Business Context and Reporting Period
This Form 8-K filing by First Community Corporation, dated June 28, 2012, reports the termination of regulatory restrictions imposed on its principal subsidiary, First Community Bank, N.A. The filing addresses the conclusion of a Formal Written Agreement with the Office of the Comptroller of the Currency (OCC) and the removal of Individual Minimum Capital Ratios.
Key Financial Metrics and Capital Status
The filing provides specific regulatory capital ratios as of March 31, 2012, demonstrating the Bank's compliance with well-capitalized standards:
- Tier 1 Leverage Capital Ratio: 9.70% (General regulatory minimum: 5.00%)
- Tier 1 Risk-Based Capital Ratio: 15.53% (General regulatory minimum: 6.00%)
- Total Risk-Based Capital Ratio: 16.78% (General regulatory minimum: 10.00%)
Regarding the investment portfolio, as of May 10, 2012, the Bank held $1.7 million in non-agency mortgage-backed securities (MBSs) rated below investment grade. The filing does not provide data on revenue, profit, cash flow, or debt levels.
Material Changes Versus Prior Period
Effective June 28, 2012, the Bank is no longer subject to:
- The Formal Written Agreement entered into on April 6, 2010, which was triggered by OCC findings regarding downgraded non-agency MBSs in the investment portfolio.
- Individual Minimum Capital Ratios established on February 24, 2010, which required significantly higher capital thresholds (Tier 1 Leverage of 8.00%, Tier 1 Risk-Based of 10.00%, and Total Risk-Based of 12.00%) than the general regulatory minimums.
The reduction of below-investment-grade non-agency MBSs to $1.7 million represents a material improvement from the levels that originally prompted the 2010 agreement.
Management Commentary and Outlook
Michael C. Crapps, President and CEO of the Bank, stated that the termination of the agreement and capital ratios reflects the commitment of officers and employees and a continued focus on the soundness of the institution. The filing indicates the Bank is now well-capitalized for regulatory purposes under standard guidelines. No specific financial guidance or future outlook regarding revenue or earnings is provided in this report.
Key Facts for Investor Verification
- Confirm the Bank's current status as "well-capitalized" under standard OCC guidelines following the removal of individual minimums.
- Verify the current composition and valuation of the remaining $1.7 million in below-investment-grade non-agency MBSs.
- Review subsequent quarterly reports to ensure capital ratios remain above the general regulatory minimums (5.00%, 6.00%, and 10.00%) without the previous buffer requirements.
- Check for any new regulatory correspondence or agreements that may have been issued after June 28, 2012.