First Community Bankshares, Inc. Announces Second Quarter 2025 Results and Quarterly Cash Dividend

July 22, 2025 16:00 ET | Source: First Community Bankshares, Inc. BLUEFIELD, Va., July 22, 2025 (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 June 30, 2025. The Company reported net income of $12.25 million, or $0.67 per diluted common share, for the quarter ended June 30, 2025. Net income for the six months ended June 30, 2025, was $24.06 million or $1.31 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 August 8, 2025, and is expected to be paid on August 22, 2025. This year marks the 40th consecutive year of regular dividends to common shareholders and the prior year was the 15th consecutive year of regular dividend increases. During the second quarter of 2025, the Company was named a recipient of the 2024 Raymond James Community Bankers Cup. The award recognizes the superior financial performance of the top 10% of the country's community banks. Second Quarter 2025 Highlights Income Statement Net interest margin for the second quarter of 2025 remained strong at 4.37%. The yield on earning assets decreased 16 basis points from the same period of 2024 and is primarily attributable to a decrease in interest income of $1.40 million. Interest income on loans decreased $2.05 million, which was primarily due to a decrease in the average balance for loans of $134.85 million. Additionally, the yield on loans decreased 6 basis points. The decrease in interest income on loans was somewhat offset by an increase in interest income on interest-bearing deposits with banks of $840 thousand. Interest expense on interest-bearing liabilities decreased $145 thousand, which is primarily attributable to a decrease in average balance, as well as a decrease in yield of 3 basis points.There was a recovery of provision for credit losses for the quarter ending June 30, 2025, of $285 thousand compared to a provision of $144 thousand for the same period of 2024. The decrease is primarily due to a decrease in net charge-offs for the quarter of $553 thousand compared to the same period in 2024 and a reduction in loan balance period over period of $119.99 million.Noninterest income increased approximately $998 thousand, or 10.68%, when compared to the same quarter of 2024. The increase is primarily attributable to an increase in service charges on deposits of $692 thousand, or 20.19%. Noninterest expense increased $558 thousand, or 2.24%, when compared to the same period of 2024. The increase is attributable to increases in salaries and benefits of $1.86 million, or 14.87%, other operating expense of $328 thousand, or 10.84%, and advertising and public relations of $221 thousand, or 23.67%. Net income of $12.25 million for the second quarter of 2025, was a decrease of $440 thousand, or 3.47%, from the same quarter of 2024. Net income of $24.06 million for the first six months of 2025, was a decrease of $1.47 million, or 5.75%, from the same period of 2024.Annualized return on average assets ("ROA") was 1.53% for the second quarter of 2025 compared to 1.58% for the same period of 2024. Annualized return on average assets ("ROA") for the six months ended June 30, 2025, was 1.51% compared to 1.59% for the same period of 2024 Annualized return on average common equity ("ROE") was 9.84% for the second quarter of 2025 compared to 10.02% for the same period of 2024. Annualized return on average common equity ("ROE") was 9.67% for the six months ended June 30, 2025, compared to 10.10% for the same period of 2024. Additionally, return on average tangible common equity continues to remain strong at 14.32% for the second quarter of 2025. Balance Sheet and Asset Quality Consolidated assets totaled $3.18 billion at June 30, 2025.Loans decreased $62.81 million, or 2.60%, from December 31, 2024. Securities available for sale decreased $37.31 million, or 21.97%, from December 31, 2024. Deposits decreased $55.88 million, or 2.08%, which was due to a decrease in interest-bearing demand deposits and declining higher-rate time deposits. Stockholder equity decreased $23.56 million, or 4.48% primarily due to the payment of a special cash dividend in the first quarter of 2025. The net effect of these balance sheet changes resulted in an increase in cash and cash equivalents of $17.60 million, or 4.66%.The Company repurchased 50,338 common shares during the second quarter of 2025 at a cost of $1.85 million; there were no shares repurchased in the first quarter of 2025. The Company purchased 155,044 common shares during the second quarter of 2024 at a total cost of $5.28 million; a total of 244,440 common shares was purchased during the first six months of 2024 at a total cost of $8.25 million.Total non-performing assets as of June 30, 2025, were $19.17 million, compared with $20.67 million as of December 31, 2024, and $19.93 million as of June 30, 2024. The Company has realized a declining trend in non-performing assets since September 30, 2024.Non-performing loans to total loans remained the same at 0.79% when compared with the same quarter of 2024. The Company experienced net charge-offs for the second quarter of 2025 of $472 thousand, or 0.08% of annualized average loans, compared to net charge-offs of $1.03 million, or 0.16%, of annualized average loans for the same period in 2024.The allowance for credit losses to total loans was 1.40% at June 30, 2025, compared to 1.44% at December 31, 2024 and 1.41% at June 30, 2024.Book value per share at June 30, 2025, was $ 27.46, a decrease of $1.27 from year-end 2024. The decrease is primarily attributable to the payment of the special cash dividend in the first quarter of 2025 of $2.07 per share totaling approximately $37.93 million. 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 June 30, 2025. 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 $1.66 billion in combined assets as of June 30, 2025. The Company reported consolidated assets of $3.18 billion as of June 30, 2025. 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)(Amounts in thousands, except share and per share data) Three Months Ended Six Months Ended June 30, March 31, December 31, September 30, June 30, June 30, 2025 2025 2024 2024 2024 2025 2024 Interest income Interest and fees on loans $30,637 $30,669 $31,637 $32,120 $32,696 $61,306 $66,114 Interest on securities 1,029 1,238 1,447 1,070 1,211 2,267 2,909 Interest on deposits in banks 3,722 3,262 3,348 3,702 2,882 6,984 3,795 Total interest income 35,388 35,169 36,432 36,892 36,789 70,557 72,818 Interest expense Interest on deposits 4,731 4,871 5,099 5,298 4,877 9,602 9,242 Interest on borrowings - - - - - - 35 Total interest expense 4,731 4,871 5,099 5,298 4,877 9,602 9,277 Net interest income 30,657 30,298 31,333 31,594 31,912 60,955 63,541 Provision for credit losses (285) 321 1,082 1,360 144 36 1,155 Net interest income after provision 30,942 29,977 30,251 30,234 31,768 60,919 62,386 Noninterest income 10,340 10,229 10,337 10,452 9,342 20,569 18,601 Noninterest expense 25,455 24,944 24,107 24,177 24,897 50,399 48,283 Income before income taxes 15,827 15,262 16,481 16,509 16,213 31,089 32,704 Income tax expense 3,581 3,444 3,441 3,476 3,527 7,025 7,173 Net income $12,246 $11,818 $13,040 $13,033 $12,686 $24,064 $25,531 Earnings per common share Basic $0.67 $0.64 $0.71 $0.71 $0.69 $1.31 $1.39 Diluted $0.67 $0.64 $0.71 $0.71 $0.71 $1.31 $1.42 Cash dividends per common share Regular 0.31 0.31 0.31 0.31 0.29 0.62 0.58 Special cash dividend - 2.07 - - - 2.07 - Weighted average shares outstanding Basic 18,295,465 18,324,760 18,299,612 18,279,612 18,343,958 18,310,032 18,410,043 Diluted 18,400,793 18,451,321 18,418,441 18,371,907 18,409,876 18,427,503 18,475,110 Performance ratios Return on average assets 1.53% 1.49% 1.60% 1.60% 1.58% 1.51% 1.59%Return on average common equity 9.84% 9.49% 9.89% 10.04% 10.02% 9.67% 10.10%Return on average tangible common equity(1) 14.32% 13.79% 14.12% 14.46% 14.54% 14.04% 14.68% ________________________ (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 Six Months Ended (Amounts in thousands) June 30, March 31, December 31, September 30, June 30, June 30, 2025 2025 2024 2024 2024 2025 2024 Noninterest income Wealth management $1,222 $1,162 $1,251 $1,071 $1,064 $2,384 $2,163 Service charges on deposits 4,120 3,836 3,613 3,661 3,428 7,956 6,738 Other service charges and fees 3,791 3,340 3,575 3,697 3,670 7,131 7,120 Other operating income 1,207 1,891 1,898 2,023 1,180 3,098 2,580 Total noninterest income $10,340 $10,229 $10,337 $10,452 $9,342 $20,569 $18,601 Noninterest expense Salaries and employee benefits $14,349 $13,335 $13,501 $13,129 $12,491 $27,684 $25,072 Occupancy expense 1,290 1,576 1,329 1,270 1,309 2,866 2,687 Furniture and equipment expense 1,587 1,575 1,562 1,574 1,687 3,162 3,232 Service fees 2,475 2,484 2,305 2,461 2,427 4,959 4,876 Advertising and public relations 1,154 1,055 1,165 967 933 2,209 1,729 Professional fees 360 372 295 221 330 732 702 Amortization of intangibles 526 524 535 536 530 1,050 1,060 FDIC premiums and assessments 361 362 365 365 364 723 733 Litigation expense - - - - 1,800 - 1,800 Other operating expense 3,353 3,661 3,050 3,654 3,026 7,014 6,392 Total noninterest expense $25,455 $24,944 $24,107 $24,177 $24,897 $50,399 $48,283 RECONCILIATION OF GAAP NET INCOME TO NON-GAAP ADJUSTED EARNINGS (Unaudited)(Amounts in thousands, except per share data) Three Months Ended Six Months Ended June 30, March 31, December 31, September 30, June 30, June 30, 2025 2025 2024 2024 2024 2025 2024 Adjusted Net Income for diluted earnings per share $12,246 $11,818 $13,040 $13,033 $12,686 $24,064 $26,210 Non-GAAP adjustments: Litigation expense - - - - 1,800 - 1,800 Other items(1) - - - (825) - - - Total adjustments - - - (825) 1,800 0 1,800 Tax effect - - - (198) 432 0 432 Adjusted earnings, non-GAAP $12,246 $11,818 $13,040 $12,406 $14,054 $24,064 $27,578 Adjusted diluted earnings per common share, non-GAAP $0.67 $0.64 $0.71 $0.68 $0.76 $1.31 $1.49 Performance ratios, non-GAAP Adjusted return on average assets 1.53% 1.49% 1.60% 1.53% 1.75% 1.51% 1.72%Adjusted return on average common equity 9.84% 9.49% 9.89% 9.56% 11.10% 9.67% 10.91%Adjusted return on average tangible common equity (2) 14.32% 13.79% 14.12% 13.77% 16.11% 14.04% 15.86% ________________________ (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 June 30, 2025 2024 (Amounts in thousands) Average Average Yield/ Average Average Yield/ Balance Interest(1) Rate(1) Balance Interest(1) Rate(1) Assets Earning assets Loans(2)(3) $2,364,362 $30,731 5.21% $2,499,212 $32,777 5.27%Securities available for sale 128,457 1,053 3.29% 144,755 1,242 3.45%Interest-bearing deposits 333,872 3,722 4.47% 210,432 2,883 5.51%Total earning assets 2,826,691 35,506 5.04% 2,854,399 36,902 5.20%Other assets 377,879 373,029 Total assets $3,204,570 $3,227,428 Liabilities and stockholders' equity Interest-bearing deposits Demand deposits $657,888 $178 0.11% $664,707 $174 0.10%Savings deposits 895,024 3,322 1.49% 874,420 3,582 1.65%Time deposits 228,485 1,232 2.16% 246,291 1,121 1.83%Total interest-bearing deposits 1,781,397 4,732 1.07% 1,785,418 4,877 1.10%Borrowings Federal funds purchased - - - - - 0.00%Retail repurchase agreements 1,293 - 0.07% 1,002 - 0.04%Total borrowings 1,293 - 0.07% 1,002 - 0.04%Total interest-bearing liabilities 1,782,690 4,732 1.06% 1,786,420 4,877 1.10%Noninterest-bearing demand deposits 877,346 884,681 Other liabilities 45,310 47,123 Total liabilities 2,705,346 2,718,224 Stockholders' equity 499,224 509,204 Total liabilities and stockholders' equity $3,204,570 $3,227,428 Net interest income, FTE(1) $30,774 $32,025 Net interest rate spread 3.97% 4.10%Net interest margin, FTE(1) 4.37% 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 $430 thousand and $661 thousand for the three months ended June 30, 2025 and 2024, respectively. AVERAGE BALANCE SHEETS AND NET INTEREST INCOME ANALYSIS (Unaudited) Six Months Ended June 30, 2025 2024 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) $2,379,630 $61,488 5.21% $2,524,159 $66,278 5.28%Securities available for sale 138,804 2,314 3.36% 191,882 2,974 3.12%Interest-bearing deposits 315,011 6,984 4.47% 138,458 3,798 5.52%Total earning assets 2,833,445 70,786 5.04% 2,854,499 73,050 5.15%Other assets 375,846 373,322 Total assets $3,209,291 $3,227,821 Liabilities and stockholders' equity Interest-bearing deposits Demand deposits $658,268 $358 0.11% $665,291 $336 0.10%Savings deposits 893,096 6,633 1.50% 870,252 6,995 1.62%Time deposits 233,343 2,612 2.26% 248,133 1,911 1.55%Total interest-bearing deposits 1,784,707 9,603 1.09% 1,783,676 9,242 1.04%Borrowings Federal funds purchased - - - 1,264 35 5.52%Retail repurchase agreements 1,183 - 0.06% 1,065 - 0.05%Total borrowings 1,183 - 0.06% 2,329 35 3.02%Total interest-bearing liabilities 1,785,890 9,603 1.08% 1,786,005 9,277 1.04%Noninterest-bearing demand deposits 868,714 885,813 Other liabilities 52,698 47,710 Total liabilities 2,707,302 2,719,528 Stockholders' equity 501,989 508,293 Total liabilities and stockholders' equity $3,209,291 $3,227,821 Net interest income, FTE(1) $61,183 $63,773 Net interest rate spread 3.96% 4.11%Net interest margin, FTE(1) 4.35% 4.49% ________________________(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 $986 thousand and $1.44 million for the six months ended June 30, 2025 and 2024, respectively. CONDENSED CONSOLIDATED QUARTERLY BALANCE SHEETS (Unaudited) June 30, March 31, December 31, September 30, June 30, (Amounts in thousands, except per share data) 2025 2025 2024 2024 2024 Assets Cash and cash equivalents $395,057 $414,682 $377,454 $315,338 $329,877 Debt securities available for sale, at fair value 132,535 129,659 169,849 166,669 129,686 Loans held for investment, net of unearned income 2,353,277 2,382,699 2,416,089 2,444,113 2,473,268 Allowance for credit losses (33,020) (33,784) (34,825) (35,118) (34,885)Loans held for investment, net 2,320,257 2,348,915 2,381,264 2,408,995 2,438,383 Premises and equipment, net 48,023 48,780 48,735 49,654 50,528 Other real estate owned 455 298 521 346 100 Interest receivable 8,787 9,306 9,207 9,883 9,984 Goodwill 143,946 143,946 143,946 143,946 143,946 Other intangible assets 11,964 12,490 13,014 13,550 14,085 Other assets 119,990 117,697 117,226 115,980 116,230 Total assets $3,181,014 $3,225,773 $3,261,216 $3,224,361 $3,232,819 Liabilities Deposits Noninterest-bearing $873,677 $893,794 $883,499 $869,723 $889,462 Interest-bearing 1,761,687 1,790,683 1,807,748 1,789,530 1,787,810 Total deposits 2,635,364 2,684,477 2,691,247 2,659,253 2,677,272 Securities sold under agreements to repurchase 1,016 908 906 954 894 Interest, taxes, and other liabilities 41,805 43,971 42,671 43,460 45,769 Total liabilities 2,678,185 2,729,356 2,734,824 2,703,667 2,723,935 Stockholders' equity Common stock 18,311 18,327 18,322 18,291 18,270 Additional paid-in capital 169,358 169,867 169,752 168,691 168,272 Retained earnings 324,307 317,728 349,489 342,121 334,756 Accumulated other comprehensive loss (9,147) (9,505) (11,171) (8,409) (12,414)Total stockholders' equity 502,829 496,417 526,392 520,694 508,884 Total liabilities and stockholders' equity $3,181,014 $3,225,773 $3,261,216 $3,224,361 $3,232,819 Shares outstanding at period-end 18,311,232 18,326,657 18,321,795 18,290,938 18,270,273 Book value per common share $27.46 $27.09 $28.73 $28.47 $27.85 Tangible book value per common share(1) 18.95 18.55 20.16 19.86 19.20 ________________________(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) June 30, March 31, December 31, September 30, June 30, (Amounts in thousands) 2025 2025 2024 2024 2024 Allowance for Credit Losses Balance at beginning of period: Allowance for credit losses - loans $33,784 $34,825 $35,118 $34,885 $35,461 Allowance for credit losses - loan commitments 312 341 441 441 746 Total allowance for credit losses beginning of period 34,096 35,166 35,559 35,326 36,207 Provision for credit losses: (Recovery of ) provision for credit losses - loans (292) 350 1,182 1,360 449 (Recovery of) provision for credit losses - loan commitments 7 (29) (100) - (305)Total provision for credit losses - loans and loan commitments (285) 321 1,082 1,360 144 Charge-offs (1,509) (1,998) (2,005) (1,799) (1,599)Recoveries 1,037 607 530 672 574 Net charge-offs (472) (1,391) (1,475) (1,127) (1,025)Balance at end of period: Allowance for credit losses - loans 33,020 33,784 34,825 35,118 34,885 Allowance for credit losses - loan commitments 319 312 341 441 441 Ending balance $33,339 $34,096 $35,166 $35,559 $35,326 Nonperforming Assets Nonaccrual loans $18,084 $19,974 $19,869 $19,754 $19,815 Accruing loans past due 90 days or more 568 117 149 176 19 Modified loans past due 90 days or more - 125 135 - - Total nonperforming loans 18,652 20,216 20,153 19,930 19,834 OREO 455 298 521 346 100 Total nonperforming assets $19,107 $20,514 $20,674 $20,276 $19,934 Additional Information Total modified loans $2,129 $2,124 $2,260 $2,320 $2,290 Asset Quality Ratios Nonperforming loans to total loans 0.79% 0.85% 0.83% 0.82% 0.80%Nonperforming assets to total assets 0.60% 0.64% 0.63% 0.63% 0.62%Allowance for credit losses to nonperforming loans 177.03% 167.12% 172.80% 176.21% 175.88%Allowance for credit losses to total loans 1.40% 1.42% 1.44% 1.44% 1.41%Annualized net charge-offs to average loans 0.08% 0.24% 0.24% 0.18% 0.16% FOR MORE INFORMATION, CONTACT:David D. Brown(276) 326-9000

First Community Bankshares, Inc. Announces Second Quarter 2025 Results and Quarterly Cash Dividend

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