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

Author's Avatar
Oct 22, 2024

BLUEFIELD, Va., Oct. 22, 2024 (GLOBE NEWSWIRE) -- First Community Bankshares, Inc. ( 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 Companys 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 EndedNine Months Ended
September 30,June 30,March 31,December 31,September 30,September 30,
2024202420242023202320242023
Interest income
Interest and fees on loans$32,120$32,696$33,418$33,676$33,496$98,234$93,051
Interest on securities1,0701,2111,6981,8881,9123,9796,068
Interest on deposits in banks3,7022,8829134386977,4972,044
Total interest income36,89236,78936,02936,00236,105109,710101,163
Interest expense
Interest on deposits5,2984,8774,3653,9352,75814,5405,406
Interest on borrowings--354-35136
Total interest expense5,2984,8774,4003,9392,75814,5755,542
Net interest income31,59431,91231,62932,06333,34795,13595,621
Provision for credit losses1,3601441,0111,0291,1092,5156,956
Net interest income after provision30,23431,76830,61831,03432,23892,62088,665
Noninterest income10,4529,3429,25910,4629,62229,05326,990
Noninterest expense24,17724,89723,38626,78022,91372,46068,397
Income before income taxes16,50916,21316,49114,71618,94749,21347,258
Income tax expense3,4763,5273,6462,9324,30710,64911,022
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
Regular0.310.290.290.290.290.890.87
Weighted average shares outstanding
Basic18,279,61218,343,95818,476,12818,530,11418,786,03218,366,24917,816,505
Diluted18,371,90718,409,87618,545,91018,575,22618,831,83618,432,02317,857,494
Performance ratios
Return on average assets1.60%1.58%1.60%1.43%1.74%1.60%1.49%
Return on average common equity10.04%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 EndedNine Months Ended
September 30,June 30,March 31,December 31,September 30,September 30,
2024202420242023202320242023
Noninterest income
Wealth management$1,071$1,064$1,099$1,052$1,145$3,234$3,127
Service charges on deposits3,6613,4283,3103,6373,72910,39910,359
Other service charges and fees3,6973,6703,4503,5413,56410,81710,106
(Loss) gain on sale of securities------(21)
Other operating income2,0231,1801,4002,2321,1844,6033,419
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 expense1,2701,3091,3781,2521,2713,9573,715
Furniture and equipment expense1,5741,6871,5451,4891,4804,8064,389
Service fees2,4612,4272,4492,2552,3507,3376,653
Advertising and public relations9679337968439682,6962,457
Professional fees221330372787172923780
Amortization of intangibles5365305305365361,5961,195
FDIC premiums and assessments3653643693763921,0981,135
Merger expense------2,393
Litigation expense-1,800-3,000-1,800-
Other operating expense3,6543,0263,3663,3093,07110,0468,726
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 EndedNine Months Ended
September 30,June 30,March 31,December 31,September 30,September 30,
2024202420242023202320242023
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)9754,028
Tax effect(198)432-720(49)234532
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 assets1.53%1.75%1.60%1.77%1.75%1.63%1.66%
Adjusted return on average common equity9.56%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,
20242023
AverageAverage
Yield/
AverageAverage
Yield/
(Amounts in thousands)BalanceInterest(1)Rate(1)BalanceInterest(1)Rate(1)
Assets
Earning assets
Loans(2)(3)$2,455,807$32,2015.22%$2,604,885$33,5665.11%
Securities available for sale133,6541,0993.27%284,6591,9522.72%
Interest-bearing deposits270,4403,7015.44%50,8556975.44%
Total earning assets2,859,90137,0015.15%2,940,39936,2154.89%
Other assets371,358393,001
Total assets$3,231,259$3,333,400
Liabilities and stockholders' equity
Interest-bearing deposits
Demand deposits$656,780$2340.14%$699,066$1650.09%
Savings deposits886,7663,7351.68%862,1211,9410.89%
Time deposits245,0201,3292.16%263,9406520.98%
Total interest-bearing deposits1,788,5665,2981.18%1,825,1272,7580.60%
Borrowings
Retail repurchase agreements1,054-0.05%1,254-N/M
Total borrowings1,054-0.05%1,254-N/M
Total interest-bearing liabilities1,789,6205,2981.18%1,826,3812,7580.60%
Noninterest-bearing demand deposits877,472964,093
Other liabilities47,89243,574
Total liabilities2,714,9842,834,048
Stockholders' equity516,275499,352
Total liabilities and stockholders' equity$3,231,259$3,333,400
Net interest income, FTE(1)$31,703$33,457
Net interest rate spread3.97%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,
20242023
AverageAverage
Yield/
AverageAverage
Yield/
(Amounts in thousands)BalanceInterest(1)Rate(1)BalanceInterest(1)Rate(1)
Assets
Earning assets
Loans(2)(3)$2,501,209$98,4795.26%$2,523,814$93,2614.94%
Securities available for sale172,3314,0733.16%306,4356,1912.70%
Interest-bearing deposits182,7737,4995.48%51,7592,0475.29%
Total earning assets2,856,313110,0515.15%2,882,008101,4994.71%
Other assets372,663366,243
Total assets$3,228,976$3,248,251
Liabilities and stockholders' equity
Interest-bearing deposits
Demand deposits$662,433$5700.11%$682,820$2250.04%
Savings deposits875,79710,7301.64%850,4113,7310.59%
Time deposits247,0883,2401.75%272,4351,4500.71%
Total interest-bearing deposits1,785,31814,5401.09%1,805,6665,4060.40%
Borrowings
Federal funds purchased839355.52%3,5321355.11%
Retail repurchase agreements1,061-0.05%1,67410.06%
Total borrowings1,900352.46%5,2061363.49%
Total interest-bearing liabilities1,787,21814,5751.09%1,810,8725,5420.41%
Noninterest-bearing demand deposits883,013924,591
Other liabilities47,77240,014
Total liabilities2,718,0032,775,477
Stockholders' equity510,973472,774
Total liabilities and stockholders' equity$3,228,976$3,248,251
Net interest income, FTE(1)$95,476$95,957
Net interest rate spread4.06%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)20242024202420232023
Assets
Cash and cash equivalents$315,338$329,877$248,905$116,420$113,397
Debt securities available for sale, at fair value166,669129,686166,247280,961275,332
Loans held for investment, net of unearned income2,444,1132,473,2682,519,8332,572,2982,593,472
Allowance for credit losses(35,118)(34,885)(35,461)(36,189)(36,031)
Loans held for investment, net2,408,9952,438,3832,484,3722,536,1092,557,441
Premises and equipment, net49,65450,52851,33350,68051,205
Other real estate owned346100374192243
Interest receivable9,8839,98410,71910,88110,428
Goodwill143,946143,946143,946143,946143,946
Other intangible assets13,55014,08514,61515,14515,681
Other assets115,980116,230115,470114,211116,552
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-bearing1,789,5301,787,8101,779,8191,790,4051,801,835
Total deposits2,659,2532,677,2722,682,2152,722,3252,746,136
Securities sold under agreements to repurchase9548941,0061,1191,029
Interest, taxes, and other liabilities43,46045,76945,81641,80741,393
Total liabilities2,703,6672,723,9352,729,0372,765,2512,788,558
Stockholders' equity
Common stock18,29118,27018,41318,50218,671
Additional paid-in capital168,691168,272173,041175,841180,951
Retained earnings342,121334,756327,389319,902313,489
Accumulated other comprehensive loss(8,409)(12,414)(11,899)(10,951)(17,444)
Total stockholders' equity520,694508,884506,944503,294495,667
Total liabilities and stockholders' equity$3,224,361$3,232,819$3,235,981$3,268,545$3,284,225
Shares outstanding at period-end18,290,93818,270,27318,413,08818,502,39618,671,470
Book value per common share$28.47$27.85$27.53$27.20$26.55
Tangible book value per common share(1)19.8619.2018.9218.6018.00
____________
(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)20242024202420232023
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 commitments441746746758964
Total allowance for credit losses beginning of period35,32636,20736,93536,78937,141
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 - loans1,3604491,0111,0411,315
(Recovery of) provision for credit losses - loan commitments-(305)-(12)(206)
Total provision for credit losses - loans and loan commitments1,3601441,0111,0291,109
Charge-offs(1,799)(1,599)(2,448)(2,105)(2,157)
Recoveries6725747091,222696
Net (charge-offs) recoveries(1,127)(1,025)(1,739)(883)(1,461)
Balance at end of period:
Allowance for credit losses - loans35,11834,88535,46136,18936,031
Allowance for credit losses - loan commitments441441746746758
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 more176193010459
Modified loans past due 90 days or more-----
Total nonperforming loans19,93019,83419,64719,46018,425
OREO346100374192243
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 loans0.82%0.80%0.78%0.76%0.71%
Nonperforming assets to total assets0.63%0.62%0.62%0.60%0.57%
Allowance for credit losses to nonperforming loans176.21%175.88%180.49%185.97%195.55%
Allowance for credit losses to total loans1.44%1.41%1.41%1.41%1.39%
Annualized net charge-offs (recoveries) to average loans0.18%0.16%0.27%0.14%0.22%
FOR MORE INFORMATION, CONTACT:
David D. Brown
(276) 326-9000
ti?nf=OTI2MDEwNyM2NTQyMTU1IzIwMTkwMDE=
First-Community-Bankshares-Inc.png