BLUEFIELD, Va., April 23, 2019 (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 March 31, 2019. The Company reported net income of $9.63 million, or $0.60 per diluted common share, for the quarter ended March 31, 2019, which was an increase of $763 thousand, or 8.60%, over the same quarter of 2018.

The Company also announced today that the Board of Directors declared a quarterly cash dividend to common shareholders of twenty-five cents ($0.25) per common share, an increase of seven cents ($0.07), or 38.89%, over last second quarter's dividend. The quarterly dividend is payable to common shareholders of record on May 3, 2019, and is expected to be paid on or about May 17, 2019. The current year marks the 34^th consecutive year of regular cash dividends paid to shareholders.

First Quarter 2019 Highlights

• General

• The Company’s remaining wholesale repurchase agreement of $25 million matured during the first quarter.  The company repaid the borrowing with current liquidity, which should result in annualized net pre-tax savings of $378 thousand. This culminates the Company's 5-year strategic shift back to a more traditional community bank balance sheet, during which the Company paid off $200 million in wholesale debt.
• The Company declared a quarterly cash dividend to common shareholders of twenty-five cents ($0.25) per common share, an increase of seven cents ($0.07), or 38.89%, over last second quarter's dividend.
• The Company received $1.68 million from litigation settlements during the first quarter.
  

• Income Statement

• Net income increased $763 thousand, or 8.60%, to $9.63 million compared to the same quarter of 2018.
• Diluted earnings per share increased $.08 to $.60 compared to the same quarter of 2018, for an increase of 15.38%.
• Return on average assets for the quarter increased to 1.75%. Return on average equity for the quarter increased to 11.77%.
• Net interest margin increased 22 basis points to 4.60% compared to the same quarter of 2018.
  

• Balance Sheet

• Book value per common share increased $0.27 to $21.06, and tangible book value per common share increased $0.20 to a record $14.89, compared to December 31, 2018.
• The Company repurchased 232,900 common shares for $7.78 million during the quarter.
• The Company and its subsidiary bank both significantly exceed regulatory “well capitalized” targets as of March 31, 2019.

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 44 branch banking locations in Virginia, West Virginia, North Carolina, and Tennessee as of March 31, 2019. First Community Bank offers wealth management and investment advice through its Trust Division and First Community Wealth Management, which collectively managed and administered $1.02 billion in combined assets as of March 31, 2019. The Company reported consolidated assets of $2.24 billion as of March 31, 2019. 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
			March 31,				December 31,				September 30,				June 30,				March 31,
(Amounts in thousands, except share and per share data)			2019				2018				2018				2018				2018
Interest income
	Interest and fees on loans		$	22,179			$	23,938			$	22,556			$	22,422			$	22,755
	Interest on securities			1,094				1,249				1,372				1,361				1,104
	Interest on deposits in banks			338				194				358				514				471
Total interest income				23,611				25,381				24,286				24,297				24,330
Interest expense
	Interest on deposits			1,305				1,297				1,269				1,327				1,251
	Interest on borrowings			120				205				692				708				700
Total interest expense				1,425				1,502				1,961				2,035				1,951
Net interest income				22,186				23,879				22,325				22,262				22,379
Provision for loan losses				1,220				908				495				495				495
Net interest income after provision				20,966				22,971				21,830				21,767				21,884
Noninterest income				8,080				6,297				6,519				6,959				6,668
Noninterest expense				16,785				17,366				18,131				17,160				17,116
Income before income taxes				12,261				11,902				10,218				11,566				11,436
Income tax expense				2,630				2,596				1,118				2,500				2,568
Net income			$	9,631			$	9,306			$	9,100			$	9,066			$	8,868
Earnings per common share
	Basic		$	0.61			$	0.57			$	0.55			$	0.54			$	0.52
	Diluted			0.60				0.57				0.55				0.54				0.52
Cash dividends per common share
	Regular			0.21				0.21				0.21				0.18				0.18
	Special			-				-				-				-				0.48
Weighted average shares outstanding
	Basic			15,839,424				16,201,148				16,512,823				16,689,398				16,955,758
	Diluted			15,920,950				16,280,404				16,612,416				16,788,615				17,047,638
Performance ratios
	Return on average assets			1.75	%			1.63	%			1.55	%			1.53	%			1.52	%
	Return on average common equity			11.77	%			11.01	%			10.59	%			10.68	%			10.30	%
	Return on average tangible common equity(1)			16.66	%			15.58	%			15.06	%			15.21	%			14.53	%
(1) A non-GAAP financial measure defined as net income divided by average stockholders' equity less average goodwill and other intangible assets

RECONCILIATION OF GAAP NET INCOME TO NON-GAAP ADJUSTED EARNINGS (Unaudited)
				Three Months Ended
				March 31,				December 31,				September 30,				June 30,				March 31,
				2019				2018				2018				2018				2018
(Amounts in thousands, except per share data)
Net income				$	9,631			$	9,306			$	9,100			$	9,066			$	8,868
Non-GAAP adjustments:
	Net loss on sale of securities				-				-				618				-				-
	Loss on extinguishment of debt				-				-				1,096				-				-
	Goodwill impairment				-				-				1,492				-				-
	Deferred tax asset revaluation				-				-				(1,669	)			-				-
	Other items(1)				(1,675	)			254				-				297				(130	)
Total adjustments					(1,675	)			254				1,537				297				(130	)
Tax effect					(328	)			61				411				96				(24	)
Adjusted earnings, non-GAAP				$	8,284			$	9,499			$	10,226			$	9,267			$	8,762
Adjusted diluted earnings per common share,
	non-GAAP			$	0.52			$	0.58			$	0.62			$	0.55			$	0.51
Performance ratios, non-GAAP
	Adjusted return on average assets				1.51	%			1.67	%			1.74	%			1.57	%			1.50	%
	Adjusted return on average common equity				10.12	%			11.23	%			11.90	%			10.91	%			10.17	%
	Adjusted return on average tangible
			common equity(2)		14.33	%			15.90	%			16.93	%			15.55	%			14.36	%
(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,
				2019									2018
				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)			$	1,765,132		$	22,236		5.11	%		$	1,805,839		$	22,827		5.13	%
	Securities available for sale				145,783			1,231		3.43	%			165,103			1,384		3.40	%
	Securities held to maturity				12,348			45		1.48	%			25,132			105		1.69	%
	Interest-bearing deposits				54,694			338		2.50	%			117,953			471		1.62	%
Total earning assets					1,977,957			23,850		4.89	%			2,114,027			24,787		4.76	%
Other assets					247,965									252,284
Total assets				$	2,225,922								$	2,366,311
Liabilities and stockholders' equity
Interest-bearing deposits
	Demand deposits			$	447,023		$	37		0.03	%		$	462,741		$	63		0.06	%
	Savings deposits				501,276			175		0.14	%			518,560			82		0.06	%
	Time deposits				438,454			1,093		1.01	%			493,545			1,106		0.91	%
Total interest-bearing deposits					1,386,753			1,305		0.38	%			1,474,846			1,251		0.34	%
Borrowings
	Retail repurchase agreements				3,259			1		0.13	%			4,444			1		0.09	%
	Wholesale repurchase agreements				15,278			119		3.17	%			25,000			199		3.23	%
	FHLB advances and other borrowings				-			-		-				50,000			500		4.06	%
Total borrowings					18,537			120		2.63	%			79,444			700		3.57	%
Total interest-bearing liabilities					1,405,290			1,425		0.41	%			1,554,290			1,951		0.51	%
Noninterest-bearing demand deposits					459,766									432,606
Other liabilities					28,894									30,142
Total liabilities					1,893,950									2,017,038
Stockholders' equity					331,972									349,273
Total liabilities and stockholders' equity				$	2,225,922								$	2,366,311
Net interest income, FTE(1)							$	22,425								$	22,836
Net interest rate spread										4.48	%								4.25	%
Net interest margin, FTE(1)										4.60	%								4.38	%
(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 purchase accounting accretion of $764 thousand and $1.8 million for the three months ended March 31, 2019 and 2018, respectively.

 

 

CONDENSED CONSOLIDATED QUARTERLY NONINTEREST INCOME AND EXPENSE  (Unaudited)
	Three Months Ended
	March  31,				December 31,				September 30,				June 30,				March 31,
(Amounts in thousands)	2019				2018				2018				2018				2018
Noninterest income
Wealth management	$	745			$	854			$	791			$	823			$	794
Service charges on deposits		3,408				3,850				3,803				3,612				3,468
Other service charges and fees		2,049				2,017				1,925				1,934				1,857
Insurance commissions		-				-				299				338				329
Net loss on sale of securities		-				-				(618	)			-				-
Net FDIC indemnification asset amortization		(552	)			(579	)			(645	)			(575	)			(382	)
Other income		1,675				-				-				-				-
Other operating income		755				155				964				827				602
Total noninterest income	$	8,080			$	6,297			$	6,519			$	6,959			$	6,668
Noninterest expense
Salaries and employee benefits	$	9,166			$	9,273			$	8,983			$	8,993			$	9,441
Occupancy expense		1,153				1,134				1,075				1,083				1,250
Furniture and equipment expense		1,033				1,004				985				945				1,046
Service fees		1,030				1,047				1,134				851				828
Advertising and public relations		524				550				478				461				522
Professional fees		414				356				337				430				307
Amortization of intangibles		246				254				261				263				261
FDIC premiums and assessments		168				209				234				252				211
Loss on extinguishment of debt		-				-				1,096				-				-
Goodwill impairment		-				-				1,492				-				-
Other operating expense		3,051				3,539				2,056				3,882				3,250
Total noninterest expense	$	16,785			$	17,366			$	18,131			$	17,160			$	17,116

 

CONDENSED CONSOLIDATED QUARTERLY BALANCE SHEETS (Unaudited)
				March 31,				December 31,				September 30,				June 30,				March 31,
(Amounts in thousands, except per share data)				2019				2018				2018				2018				2018
Assets
Cash and cash equivalents				$	148,546			$	76,873			$	73,679			$	107,957			$	205,140
Debt securities available for sale					132,597				153,116				163,593				196,425				164,192
Debt securities held to maturity					-				25,013				25,047				25,082				25,115
Loans held for investment, net of unearned income
	Noncovered				1,719,905				1,756,269				1,770,426				1,776,112				1,767,703
	Covered				17,475				18,815				20,483				22,919				25,406
	Allowance for loan losses				(18,243	)			(18,267	)			(18,256	)			(19,583	)			(19,500	)
Loans held for investment, net					1,719,137				1,756,817				1,772,653				1,779,448				1,773,609
FDIC indemnification asset					4,578				5,108				5,653				6,390				6,884
Premises and equipment, net					46,636				45,785				45,537				45,547				46,415
Other real estate owned, noncovered					3,903				3,806				4,754				4,805				4,620
Other real estate owned, covered					152				32				44				44				70
Interest receivable					5,227				5,481				5,374				5,580				5,155
Goodwill					92,744				92,744				94,287				95,779				95,779
Other intangible assets					4,780				5,026				5,366				5,628				5,891
Other assets					84,035				74,573				73,701				75,435				95,437
Total assets				$	2,242,335			$	2,244,374			$	2,269,688			$	2,348,120			$	2,428,307
Liabilities
Deposits
	Noninterest-bearing			$	479,299			$	459,550			$	463,945			$	462,851			$	460,478
	Interest-bearing				1,399,138				1,396,200				1,411,906				1,441,887				1,520,141
Total deposits					1,878,437				1,855,750				1,875,851				1,904,738				1,980,619
Securities sold under agreements to repurchase					3,700				29,370				30,151				27,869				29,115
FHLB borrowings					-				-				-				50,000				50,000
Interest, taxes, and other liabilities					27,096				26,397				25,284				26,392				26,536
Total liabilities					1,909,233				1,911,517				1,931,286				2,008,999				2,086,270
Stockholders' equity
Common stock(2)					15,818				16,007				21,382				21,382				21,382
Additional paid-in capital(2)					115,914				122,486				229,182				228,949				228,774
Retained earnings					202,103				195,793				189,902				184,279				178,227
Treasury stock, at cost(2)					-				-				(99,247	)			(92,904	)			(83,865	)
Accumulated other comprehensive loss					(733	)			(1,429	)			(2,817	)			(2,585	)			(2,481	)
Total stockholders' equity					333,102				332,857				338,402				339,121				342,037
Total liabilities and stockholders' equity				$	2,242,335			$	2,244,374			$	2,269,688			$	2,348,120			$	2,428,307
Shares outstanding at period-end					15,818,368				16,007,263				16,390,502				16,574,347				16,847,452
Book value per common share				$	21.06			$	20.79			$	20.65			$	20.46			$	20.30
Tangible book value per common share(1)					14.89				14.69				14.57				14.34				14.27
(1) A non-GAAP financial measure defined as stockholders' equity less goodwill and other intangible assets, divided by shares outstanding
(2) In accordance with the Company's reincorporation from Nevada to Virginia on October 2, 2018, treasury stock is not recognized.

 

SELECTED CREDIT QUALITY INFORMATION (Unaudited)
	March 31,				December 31,				September 30,				June 30,				March 31,
(Amounts in thousands)	2019				2018				2018				2018				2018
Allowance for Loan Losses
Beginning balance	$	18,267			$	18,256			$	19,583			$	19,500			$	19,276
Provision for loan losses charged to operations		1,220				908				495				495				495
Charge-offs		(1,622	)			(1,282	)			(2,177	)			(750	)			(698	)
Recoveries		378				385				355				338				427
Net charge-offs		(1,244	)			(897	)			(1,822	)			(412	)			(271	)
Ending balance	$	18,243			$	18,267			$	18,256			$	19,583			$	19,500
Nonperforming Assets
Non-covered nonperforming assets
Nonaccrual loans	$	18,544			$	19,583			$	20,542			$	21,467			$	21,650
Accruing loans past due 90 days or more		156				58				46				-				27
Troubled debt restructurings ("TDRs")(1)		835				161				189				133				77
Total non-covered nonperforming loans		19,535				19,802				20,777				21,600				21,754
OREO		3,903				3,806				4,754				4,805				4,620
Total non-covered nonperforming assets	$	23,438			$	23,608			$	25,531			$	26,405			$	26,374
Covered nonperforming assets
Nonaccrual loans	$	237			$	322			$	330			$	509			$	596
Total covered nonperforming loans		237				322				330				509				596
OREO		152				32				44				44				70
Total covered nonperforming assets	$	389			$	354			$	374			$	553			$	666
Additional Information
Performing TDRs(2)	$	5,654			$	6,266			$	6,953			$	6,847			$	7,220
Total TDRs(3)		6,489				6,427				7,142				6,980				7,297
Non-covered ratios
Nonperforming loans to total loans		1.14	%			1.13	%			1.17	%			1.22	%			1.23	%
Nonperforming assets to total assets		1.05	%			1.06	%			1.14	%			1.14	%			1.10	%
Non-PCI allowance to nonperforming loans		93.39	%			92.25	%			87.87	%			90.66	%			89.64	%
Non-PCI allowance to total loans		1.06	%			1.04	%			1.03	%			1.10	%			1.10	%
Annualized net charge-offs to average loans		0.29	%			0.20	%			0.41	%			0.09	%			0.06	%
Total ratios
Nonperforming loans to total loans		1.14	%			1.13	%			1.18	%			1.23	%			1.25	%
Nonperforming assets to total assets		1.06	%			1.07	%			1.14	%			1.15	%			1.11	%
Allowance for loan losses to nonperforming loans		92.27	%			90.77	%			86.49	%			88.57	%			87.25	%
Allowance for loan losses to total loans		1.05	%			1.03	%			1.02	%			1.09	%			1.09	%
Annualized net charge-offs to average loans		0.29	%			0.20	%			0.40	%			0.09	%			0.06	%
(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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