646) | (4517) |
| Net Income (GAAP) | $4043 | $3951 | $3919 | $14613 | $15465 |

---

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | Three months ended | Three months ended | Twelve months ended | Twelve months ended |
|  | December 31, | December 31, | December 31, | December 31, |
| **Net interest margin excluding PPP Loans** | 2022 | 2021 | 2022 | 2021 |
| Net interest margin excluding PPP loans (non-GAAP) | 3.39% | 2.91% | 3.11% | 3.03% |
| Effect to adjust for PPP loans | 0.00 | 0.06 | 0.00 | 0.16 |
| Net interest margin (GAAP) | 3.39% | 2.97% | 3.11% | 3.19% |
|  | Three months ended | Three months ended | Twelve months ended | Twelve months ended |
|  | December 31, | December 31, | December 31, | December 31, |
| **Net interest margin on a tax-equivalent basis excluding<br> PPP Loans** | 2022 | 2021 | 2022 | 2021 |
| Net interest margin on a tax-equivalent basis excluding PPP loans (non-GAAP) | 3.42% | 2.95% | 3.14% | 3.07% |
| Effect to adjust for PPP loans | 0.00 | 0.06 | 0.00 | 0.16 |
| Net interest margin on a tax equivalent basis (GAAP) | 3.42% | 3.01% | 3.14% | 3.23% |

---

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | December 31, | September 30, | Growth | Annualized<br> Growth |
| **Loans and loan growth** | 2022 | 2022 | Dollars | Rate |
| Non-PPP Loans and Related Credit Facilities (non-GAAP) | $980638 | $949972 | $30666 | 12.8% |
| PPP Related Credit Facilities | 0 | 0 | 0 | 0% |
| Non-PPP Loans (non-GAAP) | $980638 | $949972 | $30666 | 12.8% |
| PPP Loans | 219 | 238 | (19) | (31.7)% |
| Total Loans (GAAP) | $980857 | $950210 | $30647 | 12.8% |
|  | December 31, | December 31, | Growth | Annualized<br> Growth |
| **Loans and loan growth** | 2022 | 2021 | Dollars | Rate |
| Non-PPP Loans and Related Credit Facilities (non-GAAP) | $980638 | $862235 | $118403 | 13.7% |
| PPP Related Credit Facilities | 0 | 0 | 0 | 0% |
| Non-PPP Loans (non-GAAP) | $980638 | $862235 | $118403 | 13.7% |
| PPP Loans | 219 | 1467 | (1248) | (85.1)% |
| Total Loans (GAAP) | $980857 | $863702 | $117155 | 13.6% |

---

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," "Tangible book value per common share excluding accumulated other comprehensive income (loss)," "Tangible common shareholders' equity to tangible assets excluding accumulated other comprehensive income (loss)," "Return on average tangible common equity," "Pre-tax, pre-provision earnings," "Net interest margin excluding PPP Loans," "Net interest margin on a tax-equivalent basis excluding PPP Loans," "Non-PPP Loans and Related Credit Facilities," and "Non-PPP Loans."

&nbsp;&nbsp;&nbsp;&nbsp;· "Tangible
 book value per common share" is defined as total equity reduced by recorded intangible
 assets divided by total common shares outstanding.

&nbsp;&nbsp;&nbsp;&nbsp;· "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.

&nbsp;&nbsp;&nbsp;&nbsp;· "Tangible
 book value per common share excluding accumulated other comprehensive income (loss)"
 is defined as total equity reduced by recorded intangible assets and accumulated other comprehensive
 income (loss) divided by total common shares outstanding.

&nbsp;&nbsp;&nbsp;&nbsp;· "Tangible
 common shareholders' equity to tangible assets excluding accumulated other comprehensive
 income (loss)" is defined as total common equity reduced by recorded intangible assets
 and accumulated other comprehensive income (loss) divided by total assets reduced by recorded
 intangible assets and other comprehensive income (loss).

&nbsp;&nbsp;&nbsp;&nbsp;· "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.

&nbsp;&nbsp;&nbsp;&nbsp;· "Pre-tax,
 pre-provision earnings" is defined as net interest income plus non-interest income,
 reduced by non-interest expense.

&nbsp;&nbsp;&nbsp;&nbsp;· "Net
 interest margin excluding PPP Loans" is defined as annualized net interest income less
 annualized interest income on PPP Loans divided by average earning assets less the average
 balance of PPP Loans.

&nbsp;&nbsp;&nbsp;&nbsp;· "Net
 interest margin on a tax-equivalent basis excluding PPP Loans" is defined as annualized
 net interest income on a tax-equivalent basis less annualized interest income on PPP Loans
 divided by average earning assets less the average balance of PPP Loans.

&nbsp;&nbsp;&nbsp;&nbsp;· "Non-PPP
 Loans and Related Credit Facilities" is defined as Total Loans less PPP Related Credit
 Facilities and PPP Loans.

&nbsp;&nbsp;&nbsp;&nbsp;· "Non-PPP
 Loans" is defined as Total Loans less PPP Loans.

&nbsp;&nbsp;&nbsp;&nbsp;· "Non-PPP
 Loans and Related Credit Facilities Growth - Dollars" is calculated by taking the difference
 between two time periods compared for Total Loans less PPP Loans and PPP Related Credit Facilities. 
 "Non-PPP Loans and Related Credit Facilities – Annualized Growth Rate"
 is calculated by (i) dividing "Non-PPP Loans and Related Credit Facilities Loan Growth
 - Dollars" by the number of days between the two time periods compared (ii) times the
 number of days in the year (iii) divided by the prior time period Non-PPP Loans and Related
 Credit Facilities balance.

&nbsp;&nbsp;&nbsp;&nbsp;· "Non-PPP
 Loans Growth - Dollars" is calculated by taking the difference between two time periods
 compared for Total Loans less PPP Loans. "Non-PPP Loans – Annualized Growth
 Rate" is calculated by (i) dividing "Non-PPP Loans Loan Growth - Dollars"
 by the number of days between the two time periods compared (ii) times the number of days
 in the year (iii) divided by the prior time period Non-PPP Loans balance.

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.