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 11^th consecutive year of regular dividend increases and the 36^th 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