Archived Press Releases

Provident Community Bancshares Reports First Quarter5/17/2013

Rock Hill, South Carolina - May 17, 2013: Provident Community Bancshares, Inc. (OTCBB: PCBS) (the "Corporation") recorded a net loss to common shareholders of $462,000 for the three months ended March 31, 2013 as compared to a net loss of $202,000 for the same period in 2012. The increase in loss in 2013 was primarily due to a reduction in net interest income due primarily to lower loan balances and a decrease in the yield on interest-earning assets due to the lower interest rate environment, offset by the absence of a provision for loan losses for the period ended March 31, 2013, due to a net reduction in loans, nonperforming assets and charge-offs. In addition, the Corporation did not record any gain on the sale of investments for the quarter ending March 31, 2013 compared to $239,000 for the previous year comparable quarter. Net loss per common share was $0.26 (diluted) for the three months ended March 31, 2013, versus a net loss of $0.11 per common share (diluted) for the same period in 2012.

Assets increased $5.2 million, or 1.5%, to $355.1 million at March 31, 2013 from $349.9 million at December 31, 2012. The increase in assets was due primarily to the growth in federal funds sold and securities as a result of deposit growth that was attributed to county tax receipts. It is anticipated that these funds will be drawn down over the course of the year for county needs. Net loans decreased $4.0 million from December 31, 2012 to March 31, 2013, due primarily to a significant reduction in loan demand as a result of economic conditions in South Carolina and more stringent underwriting standards. Investment securities at March 31, 2013 increased $4.9 million, or 2.9%, to $174.1 million from $169.2 million at December 31, 2012, primarily due to an increase in mortgage-backed securities, offset by a decrease in securities of government sponsored enterprises. Federal funds sold at March 31, 2013 increased $8.5 million to $28.8 million from $20.3 million at December 31, 2012 as a result of funds invested with proceeds from maturities of securities and loan payments. Total liabilities increased $5.8 million to $343.6 million at March 31, 2013 from $337.7 million at December 31, 2012. Deposits increased $7.1 million, or 2.6%, to $284.6 million at March 31, 2013 from $277.5 million at December 31, 2012 due to the increased county tax receipts. Security agreements to repurchase decreased $1.2 million to $5.1 million at March 31, 2013 from $6.3 million at December 31, 2012. Shareholders' equity decreased $616,000, or 5.1%, to $11.6 million at March 31, 2013 from $12.2 million at December 31, 2012 primarily due to a $273,000 increase in unrealized losses on securities available for sale along with a net operating loss of $343,000.

Nonperforming loans, which are primarily commercial real estate properties, were $14.0 million as of March 31, 2013, or 11.7% of total loans, as compared to $13.1 million at December 31, 2012, an increase of $829,000. Real estate acquired through foreclosure decreased $1.2 million, to $8.0 million at March 31, 2013 from $9.2 million at December 31, 2012, as a result of property sales. Bad debt charge-offs, net of recoveries were $12,000 for the three months ended March 31, 2013 compared to $160,000 for the same period in 2012.

COMPANY INFORMATION

Provident Community Bancshares is the holding company for Provident Community Bank, N.A., which operates eight community oriented banking centers in the upstate of South Carolina that offer a full array of financial services. The Corporation is headquartered in Rock Hill, South Carolina and its common stock is traded on the Over The Counter Bulletin Board under the symbol PCBS. Please visit our website at www.providentonline.com or contact Wanda J. Wells, SVP/Shareholder Relations Officer at wwells@providentonline.com or Richard H. Flake, EVP/CFO at rflake@providentonline.com.

FORWARD-LOOKING STATEMENTS

Certain matters set forth in this news release may contain forward-looking statements that are provided to assist in the understanding of anticipated future financial performance. Forward-looking statements are typically identified by words such as "believe," "expect," "anticipate," "intend," "outlook," "estimate," "forecast," "project" and other similar words and expressions. Forward-looking statements are subject to numerous assumptions, risk and uncertainties, which may change over time. The Corporation's performance involves risks and uncertainties that may cause actual results to differ materially from those in such statements. For a discussion of certain factors that may cause such forward-looking statements to differ materially from the Corporation's actual results, see the Corporation's Annual Report in Form 10-K for the year ended December 31, 2012, including in the Risk Factors section of that report. Forward-looking statements speak only as of the date they are made. The Corporation does not assume any duty and does not undertake to update its forward-looking statements.

SUMMARY CONSOLIDATED FINANCIAL DATA

Our summary consolidated financial data as of and for the three months ended March 31, 2013, in the opinion of our management, contain all adjustments (consisting of only normal recurring adjustments) necessary to present fairly our financial position and results of operations for such periods in accordance with generally accepted accounting principles.


Whistleblower Policy Encourages Fair Reporting and Disclosure7/14/2011

Whistleblower Policy

Effective:MAY 27, 2004
Revised: SEPTEMBER 14, 2010
Board Approved: SEPTEMBER 18, 2012

OVERVIEW

Provident Community Bancshares, Inc. (the 'Corporation') is committed to complying with all applicable laws, regulations, accounting standards, internal accounting controls, audit practices and other matters and has adopted this policy in order to:

Encourage disclosure and investigation of improprieties before they can disrupt the business or operations of the Corporation or lead to serious loss.

Promote a climate of accountability.

Ensure that no associate should feel at a disadvantage in lawfully raising legitimate concerns. The Audit / Compliance Committee of the Corporation's Board of Directors is responsible for establishing procedures for the receipt, retention, and treatment of complaints received by the Corporation regarding accounting, internal accounting controls, auditing and other matters. Individuals are encouraged to report concerns regarding questionable accounting, internal accounting controls, auditing and other matters as outlined in this policy. Any person may submit a good faith complaint, report, or concern regarding such matters without fear of dismissal or retaliation of any kind.

SCOPE OF POLICY

This policy relates to complaints, reports, and concerns about questionable accounting, internal accounting controls, auditing matters, or other matters including, but not limited to:

Any fraud or misstatement or omission in any financial statement of, or other financial information published by, the Corporation, including any report or document filed by the Corporation with the Securities and Exchange Commission or other governmental or regulatory authority;

Any error or misconduct in the preparation, evaluation, review or audit of any of the Corporation's financial statements;

Any fraud or misstatement or omission in the recording and maintaining of the financial records of the Corporation;

Any weakness or deficiency in or noncompliance with the Corporation's internal accounting controls;

Any misrepresentation or false statement made to or by a senior officer or accountant regarding a matter contained in, or required to be contained in, the financial records, financial statements, financial reports of the Corporation;

Any deviation from full and fair reporting of the Corporation's financial condition, results of operations or cash flows;

Any effort to mislead, deceive, coerce or fraudulently influence any internal or independent accountant or auditor in connection with the preparation, examination, audit or review of any financial statement or records of the Corporation;

Any other error, deficiency or weakness in the Corporation's financial statements, internal controls, auditing procedures or financial records or reports; or

Any matter or conflict of interest regarding the Corporation's independent auditors that may threaten their independence. This policy also relates to reports of violations, including violations of:

Applicable laws, rules, and regulations.

The Corporation's Code of Ethics

Any other code, policy or procedure established by the Corporation.

REPORTING PROCESS

Provident Community Bancshares has retained a third-party provider, The Network, to accept, verify, and log any complaints received. Any individual with concerns regarding questionable accounting, internal accounting controls, auditing and other matters can anonymously report a complaint through The Network by telephone or the internet at:
Toll-free number: 866.614.4836

Internet address: www.reportlineweb.com/providentcommunitybank Alternatively, any person wishing to communicate directly with an individual at Provident Community Bancshares to register a complaint may contact the Corporation's Chairman of the Audit / Compliance Committee at 803.329.4920, by mail at P.O. Box 36061, Rock Hill, SC 29732 or by email at breakfieldb@comporium.net. If a complaint involves the Chairman of the Audit / Compliance Committee or any member of the Audit / Compliance Committee, the complaint can be reported directly to the Corporation's Special Counsel, Kilpatrick Stockton, LLP, 607 14th Street, NW, Suite 900, Washington, DC 20005-2018.

The reporting individual should provide names, dates, places and other details sufficient to facilitate an effective investigation.

CONFIDENTIALITY

To help facilitate an effective investigation, Provident Community Bancshares encourages individuals to identify themselves when making a complaint. However, any person who does not want to be identified is entitled to register a complaint anonymously. Provident Community Bancshares will treat all complaints in a confidential manner. If a person has identified himself or herself when making a complaint in good faith, the Corporation will exercise particular care to keep the person's identity confidential until a formal investigation is launched. Thereafter, the identity of the person who registered a complaint will be kept confidential unless disclosure is necessary to complete a fair investigation or for another overriding reason, or as required by law or regulation.

HANDLING OF COMPLAINTS

Upon receiving a complaint under this policy, The Network will notify the Chairman of the Audit / Compliance Committee of Provident Community Bancshares' Board of Directors and other designees determined by the Audit / Compliance Committee that a complaint has been received. No person who is the subject of a complaint will receive such a notification. Upon receiving notice of a complaint, the Chairman of the Audit / Compliance Committee along with the Audit / Compliance Committee designees will investigate to determine if the information can be substantiated. Upon receiving the results of the investigation, the Chairman of the Audit / Compliance Committee and his designees will determine any further action required to follow up on the complaint. Prompt and appropriate corrective action will be taken when and as warranted in the judgment of the Audit / Compliance Committee. The Audit / Compliance Committee will maintain a log of all complaints reported to The Network, tracking their receipt, investigation, and resolution. At least annually, the Audit / Compliance Committee will provide copies of any complaints and concerns it receives, summaries of investigations and any corrective action taken, without identifying the source, if appropriate.

NO RETALIATION

Provident Community Bancshares will not discharge, demote, suspend, threaten, harass or in any other manner discriminate or retaliate against any person by reason of his or her having made any such complaint, or having reported any such concern, in good faith pursuant to and in accordance with these procedures. It shall be a violation of Provident Community Bancshares' policy to take any such action.





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