• First Community Bankshares, Inc. Announces Fourth Quarter Results, Quarterly Cash Dividend, and Stock Repurchase Plan

    Source: Nasdaq GlobeNewswire / 26 Jan 2021 16:30:01   America/New_York

    BLUEFIELD, Va., Jan. 26, 2021 (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 December 31, 2020. The Company reported net income of $11.55 million, or $0.65 per diluted common share, for the quarter ended December 31, 2020, which was an increase of $0.04, or 6.56%, over the same quarter of 2019. Net income was $35.93 million, or $2.02 per diluted common share, for the twelve months ended December 31, 2020, which represents a 17.89% decrease in per share diluted earnings compared to the same period of 2019.

    The Company also declared a quarterly cash dividend to common shareholders of twenty-five cents ($0.25) per common share. The quarterly dividend is payable to common shareholders of record on February 5, 2021, and is expected to be paid on or about February 19, 2021. The current year is the 11th consecutive year of regular dividend increases and the 36th consecutive year of regular dividends to common shareholders.

    Additionally, today the Board of Directors authorized the repurchase of up to 2.4 million shares of the Company’s outstanding common stock through January 26, 2024. Repurchases may be made through open market purchases or in privately negotiated transactions at prevailing market prices. The actual means and timing of any purchases, target number of shares and range of prices under the program will be determined by management in its discretion and will depend on a number of factors, including the market price of the shares, general market and economic conditions, share issuances under equity plans, and applicable legal requirements and other conditions.

    Fourth Quarter 2020 and Current Highlights

    • General
      • The Company booked $63.56 million of new residential mortgage loans during the fourth quarter and the pipeline remains strong at $38.15 million on January 25, 2021.
      • As of December 31, 2020, $3.94 million, or 6.46%, of the Company’s Paycheck Protection Program loan balances had been forgiven by the SBA.
      • As of December 31, 2020, current commercial and consumer COVID-19 loan deferrals stood at $26.54 million and $5.72 million, respectively, down significantly from $436.11 million at June 30, 2020.
      • On December 31, 2020, the Company closed two branches located in Abingdon, Virginia, acquired in the Highlands Union Bank transaction last year. The Company will continue to serve its customers in the important Abingdon market through two strategically placed branches, including its recently upgraded and remodeled Main Street branch, significantly improving efficiency while maintaining first-rate market presence.

    • Income Statement
      • Return on average assets remained strong at 1.54% for the fourth quarter and 1.24% for the twelve-month period.
      • Net interest margin decreased 29 basis points to 4.18% compared to the same quarter of 2019. Net interest margin decreased 30 basis points to 4.29% for the full year 2020 compared to 2019. Both period decreases are reflective of the current historic low interest rate environment partially offset by an increase in accelerated accretion of $3.73 million for the quarter and $6.23 million for the year.
      • Fourth quarter earnings reflect a loan loss provision of $634 thousand, an increase of $543 thousand over fourth quarter of 2019.
    • Balance Sheet
      • Interest-free deposits grew $144.93 million during 2020, and total deposits grew $216.34 million, or 9.29%, during 2020.
      • Book value per share at December 31, 2020, was $24.08, an increase of $0.75 during the year.
      • As of December 31, 2020, the Company continues to significantly exceed regulatory “well capitalized” targets, as well as all capital targets of its capital management plan.

    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 50 branch banking locations in Virginia, West Virginia, North Carolina, and Tennessee as of December 31, 2020. First Community Bank offers wealth management and investment advice through its Trust Division and First Community Wealth Management, which collectively managed and administered $1.18 billion in combined assets as of December 31, 2020. The Company reported consolidated assets of $3.01 billion as of December 31, 2020. 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 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 Twelve Months Ended 
           
       December 31, September 30, June 30, March 31, December 31,December 31, 
    (Amounts in thousands, except share and per share data) 2020   2020   2020   2020   2019   2020   2019  
    Interest income              
     Interest and fees on loans$28,101  $27,297  $26,991  $28,058  $21,837  $110,447  $88,805  
     Interest on securities 549   609   713   918   870   2,789   3,716  
     Interest on deposits in banks 96   89   82   533   663   800   2,447  
    Total interest income 28,746   27,995   27,786   29,509   23,370   114,036   94,968  
    Interest expense              
     Interest on deposits 1,029   1,161   1,445   1,825   1,312   5,460   5,392  
     Interest on borrowings -   -   2   2   1   4   123  
    Total interest expense 1,029   1,161   1,447   1,827   1,313   5,464   5,515  
    Net interest income 27,717   26,834   26,339   27,682   22,057   108,572   89,453  
    Provision for loan losses 634   4,703   3,831   3,500   91   12,668   3,571  
    Net interest income after provision 27,083   22,131   22,508   24,182   21,966   95,904   85,882  
    Noninterest income 7,733   7,638   6,913   7,549   9,314   29,833   33,677  
    Noninterest expense 19,877   19,171   18,913   21,664   18,883   79,625   69,763  
    Income before income taxes 14,939   10,598   10,508   10,067   12,397   46,112   49,796  
    Income tax expense 3,389   2,332   2,270   2,195   2,833   10,186   10,994  
    Net income$11,550  $8,266  $8,238  $7,872  $9,564  $35,926  $38,802  
                     
    Earnings per common share              
     Basic$0.65  $0.47  $0.47  $0.44  $0.61  $2.02  $2.47  
     Diluted 0.65   0.47   0.46   0.44   0.61   2.02   2.46  
    Cash dividends per common share              
     Regular 0.25   0.25   0.25   0.25   0.25   1.00   0.96  
    Weighted average shares outstanding              
     Basic 17,717,356   17,710,283   17,701,853   17,998,994   15,611,093   17,781,748   15,690,812  
     Diluted 17,751,805   17,732,428   17,728,300   18,050,071   15,670,047   17,815,380   15,756,093  
    Performance ratios              
     Return on average assets 1.54%  1.11%  1.15%  1.16%  1.71%  1.24%  1.75% 
     Return on average common equity 10.82%  7.83%  7.97%  7.49%  11.08%  8.54%  11.54% 
     Return on average tangible common equity(1) 15.96%  11.62%  11.91%  11.12%  15.33%  12.68%  16.09% 
                     
                     
    (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 Twelve Months Ended
      December 31, September 30, June 30, March 31, December 31, December 31,
    (Amounts in thousands) 2020   2020   2020   2020   2019   2020   2019  
    Noninterest income             
     Wealth management$810  $909  $854  $844  $842  $3,417  $3,423  
     Service charges on deposits 3,478   3,250   2,560   3,731   3,702   13,019   14,594  
     Other service charges and fees 2,737   2,748   2,617   2,231   2,096   10,333   8,281  
     Net gain (loss) on sale of securities -   -   -   385   -   385   (43) 
     Net FDIC indemnification asset amortization (338)  (383)  (483)  (486)  (590)  (1,690)  (2,377) 
     Other income -   -   -   -   2,395   -   6,995  
     Other operating income 1,046   1,114   1,365   844   869   4,369   2,804  
    Total noninterest income$7,733  $7,638  $6,913  $7,549  $9,314  $29,833  $33,677  
    Noninterest expense             
     Salaries and employee benefits$11,119  $10,485  $11,015  $11,386  $9,495  $44,005  $37,148  
     Occupancy expense 1,225   1,228   1,275   1,315   1,057   5,043   4,334  
     Furniture and equipment expense 1,446   1,412   1,316   1,384   1,179   5,558   4,457  
     Service fees 1,232   1,581   1,329   1,523   721   5,665   4,448  
     Advertising and public relations 534   430   475   512   478   1,951   2,310  
     Professional fees 276   408   307   233   408   1,224   1,698  
     Amortization of intangibles 364   365   360   361   251   1,450   997  
     FDIC premiums and assessments 202   191   33   -   -   426   318  
     Merger, acquisition, and divestiture expense -   -   -   1,893   1,532   1,893   2,124  
     Other operating expense 3,479   3,071   2,803   3,057   3,762   12,410   11,929  
    Total noninterest expense$19,877  $19,171  $18,913  $21,664  $18,883  $79,625  $69,763  

     


    RECONCILIATION OF GAAP NET INCOME TO NON-GAAP ADJUSTED EARNINGS (Unaudited) 
                     
       Three Months Ended
    		 Twelve Months Ended 
       December 31, September 30, June 30, March 31, December 31, December 31, 
        2020   2020   2020   2020   2019   2020   2019  
    (Amounts in thousands, except per share data)              
    Net income$11,550  $8,266  $8,238  $7,872  $9,564  $35,926  $38,802  
    Adjustments:              
     Net (gain) loss on sale of securities -   -   -   (385)  -   (385)  43  
     Merger, acquisition, and divestiture expense -   -   -   1,893   1,532   1,893   2,124  
     Other items(1) -   -   -   -   (2,395)  -   (6,995) 
    Total adjustments -   -   -   1,508   (863)  1,508   (4,828) 
    Tax effect -   -   -   354   (331)  354   (1,343) 
    Adjusted earnings, non-GAAP$11,550  $8,266  $8,238  $9,026  $9,032  $37,080  $35,317  
                     
    Adjusted diluted earnings per common share,              
     non-GAAP$0.65  $0.47  $0.46  $0.50  $0.58  $2.08  $2.24  
    Performance ratios, non-GAAP              
     Adjusted return on average assets 1.54%  1.11%  1.15%  1.33%  1.61%  1.28%  1.59% 
     Adjusted return on average common equity 10.82%  7.83%  7.97%  8.59%  10.46%  8.81%  10.51% 
     Adjusted return on average tangible              
      common equity(2) 15.96%  11.62%  11.91%  12.75%  14.48%  13.08%  14.65% 
                     
                     
    (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 December 31,  
        2020
    		  2019
    		  
            
       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)$2,188,069 $28,143 5.12% $1,697,133 $21,876 5.11%  
     Securities available for sale 87,592  640 2.91%  116,950  1,020 3.46%  
     Interest-bearing deposits 375,088  99 0.11%  159,904  663 1.64%  
    Total earning assets 2,650,749  28,882 4.33%  1,973,987  23,559 4.73%  
    Other assets 337,906      249,300      
    Total assets$2,988,655     $2,223,287      
                    
    Liabilities and stockholders' equity             
    Interest-bearing deposits             
     Demand deposits$594,222 $50 0.03% $463,235 $88 0.08%  
     Savings deposits 739,312  112 0.06%  509,540  234 0.18%  
     Time deposits 428,849  867 0.80%  393,424  989 1.00%  
    Total interest-bearing deposits 1,762,383  1,029 0.23%  1,366,199  1,311 0.38%  
    Borrowings             
     Retail repurchase agreements 925- 1 0.14%  1,515  - 0.00%  
     FHLB advances and other borrowings  -  - -   -  - -   
    Total borrowings 925  1 0.14%  1,515  - 0.00%  
    Total interest-bearing liabilities 1,763,308  1,030 0.23%  1,367,714  1,311 0.38%  
    Noninterest-bearing demand deposits 763,412      480,096      
    Other liabilities 37,305      32,957      
    Total liabilities 2,564,025      1,880,767      
    Stockholders' equity 424,630      342,520      
    Total liabilities and stockholders' equity$2,988,655     $2,223,287      
    Net interest income, FTE(1)  $27,852     $22,248    
    Net interest rate spread    4.10%     4.36%  
    Net interest margin, FTE(1)    4.18%     4.47%  
                    
                    
    (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 $4.24 million and $511 thousand for the three months ended December 31, 2020 and 2019, respectively.  


    AVERAGE BALANCE SHEETS AND NET INTEREST INCOME ANALYSIS (Unaudited) 
                    
       Twelve Months Ended December 31,  
        2020  2019
    		  
            
       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)$2,142,637 $110,619 5.16% $1,722,419 $88,990 5.17%  
     Securities available for sale 105,005  3,259 3.10%  126,732  4,334 3.42%  
     Securities held to maturity -  - -   3,045  45 1.48%  
     Interest-bearing deposits 296,495  805 0.27%  116,119  2,447 2.10%  
    Total earning assets 2,544,137  114,683 4.51%  1,968,315  95,816 4.87%  
    Other assets 348,150      248,926      
    Total assets$2,892,287     $2,217,241      
                    
    Liabilities and stockholders' equity             
    Interest-bearing deposits             
     Demand deposits$556,279 $311 0.06% $453,824 $281 0.06%  
     Savings deposits 711,831  902 0.13%  504,081  823 0.16%  
     Time deposits 456,755  4,247 0.93%  418,450  4,288 1.02%  
    Total interest-bearing deposits 1,724,865  5,460 0.32%  1,376,355  5,392 0.39%  
    Borrowings             
     Retail repurchase agreements 1,145- 3 0.28%  2,471  4 0.14%  
     Wholesale repurchase agreements -  - -   3,767  119 3.17%  
     FHLB advances and other borrowings  36  1 2.23%  -  - -   
    Total borrowings 1,181  4 0.34%  6,238  123 1.96%  
    Total interest-bearing liabilities 1,726,046  5,464 0.32%  1,382,593  5,515 0.40%  
    Noninterest-bearing demand deposits 707,623      468,774      
    Other liabilities 37,826      29,736      
    Total liabilities 2,471,495      1,881,103      
    Stockholders' equity 420,792      336,138      
    Total liabilities and stockholders' equity$2,892,287     $2,217,241      
    Net interest income, FTE(1)  $109,219     $90,301    
    Net interest rate spread    4.19%     4.47%  
    Net interest margin, FTE(1)    4.29%     4.59%  
                    
                    
    (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 $9.46 million and $3.23 million for the twelve months ended December 31, 2020 and 2019, respectively.  


    CONDENSED CONSOLIDATED QUARTERLY BALANCE SHEETS (Unaudited) 
                 
       December 31,
    		 September 30,
    		 June 30, March 31, December 31,
    		 
    (Amounts in thousands, except per share data) 2020   2020   2020   2020   2019  
    Assets          
    Cash and cash equivalents$456,561  $375,664  $421,492  $241,613  $217,009  
    Debt securities available for sale 83,358   90,972   98,367   107,753   169,574  
    Loans held for sale -   -   -   -   263  
    Loans held for investment, net of unearned income         
     Noncovered 2,176,952   2,184,251   2,125,560   2,084,610   2,101,599  
     Covered 9,680   10,744   11,257   12,115   12,861  
     Allowance for loan losses (26,182)  (27,277)  (23,758)  (21,137)  (18,425) 
    Loans held for investment, net 2,160,450   2,167,718   2,113,059   2,075,588   2,096,035  
    FDIC indemnification asset 1,223   1,598   1,943   2,433   2,883  
    Premises and equipment, net 57,700   60,488   62,658   63,319   62,824  
    Other real estate owned, noncovered 2,083   2,103   2,181   2,502   3,969  
    Interest receivable 9,052   9,151   8,380   6,117   6,677  
    Goodwill 129,565   129,565   129,565   129,565   129,565  
    Other intangible assets 7,069   7,433   7,798   8,159   8,519  
    Other assets 104,075   103,236   103,623   101,912   101,529  
    Total assets$3,011,136  $2,947,928  $2,949,066  $2,738,961  $2,798,847  
                 
    Liabilities          
    Deposits          
     Noninterest-bearing$772,795  $750,277  $752,899  $620,292  $627,868  
     Interest-bearing 1,773,452   1,741,962   1,744,947   1,668,122   1,702,044  
    Total deposits 2,546,247   2,492,239   2,497,846   2,288,414   2,329,912  
    Securities sold under agreements to repurchase 964   956   1,100   1,348   1,601  
    FHLB and other borrowings -   -   -   1,000   -  
    Interest, taxes, and other liabilities 37,195   34,816   34,290   36,593   38,515  
    Total liabilities 2,584,406   2,528,011   2,533,236   2,327,355   2,370,028  
                 
    Stockholders' equity          
    Common stock 17,723   17,717   17,710   17,700   18,377  
    Additional paid-in capital 173,345   172,980   172,601   172,231   192,413  
    Retained earnings 237,585   230,464   226,627   222,814   219,535  
    Accumulated other comprehensive loss (1,923)  (1,244)  (1,108)  (1,139)  (1,506) 
    Total stockholders' equity 426,730   419,917   415,830   411,606   428,819  
    Total liabilities and stockholders' equity$3,011,136  $2,947,928  $2,949,066  $2,738,961  $2,798,847  
                 
    Shares outstanding at period-end 17,722,507   17,716,522   17,709,569   17,700,140   18,376,991  
    Book value per common share$24.08  $23.70  $23.48  $23.25  $23.33  
    Tangible book value per common share(1) 16.37   15.97   15.72   15.47   15.82  
                 
                 
    (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)
                
       December 31,
    		 September 30,
    		 June 30, March31, December 31,
    (Amounts in thousands) 2020   2020   2020   2020   2019 
    Allowance for Loan Losses          
    Beginning balance$27,277  $23,758  $21,137  $18,425  $18,493 
    Provision for loan losses charged to operations 634   4,703   3,831   3,500   91 
    Charge-offs (2,194)  (1,563)  (1,672)  (1,194)  (1,353)
    Recoveries 465   379   462   406   1,194 
    Net charge-offs (1,729)  (1,184)  (1,210)  (788)  (159)
    Ending balance$26,182  $27,277  $23,758  $21,137  $18,425 
                
    Nonperforming Assets         
    Non-covered nonperforming assets         
    Nonaccrual loans$21,706  $24,423  $24,471  $20,263  $16,113 
    Accruing loans past due 90 days or more 295   43   284   329   144 
    Troubled debt restructurings ("TDRs")(1) 187   456   598   623   720 
    Total non-covered nonperforming loans 22,188   24,922   25,353   21,215   16,977 
    OREO 2,083   2,103   2,181   2,502   3,969 
    Total non-covered nonperforming assets$24,271  $27,025  $27,534  $23,717  $20,946 
                
    Covered nonperforming assets         
    Nonaccrual loans$297  $333  $299  $145  $244 
    Total covered nonperforming loans 297   333   299   145   244 
    OREO -   -   -   -   - 
    Total covered nonperforming assets$297  $333  $299  $145  $244 
                
    Additional Information         
    Performing TDRs(2)$10,061  $10,480  $10,822  $8,429  $5,855 
    Total Accruing TDRs(3) 10,248   10,936   11,420   9,052   6,575 
                
    Non-covered ratios         
    Nonperforming loans to total loans 1.02%  1.14%  1.19%  1.02%  0.81%
    Nonperforming assets to total assets 0.81%  0.92%  0.94%  0.87%  0.75%
    Non-PCI allowance to nonperforming loans 118.00%  109.45%  93.71%  99.63%  108.53%
    Non-PCI allowance to total loans 1.20%  1.25%  1.12%  1.01%  0.88%
    Annualized net charge-offs to average loans 0.26%  0.22%  0.23%  0.15%  0.04%
                
    Total ratios         
    Nonperforming loans to total loans 1.03%  1.15%  1.20%  1.02%  0.81%
    Nonperforming assets to total assets 0.82%  0.93%  0.94%  0.87%  0.76%
    Allowance for loan losses to nonperforming loans 116.44%  108.01%  92.62%  98.96%  106.99%
    Allowance for loan losses to total loans 1.20%  1.24%  1.11%  1.01%  0.87%
    Annualized net charge-offs to average loans 0.26%  0.22%  0.23%  0.15%  0.04%
                
                
    (1) Accruing TDRs restructured within the past six months or nonperforming
    (2) Accruing TDRs with six months or more of satisfactory payment performance
    (3) Accruing total TDRs


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

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