First Community Bankshares Inc (FCBC, Financial) released its unaudited results for the third quarter ended September 30, 2023, on October 24, 2023. The company reported a net income of $14.64 million, or $0.79 per diluted common share, for the quarter. This represents a 9.66% increase compared to the net income of $13.35 million in the same quarter of 2022. For the nine months ended September 30, 2023, the net income was $36.24 million or $2.06 per diluted common share.
Income Statement Highlights
The increase in net income is primarily attributable to a significant increase in net interest income, which rose by $4.01 million compared to the same quarter in 2022. This was due to increases in benchmark interest rates, which improved the net interest margin. The net interest margin of 4.51% is an increase of 50 basis points over the same quarter of 2022.
Interest and fees on loans increased by $7.09 million from the same quarter of 2022, attributable to both an increase in yield and an increase in average balance compared to the yield and average balance of the prior year. The annualized return on average assets was 1.74% for the third quarter and 1.49% for the first nine months of 2023, compared to 1.63% and 1.41% for the same periods, respectively, of 2022.
Balance Sheet and Asset Quality
The company's loan portfolio increased by $193.28 million, or 8.05%, from December 31, 2022. However, excluding the Surrey transaction, the loan portfolio decreased approximately $45.81 million, or 1.91%. Deposits increased by $67.32 million, or 2.51%, from year-end 2022. Excluding the Surrey transaction, deposits decreased approximately $336.31 million, or 12.55%, from December 31, 2022.
First Community Bankshares repurchased 299,012 common shares during the third quarter of 2023 for a total cost of $9.37 million. The company recently announced a new 2.7 million share repurchase program that replaces the small remainder of the prior program and expires on December 31, 2026.
Dividend Announcement
First Community Bankshares also declared a quarterly cash dividend to common shareholders of $0.29 per common share. The dividend is payable to common shareholders of record on November 10, 2023, and is expected to be paid on or about November 24, 2023. This marks the 38th consecutive year of regular dividends to common shareholders.
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. The company reported consolidated assets of $3.28 billion as of September 30, 2023.
