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.
| 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) | 2023 | 2023 | 2023 | 2023 | 2022 | 2023 | 2022 | |||||||||||||||||||||
| Interest income | ||||||||||||||||||||||||||||
| Interest and fees on loans | $ | 33,676 | $ | 33,496 | $ | 31,927 | $ | 27,628 | $ | 27,873 | $ | 126,727 | $ | 104,570 | ||||||||||||||
| Interest on securities | 1,888 | 1,912 | 2,057 | 2,099 | 1,900 | 7,956 | 5,986 | |||||||||||||||||||||
| Interest on deposits in banks | 438 | 697 | 885 | 462 | 1,215 | 2,482 | 3,763 | |||||||||||||||||||||
| Total interest income | 36,002 | 36,105 | 34,869 | 30,189 | 30,988 | 137,165 | 114,319 | |||||||||||||||||||||
| Interest expense | ||||||||||||||||||||||||||||
| Interest on deposits | 3,935 | 2,758 | 1,930 | 718 | 366 | 9,341 | 1,654 | |||||||||||||||||||||
| Interest on borrowings | 4 | 0 | 77 | 59 | 1 | 140 | 2 | |||||||||||||||||||||
| Total interest expense | 3,939 | 2,758 | 2007 | 777 | 367 | 9,481 | 1,656 | |||||||||||||||||||||
| Net interest income | 32,063 | 33,347 | 32,862 | 29,412 | 30,621 | 127,684 | 112,663 | |||||||||||||||||||||
| Provision for credit losses | 1,029 | 1,109 | 4,105 | 1,742 | 3,416 | 7,985 | 6,572 | |||||||||||||||||||||
| Net interest income after provision | 31,034 | 32,238 | 28,757 | 27,670 | 27,205 | 119,699 | 106,091 | |||||||||||||||||||||
| Noninterest income | 10,462 | 9,622 | 8,785 | 8,583 | 9,184 | 37,452 | 37,182 | |||||||||||||||||||||
| Noninterest expense | 26,780 | 22,913 | 24,671 | 20,813 | 20,730 | 95,177 | 83,116 | |||||||||||||||||||||
| Income before income taxes | 14,716 | 18,947 | 12,871 | 15,440 | 15,659 | 61,974 | 60,157 | |||||||||||||||||||||
| Income tax expense | 2,932 | 4,307 | 3,057 | 3,658 | 3,076 | 13,954 | 13,495 | |||||||||||||||||||||
| Net income | $ | 11,784 | $ | 14,640 | $ | 9,814 | $ | 11,782 | $ | 12,583 | $ | 48,020 | $ | 46,662 | ||||||||||||||
| Adjustment to Net Income for Fair Value Changes to Restricted Stock Units (tax- effected) | $ | 530 | $ | 215 | $ | 335 | $ | 20 | $ | – | $ | 1,100 | $ | – | ||||||||||||||
| Adjusted Net Income for diluted earnings per share | $ | 12,314 | $ | 14,855 | $ | 10,149 | $ | 11,802 | $ | 12,583 | $ | 49,120 | $ | 46,662 | ||||||||||||||
| Earnings per common share | ||||||||||||||||||||||||||||
| Basic | $ | 0.64 | $ | 0.78 | $ | 0.53 | $ | 0.73 | $ | 0.78 | $ | 2.67 | $ | 2.82 | ||||||||||||||
| Diluted | $ | 0.66 | $ | 0.79 | $ | 0.55 | $ | 0.72 | $ | 0.77 | $ | 2.72 | $ | 2.82 | ||||||||||||||
| Cash dividends per common share | ||||||||||||||||||||||||||||
| Regular | 0.29 | 0.29 | 0.29 | 0.29 | 0.29 | 1.16 | 1.12 | |||||||||||||||||||||
| Weighted average shares outstanding | ||||||||||||||||||||||||||||
| Basic | 18,530,114 | 18,786,032 | 18,407,078 | 16,228,297 | 16,229,289 | 17,996,373 | 16,519,848 | |||||||||||||||||||||
| Diluted | 18,575,226 | 18,831,836 | 18,431,598 | 16,289,489 | 16,281,922 | 18,027,151 | 16,562,257 | |||||||||||||||||||||
| Performance ratios | ||||||||||||||||||||||||||||
| Return on average assets | 1.43 | % | 1.74 | % | 1.18 | % | 1.55 | % | 1.59 | % | 1.48 | % | 1.45 | % | ||||||||||||||
| Return on average common equity | 9.39 | % | 11.63 | % | 8.04 | % | 11.15 | % | 11.99 | % | 10.02 | % | 11.04 | % | ||||||||||||||
| Return on average tangible common equity (1) | 13.82 | % | 17.11 | % | 11.65 | % | 16.19 | % | 17.75 | % | 14.65 | % | 16.17 | % | ||||||||||||||
| (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) | 2023 | 2023 | 2023 | 2023 | 2022 | 2023 | 2022 | ||||||||||||||
| Noninterest income | |||||||||||||||||||||
| Wealth management | $ | 1,052 | $ | 1,145 | $ | 965 | $ | 1,017 | $ | 958 | $ | 4,179 | $ | 3,855 | |||||||
| Service charges on deposits | 3,637 | 3,729 | 3,471 | 3,159 | 3,354 | 13,996 | 14,213 | ||||||||||||||
| Other service charges and fees | 3,541 | 3,564 | 3,460 | 3,082 | 3,006 | 13,647 | 12,308 | ||||||||||||||
| (Loss) gain on sale of securities | – | – | (28 | ) | 7 | – | (21 | ) | – | ||||||||||||
| Gain on divestiture | – | – | – | – | – | – | 1,658 | ||||||||||||||
| Other operating income | 2,232 | 1,184 | 917 | 1,318 | 1866 | 5,651 | 5,148 | ||||||||||||||
| Total noninterest income | $ | 10,462 | $ | 9,622 | $ | 8,785 | $ | 8,583 | $ | 9,184 | $ | 37,452 | $ | 37,182 | |||||||
| Noninterest expense | |||||||||||||||||||||
| Salaries and employee benefits | $ | 12,933 | $ | 12,673 | $ | 12,686 | $ | 11,595 | $ | 11,913 | $ | 49,887 | $ | 47,183 | |||||||
| Occupancy expense | 1,252 | 1,271 | 1,276 | 1,168 | 1,196 | 4,967 | 4,818 | ||||||||||||||
| Furniture and equipment expense | 1,489 | 1,480 | 1,508 | 1,401 | 1,413 | 5,878 | 6,001 | ||||||||||||||
| Service fees | 2,255 | 2,350 | 2,284 | 2,019 | 1,905 | 8,908 | 7,606 | ||||||||||||||
| Advertising and public relations | 843 | 968 | 846 | 643 | 574 | 3,300 | 2,409 | ||||||||||||||
| Professional fees | 787 | 172 | 281 | 327 | 98 | 1,567 | 1,303 | ||||||||||||||
| Amortization of intangibles | 536 | 536 | 425 | 234 | 364 | 1,731 | 1,446 | ||||||||||||||
| FDIC premiums and assessments | 376 | 392 | 423 | 320 | 330 | 1,511 | 1,126 | ||||||||||||||
| Merger expense | – | – | 2,014 | 379 | 596 | 2,393 | 596 | ||||||||||||||
| Divestiture expense | – | – | – | – | – | – | 153 | ||||||||||||||
| Litigation expense | 3,000 | – | – | – | – | 3,000 | – | ||||||||||||||
| Other operating expense | 3,309 | 3,071 | 2,928 | 2,727 | 2,341 | 12,035 | 10,475 | ||||||||||||||
| Total noninterest expense | $ | 26,780 | $ | 22,913 | $ | 24,671 | $ | 20,813 | $ | 20,730 | $ | 95,177 | $ | 83,116 | |||||||
| 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) | 2023 | 2023 | 2023 | 2023 | 2022 | 2023 | 2022 | |||||||||||||||||||||
| Adjusted Net Income for diluted earnings per share | $ | 12,314 | $ | 14,855 | $ | 10,149 | $ | 11,802 | $ | 12,583 | $ | 49,120 | $ | 46,662 | ||||||||||||||
| Non-GAAP adjustments: | ||||||||||||||||||||||||||||
| Loss (gain) on sale of securities | – | – | 28 | (7 | ) | – | 21 | – | ||||||||||||||||||||
| Merger expense | – | – | 2,014 | 379 | 596 | 2,393 | 596 | |||||||||||||||||||||
| Day 2 provision for allowance for credit losses – Surrey | – | – | 1,614 | – | – | 1,614 | – | |||||||||||||||||||||
| Divestiture expense | – | – | – | – | – | – | 153 | |||||||||||||||||||||
| Gain on divestiture | – | – | – | – | – | – | (1,658 | ) | ||||||||||||||||||||
| Litigation expense | 3,000 | – | – | 0 | – | 3,000 | ||||||||||||||||||||||
| Other items (1) | – | (204 | ) | – | – | (450 | ) | (204 | ) | (542 | ) | |||||||||||||||||
| Total adjustments | 3,000 | (204 | ) | 3,656 | 372 | 146 | 6,824 | (1,451 | ) | |||||||||||||||||||
| Tax effect | 720 | (49 | ) | 522 | 10 | (29 | ) | 1,203 | (412 | ) | ||||||||||||||||||
| Adjusted earnings, non-GAAP | $ | 14,594 | $ | 14,700 | $ | 13,283 | $ | 12,163 | $ | 12,758 | $ | 54,741 | $ | 45,623 | ||||||||||||||
| Adjusted diluted earnings per common share, non-GAAP | $ | 0.79 | $ | 0.78 | $ | 0.72 | $ | 0.75 | $ | 0.78 | $ | 3.04 | $ | 2.75 | ||||||||||||||
| Performance ratios, non-GAAP | ||||||||||||||||||||||||||||
| Adjusted return on average assets | 1.77 | % | 1.75 | % | 1.60 | % | 1.60 | % | 1.61 | % | 1.68 | % | 1.42 | % | ||||||||||||||
| Adjusted return on average common equity | 11.63 | % | 11.68 | % | 10.88 | % | 11.51 | % | 12.16 | % | 11.43 | % | 10.80 | % | ||||||||||||||
| Adjusted return on average tangible common equity (2) | 17.11 | % | 17.18 | % | 15.77 | % | 16.72 | % | 17.93 | % | 16.70 | % | 15.84 | % | ||||||||||||||
| (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, | ||||||||||||||||||||||||
| 2023 | 2022 | |||||||||||||||||||||||
| (Amounts in thousands) | Average Balance | Interest(1) | Average Yield/ Rate(1) | Average Balance | Interest(1) | Average Yield/ Rate(1) | ||||||||||||||||||
| Assets | ||||||||||||||||||||||||
| Earning assets | ||||||||||||||||||||||||
| Loans (2) (3) | $ | 2,581,528 | $ | 33,758 | 5.19 | % | $ | 2,383,161 | $ | 27,944 | 4.65 | % | ||||||||||||
| Securities available for sale | 274,513 | 1,924 | 2.78 | % | 299,488 | 1,942 | 2.57 | % | ||||||||||||||||
| Interest-bearing deposits | 31,293 | 438 | 5.55 | % | 130,363 | 1,218 | 3.71 | % | ||||||||||||||||
| Total earning assets | 2,887,334 | 36,120 | 4.96 | % | 2,813,012 | 31,104 | 4.39 | % | ||||||||||||||||
| Other assets | 379,960 | 326,043 | ||||||||||||||||||||||
| Total assets | $ | 3,267,294 | $ | 3,139,055 | ||||||||||||||||||||
| Liabilities and stockholders’ equity | | |||||||||||||||||||||||
| Interest-bearing deposits | ||||||||||||||||||||||||
| Demand deposits | $ | 697,555 | $ | 180 | 0.10 | % | $ | 666,517 | $ | 27 | 0.02 | % | ||||||||||||
| Savings deposits | 838,455 | 3,050 | 1.44 | % | 856,755 | 106 | 0.05 | % | ||||||||||||||||
| Time deposits | 254,668 | 705 | 1.10 | % | 293,520 | 232 | 0.31 | % | ||||||||||||||||
| Total interest-bearing deposits | 1,790,678 | 3,935 | 0.87 | % | 1,816,792 | 365 | 0.08 | % | ||||||||||||||||
| Borrowings | ||||||||||||||||||||||||
| Federal funds purchased | 293 | 4 | 5.35 | % | – | – | 0.00 | % | ||||||||||||||||
| Retail repurchase agreements | 1,090 | – | 0.05 | % | 2,473 | 1 | 0.07 | % | ||||||||||||||||
| Total borrowings | 1,383 | 4 | 0.87 | % | 2,473 | 1 | 0.07 | % | ||||||||||||||||
| Total interest-bearing liabilities | 1,792,061 | 3,939 | 0.87 | % | 1,819,265 | 366 | 0.08 | % | ||||||||||||||||
| Noninterest-bearing demand deposits | 931,681 | 864,537 | ||||||||||||||||||||||
| Other liabilities | 45,819 | 38,993 | ||||||||||||||||||||||
| Total liabilities | 2,769,561 | 2,722,795 | ||||||||||||||||||||||
| Stockholders’ equity | 497,733 | 416,260 | ||||||||||||||||||||||
| Total liabilities and stockholders’ equity | $ | 3,267,294 | $ | 3,139,055 | ||||||||||||||||||||
| Net interest income, FTE (1) | $ | 32,181 | $ | 30,738 | ||||||||||||||||||||
| Net interest rate spread | 4.09 | % | 4.31 | % | ||||||||||||||||||||
| Net interest margin, FTE (1) | 4.42 | % | 4.34 | % | ||||||||||||||||||||
| (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 $792 thousand and $395 thousand for the three months ended December 31, 2023 and 2022, respectively. | ||||||||||||||||||||||||
| AVERAGE BALANCE SHEETS AND NET INTEREST INCOME ANALYSIS (Unaudited) | ||||||||||||||||||||||||
| Year Ended December 31, | ||||||||||||||||||||||||
| 2023 | 2022 | |||||||||||||||||||||||
| (Amounts in thousands) | Average Balance | Interest(1) | Average Yield/ Rate(1) | Average Balance | Interest(1) | Average Yield/ Rate(1) | ||||||||||||||||||
| Assets | ||||||||||||||||||||||||
| Earning assets | ||||||||||||||||||||||||
| Loans (2) (3) | $ | 2,538,361 | $ | 127,019 | 5.00 | % | $ | 2,298,503 | $ | 104,830 | 4.56 | % | ||||||||||||
| Securities available for sale | 298,389 | 8,115 | 2.72 | % | 256,221 | 6,172 | 2.41 | % | ||||||||||||||||
| Interest-bearing deposits | 46,601 | 2,485 | 5.33 | % | 330,785 | 3,767 | 1.14 | % | ||||||||||||||||
| Total earning assets | 2,883,351 | 137,619 | 4.77 | % | 2,885,509 | 114,769 | 3.98 | % | ||||||||||||||||
| Other assets | 369,700 | 328,635 | ||||||||||||||||||||||
| Total assets | $ | 3,253,051 | $ | 3,214,144 | ||||||||||||||||||||
| Liabilities and stockholders’ equity | ||||||||||||||||||||||||
| Interest-bearing deposits | ||||||||||||||||||||||||
| Demand deposits | $ | 686,534 | $ | 405 | 0.06 | % | $ | 683,502 | $ | 112 | 0.02 | % | ||||||||||||
| Savings deposits | 847,397 | 6,781 | 0.80 | % | 880,171 | 306 | 0.03 | % | ||||||||||||||||
| Time deposits | 267,957 | 2,155 | 0.80 | % | 322,158 | 1,235 | 0.38 | % | ||||||||||||||||
| Total interest-bearing deposits | 1,801,888 | 9,341 | 0.52 | % | 1,885,831 | 1,653 | 0.09 | % | ||||||||||||||||
| Borrowings | ||||||||||||||||||||||||
| Federal funds purchased | 2,715 | 139 | 5.12 | % | – | – | 0.00 | % | ||||||||||||||||
| Retail repurchase agreements | 1,528 | 1 | 0.06 | % | 2,239 | 2 | 0.07 | % | ||||||||||||||||
| Total borrowings | 4,243 | 140 | 3.30 | % | 2,239 | 2 | 0.07 | % | ||||||||||||||||
| Total interest-bearing liabilities | 1,806,131 | 9,481 | 0.52 | % | 1,888,070 | 1,655 | 0.09 | % | ||||||||||||||||
| Noninterest-bearing demand deposits | 926,378 | 864,224 | ||||||||||||||||||||||
| Other liabilities | 41,477 | 39,363 | ||||||||||||||||||||||
| Total liabilities | 2,773,986 | 2,791,657 | ||||||||||||||||||||||
| Stockholders’ equity | 479,065 | 422,487 | ||||||||||||||||||||||
| Total liabilities and stockholders’ equity | $ | 3,253,051 | $ | 3,214,144 | ||||||||||||||||||||
| Net interest income, FTE (1) | $ | 128,138 | $ | 113,114 | ||||||||||||||||||||
| Net interest rate spread | 4.25 | % | 3.89 | % | ||||||||||||||||||||
| Net interest margin, FTE (1) | 4.44 | % | 3.92 | % | ||||||||||||||||||||
| (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 $2.74 million and $2.62 million for the twelve months ended December 31, 2023 and 2022, respectively. | ||||||||||||||||||||||||
| CONDENSED CONSOLIDATED QUARTERLY BALANCE SHEETS (Unaudited) | ||||||||||||||||||||
| (Amounts in thousands, except per share data) | December 31, 2023 | September 30, 2023 | June 30, 2023 | March 31, 2023 | December 31, 2022 | |||||||||||||||
| Assets | ||||||||||||||||||||
| Cash and cash equivalents | $ | 116,420 | $ | 113,397 | $ | 152,660 | $ | 92,385 | $ | 170,846 | ||||||||||
| Debt securities available for sale | 280,961 | 275,332 | 314,373 | 308,269 | 300,349 | |||||||||||||||
| Loans held for investment, net of unearned income | 2,572,298 | 2,593,472 | 2,621,073 | 2,388,897 | 2,400,197 | |||||||||||||||
| Allowance for credit losses | (36,189 | ) | (36,031 | ) | (36,177 | ) | (30,789 | ) | (30,556 | ) | ||||||||||
| Loans held for investment, net | 2,536,109 | 2,557,441 | 2,584,896 | 2,358,108 | 2,369,641 | |||||||||||||||
| Premises and equipment, net | 50,680 | 51,205 | 53,546 | 47,407 | 47,340 | |||||||||||||||
| Other real estate owned | 192 | 243 | 339 | 481 | 703 | |||||||||||||||
| Interest receivable | 10,881 | 10,428 | 10,185 | 8,646 | 9,279 | |||||||||||||||
| Goodwill | 143,946 | 143,946 | 143,946 | 129,565 | 129,565 | |||||||||||||||
| Other intangible assets | 15,145 | 15,681 | 16,217 | 3,942 | 4,176 | |||||||||||||||
| Other assets | 114,854 | 116,552 | 115,275 | 102,869 | 103,673 | |||||||||||||||
| Total assets | $ | 3,269,188 | $ | 3,284,225 | $ | 3,391,437 | $ | 3,051,672 | $ | 3,135,572 | ||||||||||
| Liabilities | ||||||||||||||||||||
| Deposits | ||||||||||||||||||||
| Noninterest-bearing | $ | 931,920 | $ | 944,301 | $ | 974,995 | $ | 823,297 | $ | 872,168 | ||||||||||
| Interest-bearing | 1,790,405 | 1,801,835 | 1,877,683 | 1,761,327 | 1,806,647 | |||||||||||||||
| Total deposits | 2,722,325 | 2,746,136 | 2,852,678 | 2,584,624 | 2,678,815 | |||||||||||||||
| Securities sold under agreements to repurchase | 1,119 | 1,029 | 1,348 | 1,866 | 1,874 | |||||||||||||||
| Interest, taxes, and other liabilities | 42,450 | 41,393 | 38,691 | 33,451 | 32,898 | |||||||||||||||
| Total liabilities | 2,765,894 | 2,788,558 | 2,892,717 | 2,619,941 | 2,713,587 | |||||||||||||||
| Stockholders’ equity | ||||||||||||||||||||
| Common stock | 18,502 | 18,671 | 18,969 | 16,243 | 16,225 | |||||||||||||||
| Additional paid-in capital | 175,841 | 180,951 | 189,917 | 128,666 | 128,508 | |||||||||||||||
| Retained earnings | 319,902 | 313,489 | 304,295 | 300,047 | 292,971 | |||||||||||||||
| Accumulated other comprehensive loss | (10,951 | ) | (17,444 | ) | (14,461 | ) | (13,225 | ) | (15,719 | ) | ||||||||||
| Total stockholders’ equity | 503,294 | 495,667 | 498,720 | 431,731 | 421,985 | |||||||||||||||
| Total liabilities and stockholders’ equity | $ | 3,269,188 | $ | 3,284,225 | $ | 3,391,437 | $ | 3,051,672 | $ | 3,135,572 | ||||||||||
| Shares outstanding at period-end | 18,502,396 | 18,671,470 | 18,969,281 | 16,243,551 | 16,225,399 | |||||||||||||||
| Book value per common share | $ | 27.20 | $ | 26.55 | $ | 26.29 | $ | 26.58 | $ | 26.01 | ||||||||||
| Tangible book value per common share (1) | 18.60 | 18.00 | 17.85 | 18.36 | 17.76 | |||||||||||||||
| (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) | ||||||||||||||||||||
| (Amounts in thousands) | December 31, 2023 | September 30, 2023 | June 30, 2023 | March 31, 2023 | December 31, 2022 | |||||||||||||||
| Allowance for Credit Losses | ||||||||||||||||||||
| Balance at beginning of period: | ||||||||||||||||||||
| Allowance for credit losses – loans | $ | 36,031 | $ | 36,177 | $ | 30,789 | $ | 30,556 | $ | 29,388 | ||||||||||
| Allowance for credit losses – loan commitments (1) | 758 | 964 | 964 | 1,196 | 1,416 | |||||||||||||||
| Total allowance for credit losses beginning of period | 36,789 | 37,141 | 31,753 | 31,752 | 30,804 | |||||||||||||||
| Adjustments to beginning balance: | ||||||||||||||||||||
| Allowance for credit losses – loans – Surrey acquisition for purchased credit deteriorated loans | – | – | 2,011 | – | – | |||||||||||||||
| Allowance for credit losses – loan commitments (1) | – | – | – | – | – | |||||||||||||||
| Net Adjustments | – | – | 2,011 | – | – | |||||||||||||||
| Provision for credit losses: | ||||||||||||||||||||
| Provision for credit losses – loans | 1,041 | 1,315 | 4,105 | 1,974 | 3,416 | |||||||||||||||
| (Recovery of) provision for credit losses – loan commitments (1) | (12 | ) | (206 | ) | – | (232 | ) | (220 | ) | |||||||||||
| Total provision for credit losses – loans and loan commitments | 1,029 | 1,109 | 4,105 | 1,742 | 3,196 | |||||||||||||||
| Charge-offs | (2,105 | ) | (2,157 | ) | (1,993 | ) | (2,570 | ) | (2,873 | ) | ||||||||||
| Recoveries | 1,222 | 696 | 1,265 | 829 | 625 | |||||||||||||||
| Net (charge-offs) recoveries | (883 | ) | (1,461 | ) | (728 | ) | (1,741 | ) | (2,248 | ) | ||||||||||
| Balance at end of period: | ||||||||||||||||||||
| Allowance for credit losses – loans | 36,189 | 36,031 | 36,177 | 30,789 | 30,556 | |||||||||||||||
| Allowance for credit losses – loan commitments (1) | 746 | 758 | 964 | 964 | 1,196 | |||||||||||||||
| Ending balance | $ | 36,935 | $ | 36,789 | $ | 37,141 | $ | 31,753 | $ | 31,752 | ||||||||||
| Nonperforming Assets | ||||||||||||||||||||
| Nonaccrual loans | $ | 19,356 | $ | 18,366 | $ | 18,628 | $ | 15,557 | $ | 15,208 | ||||||||||
| Accruing loans past due 90 days or more | 104 | 59 | – | 23 | 142 | |||||||||||||||
| Modified loans past due 90 days or more (2) | – | – | – | – | – | |||||||||||||||
| Troubled debt restructurings (“TDRs”) (3) | – | – | – | – | 1,346 | |||||||||||||||
| Total nonperforming loans | 19,460 | 18,425 | 18,628 | 15,580 | 16,696 | |||||||||||||||
| OREO | 192 | 243 | 339 | 481 | 703 | |||||||||||||||
| Total nonperforming assets | $ | 19,652 | $ | 18,668 | $ | 18,967 | $ | 16,061 | $ | 17,399 | ||||||||||
| Additional Information | ||||||||||||||||||||
| Total modified loans (2) | $ | 1,873 | $ | 1,674 | $ | 642 | $ | 429 | $ | – | ||||||||||
| Total accruing TDRs (4) | $ | – | $ | – | $ | – | $ | – | $ | 7,112 | ||||||||||
| Asset Quality Ratios | ||||||||||||||||||||
| Nonperforming loans to total loans | 0.76 | % | 0.71 | % | 0.71 | % | 0.65 | % | 0.70 | % | ||||||||||
| Nonperforming assets to total assets | 0.60 | % | 0.57 | % | 0.56 | % | 0.53 | % | 0.55 | % | ||||||||||
| Allowance for credit losses to nonperforming loans | 185.97 | % | 195.55 | % | 194.21 | % | 197.62 | % | 183.01 | % | ||||||||||
| Allowance for credit losses to total loans | 1.41 | % | 1.39 | % | 1.38 | % | 1.29 | % | 1.27 | % | ||||||||||
| Annualized net charge-offs (recoveries) to average loans | 0.14 | % | 0.22 | % | 0.11 | % | 0.29 | % | 0.37 | % | ||||||||||
| (1) Prior quarter information for loan commitments has been reclassed for presentation purposes. | ||||||||||||||||||||
| (2) ASU 2022-02, Financial Instruments-Credit Losses (Topic 326), Troubled Debt Restructurings and Vintage Disclosures. ASU adopted effective January 1, 2023. | ||||||||||||||||||||
| (3) Accruing TDRs restructured within the past six months or nonperforming as reported prior to the adoption of ASU 2022-02 Financial Instruments-Credit Losses (Topic 326), Troubled Debt Restructurings and Vintage Disclosures. | ||||||||||||||||||||
| (4) Accruing total TDRs as reported prior to the adoption of ASU 2022-02 Financial Instruments-Credit Losses (Topic 326), Troubled Debt Restructurings and Vintage Disclosures. | ||||||||||||||||||||
FOR MORE INFORMATION, CONTACT:
David D. Brown
(276) 326-9000
