FCBC First Community Bancshares Inc

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, 2024. The Company reported net income of $13.04 million, or $0.71 per diluted common share, for the quarter ended December 31, 2024.  Net income for the twelve months ended December 31, 2024, was $51.60 million or $2.80 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 February 14, 2025, and is expected to be paid on  February 28, 2025. This marks the 40th consecutive year of regular dividends to common shareholders.

Additionally, the Board of Directors declared a special cash dividend to common shareholders of $2.07 per common share.

The Company’s capital management plan and philosophy require the maintenance of a strong capital base from which to grow and serve its customers. As part of the capital plan, the Company intends to return current earnings not needed to fund growth in core operations or other uses back to shareholders through regular cash dividends and stock repurchases. To the extent current earnings exceed those capital uses, the Company may declare special dividends from time to time. The Company earned approximately $197.45 million in the last four years, from which it paid regular dividends of $79.68 million, and repurchased shares for $81.95 million.  Since July 1, 2013, the Company earned approximately $415.90 million, from which it paid regular dividends of $174.84 million, special dividends of $8.12 million, and repurchased 9.33 million shares for $232.08 million

The Board of Directors determined that the Company will have sufficient surplus capital to support anticipated growth opportunities and other needs after payment of the special dividend totaling approximately $37.92 million. This special cash dividend is also payable on February 28, 2025, to shareholders of record February 14, 2025, and may not be indicative of special cash dividend activity in the future.

Fourth Quarter 2024 Highlights

Income Statement

• Net income of $13.04 million for the fourth quarter of 2024, was a increase of $1.26 million, or 10.65%, from the same quarter of 2023.  Net income of $51.60 million for the year, was an increase of $3.58 million, or 7.46%, from the same period of 2023.
• Net interest income decreased $730 thousand compared to the same quarter in 2023, primarily due to increases in rates paid on interest-bearing deposits.
• Net interest margin of 4.36% was a decrease of 6 basis points over the same quarter of 2023.  The yield on earning assets increased 11 basis points from the same period of 2023 and is primarily attributable to an increase in interest income of $422 thousand.  Interest income on interest-bearing deposits with banks increased $2.91 million and was primarily due to the increase in the average balance of $246.39 million offset by a decrease in yield of 75 basis points.  This increase in interest income was offset by decreases in interest income for loans and securities available-for-sale of $2.04 million and $450 thousand, respectively.  The decreases were primarily due to decreases in the average balance for loans and securities available-for-sale of $159.86 million and $107.16 million offset by increases in yield of 2 basis points and 72 basis points, respectively.  Interest expense on interest-bearing liabilities increased $1.16 million and is primarily attributable to yield.  The yield on interest-bearing liabilities increased 26 basis points when compared with the same period of 2023 and is primarily attributable to increased rates on interest-bearing deposit liabilities.
• Noninterest income decreased approximately $125 thousand, or 1.19%, when compared to the same quarter of 2023.  Noninterest expense decreased $2.67 million, or 9.98% when compared to the same period of 2023.  The decrease is primarily attributable to litigation expense of $3.00 million recorded in the fourth quarter of 2023.
• Annualized return on average assets ("ROA") was 1.60% for both the fourth quarter and for the twelve months of 2024 compared to 1.43% and 1.48% for the same periods, respectively, of 2023. Annualized return on average common equity ("ROE") was 9.89% for the fourth quarter of 2024 and 10.03% for the year compared to 9.39% and 10.02% for the same periods, respectively, of 2023.  Annualized return on average tangible common equity ("ROTCE") was 14.12% for the fourth quarter of 2024 and 14.48% for the year compared to 13.82% and 14.65% for the same periods, respectively, of 2023.

Balance Sheet and Asset Quality

• Consolidated assets totaled $3.26 billion at December 31, 2024.
• Loans decreased $156.21 million, or 6.07%, from December 31, 2023.  Securities available for sale decreased $111.12 million, or 39.55%, from December 31, 2023.  Deposits decreased $31.08 million, or 1.14%.  The net effect of these balance sheet changes resulted in an increase in cash and cash equivalents of $261.03 million, or 224.22%.
• The Company did not repurchase any common shares during the fourth quarter of 2024.  The Company repurchased 257,294 common shares during 2024 at a total cost of $8.72 million.
• Non-performing loans to total loans increased to 0.83% when compared with the same quarter of 2023.  The Company experienced net charge-offs for the fourth quarter of 2024 of $1.48 million, or 0.24% of annualized average loans, compared to net charge-offs of $883 thousand, or 0.14%, of annualized average loans for the same period in 2023.
• The allowance for credit losses to total loans was 1.44% at December 31, 2024, compared to 1.41% at December 31, 2023.
• Book value per share at December 31, 2024, was $ 28.73, an increase of $1.53 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 December 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 $1.62 billion in combined assets as of December 31, 2024. The Company reported consolidated assets of $3.26 billion as of December 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																				Year Ended
		December 31,				September 30,				June 30,				March 31,				December 31,				December 31,
(Amounts in thousands, except share and per share data)		2024				2024				2024				2024				2023				2024				2023
Interest income
Interest and fees on loans		$	31,637			$	32,120			$	32,696			$	33,418			$	33,676			$	129,871			$	126,727
Interest on securities			1,447				1,070				1,211				1,698				1,888				5,426				7,956
Interest on deposits in banks			3,348				3,702				2,882				913				438				10,845				2,482
Total interest income			36,432				36,892				36,789				36,029				36,002				146,142				137,165
Interest expense
Interest on deposits			5,099				5,298				4,877				4,365				3,935				19,639				9,341
Interest on borrowings			-				-				-				35				4				35				140
Total interest expense			5,099				5,298				4,877				4,400				3,939				19,674				9,481
Net interest income			31,333				31,594				31,912				31,629				32,063				126,468				127,684
Provision for credit losses			1,082				1,360				144				1,011				1,029				3,597				7,985
Net interest income after provision			30,251				30,234				31,768				30,618				31,034				122,871				119,699
Noninterest income			10,337				10,452				9,342				9,259				10,462				39,390				37,452
Noninterest expense			24,107				24,177				24,897				23,386				26,780				96,567				95,177
Income before income taxes			16,481				16,509				16,213				16,491				14,716				65,694				61,974
Income tax expense			3,441				3,476				3,527				3,646				2,932				14,090				13,954
Net income		$	13,040			$	13,033			$	12,686			$	12,845			$	11,784			$	51,604			$	48,020
Earnings per common share
Basic		$	0.71			$	0.71			$	0.69			$	0.70			$	0.64			$	2.81			$	2.67
Diluted		$	0.71			$	0.71			$	0.71			$	0.71			$	0.66			$	2.80			$	2.72
Cash dividends per common share
Regular			0.31				0.31				0.29				0.29				0.29				1.20				1.16
Weighted average shares outstanding
Basic			18,299,612				18,279,612				18,343,958				18,476,128				18,530,114				18,349,498				17,996,373
Diluted			18,418,441				18,371,907				18,409,876				18,545,910				18,575,226				18,430,206				18,027,151
Performance ratios
Return on average assets			1.60	%			1.60	%			1.58	%			1.60	%			1.43	%			1.60	%			1.48	%
Return on average common equity			9.89	%			10.04	%			10.02	%			10.18	%			9.39	%			10.03	%			10.02	%
Return on average tangible common equity(1)			14.12	%			14.46	%			14.54	%			14.82	%			13.82	%			14.48	%			14.65	%

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(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																				Year Ended
		December 31,				September 30,				June 30,				March 31,				December 31,				December 31,
(Amounts in thousands)		2024				2024				2024				2024				2023				2024				2023
Noninterest income
Wealth management		$	1,251			$	1,071			$	1,064			$	1,099			$	1,052			$	4,485			$	4,179
Service charges on deposits			3,613				3,661				3,428				3,310				3,637				14,012				13,996
Other service charges and fees			3,575				3,697				3,670				3,450				3,541				14,392				13,647
(Loss) gain on sale of securities			-				-				-				-				-				-				(21	)
Other operating income			1,898				2,023				1,180				1,400				2,232				6,501				5,651
Total noninterest income		$	10,337			$	10,452			$	9,342			$	9,259			$	10,462			$	39,390			$	37,452
Noninterest expense
Salaries and employee benefits		$	13,501			$	13,129			$	12,491			$	12,581			$	12,933			$	51,702			$	49,887
Occupancy expense			1,329				1,270				1,309				1,378				1,252				5,286				4,967
Furniture and equipment expense			1,562				1,574				1,687				1,545				1,489				6,368				5,878
Service fees			2,305				2,461				2,427				2,449				2,255				9,642				8,908
Advertising and public relations			1,165				967				933				796				843				3,861				3,300
Professional fees			295				221				330				372				787				1,218				1,567
Amortization of intangibles			535				536				530				530				536				2,131				1,731
FDIC premiums and assessments			365				365				364				369				376				1,463				1,511
Merger expense			-				-				-				-				-				-				2,393
Litigation expense			-				-				1,800				-				3,000				1,800				3,000
Other operating expense			3,050				3,654				3,026				3,366				3,309				13,096				12,035
Total noninterest expense		$	24,107			$	24,177			$	24,897			$	23,386			$	26,780			$	96,567			$	95,177

RECONCILIATION OF GAAP NET INCOME TO NON-GAAP ADJUSTED EARNINGS (Unaudited)
		Three Months Ended																				Year Ended
		December 31,				September 30,				June 30,				March 31,				December 31,				December 31,
(Amounts in thousands, except per share data)		2024				2024				2024				2024				2023				2024				2023
Adjusted Net Income for diluted earnings per share		$	13,040			$	13,033			$	12,686			$	12,845			$	12,314			$	51,604			$	49,120
Non-GAAP adjustments:
Loss (gain) on sale of securities			-				-				-				-				-				-				21
Merger expense			-				-				-				-				-				-				2,393
Day 2 provision for allowance for credit losses - Surrey			-				-				-				-				-				-				1,614
Litigation expense			-				-				1,800				-				3,000				1,800				3,000
Other items(1)			-				(825	)			-				-				-				(825	)			(204	)
Total adjustments			-				(825	)			1,800				-				3,000				975				6,824
Tax effect			-				(198	)			432				-				720				234				1,203
Adjusted earnings, non-GAAP		$	13,040			$	12,406			$	14,054			$	12,845			$	14,594			$	52,345			$	54,741
Adjusted diluted earnings per common share, non-GAAP		$	0.71			$	0.68			$	0.76			$	0.69			$	0.79			$	2.84			$	3.04
Performance ratios, non-GAAP
Adjusted return on average assets			1.60	%			1.53	%			1.75	%			1.60	%			1.77	%			1.62	%			1.68	%
Adjusted return on average common equity			9.89	%			9.56	%			11.10	%			10.18	%			11.63	%			10.18	%			11.43	%
Adjusted return on average tangible common equity (2)			14.12	%			13.77	%			16.11	%			14.82	%			17.11	%			14.69	%			16.70	%

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(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,
		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)		$	2,421,668			$	31,717				5.21	%		$	2,581,528			$	33,758				5.19	%
Securities available for sale			167,357				1,474				3.50	%			274,513				1,924				2.78	%
Interest-bearing deposits			277,678				3,351				4.80	%			31,293				438				5.55	%
Total earning assets			2,866,703				36,542				5.07	%			2,887,334				36,120				4.96	%
Other assets			379,566												379,960
Total assets		$	3,246,269											$	3,267,294
Liabilities and stockholders' equity
Interest-bearing deposits
Demand deposits		$	663,033			$	226				0.14	%		$	697,555			$	180				0.10	%
Savings deposits			886,886				3,476				1.56	%			838,455				3,050				1.44	%
Time deposits			242,899				1,396				2.29	%			254,668				705				1.10	%
Total interest-bearing deposits			1,792,818				5,098				1.13	%			1,790,678				3,935				0.87	%
Borrowings
Federal funds purchased			-				-				-				293				4				5.35	%
Retail repurchase agreements			995				1				0.05	%			1,090				-				0.05	%
Total borrowings			995				1				0.05	%			1,383				4				0.87	%
Total interest-bearing liabilities			1,793,813				5,099				1.13	%			1,792,061				3,939				0.87	%
Noninterest-bearing demand deposits			881,767												931,681
Other liabilities			46,142												45,819
Total liabilities			2,721,722												2,769,561
Stockholders' equity			524,547												497,733
Total liabilities and stockholders' equity		$	3,246,269											$	3,267,294
Net interest income, FTE(1)						$	31,443											$	32,181
Net interest rate spread											3.94	%											4.09	%
Net interest margin, FTE(1)											4.36	%											4.42	%

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(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 $863 thousand and $792 thousand for the three months ended December 31, 2024 and 2023, respectively.

AVERAGE BALANCE SHEETS AND NET INTEREST INCOME ANALYSIS (Unaudited)
		Year Ended December 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)		$	2,481,215			$	130,196				5.25	%		$	2,538,361			$	127,019				5.00	%
Securities available for sale			171,081				5,547				3.24	%			298,389				8,115				2.72	%
Interest-bearing deposits			206,629				10,850				5.25	%			46,601				2,485				5.33	%
Total earning assets			2,858,925				146,593				5.13	%			2,883,351				137,619				4.77	%
Other assets			374,398												369,700
Total assets		$	3,233,323											$	3,253,051
Liabilities and stockholders' equity
Interest-bearing deposits
Demand deposits		$	662,584			$	796				0.12	%		$	686,534			$	405				0.06	%
Savings deposits			878,584				14,206				1.62	%			847,397				6,781				0.80	%
Time deposits			246,035				4,636				1.88	%			267,957				2,155				0.80	%
Total interest-bearing deposits			1,787,203				19,638				1.10	%			1,801,888				9,341				0.52	%
Borrowings
Federal funds purchased			628				35				5.53	%			2,715				139				5.12	%
Retail repurchase agreements			1,045				1				0.05	%			1,528				1				0.06	%
Total borrowings			1,673				36				2.15	%			4,243				140				3.30	%
Total interest-bearing liabilities			1,788,876				19,674				1.10	%			1,806,131				9,481				0.52	%
Noninterest-bearing demand deposits			882,700												926,378
Other liabilities			47,362												41,477
Total liabilities			2,718,938												2,773,986
Stockholders' equity			514,385												479,065
Total liabilities and stockholders' equity		$	3,233,323											$	3,253,051
Net interest income, FTE(1)						$	126,919											$	128,138
Net interest rate spread											4.03	%											4.25	%
Net interest margin, FTE(1)											4.44	%											4.44	%

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(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 $2.90 million and $2.74 million for the twelve months ended December 31, 2024 and 2023, respectively.

CONDENSED CONSOLIDATED QUARTERLY BALANCE SHEETS (Unaudited)
		December 31,				September 30,				June 30,				March 31,				December 31,
(Amounts in thousands, except per share data)		2024				2024				2024				2024				2023
Assets
Cash and cash equivalents		$	377,454			$	315,338			$	329,877			$	248,905			$	116,420
Debt securities available for sale, at fair value			169,849				166,669				129,686				166,247				280,961
Loans held for investment, net of unearned income			2,416,089				2,444,113				2,473,268				2,519,833				2,572,298
Allowance for credit losses			(34,825	)			(35,118	)			(34,885	)			(35,461	)			(36,189	)
Loans held for investment, net			2,381,264				2,408,995				2,438,383				2,484,372				2,536,109
Premises and equipment, net			48,735				49,654				50,528				51,333				50,680
Other real estate owned			521				346				100				374				192
Interest receivable			9,207				9,883				9,984				10,719				10,881
Goodwill			143,946				143,946				143,946				143,946				143,946
Other intangible assets			13,014				13,550				14,085				14,615				15,145
Other assets			117,226				115,980				116,230				115,470				114,211
Total assets		$	3,261,216			$	3,224,361			$	3,232,819			$	3,235,981			$	3,268,545
Liabilities
Deposits
Noninterest-bearing		$	883,499			$	869,723			$	889,462			$	902,396			$	931,920
Interest-bearing			1,807,748				1,789,530				1,787,810				1,779,819				1,790,405
Total deposits			2,691,247				2,659,253				2,677,272				2,682,215				2,722,325
Securities sold under agreements to repurchase			906				954				894				1,006				1,119
Interest, taxes, and other liabilities			42,671				43,460				45,769				45,816				41,807
Total liabilities			2,734,824				2,703,667				2,723,935				2,729,037				2,765,251
Stockholders' equity
Common stock			18,322				18,291				18,270				18,413				18,502
Additional paid-in capital			169,752				168,691				168,272				173,041				175,841
Retained earnings			349,489				342,121				334,756				327,389				319,902
Accumulated other comprehensive loss			(11,171	)			(8,409	)			(12,414	)			(11,899	)			(10,951	)
Total stockholders' equity			526,392				520,694				508,884				506,944				503,294
Total liabilities and stockholders' equity		$	3,261,216			$	3,224,361			$	3,232,819			$	3,235,981			$	3,268,545
Shares outstanding at period-end			18,321,795				18,290,938				18,270,273				18,413,088				18,502,396
Book value per common share		$	28.73			$	28.47			$	27.85			$	27.53			$	27.20
Tangible book value per common share(1)			20.16				19.86				19.20				18.92				18.60

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(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,				March 31,				December 31,
(Amounts in thousands)		2024				2024				2024				2024				2023
Allowance for Credit Losses
Balance at beginning of period:
Allowance for credit losses - loans		$	35,118			$	34,885			$	35,461			$	36,189			$	36,031
Allowance for credit losses - loan commitments			441				441				746				746				758
Total allowance for credit losses beginning of period			35,559				35,326				36,207				36,935				36,789
Provision for credit losses:
Provision for credit losses - loans			1,182				1,360				449				1,011				1,041
(Recovery of) provision for credit losses - loan commitments			(100	)			-				(305	)			-				(12	)
Total provision for credit losses - loans and loan commitments			1,082				1,360				144				1,011				1,029
Charge-offs			(2,005	)			(1,799	)			(1,599	)			(2,448	)			(2,105	)
Recoveries			530				672				574				709				1,222
Net (charge-offs) recoveries			(1,475	)			(1,127	)			(1,025	)			(1,739	)			(883	)
Balance at end of period:
Allowance for credit losses - loans			34,825				35,118				34,885				35,461				36,189
Allowance for credit losses - loan commitments			341				441				441				746				746
Ending balance		$	35,166			$	35,559			$	35,326			$	36,207			$	36,935
Nonperforming Assets
Nonaccrual loans		$	19,869			$	19,754			$	19,815			$	19,617			$	19,356
Accruing loans past due 90 days or more			149				176				19				30				104
Modified loans past due 90 days or more			135				-				-				-				-
Total nonperforming loans			20,153				19,930				19,834				19,647				19,460
OREO			521				346				100				374				192
Total nonperforming assets		$	20,674			$	20,276			$	19,934			$	20,021			$	19,652
Additional Information
Total modified loans		$	2,260			$	2,320			$	2,290			$	2,177			$	1,873
Asset Quality Ratios
Nonperforming loans to total loans			0.83	%			0.82	%			0.80	%			0.78	%			0.76	%
Nonperforming assets to total assets			0.63	%			0.63	%			0.62	%			0.62	%			0.60	%
Allowance for credit losses to nonperforming loans			172.80	%			176.21	%			175.88	%			180.49	%			185.97	%
Allowance for credit losses to total loans			1.44	%			1.44	%			1.41	%			1.41	%			1.41	%
Annualized net charge-offs (recoveries) to average loans			0.24	%			0.18	%			0.16	%			0.27	%			0.14	%

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