932781--3/29/2010--FIRST_COMMUNITY_CORP

related topics

{stock, price, share}

{loan, real, estate}

{loss, insurance, financial}

{condition, economic, financial}

{acquisition, growth, future}

{capital, credit, financial}

{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. We cannot predict the effect of recent or future legislative and regulatory initiatives. Changes in the financial markets could impair the value of our investment portfolio. Our focus on lending to small to mid-sized community-based businesses may increase our credit risk. Our decisions regarding credit risk and reserves for loan losses may materially and adversely affect our business. We may have higher loan losses than we have allowed for in our allowance for loan losses. 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 face strong competition for customers, which could prevent us from obtaining customers and may cause us to pay higher interest rates to attract customers. 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. We obtain a portion of our deposits from out of market sources. We have a concentration of credit exposure in commercial real estate and a downturn in commercial real estate could adversely affect our 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 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. Because of our participation in the Treasury's CPP, we are subject to several restrictions including restrictions on compensation paid to our executives. We are subject to extensive regulation that could limit or restrict our activities. We may need to raise additional capital in the future, but that capital may not be available when it is needed. Our historical operating results may not be indicative of our future operating results. We will face risks with respect to expansion through acquisitions or mergers. Our underwriting decisions may materially and adversely affect our business. Our ability to pay cash dividends is limited, and we may be unable to pay future dividends even if we desire to do so. 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. Legislation or regulatory changes could cause us to seek to repurchase the preferred stock and warrant that we sold to the Treasury pursuant to the CPP. There can be no assurance whether or when the Series T Preferred Stock can be redeemed or whether or when the related Warrant can be repurchased. 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 Treasury may be dilutive to holders of our common stock. 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. We are exposed to the possibility of technology failure and a disruption in our operations may adversely affect our business.

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932781--3/29/2010--FIRST_COMMUNITY_CORP_/SC/