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

BLUEFIELD, Va., Jan. 23, 2024 (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, 2023. The Company reported net income of $11.78 million, or $0.66 per diluted common share, for the quarter ended December 31, 2023. Net income for the twelve months ended December 31, 2023, was $48.02 million or $2.72 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 February 9, 2024, and is expected to be paid on or about February 23, 2024. This marks the 39th consecutive year of regular dividends to common shareholders.

Fourth Quarter 2023 and Full Year Highlights

Income Statement

• Net income of $11.78 million for the fourth quarter and $48.02 million for the year were negatively impacted by a $3.00 million accrual for estimated litigation expenses.
• Adjusted for non-recurring items, fourth quarter net income increased $1.84 million to $14.59 million compared to fourth quarter 2022 on improved net interest margin and lower provision for credit losses. Also adjusted for non-recurring items, current year net income of $54.74 million was $9.12 million, or 19.99%, greater than last year.
• Net interest income increased $1.44 million compared to the same quarter in 2022, as increases in benchmark interest rates have improved net interest margin. Provision for credit losses was approximately $2.39 million lower than the same quarter last year.
• Interest and fees on loans increased $5.80 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. The Company acquired Surrey Bancorp on April 21, 2023, adding approximately $239.08 million in loans. Interest income on deposits in banks decreased $777 thousand to $438 thousand for the fourth quarter, primarily due to a significant decrease in the average balance compared to the fourth quarter of 2022.
• Annualized return on average assets (“ROA”) was 1.43% for the fourth quarter and 1.48% for the twelve months of 2023 compared to 1.59% and 1.45% for the same periods, respectively of 2022. Annualized return on average common equity (“ROE”) was 9.39% for the fourth quarter and 10.02% for the twelve months of 2023 compared to 11.99% and 11.04%, for the same periods, respectively of 2022. Adjusted for non-recurring items, ROA was 1.77% and ROE was 11.63% for the fourth quarter of 2023.

Balance Sheet and Asset Quality

• The Company’s loan portfolio increased by $172.10 million, or 7.17%, from December 31, 2022. Excluding the Surrey transaction, the loan portfolio decreased approximately $66.98 million, or 2.79%.
• Deposits increased $43.51 million, or 1.62%, from year-end 2022. Excluding the Surrey transaction, deposits decreased approximately $360.13 million, or 13.44%, from December 31, 2022.
• The Company repurchased 189,500 common shares during the fourth quarter of 2023 for a total cost of $5.98 million. The Company repurchased 768,079 common shares during 2023 for a total cost of $23.04 million. The Company recently announced a new 2.7 million share repurchase program that replaced the remainder of the prior program.
• Non-performing loans to total loans increased to 0.76% when compared with the same quarter of 2022. The Company experienced net charge-offs for the fourth quarter of 2023 of $883 thousand, or 0.14%, of annualized average loans, compared to net charge-offs of $2.25 million, or 0.37%, of annualized average loans for the same period in 2022.
• The allowance for credit losses to total loans was 1.41% at December 31, 2023, compared to 1.27% for the same period of 2022.
• The accumulated other comprehensive loss of $10.95 million at December 31, 2023, decreased $4.77 million compared to the accumulated other comprehensive loss of $15.71 million at December 31, 2022.
• Book value per share at December 31, 2023, was $27.20, an increase of $1.19 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%. 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 December 31, 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 $1.49 billion in combined assets as of December 31, 2023. The Company reported consolidated assets of $3.27 billion as of December 31, 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; 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.

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