First Community Bankshares, Inc. Announces Third Quarter 2024 Results and Quarterly Cash Dividend

BLUEFIELD, Va., Oct. 22, 2024 (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 September 30, 2024. The Company reported net income of $13.03 million, or $0.71 per diluted common share, for the quarter ended September 30, 2024.  Net income for the nine months ended September 30, 2024, was $38.56 million or $2.09 per diluted common share.   

The Company also declared a quarterly cash dividend to common shareholders of thirty-one cents, $0.31 per common share. The quarterly dividend is payable to common shareholders of record on November 8, 2024, and is expected to be paid on or about November 22, 2024. This marks the 39th consecutive year of regular dividends to common shareholders.

The Company is working with borrowers and customers in North Carolina, Tennessee, Virginia, and southern West Virginia affected by the devastating floods, power outages, and water shortages from Hurricane Helene.  This includes payment relief for affected borrowers.  We will continue to monitor the situation over the coming weeks as it relates to asset quality.

Third Quarter 2024 Highlights

Income Statement

• Net income of $13.03 million for the third quarter of 2024, was a decrease of $1.61 million, or 10.98%, from the same quarter of 2023.  Net income of $38.56 million for the first nine months of 2024, was an increase of $2.33 million, or 6.42%, from the same period of 2023.  
• Net interest income decreased $1.75 million compared to the same quarter in 2023, primarily due to increases in rates paid on interest-bearing deposits.    
• Net interest margin of 4.41% was a decrease of 10 basis points over the same quarter of 2023.  The yield on earning assets increased 26 basis points from the same period of 2023 and is attributable to an increase in interest income resulting from an increase in yield.  While there was an increase in yield for both loans and securities available for sale; the average balances decreased.  The average balance for interest-bearing deposits with banks increased $219.59 million over the same period of 2023; however, there was no change in the yield from the same period of 2023.  The yield on interest-bearing liabilities increased 58 basis points when compared with the same period of 2023 and is primarily attributable to increased rates on interest-bearing deposit liabilities.  
• Noninterest income increased approximately $830 thousand, or 8.63%, when compared to the same quarter of 2023.  Noninterest income for the third quarter of 2024 included a gain of $825 thousand from the sale of  two closed branch properties; noninterest income for the same period of 2023 included a gain of $204 thousand for the sale of a closed branch property.  Noninterest expense increased $1.26 million, or 5.52%.    
• Annualized return on average assets ("ROA") was 1.60% for the third quarter and 1.60% for the first nine months of 2024 compared to 1.74% and 1.49% for the same periods, respectively, of 2023. Annualized return on average common equity ("ROE") was 10.04% for the third quarter and 10.08% for the first nine months of 2024 compared to 11.63% and 10.25% for the same periods, respectively, of 2023.  Annualized return on average tangible common equity ("ROTCE") was 14.46% for the third quarter and 14.61% for the first nine months of 2024 compared to 17.11% and 14.94% for the same periods, respectively, of 2023.

Balance Sheet and Asset Quality

• Consolidated assets totaled $3.22 billion at September 30, 2024.  
• Loans decreased $128.19 million, or 4.98%, from December 31, 2023.  Securities available for sale decreased $114.29 million, or 40.68%, from December 31, 2023.  Deposits decreased $63.07 million, or 2.32%.  The net effect of these balance sheet changes resulted in an increase in cash and cash equivalents of $198.92 million, or 170.86%.    
• The Company repurchased 12,854 common shares during the third quarter of 2024 at a total cost of $469 thousand.  The Company repurchased 257,294 common shares during the first nine months of 2024 at a total cost of $8.72 million.  
• Non-performing loans to total loans increased to 0.82% when compared with the same quarter of 2023.  The Company experienced net charge-offs for the third quarter of 2024 of $1.13 million, or 0.18% of annualized average loans, compared to net charge-offs of $1.46 million, or 0.22%, of annualized average loans for the same period in 2023.
• The allowance for credit losses to total loans was 1.44% at September 30, 2024, compared to 1.41% at December 31, 2023, and 1.39% for September 30, 2023.
• Book value per share at September 30, 2024, was $ 28.47, an increase of $1.27 from year-end 2023.

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%.  Where non-GAAP financial measures are used, the comparable GAAP financial measure, as well as a reconciliation to that comparable GAAP financial measure can be found in the attached tables to this press release.  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 53 branch banking locations in Virginia, West Virginia, North Carolina, and Tennessee as of September 30, 2024. 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 $1.64 billion in combined assets as of September 30, 2024. The Company reported consolidated assets of $3.22 billion as of September 30, 2024. 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; changes in banking laws and regulations; the degree of competition by traditional and non-traditional competitors; the impact of natural disasters, extreme weather events, military conflict , terrorism or other geopolitical events; 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)
(Amounts in thousands, except share and per share data)
		Three Months Ended																				Nine Months Ended
		September 30,				June 30,				March 31,				December 31,				September 30,				September 30,
		2024				2024				2024				2023				2023				2024				2023
Interest income
Interest and fees on loans		$	32,120			$	32,696			$	33,418			$	33,676			$	33,496			$	98,234			$	93,051
Interest on securities			1,070				1,211				1,698				1,888				1,912				3,979				6,068
Interest on deposits in banks			3,702				2,882				913				438				697				7,497				2,044
Total interest income			36,892				36,789				36,029				36,002				36,105				109,710				101,163
Interest expense
Interest on deposits			5,298				4,877				4,365				3,935				2,758				14,540				5,406
Interest on borrowings			-				-				35				4				-				35				136
Total interest expense			5,298				4,877				4,400				3,939				2,758				14,575				5,542
Net interest income			31,594				31,912				31,629				32,063				33,347				95,135				95,621
Provision for credit losses			1,360				144				1,011				1,029				1,109				2,515				6,956
Net interest income after provision			30,234				31,768				30,618				31,034				32,238				92,620				88,665
Noninterest income			10,452				9,342				9,259				10,462				9,622				29,053				26,990
Noninterest expense			24,177				24,897				23,386				26,780				22,913				72,460				68,397
Income before income taxes			16,509				16,213				16,491				14,716				18,947				49,213				47,258
Income tax expense			3,476				3,527				3,646				2,932				4,307				10,649				11,022
Net income		$	13,033			$	12,686			$	12,845			$	11,784			$	14,640			$	38,564			$	36,236
Earnings per common share
Basic		$	0.71			$	0.69			$	0.70			$	0.64			$	0.78			$	2.10			$	2.03
Diluted		$	0.71			$	0.71			$	0.71			$	0.66			$	0.79			$	2.09			$	2.06
Cash dividends per common share
Regular			0.31				0.29				0.29				0.29				0.29				0.89				0.87
Weighted average shares outstanding
Basic			18,279,612				18,343,958				18,476,128				18,530,114				18,786,032				18,366,249				17,816,505
Diluted			18,371,907				18,409,876				18,545,910				18,575,226				18,831,836				18,432,023				17,857,494
Performance ratios
Return on average assets			1.60	%			1.58	%			1.60	%			1.43	%			1.74	%			1.60	%			1.49	%
Return on average common equity			10.04	%			10.02	%			10.18	%			9.39	%			11.63	%			10.08	%			10.25	%
Return on average tangible common equity(1)			14.46	%			14.54	%			14.82	%			13.82	%			17.11	%			14.61	%			14.94	%

 

____________
(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)
(Amounts in thousands)		Three Months Ended																				Nine Months Ended
		September 30,				June 30,				March 31,				December 31,				September 30,				September 30,
		2024				2024				2024				2023				2023				2024				2023
Noninterest income
Wealth management		$	1,071			$	1,064			$	1,099			$	1,052			$	1,145			$	3,234			$	3,127
Service charges on deposits			3,661				3,428				3,310				3,637				3,729				10,399				10,359
Other service charges and fees			3,697				3,670				3,450				3,541				3,564				10,817				10,106
(Loss) gain on sale of securities			-				-				-				-				-				-				(21	)
Other operating income			2,023				1,180				1,400				2,232				1,184				4,603				3,419
Total noninterest income		$	10,452			$	9,342			$	9,259			$	10,462			$	9,622			$	29,053			$	26,990
Noninterest expense
Salaries and employee benefits		$	13,129			$	12,491			$	12,581			$	12,933			$	12,673			$	38,201			$	36,954
Occupancy expense			1,270				1,309				1,378				1,252				1,271				3,957				3,715
Furniture and equipment expense			1,574				1,687				1,545				1,489				1,480				4,806				4,389
Service fees			2,461				2,427				2,449				2,255				2,350				7,337				6,653
Advertising and public relations			967				933				796				843				968				2,696				2,457
Professional fees			221				330				372				787				172				923				780
Amortization of intangibles			536				530				530				536				536				1,596				1,195
FDIC premiums and assessments			365				364				369				376				392				1,098				1,135
Merger expense			-				-				-				-				-				-				2,393
Litigation expense			-				1,800				-				3,000				-				1,800				-
Other operating expense			3,654				3,026				3,366				3,309				3,071				10,046				8,726
Total noninterest expense		$	24,177			$	24,897			$	23,386			$	26,780			$	22,913			$	72,460			$	68,397

RECONCILIATION OF GAAP NET INCOME TO NON-GAAP ADJUSTED EARNINGS (Unaudited)
(Amounts in thousands, except per share data)		Three Months Ended																				Nine Months Ended
		September 30,				June 30,				March 31,				December 31,				September 30,				September 30,
		2024				2024				2024				2023				2023				2024				2023
Adjusted Net Income for diluted earnings per share		$	13,033			$	12,686			$	12,845			$	12,314			$	14,855			$	38,564			$	36,828
Non-GAAP adjustments:
Loss (gain) on sale of securities			-				-				-				-				-				-				21
Merger expense			-				-				-				-				-				-				2,393
Day 2 provision for allowance for credit losses - Surrey			-				-				-				-				-				-				1,614
Litigation expense			-				1,800				-				3,000				-				1,800				-
Other items(1)			(825	)			-				-				-				(204	)			(825	)			-
Total adjustments			(825	)			1,800				-				3,000				(204	)			975				4,028
Tax effect			(198	)			432				-				720				(49	)			234				532
Adjusted earnings, non-GAAP		$	12,406			$	14,054			$	12,845			$	14,594			$	14,700			$	39,305			$	40,324
Adjusted diluted earnings per common share, non-GAAP		$	0.68			$	0.76			$	0.69			$	0.79			$	0.78			$	2.13			$	2.26
Performance ratios, non-GAAP
Adjusted return on average assets			1.53	%			1.75	%			1.60	%			1.77	%			1.75	%			1.63	%			1.66	%
Adjusted return on average common equity			9.56	%			11.10	%			10.18	%			11.63	%			11.68	%			10.27	%			11.40	%
Adjusted return on average tangible common equity (2)			13.77	%			16.11	%			14.82	%			17.11	%			17.18	%			14.89	%			16.62	%

 

____________
(1)	Includes other non-recurring income and expense items.
(2)	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 September 30,
		2024												2023
		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)		$	2,455,807			$	32,201				5.22	%		$	2,604,885			$	33,566				5.11	%
Securities available for sale			133,654				1,099				3.27	%			284,659				1,952				2.72	%
Interest-bearing deposits			270,440				3,701				5.44	%			50,855				697				5.44	%
Total earning assets			2,859,901				37,001				5.15	%			2,940,399				36,215				4.89	%
Other assets			371,358												393,001
Total assets		$	3,231,259											$	3,333,400
Liabilities and stockholders' equity
Interest-bearing deposits
Demand deposits		$	656,780			$	234				0.14	%		$	699,066			$	165				0.09	%
Savings deposits			886,766				3,735				1.68	%			862,121				1,941				0.89	%
Time deposits			245,020				1,329				2.16	%			263,940				652				0.98	%
Total interest-bearing deposits			1,788,566				5,298				1.18	%			1,825,127				2,758				0.60	%
Borrowings
Retail repurchase agreements			1,054				-				0.05	%			1,254				-				N/M
Total borrowings			1,054				-				0.05	%			1,254				-				N/M
Total interest-bearing liabilities			1,789,620				5,298				1.18	%			1,826,381				2,758				0.60	%
Noninterest-bearing demand deposits			877,472												964,093
Other liabilities			47,892												43,574
Total liabilities			2,714,984												2,834,048
Stockholders' equity			516,275												499,352
Total liabilities and stockholders' equity		$	3,231,259											$	3,333,400
Net interest income, FTE(1)						$	31,703											$	33,457
Net interest rate spread											3.97	%											4.29	%
Net interest margin, FTE(1)											4.41	%											4.51	%

 

____________
(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 $592 thousand and $874 thousand for the three months ended September 30, 2024 and 2023, respectively.

AVERAGE BALANCE SHEETS AND NET INTEREST INCOME ANALYSIS (Unaudited)
		Nine Months Ended September 30,
		2024												2023
		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)		$	2,501,209			$	98,479				5.26	%		$	2,523,814			$	93,261				4.94	%
Securities available for sale			172,331				4,073				3.16	%			306,435				6,191				2.70	%
Interest-bearing deposits			182,773				7,499				5.48	%			51,759				2,047				5.29	%
Total earning assets			2,856,313				110,051				5.15	%			2,882,008				101,499				4.71	%
Other assets			372,663												366,243
Total assets		$	3,228,976											$	3,248,251
Liabilities and stockholders' equity
Interest-bearing deposits
Demand deposits		$	662,433			$	570				0.11	%		$	682,820			$	225				0.04	%
Savings deposits			875,797				10,730				1.64	%			850,411				3,731				0.59	%
Time deposits			247,088				3,240				1.75	%			272,435				1,450				0.71	%
Total interest-bearing deposits			1,785,318				14,540				1.09	%			1,805,666				5,406				0.40	%
Borrowings
Federal funds purchased			839				35				5.52	%			3,532				135				5.11	%
Retail repurchase agreements			1,061				-				0.05	%			1,674				1				0.06	%
Total borrowings			1,900				35				2.46	%			5,206				136				3.49	%
Total interest-bearing liabilities			1,787,218				14,575				1.09	%			1,810,872				5,542				0.41	%
Noninterest-bearing demand deposits			883,013												924,591
Other liabilities			47,772												40,014
Total liabilities			2,718,003												2,775,477
Stockholders' equity			510,973												472,774
Total liabilities and stockholders' equity		$	3,228,976											$	3,248,251
Net interest income, FTE(1)						$	95,476											$	95,957
Net interest rate spread											4.06	%											4.30	%
Net interest margin, FTE(1)											4.46	%											4.45	%

 

____________
(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 $2.04 million and $1.95 million for the nine months ended September 30, 2024 and 2023, respectively.

CONDENSED CONSOLIDATED QUARTERLY BALANCE SHEETS (Unaudited)
		September 30,				June 30,				March 31,				December 31,				September 30,
(Amounts in thousands, except per share data)		2024				2024				2024				2023				2023
Assets
Cash and cash equivalents		$	315,338			$	329,877			$	248,905			$	116,420			$	113,397
Debt securities available for sale, at fair value			166,669				129,686				166,247				280,961				275,332
Loans held for investment, net of unearned income			2,444,113				2,473,268				2,519,833				2,572,298				2,593,472
Allowance for credit losses			(35,118	)			(34,885	)			(35,461	)			(36,189	)			(36,031	)
Loans held for investment, net			2,408,995				2,438,383				2,484,372				2,536,109				2,557,441
Premises and equipment, net			49,654				50,528				51,333				50,680				51,205
Other real estate owned			346				100				374				192				243
Interest receivable			9,883				9,984				10,719				10,881				10,428
Goodwill			143,946				143,946				143,946				143,946				143,946
Other intangible assets			13,550				14,085				14,615				15,145				15,681
Other assets			115,980				116,230				115,470				114,211				116,552
Total assets		$	3,224,361			$	3,232,819			$	3,235,981			$	3,268,545			$	3,284,225
Liabilities
Deposits
Noninterest-bearing		$	869,723			$	889,462			$	902,396			$	931,920			$	944,301
Interest-bearing			1,789,530				1,787,810				1,779,819				1,790,405				1,801,835
Total deposits			2,659,253				2,677,272				2,682,215				2,722,325				2,746,136
Securities sold under agreements to repurchase			954				894				1,006				1,119				1,029
Interest, taxes, and other liabilities			43,460				45,769				45,816				41,807				41,393
Total liabilities			2,703,667				2,723,935				2,729,037				2,765,251				2,788,558
Stockholders' equity
Common stock			18,291				18,270				18,413				18,502				18,671
Additional paid-in capital			168,691				168,272				173,041				175,841				180,951
Retained earnings			342,121				334,756				327,389				319,902				313,489
Accumulated other comprehensive loss			(8,409	)			(12,414	)			(11,899	)			(10,951	)			(17,444	)
Total stockholders' equity			520,694				508,884				506,944				503,294				495,667
Total liabilities and stockholders' equity		$	3,224,361			$	3,232,819			$	3,235,981			$	3,268,545			$	3,284,225
Shares outstanding at period-end			18,290,938				18,270,273				18,413,088				18,502,396				18,671,470
Book value per common share		$	28.47			$	27.85			$	27.53			$	27.20			$	26.55
Tangible book value per common share(1)			19.86				19.20				18.92				18.60				18.00

 

____________
(1)	A non-GAAP financial measure defined as stockholders' equity less goodwill and other intangible assets, divided by shares outstanding.

SELECTED CREDIT QUALITY INFORMATION (Unaudited)
		September 30,				June 30,				March 31,				December 31,				September 30,
(Amounts in thousands)		2024				2024				2024				2023				2023
Allowance for Credit Losses
Balance at beginning of period:
Allowance for credit losses - loans		$	34,885			$	35,461			$	36,189			$	36,031			$	36,177
Allowance for credit losses - loan commitments			441				746				746				758				964
Total allowance for credit losses beginning of period			35,326				36,207				36,935				36,789				37,141
Adjustments to beginning balance:
Allowance for credit losses - loans - Surrey acquisition for purchased credit deteriorated loans			-				-				-				-				-
Allowance for credit losses - loan commitments			-				-				-				-				-
Net Adjustments			-				-				-				-				-
Provision for credit losses:
Provision for credit losses - loans			1,360				449				1,011				1,041				1,315
(Recovery of) provision for credit losses - loan commitments			-				(305	)			-				(12	)			(206	)
Total provision for credit losses - loans and loan commitments			1,360				144				1,011				1,029				1,109
Charge-offs			(1,799	)			(1,599	)			(2,448	)			(2,105	)			(2,157	)
Recoveries			672				574				709				1,222				696
Net (charge-offs) recoveries			(1,127	)			(1,025	)			(1,739	)			(883	)			(1,461	)
Balance at end of period:
Allowance for credit losses - loans			35,118				34,885				35,461				36,189				36,031
Allowance for credit losses - loan commitments			441				441				746				746				758
Ending balance		$	35,559			$	35,326			$	36,207			$	36,935			$	36,789
Nonperforming Assets
Nonaccrual loans		$	19,754			$	19,815			$	19,617			$	19,356			$	18,366
Accruing loans past due 90 days or more			176				19				30				104				59
Modified loans past due 90 days or more			-				-				-				-				-
Total nonperforming loans			19,930				19,834				19,647				19,460				18,425
OREO			346				100				374				192				243
Total nonperforming assets		$	20,276			$	19,934			$	20,021			$	19,652			$	18,668
Additional Information
Total modified loans		$	2,320			$	2,290			$	2,177			$	1,873			$	1,674
Asset Quality Ratios
Nonperforming loans to total loans			0.82	%			0.80	%			0.78	%			0.76	%			0.71	%
Nonperforming assets to total assets			0.63	%			0.62	%			0.62	%			0.60	%			0.57	%
Allowance for credit losses to nonperforming loans			176.21	%			175.88	%			180.49	%			185.97	%			195.55	%
Allowance for credit losses to total loans			1.44	%			1.41	%			1.41	%			1.41	%			1.39	%
Annualized net charge-offs (recoveries) to average loans			0.18	%			0.16	%			0.27	%			0.14	%			0.22	%

FOR MORE INFORMATION, CONTACT:

David D. Brown

(276) 326-9000