First Community Extends Margin Expansion for a Tenth Quarter

The Tip Desk · October 21, 2026 · 3 min read

Net interest margin reached 3.59% tax-equivalent as net interest income rose to $20.238 million and loans grew $32.1 million.

First Community Corporation (FCCO), the holding company for First Community Bank, reported net interest margin of 3.59% on a tax-equivalent basis in the third quarter of 2026, an expansion of eight basis points from the second quarter and the tenth consecutive quarter of margin expansion.

Net interest income was $20.238 million, compared with $19.501 million in the second quarter. The company said the margin expansion was driven by a higher loan portfolio yield and a better earning-asset mix from loan growth, while cost of deposits and cost of funds remained unchanged.

The loan yield rose to 6.08% from 6.02%. Purchase-accounting amortization on the Signature Bank of Georgia loan portfolio produced $143 thousand of amortization expense, reducing loan yield by 0.04%, down from a 0.05% drag in the second quarter. Loans as a percent of earning assets were 71.9% at September 30, 2026, versus 70.7% at June 30.

Total loans increased $32.1 million to $1.610 billion, an 8.1% linked-quarter annualized growth rate. Commercial loan production was $53.3 million and advances of unfunded commercial construction loans were $17.9 million. Loan payoffs and paydowns were down approximately 16.9% from the second quarter.

Cost of deposits stayed at 1.76% and cost of funds at 1.82%. Average total deposits plus securities sold under agreements to repurchase were $2.119 billion, essentially unchanged from $2.120 billion in the second quarter. Average pure deposits were $1.699 billion. Non-interest-bearing deposits were $534.1 million, or 26.6% of total deposits, up from 26.1%.

Net income was $8.044 million, or $0.85 a share, up 54.9% from a year earlier. Excluding the after-tax effect of merger expenses, net income was $8.123 million, or $0.86 a share. Results include the Signature Bank acquisition, which closed January 8, 2026.

Non-interest income was $5.988 million, including $797 thousand of non-recurring income from an SBA loan settlement gain on a loan previously charged off by Signature Bank. Investment advisory revenue was $2.605 million, up 14.0% from the second quarter. Assets under management were $1.404 billion at September 30, 2026. Mortgage production was $45.9 million with $614 thousand of fee revenue. Government-guaranteed lending fees were $534 thousand.

Non-interest expense was $15.630 million. Merger expense fell $399 thousand to $104 thousand. An $86 thousand write-down in other real estate left $83 thousand of ORE at quarter-end.

Credit metrics remained tight. Net charge-offs including overdrafts were $9 thousand and net loan recoveries excluding overdrafts were $5 thousand. Non-performing assets were 0.04% of assets, or $990 thousand. Past-due loans were 0.27%. The provision for credit losses was $193 thousand and the allowance for credit losses on loans was $18.703 million, or 1.16% of loans. Substandard loans were $5.9 million.

Shareholders’ equity to total assets was 9.74% at September 30, 2026. Tangible common equity to tangible assets was 8.50%. Book value per share was $24.49 and tangible book value $21.09. The bank’s common equity Tier 1 ratio was 13.23% and its leverage ratio 9.52%.

The board approved a cash dividend of $0.17 a share, the 99th consecutive quarterly dividend, payable November 17, 2026. A $7.5 million share-repurchase plan approved in May 2026 remained unused in the quarter.