• First Community Bankshares, Inc. Announces Record 2021 Full Year Results, Fourth Quarter 2021 Results, and Quarterly Cash Dividend Declared

    المصدر: Nasdaq GlobeNewswire / 26 يناير 2022 16:00:01   America/New_York

    BLUEFIELD, Va., Jan. 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 year and quarter ended December 31, 2021.  Annual net income for 2021 was a record $51.17 million, or $2.94 per diluted common share.  The Company reported net income of $10.56 million, or $0.62 per diluted common share, for the quarter ended December 31, 2021. 

    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 February 11, 2022, and is expected to be paid on or about February 25, 2022. 2022 is the 37th consecutive year of regular dividends to common shareholders.

    Fourth Quarter 2021 and Current Highlights

    Income Statement

    • Annual net income for 2021 of $51.17 million, or $2.94 per diluted common share, was an increase of $15.24 million over 2020 and represents a 45.54% increase in diluted earnings per share compared to 2020.  A reversal of $8.47 million in the allowance for credit losses in 2021 accounts for a large portion of the increase in net income.  The decreases in credit loss provisioning are primarily due to significantly improved economic forecasts and GDP growth in the current year, as well as strong credit quality metrics, versus prior year provisioning driven by the pandemic.  The increase was offset by a decrease in net interest income of $6.10 million, or 5.62%, driven by the current historically low interest rate environment, as well as a $3.33 million decrease in accretion on acquired loans.
    • Net income for the fourth quarter of 2021 decreased $995 thousand to $10.56 million, or $0.62 per diluted common share, compared to the same quarter of 2020.  The decrease was primarily driven by a decrease in net interest income of $2.49 million, or 8.97%, due to the current historically low interest rate environment, as well as a $1.67 million decrease in accretion on acquired loans.  The decrease in net interest income was offset by the reversal of $846 thousand in allowance for credit losses for the fourth quarter. 
    • 2021 year-to-date return on average common equity increased to 11.96% compared to 8.54% in 2020.  Annualized fourth quarter-to-date return on average common equity decreased to 9.77% compared to 10.82% over the same quarter of 2020.
    • 2021 year-to-date return on average assets increased to 1.63% compared to 1.24% for 2020.  Annualized quarter-to-date return on average assets decreased to 1.32% compared to 1.54% over the same quarter of 2020.
    • Year-to-date non-interest income increased 14.98% to $34.30 million, over last year.  Non-interest income for the fourth quarter of 2021 increased $1.48 million, or 19.16%, compared to the same quarter of the prior year.  Both increases are largely attributable to increases in other service charges due to the more vibrant state of local economies with increased customer activity compared with last year.

    Balance Sheet and Asset Quality

    • Year-to-date, the Company has repurchased 949,386 common shares, or 5.36% of outstanding, for $28.88 million.
    • During the fourth quarter, the Company repurchased 222,700 common shares for $7.45 million. 
    • Net charge-offs for the fourth quarter of 2021 were $1.17 million, or 0.22% of annualized  average loans, compared to net charge-offs of $1.73 million, or 0.26% of annualized average loans, for the same period in 2020.   Non-performing loans to total loans remained a very low 1.03%.
    • The allowance for credit losses to total loans remains very strong at 1.29% of total loans.
    • The SBA had forgiven $56.86 million, or 93.20%, of the Company’s first round Paycheck Protection Program (“PPP”) loan balances through December 31, 2021.  Current PPP loan balances at December 31, 2021, which include second round originations, were $20.64 million. 
    • Book value per share at December 31, 2021, was $25.34, an increase of $1.26 from year-end 2020.

    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 December 31, 2021. First Community Bank offers wealth management and investment advice through its Trust Division and First Community Wealth Management, which collectively managed and administered $1.32 billion in combined assets as of December 31, 2021. The Company reported consolidated assets of $3.19 billion as of December 31, 2021. 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 Twelve Months Ended
     December 31, September 30, June 30, March 31, December 31,
    		 December 31,
    (Amounts in thousands, except share and per share data) 2021   2021   2021   2021   2020   2021   2020 
    Interest income             
    Interest and fees on loans$25,236  $25,119  $25,937  $26,540  $28,101  $102,832  $110,447 
    Interest on securities 362   445   435   495   549   1,737   2,789 
    Interest on deposits in banks 234   225   166   116   96   741   800 
    Total interest income 25,832   25,789   26,538   27,151   28,746   105,310   114,036 
    Interest expense             
    Interest on deposits 600   642   724   869   1,029   2,835   5,460 
    Interest on borrowings -   1   -   -   -   1   4 
    Total interest expense 600   643   724   869   1,029   2,836   5,464 
    Net interest income 25,232   25,146   25,814   26,282   27,717   102,474   108,572 
    (Recovery of) provision for credit losses (846)  (1,394)  (2,230)  (4,001)  634   (8,471)  12,668 
    Net interest income after provision 26,078   26,540   28,044   30,283   27,083   110,945   95,904 
    Noninterest income 9,215   8,720   8,797   7,569   7,733   34,301   29,833 
    Noninterest expense 21,701   18,836   19,361   18,820   19,877   78,718   79,625 
    Income before income taxes 13,592   16,424   17,480   19,032   14,939   66,528   46,112 
    Income tax expense 3,037   3,816   4,077   4,430   3,389   15,360   10,186 
    Net income$10,555  $12,608  $13,403  $14,602  $11,550  $51,168  $35,926 
                  
    Earnings per common share             
    Basic$0.62  $0.73  $0.77  $0.83  $0.65  $2.95  $2.02 
    Diluted 0.62   0.73   0.76   0.82   0.65   2.94   2.02 
    Cash dividends per common share             
    Regular 0.27   0.27   0.25   0.25   0.25   1.04   1.00 
    Weighted average shares outstanding             
    Basic 16,974,005   17,221,244   17,486,182   17,669,937   17,717,356   17,335,615   17,781,748 
    Diluted 17,038,980   17,279,576   17,536,144   17,729,185   17,751,805   17,402,936   17,815,380 
    Performance ratios             
    Return on average assets 1.32%  1.59%  1.70%  1.94%  1.54%  1.63%  1.24%
    Return on average common equity 9.77%  11.65%  12.55%  13.94%  10.82%  11.96%  8.54%
    Return on average tangible common equity(1) 14.28%  17.04%  18.40%  20.54%  15.96%  17.53%  12.68%
                  
    (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 Twelve Months Ended
     December 31,
    		 September 30,
    		 June 30,
    		 March 31,
    		 December 31,
    		 December 31,
    (Amounts in thousands)2021 2021  2021   2021   2020   2021   2020 
    Noninterest income             
    Wealth management$940  $974  $1,058  $881  $810  $3,853  $3,417 
    Service charges on deposits 3,718   3,599   3,098   3,031   3,478   13,446   13,019 
    Other service charges and fees 3,091   3,143   3,166   3,022   2,737   12,422   10,333 
    Net gain on sale of securities -   -   -   -   -   -   385 
    Net FDIC indemnification asset amortization -   -   (946)  (280)  (338)  (1,226)  (1,690)
    Other operating income 1,466   1,004   2,421   915   1,046   5,806   4,369 
    Total noninterest income$9,215  $8,720  $8,797  $7,569  $7,733  $34,301  $29,833 
    Noninterest expense             
    Salaries and employee benefits$12,493  $10,646  $10,216  $10,884  $11,119  $44,239  $44,005 
    Occupancy expense 1,368   1,155   1,115   1,275   1,225   4,913   5,043 
    Furniture and equipment expense 1,418   1,385   1,457   1,367   1,446   5,627   5,558 
    Service fees 1,946   1,530   1,513   1,335   1,232   6,324   5,665 
    Advertising and public relations 589   536   616   335   534   2,076   1,951 
    Professional fees 455   313   290   466   276   1,524   1,224 
    Amortization of intangibles 364   365   360   357   364   1,446   1,450 
    FDIC premiums and assessments 213   216   204   199   202   832   426 
    Merger, acquisition, and divestiture expense -   -   -   -   -   -   1,893 
    Other operating expense 2,855   2,690   3,590   2,602   3,479   11,737   12,410 
    Total noninterest expense$21,701  $18,836  $19,361  $18,820  $19,877  $78,718  $79,625 
                  


    RECONCILIATION OF GAAP NET INCOME TO NON-GAAP ADJUSTED EARNINGS (Unaudited)
                  
     Three Months EndedTwelve Months Ended
     December 31,
    		 September 30,
    		 June 30, March 31, December 31,
    		 December 31,
      2021   2021   2021   2021   2020   2021   2020 
    (Amounts in thousands, except per share data)             
    Net income$10,555  $12,608  $13,403  $14,602  $11,550  $51,168  $35,926 
    Non-GAAP adjustments:             
    Net (gain) loss on sale of securities -   -   -   -   -   -   (385)
    Merger, acquisition, and divestiture expense -   -   -   -   -   -   1,893 
    Total adjustments -   -   -   -   -   -   1,508 
    Tax effect -   -   -   -   -   -   354 
    Adjusted earnings, non-GAAP$10,555  $12,608  $13,403  $14,602  $11,550  $51,168  $37,080 
                  
    Adjusted diluted earnings per common share, non-GAAP$0.62  $0.73  $0.76  $0.82  $0.65  $2.94  $2.08 
    Performance ratios, non-GAAP             
    Adjusted return on average assets 1.32%  1.59%  1.70%  1.94%  1.54%  1.63%  1.28%
    Adjusted return on average common equity 9.77%  11.65%  12.55%  13.94%  10.82%  11.96%  8.81%
    Adjusted return on average tangible common equity(1) 14.28%  17.04%  18.40%  20.54%  15.96%  17.53%  13.08%
                  
    (1) A non-GAAP financial measure defined as adjusted earnings divided by average stockholders' equity less average goodwill and other intangible assets
                  


    AVERAGE BALANCE SHEETS AND NET INTEREST INCOME ANALYSIS (Unaudited)
                
     Three Months Ended December 31,
     2021 2020
     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)$2,163,613 $25,274 4.63% $2,188,069 $28,143 5.12%
    Securities available for sale 76,556  418 2.17%  87,592  640 2.91%
    Interest-bearing deposits 613,377  237 0.15%  375,088  99 0.11%
    Total earning assets 2,853,546  25,929 3.60%  2,650,749  28,882 4.33%
    Other assets 328,866      337,906    
    Total assets$3,182,412     $2,988,655    
                
    Liabilities and stockholders' equity           
    Interest-bearing deposits           
    Demand deposits$668,335 $28 0.02% $594,222 $50 0.03%
    Savings deposits 843,501  64 0.03%  739,312  112 0.06%
    Time deposits 362,869  509 0.56%  428,849  867 0.80%
    Total interest-bearing deposits 1,874,705  601 0.13%  1,762,383  1,029 0.23%
    Borrowings           
    Retail repurchase agreements 1,236  - N/M   925  1 0.14%
    Total borrowings 1,236  - N/M   925  1 0.14%
    Total interest-bearing liabilities 1,875,941  601 0.13%  1,763,308  1,030 0.23%
    Noninterest-bearing demand deposits 838,920      763,412    
    Other liabilities 38,986      37,305    
    Total liabilities 2,753,847      2,564,025    
    Stockholders' equity 428,565      424,630    
    Total liabilities and stockholders' equity$3,182,412     $2,988,655    
    Net interest income, FTE(1)  $25,328     $27,852  
    Net interest rate spread    3.47%     4.10%
    Net interest margin, FTE(1)    3.52%     4.18%
                
    (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 $1.10 million and $2.77 million for the three months ended December 31, 2021 and 2020, respectively.
                


    AVERAGE BALANCE SHEETS AND NET INTEREST INCOME ANALYSIS (Unaudited)
                
     Twelve Months Ended December 31,
     2021 2020
     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)$2,153,099 $102,996 4.78% $2,142,637 $110,619 5.16%
    Securities available for sale 81,049  2,008 2.48%  105,005  3,259 3.10%
    Interest-bearing deposits 570,040  745 0.13%  296,495  805 0.27%
    Total earning assets 2,804,188  105,749 3.77%  2,544,137  114,683 4.51%
    Other assets 330,640      348,150    
    Total assets$3,134,828     $2,892,287    
                
    Liabilities and stockholders' equity           
    Interest-bearing deposits           
    Demand deposits$646,999 $127 0.02% $556,279 $311 0.06%
    Savings deposits 816,845  281 0.03%  711,831  902 0.13%
    Time deposits 387,249  2,427 0.63%  456,755  4,247 0.93%
    Total interest-bearing deposits 1,851,093  2,835 0.15%  1,724,865  5,460 0.32%
    Borrowings           
    Retail repurchase agreements 1,194  1 0.07%  1,145  3 0.28%
    FHLB advances and other borrowings -  - -   36  1 2.23%
    Total borrowings 1,194  1 0.07%  1,181  4 0.34%
    Total interest-bearing liabilities 1,852,287  2,836 0.15%  1,726,046  5,464 0.32%
    Noninterest-bearing demand deposits 816,638      707,623    
    Other liabilities 38,151      37,826    
    Total liabilities 2,707,076      2,471,495    
    Stockholders' equity 427,752      420,792    
    Total liabilities and stockholders' equity$3,134,828     $2,892,287    
    Net interest income, FTE(1)  $102,913     $109,219  
    Net interest rate spread    3.62%     4.19%
    Net interest margin, FTE(1)    3.67%     4.29%
                
    (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 $4.66 million and $7.99 million for the twelve months ended December 31, 2021 and 2020, respectively.
                


    CONDENSED CONSOLIDATED QUARTERLY BALANCE SHEETS (Unaudited)
              
     December 31,
    		 September 30,
    		 June 30, March 31, December 31,
    (Amounts in thousands, except per share data) 2021   2021   2021   2021   2020 
    Assets         
    Cash and cash equivalents$677,439  $635,007  $618,738  $628,745  $456,561 
    Debt securities available for sale 76,292   77,440   79,842   87,643   83,358 
    Loans held for investment, net of unearned income (includes covered loans of $0, $9,041, $9,680, $10,744, and $11,257, for the stated periods, respectively) (1) 2,165,569   2,152,103   2,153,731   2,146,640   2,186,632 
    Allowance for credit losses (2) (27,858)  (29,877)  (31,857)  (34,563)  (26,182)
    Loans held for investment, net 2,137,711   2,122,226   2,121,874   2,112,077   2,160,450 
    FDIC indemnification asset -   -   -   946   1,223 
    Premises and equipment, net 52,284   52,842   53,560   57,371   57,700 
    Other real estate owned 1,015   1,240   1,324   1,740   2,083 
    Interest receivable 7,900   8,146   8,480   8,724   9,052 
    Goodwill 129,565   129,565   129,565   129,565   129,565 
    Other intangible assets 5,622   5,987   6,352   6,712   7,069 
    Other assets 106,691   107,258   109,548   106,543   104,075 
    Total assets$3,194,519  $3,139,711  $3,129,283  $3,140,066  $3,011,136 
              
    Liabilities         
    Deposits         
    Noninterest-bearing$842,783  $820,147  $819,138  $824,576  $772,795 
    Interest-bearing 1,886,608   1,853,699   1,846,556   1,848,524   1,773,452 
    Total deposits 2,729,391   2,673,846   2,665,694   2,673,100   2,546,247 
    Securities sold under agreements to repurchase 1,536   1,106   994   1,519   964 
    Interest, taxes, and other liabilities 35,817   37,395   35,061   39,448   37,195 
    Total liabilities 2,766,744   2,712,347   2,701,749   2,714,067   2,584,406 
              
    Stockholders' equity         
    Common stock 16,878   17,071   17,335   17,592   17,723 
    Additional paid-in capital 147,619   154,086   161,853   169,173   173,345 
    Retained earnings 264,824   258,860   250,911   241,889   237,585 
    Accumulated other comprehensive loss (1,546)  (2,653)  (2,565)  (2,655)  (1,923)
    Total stockholders' equity 427,775   427,364   427,534   425,999   426,730 
    Total liabilities and stockholders' equity$3,194,519  $3,139,711  $3,129,283  $3,140,066  $3,011,136 
              
    Shares outstanding at period-end 16,878,220   17,071,052   17,334,547   17,592,009   17,722,507 
    Book value per common share$25.34  $25.03  $24.66  $24.22  $24.08 
    Tangible book value per common share(3) 17.34   17.09   16.82   16.47   16.37 
              
    (1) No covered loans for December 2021 and September 2021. FDIC Loss Share agreement terminated in September 2021.
    (2) Effective January 1, 2021, the Company adopted the current expected credit loss methodology ("CECL"); prior to January 1, 2021, the Company utilized the incurred credit loss methodology.
    (3) A non-GAAP financial measure defined as stockholders' equity less goodwill and other intangible assets, divided by shares outstanding
              


    SELECTED CREDIT QUALITY INFORMATION (Unaudited)
              
     December 31,
    		 September 30,
    		 June 30, March 31, December 31,
    (Amounts in thousands) 2021   2021   2021   2021   2020 
    Allowance for Credit Losses (1)         
    Beginning balance$29,877  $31,857  $34,563  $26,182  $27,277 
    Cumulative effect of adoption of ASU 2016-13 -   -   -   13,107   - 
    (Recovery of) provision for credit/loan losses charged to operations (846)  (1,394)  (2,230)  (4,001)  634 
    Charge-offs (1,887)  (1,255)  (1,902)  (1,730)  (2,194)
    Recoveries 714   669   1,426   1,005   465 
    Net charge-offs (1,173)  (586)  (476)  (725)  (1,729)
    Ending balance$27,858  $29,877  $31,857  $34,563  $26,182 
              
    Nonperforming Assets         
    Nonaccrual loans$20,768  $22,070  $24,085  $26,106  $22,003 
    Accruing loans past due 90 days or more 87   5   327   171   295 
    Troubled debt restructurings ("TDRs")(2) 1,367   359   133   308   187 
    Total nonperforming loans 22,222   22,434   24,545   26,585   22,485 
    OREO 1,015   1,240   1,324   1,740   2,083 
    Total nonperforming assets$23,237  $23,674  $25,869  $28,325  $24,568 
              
    Additional Information         
    Total Accruing TDRs(3)$8,652  $8,185  $8,309  $9,027  $10,248 
              
    Asset Quality Ratios         
    Nonperforming loans to total loans 1.03%  1.04%  1.14%  1.24%  1.03%
    Nonperforming assets to total assets 0.73%  0.75%  0.83%  0.90%  0.82%
    Allowance for credit/loan losses to nonperforming loans 125.36%  133.18%  129.79%  130.01%  116.44%
    Allowance for credit/loan losses to total loans 1.29%  1.39%  1.48%  1.61%  1.20%
    Annualized net charge-offs to average loans 0.22%  0.11%  0.09%  0.14%  0.26%
              
    (1) Effective January 1, 2021, the Company adopted the current expected credit loss methodology ("CECL"); prior to January 1, 2021, the Company utilized the incurred credit loss methodology.
    (2) Accruing TDRs restructured within the past six months or nonperforming
    (3) Accruing total TDRs
      

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


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