ex_644505.htm

EX-99.1 2 ex_644505.htm EXHIBIT 99.1 ex_644505.htm

Exhibit 99.1


NEWS RELEASE
FOR IMMEDIATE RELEASE:		FOR MORE INFORMATION, CONTACT:
April 23, 2024		David D. Brown
		(276) 326-9000

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

Bluefield, Virginia – 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 March 31, 2024. The Company reported net income of $12.85 million, or $0.71 per diluted common share, for the quarter ended March 31, 2024.

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 May 10, 2024, and is expected to be paid on or about May 24, 2024. This marks the 39th consecutive year of regular dividends to common shareholders.

First Quarter 2024 Highlights

Income Statement

	o	Net income of $12.85 million for the first quarter of 2024, was an increase of $1.06 million, or 9.02%, from the same quarter of 2023.
	o	Net interest income increased $2.22 million compared to the same quarter in 2023, as increases in benchmark interest rates have improved net interest margin. Provision for credit losses was approximately $731 thousand lower than the same quarter last year.
	o	Net interest margin of 4.47% is an increase of 12 basis points over the same quarter of 2023. The yield on earning assets increased 62 basis points primarily driven by increased earnings on loans.
	o	Interest and fees on loans increased $5.79 million from the same quarter of 2023 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. The Company acquired Surrey Bancorp on April 21, 2023, adding approximately $239.08 million in loans.
	o	Noninterest income increased approximately $676 thousand, or 7.88%, when compared to the same quarter of 2023. The increase was primarily driven by increased interchange income. Noninterest expense increased $2.57 million, or 12.36%. The increase in noninterest expense was primarily driven by salaries and employee benefits, service fees, and other operating expense. The increase in non interest expense is primarily attributable to the addition of Surrey branches and staff .
	o	Annualized return on average assets ("ROA") was 1.60% for the first quarter of 2024 compared to 1.55% for the same period of 2023. Annualized return on average common equity ("ROE") was 10.18% for the first quarter of 2024 compared to 11.15% for the same period of 2023.

Balance Sheet and Asset Quality

	o	Consolidated assets totaled $3.24 billion at March 31, 2024.
	o	Securities available for sale decreased $114.71 million, or 40.83%, from December 31,2023. The decrease is primarily attributable to the maturity of $115.75 million in U.S. Treasury Notes during the first quarter of 2024. Loans decreased $52.47 million, or 2.04%. Deposits decreased $40.11 million, or 1.47%. The net effect of these balance sheet changes resulted in an increase in cash and cash equivalents of $132.49 million, or 113.80%. The increase in cash and cash equivalents is primarily attributable to an increase in federal funds sold of $142.63 million.
	o	The Company repurchased 89,396 common shares during the first quarter of 2024 for a total cost of $2.97 million.
	o	Non-performing loans to total loans increased to 0.78% when compared with the same quarter of 2023. The Company experienced net charge-offs for the first quarter of 2024 of $1.74 million, or 0.27%, of annualized average loans, compared to net charge-offs of $1.74 million, or 0.29%, of annualized average loans for the same period in 2023.

The allowance for credit losses to total loans was 1.41% at March 31, 2024, compared to 1.41% at December 31, 2023, and 1.29% for March 31, 2023.

Book value per share at March 31, 2024, was $27.53, an increase of $0.33 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 March 31, 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 $1.55 billion in combined assets as of March 31, 2024. The Company reported consolidated assets of $3.24 billion as of March 31, 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)

	Three Months Ended
	March 31,			December 31,			September 30,			June 30,			March 31,
(Amounts in thousands, except share and per share data)	2024			2023			2023			2023			2023
Interest income
Interest and fees on loans	$	33,418		$	33,676		$	33,496		$	31,927		$	27,628
Interest on securities		1,698			1,888			1,912			2,057			2,099
Interest on deposits in banks		913			438			697			885			462
Total interest income		36,029			36,002			36,105			34,869			30,189
Interest expense
Interest on deposits		4,365			3,935			2,758			1,930			718
Interest on borrowings		35			4			0			77			59
Total interest expense		4,400			3,939			2,758			2,007			777
Net interest income		31,629			32,063			33,347			32,862			29,412
Provision for credit losses		1,011			1,029			1,109			4,105			1,742
Net interest income after provision		30,618			31,034			32,238			28,757			27,670
Noninterest income		9,259			10,462			9,622			8,785			8,583
Noninterest expense		23,386			26,780			22,913			24,671			20,813
Income before income taxes		16,491			14,716			18,947			12,871			15,440
Income tax expense		3,646			2,932			4,307			3,057			3,658
Net income	$	12,845		$	11,784		$	14,640		$	9,814		$	11,782

Adjustment to Net Income for Fair Value Changes to Restricted Stock Units (tax-effected)	$	240		$	530		$	215		$	335		$	20
Adjusted Net Income for diluted earnings per share	$	13,085		$	12,314		$	14,855		$	10,149		$	11,802

Earnings per common share
Basic	$	0.70		$	0.64		$	0.78		$	0.53		$	0.73
Diluted	$	0.71		$	0.66		$	0.79		$	0.55		$	0.72
Cash dividends per common share
Regular		0.29			0.29			0.29			0.29			0.29
Weighted average shares outstanding
Basic		18,476,128			18,530,114			18,786,032			18,407,078			16,228,297
Diluted		18,545,910			18,575,226			18,831,836			18,431,598			16,289,489
Performance ratios
Return on average assets		1.60	%		1.43	%		1.74	%		1.18	%		1.55	%
Return on average common equity		10.18	%		9.39	%		11.63	%		8.04	%		11.15	%
Return on average tangible common equity(1)		14.82	%		13.82	%		17.11	%		11.65	%		16.19	%

(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
	March 31,		December 31,		September 30,		June 30,			March 31,
(Amounts in thousands)	2024		2023		2023		2023			2023
Noninterest income
Wealth management	$	1,099	$	1,052	$	1,145	$	965		$	1,017
Service charges on deposits		3,310		3,637		3,729		3,471			3,159
Other service charges and fees		3,450		3,541		3,564		3,460			3,082
(Loss) gain on sale of securities		-		-		-		(28	)		7
Other operating income		1,400		2,232		1,184		917			1,318
Total noninterest income	$	9,259	$	10,462	$	9,622	$	8,785		$	8,583
Noninterest expense
Salaries and employee benefits	$	12,581	$	12,933	$	12,673	$	12,686		$	11,595
Occupancy expense		1,378		1,252		1,271		1,276			1,168
Furniture and equipment expense		1,545		1,489		1,480		1,508			1,401
Service fees		2,449		2,255		2,350		2,284			2,019
Advertising and public relations		796		843		968		846			643
Professional fees		372		787		172		281			327
Amortization of intangibles		530		536		536		425			234
FDIC premiums and assessments		369		376		392		423			320
Merger expense		-		-		-		2,014			379
Litigation expense		-		3,000		-		-			-
Other operating expense		3,366		3,309		3,071		2,928			2,727
Total noninterest expense	$	23,386	$	26,780	$	22,913	$	24,671		$	20,813

RECONCILIATION OF GAAP NET INCOME TO NON-GAAP ADJUSTED EARNINGS (Unaudited)

	Three Months Ended
	March 31,			December 31,			September 30,			June 30,			March 31,
(Amounts in thousands, except per share data)	2024			2023			2023			2023			2023
Adjusted Net Income for diluted earnings per share	$	13,085		$	12,314		$	14,855		$	10,149		$	11,802
Non-GAAP adjustments:
Loss (gain) on sale of securities		-			-			-			28			(7	)
Merger expense		-			-			-			2,014			379
Day 2 provision for allowance for credit losses - Surrey		-			-			-			1,614			-
Litigation expense		-			3,000			-			-			-
Other items(1)		-			-			(204	)		-			-
Total adjustments		-			3,000			(204	)		3,656			372
Tax effect		-			720			(49	)		522			10
Adjusted earnings, non-GAAP	$	13,085		$	14,594		$	14,700		$	13,283		$	12,163

Adjusted diluted earnings per common share, non-GAAP	$	0.71		$	0.79		$	0.78		$	0.72		$	0.75
Performance ratios, non-GAAP
Adjusted return on average assets		1.63	%		1.77	%		1.75	%		1.60	%		1.60	%
Adjusted return on average common equity		10.37	%		11.63	%		11.68	%		10.88	%		11.51	%
Adjusted return on average tangible common equity (2)		15.10	%		17.11	%		17.18	%		15.77	%		16.72	%

(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 March 31,
	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)	$	2,549,107	$	33,500		5.29	%	$	2,393,759	$	27,698		4.69	%
Securities available for sale		239,010		1,731		2.91	%		316,734		2,140		2.74	%
Interest-bearing deposits		66,483		916		5.54	%		40,993		465		4.60	%
Total earning assets		2,854,600		36,147		5.09	%		2,751,486		30,303		4.47	%
Other assets		373,614							322,789
Total assets	$	3,228,214						$	3,074,275

Liabilities and stockholders' equity
Interest-bearing deposits
Demand deposits	$	665,875	$	162		0.10	%	$	666,447	$	26		0.02	%
Savings deposits		866,084		3,412		1.58	%		827,414		484		0.24	%
Time deposits		249,974		790		1.27	%		271,214		208		0.31	%
Total interest-bearing deposits		1,781,933		4,364		0.98	%		1,765,075		718		0.16	%
Borrowings
Federal funds purchased		2,527		35		5.52	%		4,719		58		5.07	%
Retail repurchase agreements		1,127		-		0.05	%		2,086		1		0.06	%
Total borrowings		3,654		35		3.85	%		6,805		59		0.07	%
Total interest-bearing liabilities		1,785,587		4,399		0.99	%		1,771,880		777		0.18	%
Noninterest-bearing demand deposits		886,947							838,041
Other liabilities		48,298							35,669
Total liabilities		2,720,832							2,645,590
Stockholders' equity		507,382							428,685
Total liabilities and stockholders' equity	$	3,228,214						$	3,074,275
Net interest income, FTE(1)			$	31,748						$	29,526
Net interest rate spread						4.10	%						4.29	%
Net interest margin, FTE(1)						4.47	%						4.35	%

(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 $781 thousand and $193 thousand for the three months ended March 31, 2024 and 2023, respectively.

CONDENSED CONSOLIDATED QUARTERLY BALANCE SHEETS (Unaudited)

	March 31,			December 31,			September 30,			June 30,			March 31,
(Amounts in thousands, except per share data)	2024			2023			2023			2023			2023
Assets
Cash and cash equivalents	$	248,905		$	116,420		$	113,397		$	152,660		$	92,385
Debt securities available for sale, at fair value		166,247			280,961			275,332			314,373			308,269
Loans held for investment, net of unearned income		2,519,833			2,572,298			2,593,472			2,621,073			2,388,897
Allowance for credit losses		(35,461	)		(36,189	)		(36,031	)		(36,177	)		(30,789	)
Loans held for investment, net		2,484,372			2,536,109			2,557,441			2,584,896			2,358,108
Premises and equipment, net		51,333			50,680			51,205			53,546			47,407
Other real estate owned		374			192			243			339			481
Interest receivable		10,719			10,881			10,428			10,185			8,646
Goodwill		143,946			143,946			143,946			143,946			129,565
Other intangible assets		14,615			15,145			15,681			16,217			3,942
Other assets		115,470			114,854			116,552			115,275			102,869
Total assets	$	3,235,981		$	3,269,188		$	3,284,225		$	3,391,437		$	3,051,672

Liabilities
Deposits
Noninterest-bearing	$	902,396		$	931,920		$	944,301		$	974,995		$	823,297
Interest-bearing		1,779,819			1,790,405			1,801,835			1,877,683			1,761,327
Total deposits		2,682,215			2,722,325			2,746,136			2,852,678			2,584,624
Securities sold under agreements to repurchase		1,006			1,119			1,029			1,348			1,866
Interest, taxes, and other liabilities		45,816			42,450			41,393			38,691			33,451
Total liabilities		2,729,037			2,765,894			2,788,558			2,892,717			2,619,941

Stockholders' equity
Common stock		18,413			18,502			18,671			18,969			16,243
Additional paid-in capital		173,041			175,841			180,951			189,917			128,666
Retained earnings		327,389			319,902			313,489			304,295			300,047
Accumulated other comprehensive loss		(11,899	)		(10,951	)		(17,444	)		(14,461	)		(13,225	)
Total stockholders' equity		506,944			503,294			495,667			498,720			431,731
Total liabilities and stockholders' equity	$	3,235,981		$	3,269,188		$	3,284,225		$	3,391,437		$	3,051,672

Shares outstanding at period-end		18,413,088			18,502,396			18,671,470			18,969,281			16,243,551
Book value per common share	$	27.53		$	27.20		$	26.55		$	26.29		$	26.58
Tangible book value per common share(1)		18.92			18.60			18.00			17.85			18.36

(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)

	March 31,			December 31,			September 30,			June 30,			March 31,
(Amounts in thousands)	2024			2023			2023			2023			2023
Allowance for Credit Losses
Balance at beginning of period:
Allowance for credit losses - loans	$	36,189		$	36,031		$	36,177		$	30,789		$	30,556
Allowance for credit losses - loan commitments		746			758			964			964			1,196
Total allowance for credit losses beginning of period		36,935			36,789			37,141			31,753			31,752
Adjustments to beginning balance:
Allowance for credit losses - loans - Surrey acquisition for purchased credit deteriorated loans		-			-			-			2,011			-
Allowance for credit losses - loan commitments		-			-			-			-			-
Net Adjustments		-			-			-			2,011			-
Provision for credit losses:
Provision for credit losses - loans		1,011			1,041			1,315			4,105			1,974
(Recovery of) provision for credit losses - loan commitments		-			(12	)		(206	)		-			(232	)
Total provision for credit losses - loans and loan commitments		1,011			1,029			1,109			4,105			1,742
Charge-offs		(2,448	)		(2,105	)		(2,157	)		(1,993	)		(2,570	)
Recoveries		709			1,222			696			1,265			829
Net (charge-offs) recoveries		(1,739	)		(883	)		(1,461	)		(728	)		(1,741	)
Balance at end of period:
Allowance for credit losses - loans		35,461			36,189			36,031			36,177			30,789
Allowance for credit losses - loan commitments		746			746			758			964			964
Ending balance	$	36,207		$	36,935		$	36,789		$	37,141		$	31,753

Nonperforming Assets
Nonaccrual loans	$	19,617		$	19,356		$	18,366		$	18,628		$	15,557
Accruing loans past due 90 days or more		30			104			59			-			23
Modified loans past due 90 days or more		-			-			-			-			-
Total nonperforming loans		19,647			19,460			18,425			18,628			15,580
OREO		374			192			243			339			481
Total nonperforming assets	$	20,021		$	19,652		$	18,668		$	18,967		$	16,061


Additional Information
Total modified loans	$	2,177		$	1,873		$	1,674		$	642		$	429

Asset Quality Ratios
Nonperforming loans to total loans		0.78	%		0.76	%		0.71	%		0.71	%		0.65	%
Nonperforming assets to total assets		0.62	%		0.60	%		0.57	%		0.56	%		0.53	%
Allowance for credit losses to nonperforming loans		180.49	%		185.97	%		195.55	%		194.21	%		197.62	%
Allowance for credit losses to total loans		1.41	%		1.41	%		1.39	%		1.38	%		1.29	%
Annualized net charge-offs (recoveries) to average loans		0.27	%		0.14	%		0.22	%		0.11	%		0.29	%