932781--3/27/2009--FIRST_COMMUNITY_CORP

related topics

{stock, price, share}

{condition, economic, financial}

{loan, real, estate}

{loss, insurance, financial}

{capital, credit, financial}

{acquisition, growth, future}

{regulation, change, law}

{personnel, key, retain}

{system, service, information}

{stock, price, operating}

Recent negative developments in the financial industry and the domestic and international credit markets may adversely affect our operations and results. There can be no assurance that recently enacted legislation will help stabilize the U.S. financial system. Because of our participation in the Treasury Department's CPP, we are subject to several restrictions including restrictions on compensation paid to our executives. Legislation or regulatory changes could cause us to seek to repurchase the preferred stock and warrant that we sold to the U.S. Treasury pursuant to the CPP. Continuation of the economic downturn could reduce our customer base, our level of deposits, and demand for financial products such as loans. Our ability to pay cash dividends is limited, and we may be unable to pay future dividends even if we desire to do so. The Series T Preferred Stock impacts net income available to our common shareholders and earnings per common share, and the warrant we issued to the U.S. Treasury may be dilutive to holders of our common stock. If we are unable to redeem the Series T Preferred Stock after five years, we will be required to make higher dividend payments on this stock, thereby substantially increasing our cost of capital. Our small- to medium-sized business target markets may have fewer financial resources to weather a downturn in the economy. We are exposed to changes in the regulation of financial services companies. The FDIC Deposit Insurance assessments that we are required to pay may materially increase in the future, which would have an adverse effect on our earnings and our ability to pay our liabilities as they come due. Our continued pace of growth may require us to raise additional capital in the future, but that capital may not be available when it is needed. We obtain a portion of our deposits from out of market sources. We are exposed to the possibility of technology failure. Our historical operating results may not be indicative of our future operating results. Our decisions regarding credit risk and reserves for loan losses may materially and adversely affect our business. Lack of seasoning of our loan portfolio may increase the risk of credit defaults in the future. Economic challenges, especially those affecting Lexington, Richland, Newberry, and Kershaw Counties and the surrounding areas, may reduce our customer base, our level of deposits, and demand for financial products such as loans. We have a concentration of credit exposure in commercial real estate and a downturn in commercial real estate could adversely affect its business, financial condition, and results of operations. A significant portion of our loan portfolio is secured by real estate, and events that negatively impact the real estate market could hurt our business. Changes in the financial markets could impair the value of our investment portfolio. Changes in prevailing interest rates may reduce our profitability. We are dependent on key individuals, and the loss of one or more of these key individuals could curtail our growth and adversely affect our prospects. We are subject to extensive regulation that could limit or restrict our activities. We face strong competition for customers, which could prevent us from obtaining customers and may cause us to pay higher interest rates to attract customers. We will face risks with respect to expansion through acquisitions or mergers. Our underwriting decisions may materially and adversely affect our business. We may have higher loan losses than we have allowed for in our allowance for loan losses. Holders of the Series T preferred stock have rights that are senior to those of our common shareholders. Holders of the Series T preferred stock may, under certain circumstances, have the right to elect two directors to our board of directors. Holders of the Series T preferred stock have limited voting rights.

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932781--3/27/2009--FIRST_COMMUNITY_CORP_/SC/