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First Community Corporation Announces Fourth Quarter and Year End 2022 Results and Increased Cash Dividend
First Community Corporation Announces Fourth Quarter and Year End 2022 Results and Increased Cash Dividend
PR Newswire
LEXINGTON, S.C., Jan. 18, 2023
Highlights
Diluted EPS of $0.53 per common share for the fourth quarter of 2022 and $1.92 per comm…
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First Community Corporation Announces Fourth Quarter and Year End 2022 Results and Increased Cash Dividend
PR Newswire
LEXINGTON, S.C., Jan. 18, 2023
Highlights
- 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.
- Net income of $14.613 million for the year of 2022 compared to $15.465 million in 2021.
- 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.
- 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.
- 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.
- Pure (non-CD) deposit growth, including customer cash management accounts, of $58.3 million during the year of 2022, a 4.5% growth rate.
- 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%.
- 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.
- 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.
- Increased cash dividend of $0.14 per common share, the 84th consecutive quarter of cash dividends paid to common shareholders.
- Full-service banking office opened in Rock Hill, South Carolina
LEXINGTON, S.C., Jan. 18, 2023 /PRNewswire/ -- 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.
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.
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.
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."
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.
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.
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.
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 www.firstcommunitysc.com.
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 | ||||||
December 31, | September 30, | June 30, | March 31, | December 31, | ||
2022 | 2022 | 2022 | 2022 | 2021 | ||
Total Assets | $ 1,672,946 | $ 1,651,829 | $ 1,684,824 | $ 1,652,279 | $ 1,584,508 | |
Other Short-term Investments and CD's1 | 12,937 | 17,244 | 76,918 | 68,169 | 47,049 | |
Investment Securities | ||||||
Investments Held-to-Maturity | 228,701 | 233,301 | 233,730 | - | - | |
Investments Available-for-Sale | 331,862 | 338,350 | 337,254 | 577,820 | 564,839 | |
Other Investments at Cost | 4,191 | 1,929 | 1,929 | 1,879 | 1,785 | |
Total Investment Securities | 564,754 | 573,580 | 572,913 | 579,699 | 566,624 | |
Loans Held for Sale | 1,779 | 1,758 | 4,533 | 12,095 | 7,120 | |
Loans | ||||||
Paycheck Protection Program (PPP) Loans | 219 | 238 | 250 | 269 | 1,467 | |
Non-PPP Loans | 980,638 | 949,972 | 916,082 | 875,528 | 862,235 | |
Total Loans | 980,857 | 950,210 | 916,332 | 875,797 | 863,702 | |
Allowance for Loan Losses | 11,336 | 11,315 | 11,220 | 11,063 | 11,179 | |
Goodwill | 14,637 | 14,637 | 14,637 | 14,637 | 14,637 | |
Other Intangibles | 761 | 801 | 840 | 879 | 919 | |
Total Deposits | 1,385,382 | 1,436,256 | 1,468,975 | 1,430,748 | 1,361,291 | |
Securities Sold Under Agreements to Repurchase | 68,743 | 73,659 | 71,800 | 68,060 | 54,216 | |
Federal Funds Purchased | 22,000 | - | - | - | - | |
Federal Home Loan Bank Advances | 50,000 | - | - | - | - | |
Junior Subordinated Debt | 14,964 | 14,964 | 14,964 | 14,964 | 14,964 | |
Shareholders' Equity | 118,361 | 114,145 | 117,592 | 125,380 | 140,998 | |
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 | 17.86 | 17.43 | $ 17.00 | $ 16.52 | $ 16.18 | |
Comprehensive Income (Loss) | ||||||
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): | ||||||
Leverage Ratio | 8.63 % | 8.53 % | 8.34 % | 8.43 % | 8.45 % | |
Tier 1 Capital Ratio | 13.45 % | 13.42 % | 13.47 % | 13.89 % | 13.97 % | |
Total Capital Ratio | 14.49 % | 14.49 % | 14.57 % | 15.03 % | 15.15 % | |
Common Equity Tier 1 Capital Ratio | 13.45 % | 13.42 % | 13.47 % | 13.89 % | 13.97 % | |
Tier 1 Regulatory Capital | $ 145,578 | $ 142,305 | $ 137,910 | $ 135,555 | $ 132,918 | |
Total Regulatory Capital | $ 156,914 | $ 153,620 | $ 149,130 | $ 146,618 | $ 144,097 | |
Common Equity Tier 1 Capital | $ 145,578 | $ 142,305 | $ 137,910 | $ 135,555 | $ 132,918 | |
1 Includes federal funds sold and interest-bearing deposits | ||||||
Average Balances: | Three months ended | Twelve months ended | ||||
December 31, | December 31, | |||||
2022 | 2021 | 2022 | 2021 | |||
Average Total Assets | $ 1,677,109 | $ 1,593,657 | $ 1,652,946 | $ 1,520,358 | ||
Average Loans (Includes Loans Held for Sale) | 969,015 | 880,026 | 920,379 | 888,973 | ||
Average Investment Securities | 568,833 | 532,392 | 570,552 | 456,805 | ||
Average Short-term Investments and CDs | 24,869 | 78,089 | 50,450 | 73,387 | ||
Average Earning Assets | 1,562,717 | 1,490,507 | 1,541,381 | 1,419,165 | ||
Average Deposits | 1,416,915 | 1,363,235 | 1,417,618 | 1,292,727 | ||
Average Other Borrowings | 131,470 | 77,098 | 100,722 | 77,158 | ||
Average Shareholders' Equity | 115,480 | 140,180 | 121,881 | 137,866 | ||
Asset Quality: | 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) | ||||||
Special Mention | $ 557 | $ 596 | $ 684 | $ 1,668 | $ 1,626 | |
Substandard | 6,082 | 6,539 | 6,710 | 7,849 | 7,872 | |
Doubtful | - | - | - | - | ||
Pass | 974,218 | 943,075 | 908,938 | 866,280 | 854,204 | |
$ 980,857 | $ 950,210 | $ 916,332 | $ 875,797 | $ 863,702 | ||
Nonperforming Assets | ||||||
Non-accrual Loans | $ 4,895 | $ 4,875 | $ 4,351 | $ 148 | $ 250 | |
Other Real Estate Owned and Repossessed Assets | 934 | 984 | 984 | 1,146 | 1,165 | |
Accruing Loans Past Due 90 Days or More | 2 | 30 | - | 174 | - | |
Total Nonperforming Assets | $ 5,831 | $ 5,889 | $ 5,335 | $ 1,468 | $ 1,415 | |
Accruing Trouble Debt Restructurings | $ 88 | $ 91 | $ 125 | $ 1,393 | $ 1,444 | |
Three months ended | Twelve months ended | |||||
December 31, | December 31, | |||||
2022 | 2021 | 2022 | 2021 | |||
Loans Charged-off | $ - | $ 5 | $ 4 | $ 132 | ||
Overdrafts Charged-off | 21 | 10 | 64 | 50 | ||
Loan Recoveries | (13) | (223) | (365) | (610) | ||
Overdraft Recoveries | (4) | (5) | (12) | (27) | ||
Net Charge-offs (Recoveries) | $ 4 | $ (213) | $ (309) | $ (455) | ||
Net Charge-offs / (Recoveries) to Average Loans2 | 0.00 % | (0.10 %) | (0.03 %) | (0.05 %) | ||
2 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 | Twelve months ended | ||||||||||||
December 31, | September 30, | June 30, | March 31, | December 31, | ||||||||||||
2022 | 2021 | 2022 | 2021 | 2022 | 2021 | 2022 | 2021 | 2022 | 2021 | |||||||
Interest income | $ 15,057 | $ 11,656 | $ 13,352 | $ 12,982 | $ 11,513 | $ 11,664 | $ 11,195 | $ 11,218 | $ 51,117 | $ 47,520 | ||||||
Interest expense | 1,692 | 492 | 558 | 526 | 462 | 572 | 462 | 651 | 3,174 | 2,241 | ||||||
Net interest income | 13,365 | 11,164 | 12,794 | 12,456 | 11,051 | 11,092 | 10,733 | 10,567 | 47,943 | 45,279 | ||||||
Provision for (release of) loan losses | 25 | (59) | 18 | 49 | (70) | 168 | (125) | 177 | (152) | 335 | ||||||
Net interest income after provision | 13,340 | 11,223 | 12,776 | 12,407 | 11,121 | 10,924 | 10,858 | 10,390 | 48,095 | 44,944 | ||||||
Non-interest income | ||||||||||||||||
Deposit service charges | 190 | 262 | 243 | 257 | 262 | 212 | 265 | 246 | 960 | 977 | ||||||
Mortgage banking income | 290 | 1,039 | 290 | 1,147 | 481 | 1,143 | 839 | 990 | 1,900 | 4,319 | ||||||
Investment advisory fees and non-deposit commissions | 1,033 | 1,121 | 1,053 | 1,040 | 1,195 | 957 | 1,198 | 877 | 4,479 | 3,995 | ||||||
Gain (loss) on sale of other assets | (74) | 103 | - | 13 | (45) | - | - | 77 | (119) | 193 | ||||||
Other non-recurring income | (2) | 24 | - | 47 | 5 | - | 4 | 100 | 7 | 171 | ||||||
Other | 1,076 | 1,077 | 1,087 | 1,060 | 1,111 | 1,106 | 1,068 | 1,006 | 4,342 | 4,249 | ||||||
Total non-interest income | 2,513 | 3,626 | 2,673 | 3,564 | 3,009 | 3,418 | 3,374 | 3,296 | 11,569 | 13,904 | ||||||
Non-interest expense | ||||||||||||||||
Salaries and employee benefits | 6,690 | 6,188 | 6,373 | 6,394 | 6,175 | 5,948 | 6,119 | 5,964 | 25,357 | 24,494 | ||||||
Occupancy | 725 | 740 | 786 | 743 | 786 | 734 | 705 | 730 | 3,002 | 2,947 | ||||||
Equipment | 351 | 347 | 331 | 336 | 329 | 338 | 332 | 275 | 1,343 | 1,296 | ||||||
Marketing and public relations | 289 | 324 | 163 | 140 | 446 | 313 | 361 | 396 | 1,259 | 1,173 | ||||||
FDIC assessment | 112 | 114 | 121 | 189 | 105 | 146 | 130 | 169 | 468 | 618 | ||||||
Other real estate expenses | 213 | (37) | 19 | 58 | 29 | 55 | 47 | 29 | 308 | 105 | ||||||
Amortization of intangibles | 40 | 40 | 39 | 52 | 40 | 52 | 39 | 57 | 158 | 201 | ||||||
Other | 2,274 | 2,162 | 2,585 | 1,993 | 2,278 | 2,292 | 2,221 | 1,920 | 9,358 | 8,367 | ||||||
Total non-interest expense | 10,694 | 9,878 | 10,417 | 9,905 | 10,188 | 9,878 | 9,954 | 9,540 | 41,253 | 39,201 | ||||||
Income before taxes | 5,159 | 4,971 | 5,032 | 6,066 | 3,942 | 4,464 | 4,278 | 4,146 | 18,411 | 19,647 | ||||||
Income tax expense | 1,116 | 1,052 | 1,081 | 1,318 | 812 | 921 | 789 | 891 | 3,798 | 4,182 | ||||||
Net income | $ 4,043 | $ 3,919 | $ 3,951 | $ 4,748 | $ 3,130 | $ 3,543 | $ 3,489 | $ 3,255 | $ 14,613 | $ 15,465 | ||||||
Per share data | ||||||||||||||||
Net income, basic | $ 0.54 | $ 0.52 | $ 0.52 | $ 0.63 | $ 0.42 | $ 0.47 | $ 0.46 | $ 0.44 | $ 1.94 | $ 2.06 | ||||||
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 | 7,537,227 | 7,503,835 | 7,531,104 | 7,498,832 | 7,526,284 | 7,485,625 | 7,518,375 | 7,475,522 | 7,527,496 | 7,491,053 | ||||||
Average number of shares outstanding - diluted | 7,619,524 | 7,564,909 | 7,607,909 | 7,555,998 | 7,607,349 | 7,537,179 | 7,594,840 | 7,522,568 | 7,609,487 | 7,548,840 | ||||||
Shares outstanding period end | 7,577,912 | 7,548,638 | 7,572,517 | 7,544,374 | 7,566,633 | 7,539,587 | 7,559,760 | 7,524,944 | 7,577,912 | 7,548,638 | ||||||
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 ratio1 | 66.53 % | 66.74 % | 66.78 % | 61.56 % | 71.60 % | 67.50 % | 69.93 % | 69.16 % | 68.60 % | 66.09 % | ||||||
1 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, 2021 | |||||||
Average | Interest | Yield/ | Average | Interest | Yield/ | |||
Balance | Earned/Paid | Rate | Balance | Earned/Paid | Rate | |||
Assets | ||||||||
Earning assets | ||||||||
Loans | ||||||||
PPP loans | $ 228 | $ 1 | 1.74 % | $ 4,882 | $ 254 | 20.64 % | ||
Non-PPP loans | 968,787 | 10,826 | 4.43 % | 875,144 | 9,269 | 4.20 % | ||
Total loans | 969,015 | 10,827 | 4.43 % | 880,026 | 9,523 | 4.29 % | ||
Non-taxable securities | 52,561 | 385 | 2.91 % | 54,399 | 400 | 2.92 % | ||
Taxable securities | 516,272 | 3,599 | 2.77 % | 477,993 | 1,696 | 1.41 % | ||
Int bearing deposits in other banks | 24,869 | 246 | 3.92 % | 78,081 | 37 | 0.19 % | ||
Fed funds sold | - | - | NA | 8 | - | 0.00 % | ||
Total earning assets | 1,562,717 | 15,057 | 3.82 % | 1,490,507 | 11,656 | 3.10 % | ||
Cash and due from banks | 26,260 | 26,113 | ||||||
Premises and equipment | 31,926 | 32,932 | ||||||
Goodwill and other intangibles | 15,418 | 15,575 | ||||||
Other assets | 52,102 | 39,639 | ||||||
Allowance for loan losses | (11,314) | (11,109) | ||||||
Total assets | $ 1,677,109 | $ 1,593,657 | ||||||
Liabilities | ||||||||
Interest-bearing liabilities | ||||||||
Interest-bearing transaction accounts | $ 334,724 | $ 135 | 0.16 % | $ 325,007 | $ 44 | 0.05 % | ||
Money market accounts | 304,784 | 559 | 0.73 % | 290,401 | 112 | 0.15 % | ||
Savings deposits | 162,876 | 37 | 0.09 % | 141,745 | 20 | 0.06 % | ||
Time deposits | 135,882 | 144 | 0.42 % | 155,333 | 194 | 0.50 % | ||
Fed funds purchased | 5,674 | 51 | 3.57 % | - | - | NA | ||
Securities sold under agreements to repurchase | 73,310 | 148 | 0.80 % | 62,134 | 19 | 0.12 % | ||
Other short-term debt | 37,522 | 370 | 3.91 % | - | - | NA | ||
Other long-term debt | 14,964 | 248 | 6.58 % | 14,964 | 103 | 2.73 % | ||
Total interest-bearing liabilities | 1,069,736 | 1,692 | 0.63 % | 989,584 | 492 | 0.20 % | ||
Demand deposits | 478,649 | 450,749 | ||||||
Other liabilities | 13,244 | 13,144 | ||||||
Shareholders' equity | 115,480 | 140,180 | ||||||
Total liabilities and shareholders' equity | $ 1,677,109 | $ 1,593,657 | ||||||
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 | $ 13,364 | 3.39 % | $ 10,910 | 2.91 % | ||||
Net interest income/margin - including PPP loans | $ 13,365 | 3.39 % | $ 11,164 | 2.97 % | ||||
Net interest income/margin (tax equivalent) - excl. PPP loans | $ 13,485 | 3.42 % | $ 11,047 | 2.95 % | ||||
Net interest income/margin (tax equivalent) - incl. PPP loans | $ 13,486 | 3.42 % | $ 11,301 | 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, 2021 | |||||||
Average | Interest | Yield/ | Average | Interest | Yield/ | |||
Balance | Earned/Paid | Rate | Balance | Earned/Paid | Rate | |||
Assets | ||||||||
Earning assets | ||||||||
Loans | ||||||||
PPP loans | $ 336 | $ 49 | 14.58 % | $ 36,837 | $ 3,340 | 9.07 % | ||
Non-PPP loans | 920,043 | 39,185 | 4.26 % | 852,136 | 36,331 | 4.26 % | ||
Total loans | 920,379 | 39,234 | 4.26 % | 888,973 | 39,671 | 4.46 % | ||
Non-taxable securities | 52,501 | 1,525 | 2.90 % | 54,771 | 1,564 | 2.86 % | ||
Taxable securities | 518,051 | 9,725 | 1.88 % | 402,034 | 6,155 | 1.53 % | ||
Int bearing deposits in other banks | 50,435 | 633 | 1.26 % | 72,823 | 130 | 0.18 % | ||
Fed funds sold | 15 | - | 0.00 % | 564 | - | 0.00 % | ||
Total earning assets | 1,541,381 | 51,117 | 3.32 % | 1,419,165 | 47,520 | 3.35 % | ||
Cash and due from banks | 27,034 | 23,668 | ||||||
Premises and equipment | 32,274 | 33,780 | ||||||
Goodwill and other intangibles | 15,476 | 15,649 | ||||||
Other assets | 48,031 | 38,846 | ||||||
Allowance for loan losses | (11,250) | (10,750) | ||||||
Total assets | $ 1,652,946 | $ 1,520,358 | ||||||
Liabilities | ||||||||
Interest-bearing liabilities | ||||||||
Interest-bearing transaction accounts | $ 336,115 | $ 273 | 0.08 % | $ 303,633 | $ 196 | 0.06 % | ||
Money market accounts | 308,473 | 943 | 0.31 % | 273,005 | 471 | 0.17 % | ||
Savings deposits | 157,626 | 102 | 0.06 % | 134,980 | 78 | 0.06 % | ||
Time deposits | 146,112 | 531 | 0.36 % | 158,053 | 995 | 0.63 % | ||
Fed funds purchased | 1,496 | 53 | 3.54 % | - | - | NA | ||
Securities sold under agreements to repurchase | 74,805 | 227 | 0.30 % | 62,194 | 85 | 0.14 % | ||
Other short-term debt | 9,457 | 370 | 3.91 % | - | - | NA | ||
Other long-term debt | 14,964 | 675 | 4.51 % | 14,964 | 416 | 2.78 % | ||
Total interest-bearing liabilities | 1,049,048 | 3,174 | 0.30 % | 946,829 | 2,241 | 0.24 % | ||
Demand deposits | 469,292 | 423,056 | ||||||
Other liabilities | 12,725 | 12,607 | ||||||
Shareholders' equity | 121,881 | 137,866 | ||||||
Total liabilities and shareholders' equity | $ 1,652,946 | $ 1,520,358 | ||||||
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 | $ 47,894 | 3.11 % | $ 41,939 | 3.03 % | ||||
Net interest income/margin - including PPP loans | $ 47,943 | 3.11 % | $ 45,279 | 3.19 % | ||||
Net interest income/margin (tax equivalent) - excl. PPP loans | $ 48,406 | 3.14 % | $ 42,436 | 3.07 % | ||||
Net interest income/margin (tax equivalent) - incl. PPP loans | $ 48,455 | 3.14 % | $ 45,776 | 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 | |||||||||||||||||
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 | % | |||||||
December 31, | September 30, | June 30, | March 31, | December 31, | |||||||||||||
Tangible book value per common share excluding | 2022 | 2022 | 2022 | 2022 | 2021 | ||||||||||||
Tangible common equity per common share excluding | $ | 17.86 | $ | 17.43 | $ | 17.00 | $ | 16.52 | $ | 16.18 | |||||||
Effect to adjust for intangible assets and accumulated | (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 | |||||||||||||||||
Tangible common equity to tangible assets excluding | 8.01 | % | 7.90 | % | 7.59 | % | 7.56 | % | 7.80 | % | |||||||
Effect to adjust for intangible assets and accumulated | (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 | Twelve months ended | |||||||||||||||
2022 | 2021 | 2022 | 2021 | 2022 | 2021 | 2022 | 2021 | 2022 | 2021 | |||||||||||
Return on average tangible | 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 | (2.14) | % | (1.39) | % |
(1.97) | % |
(1.68) | % | (1.66) | % | (1.38) | % | (1.32) | % | (1.27) | % | (1.74) | % | (1.43) | % |
Return on average common | 13.89 | % | 11.09 | % | 13.17 |
% |
13.42 | % | 10.82 | % | 10.51 | % | 10.31 | % | 9.74 | % | 11.99 | % | 11.22 | % |
Three months ended | Twelve months ended | |||||||||||
December 31, | September 30, | December 31, |
December 31, | |||||||||
Pre-tax, pre-provision earnings | 2022 | 2022 | 2021 | 2022 | 2021 | |||||||
Pre-tax, pre-provision earnings (non‑GAAP) | $ | 5,184 | $ | 5,050 | $ | 4,912 | $ | 18,259 | $ | 19,982 | ||
Effect to adjust for pre-tax, pre-provision earnings | (1,141) | (1,099) | (993) | (3,646) | (4,517) | |||||||
Net Income (GAAP) | $ | 4,043 | $ | 3,951 | $ | 3,919 | $ | 14,613 | $ | 15,465 | ||
Three months ended | Twelve months ended | ||||||||||||
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 | Twelve months ended | |||||||||||||
December 31, | December 31, | |||||||||||||
Net interest margin on a tax-equivalent basis excluding | 2022 | 2021 | 2022 | 2021 | ||||||||||
Net interest margin on a tax-equivalent basis excluding | 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 % | ||||||||||
Loans and loan growth | December 31, | September 30, | Growth | Annualized | |||||||
Non-PPP Loans and Related Credit Facilities (non-GAAP) | $ | 980,638 | 949,972 | 30,666 | 12.8 | % | |||||
PPP Related Credit Facilities | 0 | 0 | 0 | 0 | % | ||||||
Non-PPP Loans (non‑GAAP) | $ | 980,638 | $ | 949,972 | $ | 30,666 | 12.8 | % | |||
PPP Loans | 219 | 238 | (19) | (31.7) | % | ||||||
Total Loans (GAAP) | $ | 980,857 | $ | 950,210 | $ | 30,647 | 12.8 | % | |||
Loans and loan growth | December 31, | December 31, | Growth | Annualized | ||||||||
Non-PPP Loans and Related Credit Facilities (non-GAAP) | $ | 980,638 | 862,235 | 118,403 | 13.7 | % | ||||||
PPP Related Credit Facilities | 0 | 0 | 0 | 0 | % | |||||||
Non-PPP Loans (non‑GAAP) | $ | 980,638 | $ | 862,235 | $ | 118,403 | 13.7 | % | ||||
PPP Loans | 219 | 1,467 | (1,248) | (85.1) | % | |||||||
Total Loans (GAAP) | $ | 980,857 | $ | 863,702 | $ | 117,155 | 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."
- "Tangible book value per common share" is defined as total equity reduced by recorded intangible assets divided by total common shares outstanding.
- "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.
- "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.
- "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).
- "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.
- "Pre-tax, pre-provision earnings" is defined as net interest income plus non-interest income, reduced by non-interest expense.
- "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.
- "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.
- "Non-PPP Loans and Related Credit Facilities" is defined as Total Loans less PPP Related Credit Facilities and PPP Loans.
- "Non-PPP Loans" is defined as Total Loans less PPP Loans.
- "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.
- "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.
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SOURCE First Community Corporation
Uncategorized
Default: San Francisco Four Seasons Hotel Investors $3 Million Late On Loan As Foreclosure Looms
Default: San Francisco Four Seasons Hotel Investors $3 Million Late On Loan As Foreclosure Looms
Westbrook Partners, which acquired the San…
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Westbrook Partners, which acquired the San Francisco Four Seasons luxury hotel building, has been served a notice of default, as the developer has failed to make its monthly loan payment since December, and is currently behind by more than $3 million, the San Francisco Business Times reports.
Westbrook, which acquired the property at 345 California Center in 2019, has 90 days to bring their account current with its lender or face foreclosure.
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As SF Gate notes, downtown San Francisco hotel investors have had a terrible few years - with interest rates higher than their pre-pandemic levels, and local tourism continuing to suffer thanks to the city's legendary mismanagement that has resulted in overlapping drug, crime, and homelessness crises (which SF Gate characterizes as "a negative media narrative).
Last summer, the owner of San Francisco’s Hilton Union Square and Parc 55 hotels abandoned its loan in the first major default. Industry insiders speculate that loan defaults like this may become more common given the difficult period for investors.
At a visitor impact summit in August, a senior director of hospitality analytics for the CoStar Group reported that there are 22 active commercial mortgage-backed securities loans for hotels in San Francisco maturing in the next two years. Of these hotel loans, 17 are on CoStar’s “watchlist,” as they are at a higher risk of default, the analyst said. -SF Gate
The 155-room Four Seasons San Francisco at Embarcadero currenly occupies the top 11 floors of the iconic skyscrper. After slow renovations, the hotel officially reopened in the summer of 2021.
"Regarding the landscape of the hotel community in San Francisco, the short term is a challenging situation due to high interest rates, fewer guests compared to pre-pandemic and the relatively high costs attached with doing business here," Alex Bastian, President and CEO of the Hotel Council of San Francisco, told SFGATE.
Heightened Risks
In January, the owner of the Hilton Financial District at 750 Kearny St. - Portsmouth Square's affiliate Justice Operating Company - defaulted on the property, which had a $97 million loan on the 544-room hotel taken out in 2013. The company says it proposed a loan modification agreement which was under review by the servicer, LNR Partners.
Meanwhile last year Park Hotels & Resorts gave up ownership of two properties, Parc 55 and Hilton Union Square - which were transferred to a receiver that assumed management.
In the third quarter of 2023, the most recent data available, the Hilton Financial District reported $11.1 million in revenue, down from $12.3 million from the third quarter of 2022. The hotel had a net operating loss of $1.56 million in the most recent third quarter.
Occupancy fell to 88% with an average daily rate of $218 in the third quarter compared with 94% and $230 in the same period of 2022. -SF Chronicle
According to the Chronicle, San Francisco's 2024 convention calendar is lighter than it was last year - in part due to key events leaving the city for cheaper, less crime-ridden places like Las Vegas.
Uncategorized
Correcting the Washington Post’s 11 Charts That Are Supposed to Tell Us How the Economy Changed Since Covid
The Washington Post made some serious errors or omissions in its 11 charts that are supposed to tell us how Covid changed the economy. Wages Starting with…
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The Washington Post made some serious errors or omissions in its 11 charts that are supposed to tell us how Covid changed the economy.
Wages
Starting with its second chart, the article gives us an index of average weekly wages since 2019. The index shows a big jump in 2020, which then falls off in 2021 and 2022, before rising again in 2023.
It tells readers:
“Many Americans got large pay increases after the pandemic, when employers were having to one-up each other to find and keep workers. For a while, those wage gains were wiped out by decade-high inflation: Workers were getting larger paychecks, but it wasn’t enough to keep up with rising prices.”
That actually is not what its chart shows. The big rise in average weekly wages at the start of the pandemic was not the result of workers getting pay increases, it was the result of low-paid workers in sectors like hotels and restaurants losing their jobs.
The number of people employed in the low-paying leisure and hospitality sector fell by more than 8 million at the start of the pandemic. Even at the start of 2021 it was still down by over 4 million.
Laying off low-paid workers raises average wages in the same way that getting the short people to leave raises the average height of the people in the room. The Washington Post might try to tell us that the remaining people grew taller, but that is not what happened.
The other problem with this chart is that it is giving us weekly wages. The length of the average workweek jumped at the start of the pandemic as employers decided to work the workers they had longer hours rather than hire more workers. In January of 2021 the average workweek was 34.9 hours, compared to 34.4 hours in 2019 and 34.3 hours in February.
This increase in hours, by itself, would raise weekly pay by 2.0 percent. As hours returned to normal in 2022, this measure would misleadingly imply that wages were falling.
It is also worth noting that the fastest wage gains since the pandemic have been at the bottom end of the wage distribution and the Black/white wage gap has fallen to its lowest level on record.
Saving Rates
The third chart shows the saving rate since 2019. It shows a big spike at the start of the pandemic, as people stopped spending on things like restaurants and travel and they got pandemic checks from the government. It then falls sharply in 2022 and is lower in the most recent quarters than in 2019.
The piece tells readers:
“But as the world reopened — and people resumed spending on dining out, travel, concerts and other things that were previously off-limits — savings rates have leveled off. Americans are also increasingly dip into rainy-day funds to pay more for necessities, including groceries, housing, education and health care. In fact, Americans are now generally saving less of their incomes than they were before the pandemic.
This is an incomplete picture due to a somewhat technical issue. As I explained in a blogpost a few months ago, there is an unusually large gap between GDP as measured on the output side and GDP measured on the income side. In principle, these two numbers should be the same, but they never come out exactly equal.
In recent quarters, the gap has been 2.5 percent of GDP. This is extraordinarily large, but it also is unusual in that the output side is higher than the income side, the opposite of the standard pattern over the last quarter century.
It is standard for economists to assume that the true number for GDP is somewhere between the two measures. If we make that assumption about the data for 2023, it would imply that income is somewhat higher than the data now show and consumption somewhat lower.
In that story, as I showed in the blogpost, the saving rate for 2023 would be 6.8 percent of disposable income, roughly the same as the average for the three years before the pandemic. This would mean that people are not dipping into their rainy-day funds as the Post tells us. They are spending pretty much as they did before the pandemic.
Credit Card Debt
The next graph shows that credit card debt is rising again, after sinking in the pandemic. The piece tells readers:
“But now, debt loads are swinging higher again as families try to keep up with rising prices. Total household debt reached a record $17.5 trillion at the end of 2023, according to the Federal Reserve Bank of New York. And, in a worrisome sign for the economy, delinquency rates on mortgages, car loans and credit cards are all rising, too.”
There are several points worth noting here. Credit card debt is rising, but measured relative to income it is still below where it was before the pandemic. It was 6.7 percent of disposable income at the end of 2019, compared to 6.5 percent at the end of last year.
The second point is that a major reason for the recent surge in credit card debt is that people are no longer refinancing mortgages. There was a massive surge in mortgage refinancing with the low interest rates in 2020-2021.
Many of the people who refinanced took additional money out, taking advantage of the increased equity in their home. This channel of credit was cut off when mortgage rates jumped in 2022 and virtually ended mortgage refinancing. This means that to a large extent the surge in credit card borrowing is simply a shift from mortgage debt to credit card debt.
The point about total household debt hitting a record can be said in most months. Except in the period immediately following the collapse of the housing bubble, total debt is almost always rising.
And the rise in delinquencies simply reflects the fact that they had been at very low levels in 2021 and 2022. For the most part, delinquency rates are just getting back to their pre-pandemic levels, which were historically low.
Grocery Prices and Gas Prices
The next two charts show the patterns in grocery prices and gas prices since the pandemic. It would have been worth mentioning that every major economy in the world saw similar run-ups in prices in these two areas. In other words, there was nothing specific to U.S. policy that led to a surge in inflation here.
The Missing Charts
There are several areas where it would have been interesting to see charts which the Post did not include. It would have been useful to have a chart on job quitters, the number of people who voluntarily quit their jobs during the pandemic. In the tight labor markets of 2021 and 2022 the number of workers who left jobs they didn’t like soared to record levels, as shown below.
The vast majority of these workers took other jobs that they liked better. This likely explains another item that could appear as a graph, the record level of job satisfaction.
In a similar vein there has been an explosion in the number of people who work from home at least part-time. This has increased by more than 17 million during the pandemic. These workers are saving themselves thousands of dollars a year on commuting costs and related expenses, as well as hundreds of hours spent commuting.
Finally, there has been an explosion in the use of telemedicine since the pandemic. At the peak, nearly one in four visits with a health care professional was a remote consultation. This saved many people with serious health issues the time and inconvenience associated with a trip to a hospital or doctor’s office. The increased use of telemedicine is likely to be a lasting gain from the pandemic.
The World Has Changed
The pandemic will likely have a lasting impact on the economy and society. The Washington Post’s charts captured part of this story, but in some cases misrepr
The post Correcting the Washington Post’s 11 Charts That Are Supposed to Tell Us How the Economy Changed Since Covid appeared first on Center for Economic and Policy Research.
federal reserve pandemic mortgage rates gdp interest ratesUncategorized
Women’s basketball is gaining ground, but is March Madness ready to rival the men’s game?
The hype around Caitlin Clark, NCAA Women’s Basketball is unprecedented — but can its March Madness finally rival the Men’s?
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In March 2021, the world was struggling to find its legs amid the ongoing Covid-19 pandemic. Sports leagues were trying their best to keep going.
It started with the NBA creating a bubble in Orlando in late 2020, playing a full postseason in the confines of Disney World in arenas that were converted into gyms devoid of fans. Other leagues eventually allowed for limited capacity seating in stadiums, including the NCAA for its Men’s and Women’s Basketball tournaments.
The two tournaments were confined to two cities that year — instead of games normally played in different regions around the country: Indianapolis for the men and San Antonio for the women.
But a glaring difference between the men’s and women’s facilities was exposed by Oregon’s Sedona Prince on social media. The workout and practice area for the men was significantly larger than the women, whose weight room was just a single stack of dumbbells.
Let me put it on Twitter too cause this needs the attention pic.twitter.com/t0DWKL2YHR
— SEDONA (@sedonaprince_) March 19, 2021
The video drew significant attention to the equity gaps between the Men’s and Women’s divisions, leading to a 114-page report by a civil rights law firm that detailed the inequities between the two and suggested ways to improve the NCAA’s efforts for the Women’s side. One of these suggestions was simply to give the Women’s Tournament the same March Madness moniker as the men, which it finally got in 2022.
But underneath the surface of these institutional changes, women’s basketball’s single-biggest success driver was already emerging out of the shadows.
During the same COVID-marred season, a rookie from Iowa led the league in scoring with 26.6 points per game.
Her name: Caitlin Clark.
As it stands today, Clark is the leading scorer in the history of college basketball — Men’s or Women’s. Her jaw-dropping shooting ability has fueled record viewership and ticket sales for Women’s collegiate games, carrying momentum to the March Madness tournament that has NBA legends like Kevin Garnett and Paul Pierce more excited for the Women’s March Madness than the Men’s this year.
Related: Ticket prices for Caitlin Clark's final college home game are insanely high
But as the NCAA tries to bridge the opportunities given to the two sides, can the hype around Clark be enough for the Women’s March Madness to bring in the same fandom as the Men for the 2024 tournaments?
TheStreet spoke with Jon Lewis of Sports Media Watch, who has been following sports viewership trends for the last two decades; Melissa Isaacson, a veteran sports journalist and longtime advocate of women’s basketball; and Pete Giorgio, Deloitte’s leader for Global and US Sports to dissect the rise Caitlin Clark and women’s collegiate hoops ahead of March Madness.
“Nobody is moving the needle like Caitlin Clark,” Lewis told TheStreet. “Nobody else in sports, period, right now, is fueling record numbers on all these different networks, driving viewership beyond what the norm has been for 20 years."
The Caitlin Clark Effect is real — but there are other reasons for the success of women's basketball
The game in which Clark broke the all-time college scoring record against Ohio State on Sunday, Mar. 3 was seen by an average of 3.4 million viewers on Fox, marking the first time a women’s game broke the two million viewership barrier since 2010. Viewership for that game came in just behind the men’s game between Michigan State vs Arizona game on Thanksgiving, which Lewis said was driven by NFL viewership on the same day.
A week later, Iowa’s Big Ten Championship win over Nebraska breached the three million viewers mark as well, and the team has also seen viewership numbers crack over 1.5 million viewers multiple times throughout the regular season.
The success on television has also translated to higher ticket prices, as tickets to watch Clark at home and on the road have breached hundreds of dollars and drawn long lines outside stadiums. Isaacson, who is a professor at Northwestern, said she went to the game between the Hawkeyes and Northwestern Wildcats — which was the first sellout in school history for the team — and witnessed the effect of Clark in person.
“Standing in line interviewing people at the Northwestern game, seeing men who've never been to a women's game with their little girls watching and so excited, and seeing Caitlin and her engaging with little girls, it’s just been really fun,” Isaacson said.
But while Clark is certainly the biggest success driver, her game isn’t the only thing pulling up the women’s side. The three-point revolution, which started in the NBA with the introduction of deeper analytics as well as the rise of stars like Steph Curry, has been a positive for the Women’s game.
“They backed up to the three-point line and it’s opening up the game,” Isaacson said.
One of the major criticisms from a lot of women’s hoops detractors has been how the game does not compare in terms of quality to the men. However, shooting has become a great equalizer, displayed recently during the 2024 NBA All-Star Weekend last month when the WNBA’s Sabrina Ionescu nearly defeated Curry — who is widely considered the greatest shooter ever — in a three-point contest.
Clark has become the embodiment of the three-point revolution for the women. Her shooting displays have demanded the respect of anyone who has doubted women’s basketball in the past because being a man simply doesn’t grant someone the ability to shoot long-distance bombs the way she can.
Basketball pundit Bill Simmons admitted on a Feb. 28 episode of “The Bill Simmons Podcast” that he used to not want to watch women’s basketball because he didn’t enjoy watching the product, but finds himself following the women’s game this year more than the men’s side in large part due to Clark.
“I think she has the chance to be the most fun basketball player, male or female, when she gets to the pros,” Simmons said. “If she’s going to make the same 30-footers, routinely. It’s basically all the same Curry stuff just with a female … I would like watching her play in any format.”
But while Clark is driving up the numbers at the top, she’s not the only one carrying the greatness of the product. Lewis, Isaacson, Giorgio — and even Simmons, on his podcast — agreed that there are several other names and collegiate programs pulling in fans.
“It’s not just Iowa, it’s not just Caitlin Clark, it’s all of these teams,” Giorgio said. “Part of it is Angel Reese … coaches like Dawn Staley in South Carolina … You’ve got great stories left and right.”
The viewership showed that as well because the SEC Championship game between the LSU Tigers and University of South Carolina Gamecocks on Sunday, Mar. 10 averaged two million viewers.
Bridging the gap between the Men’s and Women’s March Madness viewership
The first reason women are catching up to the men is really star power. While the Women’s division has names like Clark and Reese, there just aren’t any names on the Men’s side this year that carry the same weight.
Garnett said on his show that he can’t name any men’s college basketball players, while on the women’s side, he could easily throw out the likes of Clark, Reese, UConn’s Paige Bueckers, and USC’s JuJu Watkins. Lewis felt the same.
Kevin Garnett energy towards WBB is unmatched. Sorry for the language but that’s how he talks. Just watch. pic.twitter.com/0yGBRGaF3O
— The9450 Podcast Network (@The9450) March 8, 2024
“The stars in the men's game, with one and done, I genuinely couldn't give you a single name of a single men’s player,” Lewis said.
A major reason for this is that the Women’s side has the continuity that the Men’s side does not. The rules of the NBA allow for players to play just one year in college — or even play a year professionally elsewhere — before entering the draft, while the WNBA requires players to be 22-years-old during the year of the draft to be eligible.
“You know the stars in the women's game because they stay longer,” Lewis said. “[In the men’s game], the programs are the stars … In the women's game, it's a lot more like the NBA where the players are the stars.”
Parity is also a massive factor on both sides. The women’s game used to be dominated by a few schools like UConn and Notre Dame. Nowadays, between LSU, Iowa, University of South Carolina, Stanford, and UConn, there are a handful of schools that have a shot to win the entire tournament. While this is more exciting for fans, the talent in the women's game isn’t deep enough, so too many upsets are unlikely. Many of the biggest draws are still expected to make deep runs.
But on the men’s side, there is a bigger shot that the smaller programs make it to the end — which is what was seen last year. UConn eventually won the whole thing, but schools without as big of a national fanbase in San Diego State, Florida Atlantic University, and the University Miami rounded out the Final Four.
“People want to see one Cinderella,” Lewis said. “They don't want to see two and three, they want one team that isn't supposed to be there.”
Is Women's March Madness ready to overtake the Men?
Social media might feel like it’s giving more traction to the Women’s game, but experts don’t necessarily expect that to show up in the viewership numbers just yet.
“There’s certainly a lot more buzz than there used to be,” Giorgio said. “It’s been growing every year for not just the past few years but for 10 years, but it’s hard to compare it versus Men’s.”
But the gap continues to get smaller and smaller between the two sides, and this year's tournament could bridge that gap even further.
One indicator is ticket prices. For the NCAA Tournament Final Four in April, “get-in” ticket prices are currently more expensive for the Women’s game than the Men’s game, according to TickPick. The ticketing site also projects that the Women’s Final Four and Championship game ticket prices will smash any previous records for the Women’s side should Clark and the Hawkeyes make a run to the end.
Getty Images/TheStreet
The caveat is that the Women’s Final Four is played in a stadium that has less than a third of the seating capacity of the Men’s Final Four. That’s why the average ticket prices are still more expensive for the men, although the gap is a lot smaller this year than in previous years.
But that caveat pretty much sums up where the women’s game currently stands versus the men’s: There is still a significant gap between the distribution and availability of the former.
While Iowa’s regular season games have garnered millions of viewers, the majority of the most-viewed games are still Men’s contests.
To illustrate the gap between the men’s and women’s game — last year’s Women’s Championship game that saw the LSU Tigers defeat the Hawkeyes was a record-breaking one for the women, drawing an average of 9.9 million viewers, more than double the viewership from the previous year.
One of the main reasons for that increase, as Lewis pointed out, is that last year’s Championship game was on ABC, which was the first time since 1995 that the Women’s Championship game was on broadcast television. The 1995 contest between UConn and Tennessee drew 7.4 million viewers.
The Men’s Championship actually had a record low in viewership last year garnering only 14.7 million viewers, driven in-part due to a lack of hype surrounding the schools that made it to the Final Four and Championship game. Viewership for the Men’s title game has been trending down in recent years — partly due to the effect the pandemic had on collective sports viewership — but the Men’s side had been easily breaching 20 million viewers for the game as recently as 2017.
Iowa's Big Ten Championship win on Sunday actually only averaged 6,000 fewer viewers than the iconic rivalry game between Duke and University of North Carolina Men’s Basketball the day prior. However, there is also the case that the Iowa game was played on broadcast TV (CBS) versus the Duke-UNC game airing on cable channel (ESPN).
So historical precedence makes it unlikely that we’ll see the women’s game match the men’s in terms of viewership as early as this year barring another massive viewership jump for the women and a lack of recovery for the Men’s side.
But ultimately, this shouldn’t be looked at as a down point for Women’s Basketball, according to Lewis. The Men’s side has built its viewership base for years, and the Women’s side is still growing. Even keeping pace with the Men’s viewership is already a great sign.
“The fact that these games have Caitlin Clark are even in the conversation with men's games, in terms of viewership is a huge deal,” Lewis said.
Related: Angel Reese makes bold statement for avoiding late game scuffle in championship game
recovery pandemic covid-19
Women’s basketball is gaining ground, but is March Madness ready to rival the men’s game?
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