• First Community Bankshares, Inc. Announces Third Quarter 2023 Results and Quarterly Cash Dividend

    Источник: Nasdaq GlobeNewswire / 24 окт 2023 15:15:35   America/Chicago

    BLUEFIELD, Va., Oct. 24, 2023 (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, 2023. The Company reported net income of $14.64 million, or $0.79 per diluted common share, for the quarter ended September 30, 2023. Net income for the nine months ended September 30, 2023, was $36.24 million or $2.06 per diluted common share.

    The Company also declared a quarterly cash dividend to common shareholders of twenty-nine cents $0.29 per common share. The quarterly 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.

    Third Quarter 2023 and Current Highlights

    Income Statement

     oNet income of $14.64 million for the quarter was approximately 9.66%, or $1.29 million, higher compared to net income of $13.35 million in the same quarter of 2022. Adjusted for non-recurring items, third quarter net income increased $2.52 million to $14.72 million compared to third quarter 2022. The increase is primarily attributable to a significant increase in net interest income.
     oNet interest income increased $4.01 million compared to the same quarter in 2022, as increases in benchmark interest rates have improved net interest margin.
     oNet interest margin of 4.51% is an increase of 50 basis points over the same quarter of 2022. The yield on earning assets increased 82 basis points primarily driven by increased earnings on loans and securities.
     oInterest and fees on loans increased $7.09 million from the same quarter of 2022 and is attributable to both an increase in yield and an increase in average balance compared to the yield and average balance of the prior year. Interest income from securities of $1.91 million was an increase of $127 thousand over the same quarter of 2022 and is primarily attributable to an increase in yield from the same period of the prior year. Interest income on deposits in banks decreased $835 thousand to $697 thousand for the third quarter, primarily due to a significant decrease in the average balance compared to the third quarter of 2022.
     oAnnualized 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. Annualized return on average common equity was 11.63% for the third quarter and 10.25% for the first nine months of 2023 compared to 12.60% and 10.73%, for the same periods, respectively of 2022.
       

    Balance Sheet and Asset Quality

     oThe Company’s loan portfolio increased by $193.28 million, or 8.05%, from December 31, 2022. Excluding the Surrey transaction, the loan portfolio decreased approximately $45.81 million, or 1.91%.
     oDeposits increased $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.
     oThe Company repurchased 299,012 common shares during the third quarter of 2023 for a total cost of $9.37 million. The Company repurchased 578,579 common shares year-to-date for a total cost of $17.06 million. The Company recently announced a new 2.7 million share repurchase program that replaces the small remainder of the prior program and expires December 31, 2026.
     oNon-performing loans to total loans remained at 0.71% when compared with the prior quarter of June 30, 2023. The Company experienced net charge-offs for the third quarter of 2023 of $1.46 million, or 0.22%, of annualized average loans, compared to net charge-offs of $1.05 million, or 0.18%, of annualized average loans for the same period in 2022. 
     oThe allowance for credit losses to total loans was 1.39% at September 30, 2023 compared to 1.38% for the second quarter of 2023.
     oAccumulated other comprehensive loss of $17.44 million at September 30, 2023, is primarily attributable to a relatively small decline in the market value of investment securities compared to book value after the significant increases in benchmark interest rates over the last seven quarters.  
     oBook value per share at September 30, 2023, was $26.55, an increase of $0.54 from year-end 2022.
       

    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 53 branch banking locations in Virginia, West Virginia, North Carolina, and Tennessee as of September 30, 2023. 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 $1.40 billion in combined assets as of September 30, 2023. The Company reported consolidated assets of $3.28 billion as of September 30, 2023. 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 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)
     
      Three Months Ended  Nine Months Ended 
      September 30,  June 30,  March 31,  December 31,  September 30,  September 30, 
    (Amounts in thousands, except share and per share data) 2023  2023  2023  2022  2022  2023  2022 
    Interest income                            
    Interest and fees on loans $33,496  $31,927  $27,628  $27,873  $26,405  $93,051  $76,697 
    Interest on securities  1,912   2,057   2,099   1,900   1,785   6,068   4,086 
    Interest on deposits in banks  697   885   462   1,215   1,532   2,044   2,548 
    Total interest income  36,105   34,869   30,189   30,988   29,722   101,163   83,331 
    Interest expense                            
    Interest on deposits  2,758   1,930   718   366   380   5,406   1,288 
    Interest on borrowings  -   77   59   1   -   136   1 
    Total interest expense  2,758   2,007   777   367   380   5,542   1,289 
    Net interest income  33,347   32,862   29,412   30,621   29,342   95,621   82,042 
    Provision for credit losses  1,109   4,105   1,742   3,416   685   6,956   3,156 
    Net interest income after provision  32,238   28,757   27,670   27,205   28,657   88,665   78,886 
    Noninterest income  9,622   8,785   8,583   9,184   9,950   26,990   27,998 
    Noninterest expense  22,913   24,671   20,813   20,730   21,145   68,397   62,386 
    Income before income taxes  18,947   12,871   15,440   15,659   17,462   47,258   44,498 
    Income tax expense  4,307   3,057   3,658   3,076   4,111   11,022   10,419 
    Net income $14,640  $9,814  $11,782  $12,583  $13,351  $36,236  $34,079 
                                 
    Adjustment to Net Income for Fair Value Changes to Restricted Stock Units (tax-effected) $237  $335  $20  $-  $-  $592  $- 
    Adjusted Net Income for diluted earnings per share $14,877  $10,149  $11,802  $12,583  $13,351  $36,828  $34,079 
                                 
    Earnings per common share                            
    Basic $0.78  $0.53  $0.73  $0.78  $0.82  $2.03  $2.05 
    Diluted $0.79  $0.55  $0.72  $0.77  $0.81  $2.06  $2.05 
    Cash dividends per common share                            
    Regular  0.29   0.29   0.29   0.29   0.27   0.87   0.83 
    Weighted average shares outstanding                            
    Basic  18,786,032   18,407,078   16,228,297   16,229,289   16,378,022   17,816,505   16,617,766 
    Diluted  18,831,836   18,431,598   16,289,489   16,281,922   16,413,202   17,857,494   16,654,697 
    Performance ratios                            
    Return on average assets  1.74%  1.18%  1.55%  1.59%  1.63%  1.49%  1.41%
    Return on average common equity  11.63%  8.04%  11.15%  11.99%  12.60%  10.25%  10.73%
    Return on average tangible common equity(1)  17.11%  11.65%  16.19%  17.75%  18.51%  14.94%  15.71%



    (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  Nine Months Ended 
      September 30,  June 30,  March 31,  December 31,  September 30,  September 30, 
    (Amounts in thousands) 2023  2023  2023  2022  2022  2023  2022 
    Noninterest income                            
    Wealth management $1,145  $965  $1,017  $958  $932  $3,127  $2,897 
    Service charges on deposits  3,729   3,471   3,159   3,354   3,689   10,359   10,859 
    Other service charges and fees  3,564   3,460   3,082   3,006   2,988   10,106   9,302 
    (Loss) gain on sale of securities  -   (28)  7   -   -   (21)  - 
    Gain on divestiture  -   -   -   -   1,658   -   1,658 
    Other operating income  1,184   917   1,318   1,866   683   3,419   3,282 
    Total noninterest income $9,622  $8,785  $8,583  $9,184  $9,950  $26,990  $27,998 
    Noninterest expense                            
    Salaries and employee benefits $12,673  $12,686  $11,595  $11,913  $12,081  $36,954  $35,270 
    Occupancy expense  1,271   1,276   1,168   1,196   1,188   3,715   3,622 
    Furniture and equipment expense  1,480   1,508   1,401   1,413   1,478   4,389   4,588 
    Service fees  2,350   2,284   2,019   1,905   1,635   6,653   5,701 
    Advertising and public relations  968   846   643   574   718   2,457   1,835 
    Professional fees  172   281   327   98   208   780   1,205 
    Amortization of intangibles  536   425   234   364   365   1,195   1,082 
    FDIC premiums and assessments  392   423   320   330   321   1,135   796 
    Merger expense  -   2,014   379   596   -   2,393   - 
    Divestiture expense  -   -   -   -   153   -   153 
    Other operating expense  3,071   2,928   2,727   2,341   2,998   8,726   8,134 
    Total noninterest expense $22,913  $24,671  $20,813  $20,730  $21,145  $68,397  $62,386 
                                 


    RECONCILIATION OF GAAP NET INCOME TO NON-GAAP ADJUSTED EARNINGS (Unaudited)
     
      Three Months Ended  Nine Months Ended 
      September 30,  June 30,  March 31,  December 31,  September 30,  September 30, 
    (Amounts in thousands, except per share data) 2023  2023  2023  2022  2022  2023  2022 
    Adjusted Net Income for diluted earnings per share $14,877  $10,149  $11,802  $12,583  $13,351  $36,828  $34,079 
    Non-GAAP adjustments:                            
    Loss (gain) on sale of securities  -   28   (7)  -   -   21   - 
    Merger expense  -   2,014   379   596   -   2,393   - 
    Day 2 provision for allowance for credit losses - Surrey  -   1,614   -   -   -   1,614   - 
    Divestiture expense  -   -   -   -   153   -   153 
    Gain on divestiture  -   -   -   -   (1,658)  -   (1,658)
    Other items(1)  (204)  -   -   (450)  -   -   (92)
    Total adjustments  (204)  3,656   372   146   (1,505)  4,028   (1,597)
    Tax effect  (49)  522   10   (29)  (361)  532   (383)
    Adjusted earnings, non-GAAP $14,722  $13,283  $12,163  $12,758  $12,207  $40,324  $32,865 
                                 
    Adjusted diluted earnings per common share, non-GAAP $0.78  $0.72  $0.75  $0.78  $0.74  $2.26  $1.97 
    Performance ratios, non-GAAP                            
    Adjusted return on average assets  1.75%  1.60%  1.60%  1.61%  1.49%  1.66%  1.36%
    Adjusted return on average common equity  11.70%  10.88%  11.51%  12.16%  11.52%  11.40%  10.35%
    Adjusted return on average tangible common equity(2)  17.21%  15.77%  16.72%  17.93%  16.92%  16.62%  15.16%



    (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, 
      2023  2022 
      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) $2,604,885  $33,566   5.11% $2,334,596  $26,474   4.50%
    Securities available for sale  284,659   1,952   2.72%  301,360   1,833   2.41%
    Interest-bearing deposits  50,855   697   5.44%  275,290   1,531   2.21%
    Total earning assets  2,940,399   36,215   4.89%  2,911,246   29,838   4.07%
    Other assets  393,001           328,534         
    Total assets $3,333,400          $3,239,780         
                             
    Liabilities and stockholders’ equity                        
    Interest-bearing deposits                        
    Demand deposits $699,066  $165   0.09% $689,376  $28   0.02%
    Savings deposits  862,121   1,941   0.89%  887,454   67   0.03%
    Time deposits  263,940   652   0.98%  317,294   285   0.36%
    Total interest-bearing deposits  1,825,127   2,758   0.60%  1,894,124   380   0.08%
    Borrowings                        
    Retail repurchase agreements  1,254   -   N/M   2,378   -  N/M 
    Total borrowings  1,254   -   N/M   2,378   -  N/M 
    Total interest-bearing liabilities  1,826,381   2,758   0.60%  1,896,502   380   0.08%
    Noninterest-bearing demand deposits  964,093           881,429         
    Other liabilities  43,574           41,373         
    Total liabilities  2,834,048           2,819,304         
    Stockholders’ equity  499,352           420,476         
    Total liabilities and stockholders’ equity $3,333,400          $3,239,780         
    Net interest income, FTE(1)     $33,457          $29,458     
    Net interest rate spread          4.29%          3.99%
    Net interest margin, FTE(1)          4.51%          4.01%



    (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 $874 thousand and $487 thousand for the three months ended September 30, 2023 and 2022, respectively.
       


    AVERAGE BALANCE SHEETS AND NET INTEREST INCOME ANALYSIS (Unaudited)
     
      Nine Months Ended September 30, 
      2023  2022 
      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) $2,523,814  $93,261   4.94% $2,269,974  $76,886   4.53%
    Securities available for sale  306,435   6,191   2.70%  241,640   4,230   2.34%
    Interest-bearing deposits  51,759   2,047   5.29%  398,326   2,549   0.86%
    Total earning assets  2,882,008   101,499   4.71%  2,909,940   83,665   3.84%
    Other assets  366,243           329,508         
    Total assets $3,248,251          $3,239,448         
                             
    Liabilities and stockholders’ equity                        
    Interest-bearing deposits                        
    Demand deposits $682,820  $225   0.04% $689,226  $85   0.02%
    Savings deposits  850,411   3,731   0.59%  888,062   200   0.03%
    Time deposits  272,435   1,450   0.71%  331,808   1,003   0.40%
    Total interest-bearing deposits  1,805,666   5,406   0.40%  1,909,096   1,288   0.09%
    Borrowings                        
    Federal funds purchased  3,532   135   5.11%  -   -   0.00%
    Retail repurchase agreements  1,674   1   0.06%  2,161   1   0.07%
    Total borrowings  5,206   136   3.49%  2,161   1   0.07%
    Total interest-bearing liabilities  1,810,872   5,542   0.41%  1,911,257   1,289   0.09%
    Noninterest-bearing demand deposits  924,591           864,119         
    Other liabilities  40,014           39,487         
    Total liabilities  2,775,477           2,814,863         
    Stockholders’ equity  472,774           424,585         
    Total liabilities and stockholders’ equity $3,248,251          $3,239,448         
    Net interest income, FTE(1)     $95,957          $82,376     
    Net interest rate spread          4.30%          3.75%
    Net interest margin, FTE(1)          4.45%          3.78%



    (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 $1.95 million and $2.22 million for the nine months ended September 30, 2023 and 2022, respectively.
       


    CONDENSED CONSOLIDATED QUARTERLY BALANCE SHEETS (Unaudited)
     
      September 30,  June 30,  March 31,  December 31,  September 30, 
    (Amounts in thousands, except per share data) 2023  2023  2023  2022  2022 
    Assets                    
    Cash and cash equivalents $113,397  $152,660  $92,385  $170,846  $229,095 
    Debt securities available for sale  275,332   314,373   308,269   300,349   299,620 
    Loans held for investment, net of unearned income  2,593,472   2,621,073   2,388,897   2,400,197   2,362,733 
    Allowance for credit losses  (36,031)  (36,177)  (30,789)  (30,556)  (29,388)
    Loans held for investment, net  2,557,441   2,584,896   2,358,108   2,369,641   2,333,345 
    Premises and equipment, net  51,205   53,546   47,407   47,340   47,891 
    Other real estate owned  243   339   481   703   559 
    Interest receivable  10,428   10,185   8,646   9,279   8,345 
    Goodwill  143,946   143,946   129,565   129,565   129,565 
    Other intangible assets  15,681   16,217   3,942   4,176   4,541 
    Other assets  116,552   115,275   102,869   103,673   107,838 
    Total assets $3,284,225  $3,391,437  $3,051,672  $3,135,572  $3,160,799 
                         
    Liabilities                    
    Deposits                    
    Noninterest-bearing $944,301  $974,995  $823,297  $872,168  $878,423 
    Interest-bearing  1,801,835   1,877,683   1,761,327   1,806,647   1,831,798 
    Total deposits  2,746,136   2,852,678   2,584,624   2,678,815   2,710,221 
    Securities sold under agreements to repurchase  1,029   1,348   1,866   1,874   1,958 
    Interest, taxes, and other liabilities  41,393   38,691   33,451   32,898   36,362 
    Total liabilities  2,788,558   2,892,717   2,619,941   2,713,587   2,748,541 
                         
    Stockholders’ equity                    
    Common stock  18,671   18,969   16,243   16,225   16,273 
    Additional paid-in capital  180,951   189,917   128,666   128,508   129,914 
    Retained earnings  313,489   304,295   300,047   292,971   285,096 
    Accumulated other comprehensive loss  (17,444)  (14,461)  (13,225)  (15,719)  (19,025)
    Total stockholders’ equity  495,667   498,720   431,731   421,985   412,258 
    Total liabilities and stockholders’ equity $3,284,225  $3,391,437  $3,051,672  $3,135,572  $3,160,799 
                         
    Shares outstanding at period-end  18,671,470   18,969,281   16,243,551   16,225,399   16,273,177 
    Book value per common share $26.55  $26.29  $26.58  $26.01  $25.33 
    Tangible book value per common share(1)  18.00   17.85   18.36   17.76   17.09 



    (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) 2023  2023  2023  2022  2022 
    Allowance for Credit Losses                    
    Balance at beginning of period:                    
    Allowance for credit losses - loans $36,177  $30,789  $30,556  $29,388  $29,749 
    Allowance for credit losses - loan commitments(1)  964   964   1,196   1,416   956 
    Total allowance for credit losses beginning of period  37,141   31,753   31,752   30,804   30,705 
    Adjustments to beginning balance:                    
    Allowance for credit losses - loans - Surrey acquisition for purchased credit deteriorated loans  -   2,011   -   -   - 
    Allowance for credit losses - loan commitments(1)  -   -   -   -   - 
    Net Adjustments  -   2,011   -   -   - 
    Provision for credit losses:                    
    Provision for credit losses - loans  1,315   4,105   1,974   3,416   685 
    (Recovery of) provision for credit losses - loan commitments(1)  (206)  -   (232)  (220)  460 
    Total provision for credit losses - loans and loan commitments  1,109   4,105   1,742   3,196   1,145 
    Charge-offs  (2,157)  (1,993)  (2,570)  (2,873)  (2,158)
    Recoveries  696   1,265   829   625   1,112 
    Net (charge-offs) recoveries  (1,461)  (728)  (1,741)  (2,248)  (1,046)
    Balance at end of period:                    
    Allowance for credit losses - loans  36,031   36,177   30,789   30,556   29,388 
    Allowance for credit losses - loan commitments(1)  758   964   964   1,196   1,416 
    Ending balance $36,789  $37,141  $31,753  $31,752  $30,804 
                         
    Nonperforming Assets                    
    Nonaccrual loans $18,366  $18,628  $15,557  $15,208  $15,303 
    Accruing loans past due 90 days or more  59   -   23   142   131 
    Modified loans past due 90 days or more(2)  -   -   -   -   - 
    Troubled debt restructurings (“TDRs”)(3)  -   -   -   1,346   1,331 
    Total nonperforming loans  18,425   18,628   15,580   16,696   16,765 
    OREO  243   339   481   703   559 
    Total nonperforming assets $18,668  $18,967  $16,061  $17,399  $17,324 
                         
                         
    Additional Information                    
    Total modified loans(2) $1,674  $642  $429  $-  $- 
    Total accruing TDRs(4) $-  $-  $-  $7,112  $7,028 
                         
    Asset Quality Ratios                    
    Nonperforming loans to total loans  0.71%  0.71%  0.65%  0.70%  0.71%
    Nonperforming assets to total assets  0.57%  0.56%  0.53%  0.55%  0.55%
    Allowance for credit losses to nonperforming loans  195.55%  194.21%  197.62%  183.01%  175.29%
    Allowance for credit losses to total loans  1.39%  1.38%  1.29%  1.27%  1.24%
    Annualized net charge-offs (recoveries) to average loans  0.22%  0.11%  0.29%  0.37%  0.18%



    (1)Prior quarter information for loan commitments has been reclassed for presentation purposes.
    (2)ASU 2022-02, Financial Instruments-Credit Losses (Topic 326), Troubled Debt Restructurings and Vintage Disclosures. ASU adopted effective January 1, 2023.
    (3)Accruing TDRs restructured within the past six months or nonperforming as reported prior to the adoption of ASU 2022-02 Financial Instruments-Credit Losses (Topic 326), Troubled Debt Restructurings and Vintage Disclosures.
    (4)Accruing total TDRs as reported prior to the adoption of ASU 2022-02 Financial Instruments-Credit Losses (Topic 326), Troubled Debt Restructurings and Vintage Disclosures.
       

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


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