• First Community Bankshares, Inc. Announces First Quarter 2022 Results and Quarterly Cash Dividend

    المصدر: Nasdaq GlobeNewswire / 26 أبريل 2022 15:30:59   America/Chicago

    BLUEFIELD, Va., April 26, 2022 (GLOBE NEWSWIRE) -- First Community Bankshares, Inc. (NASDAQ: FCBC) (www.firstcommunitybank.com) (the “Company”) today reported its unaudited results of operations and other financial information for the quarter ended March 31, 2022. The Company reported quarterly net income of $9.52 million, or $0.56 per diluted common share, for the quarter ended March 31, 2022.

    The Company also declared a quarterly cash dividend to common shareholders of twenty-seven cents ($0.27) per common share, which is an increase of 8.00% over the same quarter last year. The quarterly dividend is payable to common shareholders of record on May 6, 2022, and is expected to be paid on or about May 20, 2022. This marks the 37th consecutive year of regular dividends to common shareholders.

    First Quarter 2022 and Current Highlights

        Income Statement

    • Net income of $9.52 million for the quarter was a decrease of $5.09 million, or $0.26 per diluted common share, compared to the same quarter of 2021. The decrease was primarily driven by a return to more normalized expense in the provision for credit losses of $1.96 million for the first quarter of 2022 compared to a $4.00 million reversal of provision in the first quarter of 2021. The current year provision is largely due to robust loan growth in the first quarter, principally led by commercial loan demand. The reversal of provision in the first quarter of 2021 was driven by a significantly improved economic outlook than in early 2020.
    • Despite the significant increase in credit loss provision between the two periods, annualized first quarter return on average assets was 1.20% and return on average common equity was 8.98%.
    • Net interest margin for the first quarter was 3.55%, which was a three basis point increase from 3.52% reported for the fourth quarter of 2021. The cost of interest-bearing deposits declined another three basis points to 0.10%.
    • Salaries and employee benefits increased $787 thousand, or 7.23%, from last year. During the quarter, the Company implemented annualized wage increases of approximately $2.5 million as part of its ongoing strategic initiative to enhance Human Capital Management, which included an increased minimum wage.

        Balance Sheet and Asset Quality

    • The Company’s loan portfolio increased by $78.73 million, or an annualized growth rate of 14.74%, during the first quarter of 2022. Loan demand and originations were strong in all categories, including construction, commercial real estate, residential mortgage, and consumer loans.
    • During the first quarter, the Company repurchased 132,000 common shares for $4.09 million.
    • Non-performing loans to total loans remained very low at 0.96% of total loans and continues the declining trend experienced over the past four quarters. Net charge-offs for the first quarter of 2022 were $838 thousand, or 0.15% of annualized average loans, compared to net charge-offs of $725 thousand, or 0.14% of annualized average loans, for the same period in 2021.
    • The allowance for credit losses to total loans remained at 1.29% of total loans.
    • Book value per share at March 31, 2022, was $25.27, a decrease of $0.07 from year-end 2021.

    Non-GAAP Financial Measures

    In addition to financial statements prepared in accordance with U.S. generally accepted accounting principles (“GAAP”), the Company uses certain non-GAAP financial measures that provide useful information for financial and operational decision making, evaluating trends, and comparing financial results to other financial institutions. The non-GAAP financial measures presented in this news release include “tangible book value per common share,” “return on average tangible common equity,” “adjusted earnings,” “adjusted diluted earnings per share,” “adjusted return on average assets,” “adjusted return on average common equity,” “adjusted return on average tangible common equity,” and certain financial measures presented on a fully taxable equivalent (“FTE”) basis. FTE basis is calculated using the federal statutory income tax rate of 21%. While the Company believes certain non-GAAP financial measures enhance the understanding of its business and performance, they are supplemental and not a substitute for, or more important than, financial measures prepared in accordance with GAAP and may not be comparable to those reported by other financial institutions.

    About First Community Bankshares, Inc.

    First Community Bankshares, Inc., a financial holding company headquartered in Bluefield, Virginia, provides banking products and services through its wholly owned subsidiary First Community Bank. First Community Bank operated 49 branch banking locations in Virginia, West Virginia, North Carolina, and Tennessee as of March 31, 2022. First Community Bank offers wealth management and investment advice and services through its Trust Division and through its wholly owned subsidiary, First Community Wealth Management, which collectively managed and administered $1.28 billion in combined assets as of March 31, 2022. The Company reported consolidated assets of $3.24 billion as of March 31, 2022. The Company’s common stock is listed on the NASDAQ Global Select Market under the trading symbol, “FCBC”. Additional investor information is available on the Company’s website at www.firstcommunitybank.com.

    This news release may include forward-looking statements. These forward-looking statements are based on current expectations that involve risks, uncertainties, and assumptions. Should one or more of these risks or uncertainties materialize or should underlying assumptions prove incorrect, actual results may differ materially. These risks include: changes in business or other market conditions; the timely development, production and acceptance of new products and services; the challenge of managing asset/liability levels; the management of credit risk and interest rate risk; the difficulty of keeping expense growth at modest levels while increasing revenues; and other risks detailed from time to time in the Company’s Securities and Exchange Commission reports including, but not limited to, the Annual Report on Form 10-K for the most recent fiscal year end. Pursuant to the Private Securities Litigation Reform Act of 1995, the Company does not undertake to update forward-looking statements to reflect circumstances or events that occur after the date the forward-looking statements are made.

     
     
    CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Unaudited)
               
      Three Months Ended
    (Amounts in thousands, except share and per share data) March 31,
    2022
    		 December
    31, 2021
    		 September
    30, 2021
    		 June 30,
    2021
    		 March 31,
    2021
    Interest income          
    Interest and fees on loans $24,641  $25,236  $25,119  $25,937  $26,540 
    Interest on securities  750   362   445   435   495 
    Interest on deposits in banks  248   234   225   166   116 
    Total interest income  25,639   25,832   25,789   26,538   27,151 
    Interest expense          
    Interest on deposits  486   600   642   724   869 
    Interest on borrowings  -   -   1   -   - 
    Total interest expense  486   600   643   724   869 
    Net interest income  25,153   25,232   25,146   25,814   26,282 
    (Recovery of) provision for credit losses  1,961   (846)  (1,394)  (2,230)  (4,001)
    Net interest income after provision  23,192   26,078   26,540   28,044   30,283 
    Noninterest income  9,194   9,215   8,720   8,797   7,569 
    Noninterest expense  19,986   21,701   18,836   19,361   18,820 
    Income before income taxes  12,400   13,592   16,424   17,480   19,032 
    Income tax expense  2,885   3,037   3,816   4,077   4,430 
    Net income $9,515  $10,555  $12,608  $13,403  $14,602 
               
    Earnings per common share          
    Basic $0.57  $0.62  $0.73  $0.77  $0.83 
    Diluted  0.56   0.62   0.73   0.76   0.82 
    Cash dividends per common share          
    Regular  0.27   0.27   0.27   0.25   0.25 
    Weighted average shares outstanding          
    Basic  16,817,284   16,974,005   17,221,244   17,486,182   17,669,937 
    Diluted  16,864,515   17,038,980   17,279,576   17,536,144   17,729,185 
    Performance ratios          
    Return on average assets  1.20%  1.32%  1.59%  1.70%  1.94%
    Return on average common equity  8.98%  9.77%  11.65%  12.55%  13.94%
    Return on average tangible common equity(1)  13.10%  14.28%  17.04%  18.40%  20.54%
               
    (1) A non-GAAP financial measure defined as net income divided by average stockholders' equity less average goodwill and other intangible assets


    CONDENSED CONSOLIDATED QUARTERLY NONINTEREST INCOME AND EXPENSE (Unaudited)
               
      Three Months Ended
    (Amounts in thousands) March 31,
    2022
    		 December
    31, 2021
    		 September
    30, 2021
    		 June 30,
    2021    		 March 31,
    2021
    Noninterest income          
    Wealth management $972  $940  $974  $1,058  $881 
    Service charges on deposits  3,498   3,718   3,599   3,098   3,031 
    Other service charges and fees  3,017   3,091   3,143   3,166   3,022 
    Net FDIC indemnification asset amortization  -   -   -   (946)  (280)
    Other operating income  1,707   1,466   1,004   2,421   915 
    Total noninterest income $9,194  $9,215  $8,720  $8,797  $7,569 
    Noninterest expense          
    Salaries and employee benefits $11,671  $12,493  $10,646  $10,216  $10,884 
    Occupancy expense  1,269   1,368   1,155   1,115   1,275 
    Furniture and equipment expense  1,614   1,418   1,385   1,457   1,367 
    Service fees  1,503   1,946   1,530   1,513   1,335 
    Advertising and public relations  540   589   536   616   335 
    Professional fees  453   455   313   290   466 
    Amortization of intangibles  357   364   365   360   357 
    FDIC premiums and assessments  218   213   216   204   199 
    Other operating expense  2,361   2,855   2,690   3,590   2,602 
    Total noninterest expense $19,986  $21,701  $18,836  $19,361  $18,820 


    AVERAGE BALANCE SHEETS AND NET INTEREST INCOME ANALYSIS (Unaudited)
                 
      Three Months Ended March 31,
       2022   2021 
      Average   Average Yield/ Average   Average Yield/
    (Amounts in thousands) Balance Interest(1) Rate(1) Balance Interest(1) Rate(1)
    Assets            
    Earning assets            
    Loans(2)(3) $2,200,003  $24,698  4.55% $2,165,054  $26,582  4.98%
    Securities available for sale  140,975   800  2.30%  83,634   573  2.78%
    Interest-bearing deposits  544,718   249  0.19%  468,067   118  0.10%
    Total earning assets  2,885,696   25,747  3.62%  2,716,755   27,273  4.07%
    Other assets  328,212       331,483     
    Total assets $3,213,908      $3,048,238     
                 
    Liabilities and stockholders' equity            
    Interest-bearing deposits            
    Demand deposits $679,211  $28  0.02% $613,003  $39  0.03%
    Savings deposits  881,295   66  0.03%  778,430   91  0.05%
    Time deposits  346,902   392  0.46%  412,986   739  0.73%
    Total interest-bearing deposits  1,907,408   486  0.10%  1,804,419   869  0.19%
    Borrowings            
    Retail repurchase agreements  1,993   -  N/M   1,234   -  N/M 
    Total borrowings  1,993   -  N/M   1,234   -  N/M 
    Total interest-bearing liabilities  1,909,401   486  0.10%  1,805,653   869  0.19%
    Noninterest-bearing demand deposits  835,921       777,876     
    Other liabilities  38,956       39,926     
    Total liabilities  2,784,278       2,623,455     
    Stockholders' equity  429,630       424,783     
    Total liabilities and stockholders' equity $3,213,908      $3,048,238     
    Net interest income, FTE(1)   $25,261      $26,404   
    Net interest rate spread     3.52%     3.88%
    Net interest margin, FTE(1)     3.55%     3.94%
                 
    (1) Interest income and average yield/rate are presented on a FTE, non-GAAP, basis using the federal statutory income tax rate of 21%.
    (2) Nonaccrual loans are included in the average balance; however, no related interest income is recorded during the period of nonaccrual.
    (3) Interest on loans includes non-cash and accelerated purchase accounting accretion of $866 thousand and $1.18 million for the three months ended March 31, 2022 and 2021, respectively.


    CONDENSED CONSOLIDATED QUARTERLY BALANCE SHEETS (Unaudited)
               
    (Amounts in thousands, except per share data)  March 31,
    2022
    		 December
    31, 2021
    		 September
    30, 2021    		 June 30,
    2021
    		 March 31,
    2021
    Assets          
    Cash and cash equivalents $457,306  $677,439  $635,007  $618,738  $628,745 
    Debt securities available for sale  268,703   76,292   77,440   79,842   87,643 
    Loans held for investment, net of unearned income          
    (includes covered loans of $7,503 and $9,041 for          
    June 30 and March 31, 2021, respectively) (1)  2,244,296   2,165,569   2,152,103   2,153,731   2,146,640 
    Allowance for credit losses  (28,981)  (27,858)  (29,877)  (31,857)  (34,563)
    Loans held for investment, net  2,215,315   2,137,711   2,122,226   2,121,874   2,112,077 
    FDIC indemnification asset  -   -   -   -   946 
    Premises and equipment, net  50,912   52,284   52,842   53,560   57,371 
    Other real estate owned  848   1,015   1,240   1,324   1,740 
    Interest receivable  8,100   7,900   8,146   8,480   8,724 
    Goodwill  129,565   129,565   129,565   129,565   129,565 
    Other intangible assets  5,266   5,622   5,987   6,352   6,712 
    Other assets  108,112   106,691   107,258   109,548   106,543 
    Total assets $3,244,127  $3,194,519  $3,139,711  $3,129,283  $3,140,066 
               
    Liabilities          
    Deposits          
    Noninterest-bearing $860,652  $842,783  $820,147  $819,138  $824,576 
    Interest-bearing  1,922,292   1,886,608   1,853,699   1,846,556   1,848,524 
    Total deposits  2,782,944   2,729,391   2,673,846   2,665,694   2,673,100 
    Securities sold under agreements to repurchase  2,488   1,536   1,106   994   1,519 
    Interest, taxes, and other liabilities  34,539   35,817   37,395   35,061   39,448 
    Total liabilities  2,819,971 - 2,766,744 - 2,712,347 - 2,701,749 - 2,714,067 
               
    Stockholders' equity          
    Common stock  16,782   16,878   17,071   17,335   17,592 
    Additional paid-in capital  144,088   147,619   154,086   161,853   169,173 
    Retained earnings  269,798   264,824   258,860   250,911   241,889 
    Accumulated other comprehensive loss  (6,512)  (1,546)  (2,653)  (2,565)  (2,655)
    Total stockholders' equity  424,156   427,775   427,364   427,534   425,999 
    Total liabilities and stockholders' equity $3,244,127  $3,194,519  $3,139,711  $3,129,283  $3,140,066 
               
    Shares outstanding at period-end  16,781,975   16,878,220   17,071,052   17,334,547   17,592,009 
    Book value per common share $25.27  $25.34  $25.03  $24.66  $24.22 
    Tangible book value per common share(2)  17.24   17.34   17.09   16.82   16.47 
               
    (1) FDIC Loss Share agreement terminated in September 2021.
    (2) A non-GAAP financial measure defined as stockholders' equity less goodwill and other intangible assets, divided by shares outstanding


    SELECTED CREDIT QUALITY INFORMATION (Unaudited)
               
    (Amounts in thousands) March 31,
    2022
    		 December
    31, 2021
    		 September
    30, 2021
    		 June 30,
    2021
    		 March 31,
    2021
    Allowance for Credit Losses           
    Beginning balance $27,858  $29,877  $31,857  $34,563  $26,182 
    Cumulative effect of adoption of ASU 2016-13  -   -   -   -   13,107 
    Provision for (recovery of)          
    credit/loan losses charged to operations  1,961   (846)  (1,394)  (2,230)  (4,001)
    Charge-offs  (1,302)  (1,887)  (1,255)  (1,902)  (1,730)
    Recoveries  464   714   669   1,426   1,005 
    Net charge-offs  (838)  (1,173)  (586)  (476)  (725)
    Ending balance $28,981  $27,858  $29,877  $31,857  $34,563 
               
    Nonperforming Assets          
    Nonaccrual loans $20,487  $20,768  $22,070  $24,085  $26,106 
    Accruing loans past due 90 days or more  -   87   5   327   171 
    Troubled debt restructurings ("TDRs")(1)  1,141   1,367   359   133   308 
    Total nonperforming loans  21,628   22,222   22,434   24,545   26,585 
    OREO  848   1,015   1,240   1,324   1,740 
    Total nonperforming assets $22,476  $23,237  $23,674  $25,869  $28,325 
               
               
    Additional Information          
    Total Accruing TDRs(3) $8,782  $8,652  $8,185  $8,309  $9,027 
               
    Asset Quality Ratios          
    Nonperforming loans to total loans  0.96%  1.03%  1.04%  1.14%  1.24%
    Nonperforming assets to total assets  0.69%  0.73%  0.75%  0.83%  0.90%
    Allowance for credit/loan losses to nonperforming loans  134.00%  125.36%  133.18%  129.79%  130.01%
    Allowance for credit/loan losses to total loans  1.29%  1.29%  1.39%  1.48%  1.61%
    Annualized net charge-offs to average loans  0.15%  0.22%  0.11%  0.09%  0.14%
               
    (1) Accruing TDRs restructured within the past six months or nonperforming
    (2) Accruing total TDRs
     
     

    FOR MORE INFORMATION, CONTACT:
    David D. Brown
    (276) 326-9000


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