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Section 1: 8-K (FORM 8-K)

fcbc20190719_8k.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 8-K

 

CURRENT REPORT

Pursuant to Section 13 OR 15(d) of The Securities Exchange Act of 1934

 
 

Date of Report (Date of earliest event reported): July 23, 2019

 
 
 

FIRST COMMUNITY BANKSHARES, INC.

 

(Exact name of registrant as specified in its charter)

 
 

Virginia

 

000-19297

 

55-0694814

(State or other jurisdiction

 

(Commission

 

(IRS Employer

of incorporation)

 

File Number)

 

Identification No.)

 
 

P.O. Box 989

Bluefield, Virginia

 

24605-0989

(Address of principal executive offices)

 

(Zip Code)

 
 

Registrant’s telephone number, including area code: (276) 326-9000

 

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

[  ]   Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

[  ]   Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

[  ]   Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

[  ]   Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class   Trading Symbol(s)   Name of each exchange on which registered
         
Common Stock ($1.00 par value)  

FCBC

  NASDAQ Global Select

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).

Emerging growth company ☐

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

 

 

 

 

Item 2.02     Results of Operations and Financial Condition.

 

On July 23, 2019, First Community Bankshares, Inc. (the “Company”) announced by press release its earnings for the second quarter of 2019. A copy of the press release is attached hereto as Exhibit 99.1.

 

Item 8.01     Other Events.     

 

On July 23, 2019, the Company announced by press release its quarterly cash dividend to common shareholders of twenty-five cents ($0.25) per common share, payable on or about August 16, 2019, to shareholders of record on August 2, 2019. A copy of the press release is attached hereto as Exhibit 99.1.

 

Item 9.01     Financial Statements and Exhibits.

 

(d)

 

The following exhibit is included with this report:

 

 

 

Exhibit No.

 

Exhibit Description

 

 

 

99.1

 

Earnings and dividend press release dated July 23, 2019

 

Forward-Looking Statements 

 

This Current Report on Form 8-K contains 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 year ended. 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.

 

 

 

 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

 

 

  FIRST COMMUNITY BANKSHARES, INC.

     

Date:

July 23, 2019

 

By:

/s/ David D. Brown

     
   

David D. Brown

   

Chief Financial Officer

 

(Back To Top)

Section 2: EX-99.1 (EXHIBIT 99.1)

ex_150622.htm

Exhibit 99.1

 

 

NEWS RELEASE

FOR IMMEDIATE RELEASE:

 

FOR MORE INFORMATION, CONTACT:

July 23, 2019

 

David D. Brown

   

(276) 326-9000

 

First Community Bankshares, Inc. Announces Second Quarter Results

and Quarterly Dividend

 

Bluefield, Virginia – 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 June 30, 2019. The Company reported net income of $10.45 million, or $0.66 per diluted common share, for the quarter ended June 30, 2019, which was an increase of $1.39 million, or 15.28%, 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 four cents ($0.04), or 19.05%, over last year’s third quarter dividend. The quarterly dividend is payable to common shareholders of record on August 2, 2019, and is expected to be paid on or about August 16, 2019. The current year marks the 34th consecutive year of regular cash dividends paid to shareholders.

 

Second Quarter 2019 Highlights

 

General

 

o

The Company declared a quarterly cash dividend to common shareholders of twenty-five cents ($0.25) per common share.

 

o

The Company received $2.03 million from litigation settlements during the second quarter.

 

Income Statement

 

o

Net income increased $1.39 million, or 15.28%, to $10.45 million compared to the same quarter of 2018.

 

o

Diluted earnings per share increased $0.12 to $0.66 compared to the same quarter of 2018, for an increase of 22.22%.

 

o

Return on average assets for the quarter increased to 1.89%. Return on average equity for the quarter increased to 12.57%.

 

o

Net interest margin increased 47 basis points to 4.72% compared to the same quarter of 2018.

 

Balance Sheet

 

o

Book value per common share increased $0.55 to $21.34, and tangible book value per common share increased $0.43 to a record $15.12, compared to December 31, 2018.

 

o

The Company repurchased 194,000 common shares for $6.58 million during the quarter. Year to date, the Company has repurchased 426,900 common shares for $14.36 million compared to 474,240 shares during same period of 2018.

 

o

The Company and its subsidiary bank both significantly exceed regulatory “well capitalized” targets as of June 30, 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.

 

1

 

 

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 June 30, 2019. First Community Bank offers wealth management and investment advice through its Trust Division and First Community Wealth Management, which collectively managed and administered $1.05 billion in combined assets as of June 30, 2019. The Company reported consolidated assets of $2.21 billion as of June 30, 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.

 

2

 

 

CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Unaudited)

 

   

Three Months Ended

   

Six Months Ended

 
(Amounts in thousands, except share  

June 30,

   

March 31,

   

December 31,

   

September 30,

   

June 30,

   

June 30,

 

and per share data)

 

2019

   

2019

   

2018

   

2018

   

2018

   

2019

   

2018

 

Interest income

                                                 

Interest and fees on loans

  $ 22,721     $ 22,179     $ 23,938     $ 22,556     $ 22,422     $ 44,900     $ 45,177  

Interest on securities

    895       1,094       1,249       1,372       1,361       1,989       2,465  

Interest on deposits in banks

    766       338       194       358       514       1,104       985  

Total interest income

    24,382       23,611       25,381       24,286       24,297       47,993       48,627  

Interest expense

                                                 

Interest on deposits

    1,392       1,305       1,297       1,269       1,327       2,697       2,578  

Interest on borrowings

    1       120       205       692       708       121       1,408  

Total interest expense

    1,393       1,425       1,502       1,961       2,035       2,818       3,986  

Net interest income

    22,989       22,186       23,879       22,325       22,262       45,175       44,641  

Provision for loan losses

    1,585       1,220       908       495       495       2,805       990  

Net interest income after provision

    21,404       20,966       22,971       21,830       21,767       42,370       43,651  

Noninterest income

    8,649       8,080       6,297       6,519       6,959       16,729       13,627  

Noninterest expense

    16,651       16,785       17,366       18,131       17,160       33,436       34,276  

Income before income taxes

    13,402       12,261       11,902       10,218       11,566       25,663       23,002  

Income tax expense

    2,951       2,630       2,596       1,118       2,500       5,581       5,068  

Net income

  $ 10,451     $ 9,631     $ 9,306     $ 9,100     $ 9,066     $ 20,082     $ 17,934  
                                                         

Earnings per common share

                                                 

Basic

  $ 0.67     $ 0.61     $ 0.57     $ 0.55     $ 0.54     $ 1.27     $ 1.06  

Diluted

    0.66       0.60       0.57       0.55       0.54       1.27       1.06  

Cash dividends per common share

                                                 

Regular

    0.25       0.21       0.21       0.21       0.18       0.46       0.36  

Special

    -       -       -       -       -       -       0.48  

Weighted average shares outstanding

                                                 

Basic

    15,712,204       15,839,424       16,201,148       16,512,823       16,689,398       15,775,462       16,821,842  

Diluted

    15,775,320       15,920,950       16,280,404       16,612,416       16,788,615       15,847,498       16,912,872  

Performance ratios

                                                 

Return on average assets

    1.89 %     1.75 %     1.63 %     1.55 %     1.53 %     1.82 %     1.53 %

Return on average common equity

    12.57 %     11.77 %     11.01 %     10.59 %     10.68 %     12.17 %     10.49 %

Return on average tangible common equity(1)

    17.57 %     16.66 %     15.58 %     15.06 %     15.21 %     17.04 %     14.87 %

 


(1) A non-GAAP financial measure defined as net income divided by average stockholders' equity less average goodwill and other intangible assets

 

3

 

 

RECONCILIATION OF GAAP NET INCOME TO NON-GAAP ADJUSTED EARNINGS (Unaudited)

 

   

Three Months Ended

   

Six Months Ended

 
   

June 30,

   

March 31,

   

December 31,

   

September 30,

   

June 30,

   

June 30,

 
(Amounts in thousands, except per  

2019

   

2019

   

2018

   

2018

   

2018

   

2019

   

2018

 

share data)

                                                       

Net income

  $ 10,451     $ 9,631     $ 9,306     $ 9,100     $ 9,066     $ 20,082     $ 17,934  

Non-GAAP adjustments

                                                       

Net loss on sale of securities

    43       -       -       618       -       43       -  

Loss on extinguishment of debt

    -       -       -       1,096       -       -       -  

Goodwill impairment

    -       -       -       1,492       -       -       -  

Deferred tax asset revaluation

    -       -       -       (1,669 )     -       -       -  

Other items(1)

    (2,025 )     (1,675 )     254       -       297       (3,700 )     167  

Total adjustments

    (1,982 )     (1,675 )     254       1,537       297       (3,657 )     167  

Tax effect

    (550 )     (328 )     61       411       96       (878 )     72  

Adjusted earnings, non-GAAP

  $ 9,019     $ 8,284     $ 9,499     $ 10,226     $ 9,267     $ 17,303     $ 18,029  
                                                         

Adjusted diluted earnings per common share, non-GAAP

  $ 0.57     $ 0.52     $ 0.58     $ 0.62     $ 0.55     $ 1.09     $ 1.07  

Performance ratios, non-GAAP

                                                       

Adjusted return on average assets

    1.63 %     1.51 %     1.67 %     1.74 %     1.57 %     1.57 %     1.53 %

Adjusted return on average common equity

    10.84 %     10.12 %     11.23 %     11.90 %     10.91 %     10.48 %     10.54 %

Adjusted return on average tangible common equity(2)

    15.16 %     14.33 %     15.90 %     16.93 %     15.55 %     14.68 %     15.21 %

 


(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

 

4

 

 

AVERAGE BALANCE SHEETS AND NET INTEREST INCOME ANALYSIS (Unaudited)

 

   

Three Months Ended June 30,

 
   

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)

  $ 1,721,392     $ 22,772       5.31 %   $ 1,795,094     $ 22,458       5.02 %

Securities available for sale

    126,153       1,068       3.41 %     190,605       1,447       3.04 %

Securities held to maturity

    -       -       -       25,098       104       1.66 %

Interest-bearing deposits

    125,759       766       2.44 %     109,349       514       1.89 %

Total earning assets

    1,973,304       24,606       5.00 %     2,120,146       24,523       4.64 %

Other assets

    248,270                       252,843                  

Total assets

  $ 2,221,574                     $ 2,372,989                  
                                                 

Liabilities and stockholders' equity

                                               

Interest-bearing deposits

                                               

Demand deposits

  $ 454,246     $ 77       0.07 %   $ 484,776     $ 104       0.09 %

Savings deposits

    504,854       192       0.15 %     518,055       83       0.06 %

Time deposits

    429,469       1,123       1.05 %     477,691       1,140       0.96 %

Total interest-bearing deposits

    1,388,569       1,392       0.40 %     1,480,522       1,327       0.36 %

Borrowings

                                               

Retail repurchase agreements

    3,024       1       0.13 %     3,615       1       0.11 %

Wholesale repurchase agreements

    -       -       -       25,000       201       3.22 %

FHLB advances and other borrowings

    -       -       -       50,000       506       4.06 %

Total borrowings

    3,024       1       0.13 %     78,615       708       3.61 %

Total interest-bearing liabilities

    1,391,593       1,393       0.40 %     1,559,137       2,035       0.52 %

Noninterest-bearing demand deposits

    468,782                       447,048                  

Other liabilities

    27,904                       26,222                  

Total liabilities

    1,888,279                       2,032,407                  

Stockholders' equity

    333,595                       340,582                  

Total liabilities and stockholders' equity

  $ 2,221,874                     $ 2,372,989                  

Net interest income, FTE(1)

          $ 23,213                     $ 22,488          

Net interest rate spread

                    4.60 %                     4.12 %

Net interest margin, FTE(1)

                    4.72 %                     4.25 %

 


(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 $1.39 million and $1.36 million for the three months ended June 30, 2019 and 2018, respectively.

 

5

 

 

AVERAGE BALANCE SHEETS AND NET INTEREST INCOME ANALYSIS (Unaudited)

 

 
   

Six Months Ended June 30,

 
   

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)

  $ 1,743,141     $ 45,008       5.21 %   $ 1,800,438     $ 45,249       5.07 %

Securities available for sale

    135,914       2,299       3.41 %     177,897       2.636       2.99 %

Securities held to maturity

    6,140       45       1.48 %     25,115       209       1.68 %

Interest-bearing deposits

    90,423       1,104       2.46 %     113,627       985       1.75 %

Total earning assets

    1,975,618       48,456       4.95 %     2,117,077       49,079       4.67 %

Other assets

    248,118                       252,592                  

Total assets

  $ 2,223,736                     $ 2,369,669                  
                                                 

Liabilities and stockholders' equity

                                               

Interest-bearing deposits

                                               

Demand deposits

  $ 450,655     $ 114       0.05 %   $ 473,819     $ 167       0.07 %

Savings deposits

    503,075       367       0.15 %     518,306       165       0.06 %

Time deposits

    433,936       2,216       1.03 %     485,574       2,246       0.93 %

Total interest-bearing deposits

    1,387,666       2,697       0.39 %     1,477,699       2,578       0.35 %

Borrowings

                                               

Retail repurchase agreements

    3,141       2       0.13 %     4,031       2       0.10 %

Wholesale repurchase agreements

    7,597       119       3.16 %     25,000       400       3.23 %

FHLB advances and other borrowings

    -       -       -       50,000       1,006       4.06 %

Total borrowings

    10,738       121       2.27 %     79,031       1,408       3.59 %

Total interest-bearing liabilities

    1,398,404       2,818       0.41 %     1,556,730       3,986       0.52 %

Noninterest-bearing demand deposits

    464,299                       439,867                  

Other liabilities

    28,245                       28,168                  

Total liabilities

    1,890,948                       2,024,765                  

Stockholders' equity

    332,788                       344,904                  

Total liabilities and stockholders' equity

  $ 2,223,736                     $ 2,369,669                  

Net interest income, FTE(1)

          $ 45,638                     $ 45,093          

Net interest rate spread

                    4.54 %                     4.16 %

Net interest margin, FTE(1)

                    4.66 %                     4.30 %

 


(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 $2.15 million and $3.20 million for the six months ended June 30, 2019 and 2018, respectively.

 

6

 

 

CONDENSED CONSOLIDATED QUARTERLY NONINTEREST INCOME AND EXPENSE  (Unaudited)

 

   

Three Months Ended

   

Six Months Ended

 
   

June 30,

   

March 31,

   

December 31,

   

September 30,

   

June 30,

   

June 30,

 

(Amounts in thousands)

 

2019

   

2019

   

2018

   

2018

   

2018

   

2019

   

2018

 

Noninterest income

                                                       

Wealth management

  $ 884     $ 745     $ 854     $ 791     $ 823     $ 1,629     $ 1,617  

Service charges on deposits

    3,699       3,408       3,850       3,803       3,612       7,107       7,080  

Other service charges and fees

    2,129       2,049       2,017       1,925       1,934       4,178       3,791  

Insurance commissions

    -       -       -       299       338       -       667  

Net loss on sale of securities

    (43 )     -       -       (618 )     -       (43 )     -  

Net FDIC indemnification asset amortization

    (516 )     (552 )     (579 )     (645 )     (575 )     (1,068 )     (957 )

Other income

    2,025       1,675       -       -       -       3,700       -  

Other operating income

    471       755       155       964       827       1,226       1,429  

Total noninterest income

  $ 8,649     $ 8,080     $ 6,297     $ 6,519     $ 6,959     $ 16,729     $ 13,627  

Noninterest expense

                                                       

Salaries and employee benefits

  $ 9,153     $ 9,166     $ 9,273     $ 8,983     $ 8,993     $ 18,319     $ 18,434  

Occupancy expense

    1,082       1,153       1,134       1,075       1,083       2,235       2,333  

Furniture and equipment expense

    1,062       1,033       1,004       985       945       2,095       1,991  

Service fees

    1,231       1,030       1,047       1,134       851       2,261       1,679  

Advertising and public relations

    513       524       550       478       461       1,037       983  

Professional fees

    328       414       356       337       430       742       737  

Amortization of intangibles

    249       246       254       261       263       495       524  

FDIC premiums and assessments

    150       168       209       234       252       318       463  

Loss on extinguishment of debt

    -       -       -       1,096       -       -       -  

Goodwill impairment

    -       -       -       1,492       -       -       -  

Other operating expense

    2,883       3,051       3,539       2,056       3,882       5,934       7,132  

Total noninterest expense

  $ 16,651     $ 16,785     $ 17,366     $ 18,131     $ 17,160     $ 33,436     $ 34,276  

 

7

 

 

CONDENSED CONSOLIDATED QUARTERLY BALANCE SHEETS (Unaudited)

 

   

June 30,

   

March 31,

   

December 31,

   

September 30,

   

June 30,

 

(Amounts in thousands, except per share data)

 

2019

   

2019

   

2018

   

2018

   

2018

 

Assets

                                       

Cash and cash equivalents

  $ 156,478     $ 148,546     $ 76,873     $ 73,679     $ 107,957  

Debt securities available for sale

    119,076       132,597       153,116       163,593       196,425  

Debt securities held to maturity

    -       -       25,013       25,047       25,082  

Loans held for investment, net of unearned income

                                       

Noncovered

    1,705,408       1,719,905       1,756,269       1,770,426       1,776,112  

Covered

    15,520       17,475       18,815       20,483       22,919  

Allowance for loan losses

    (18,540 )     (18,243 )     (18,267 )     (18,256 )     (19,583 )

Loans held for investment, net

    1,702,388       1,719,137       1,756,817       1,772,653       1,779,448  

FDIC indemnification asset

    4,020       4,578       5,108       5,653       6,390  

Premises and equipment, net

    48,262       46,636       45,785       45,537       45,547  

Other real estate owned, noncovered

    3,810       3,903       3,806       4,754       4,805  

Other real estate owned, covered

    152       152       32       44       44  

Interest receivable

    5,317       5,227       5,481       5,374       5,580  

Goodwill

    92,744       92,744       92,744       94,287       95,779  

Other intangible assets

    4,532       4,780       5,026       5,366       5,628  

Other assets

    75,248       84,035       74,573       73,701       75,435  

Total assets

  $ 2,212,027     $ 2,242,335     $ 2,244,374     $ 2,269,688     $ 2,348,120  
                                         

Liabilities

                                       

Deposits

                                       

Noninterest-bearing

  $ 480,573     $ 479,299     $ 459,550     $ 463,945     $ 462,851  

Interest-bearing

    1,367,465       1,399,138       1,396,200       1,411,906       1,441,887  

Total deposits

    1,848,038       1,878,437       1,855,750       1,875,851       1,904,738  

Securities sold under agreements to repurchase

    3,083       3,700       29,370       30,151       27,869  

FHLB borrowings

    -       -       -       -       50,000  

Interest, taxes, and other liabilities

    27,220       27,096       26,397       25,284       26,392  

Total liabilities

    1,878,341       1,909,233       1,911,517       1,931,286       2,008,999  
                                         

Stockholders' equity

                                       

Common stock(2)

    15,633       15,818       16,007       21,382       21,382  

Additional paid-in capital(2)

    109,816       115,914       122,486       229,182       228,949  

Retained earnings

    208,618       202,103       195,793       189,902       184,279  

Treasury stock, at cost(2)

    -       -       -       (99,247 )     (92,904 )

Accumulated other comprehensive loss

    (381 )     (733 )     (1,429 )     (2,817 )     (2,585 )

Total stockholders' equity

    333,686       333,102       332,857       338,402       339,121  

Total liabilities and stockholders' equity

  $ 2,212,027     $ 2,242,335     $ 2,244,374     $ 2,269,688     $ 2,348,120  
                                         

Shares outstanding at period-end

    15,633,388       15,818,368       16,007,263       16,390,502       16,574,347  

Book value per common share

  $ 21.34     $ 21.06     $ 20.79     $ 20.65     $ 20.46  

Tangible book value per common share(1)

    15.12       14.89       14.69       14.57       14.34  

 


(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.

 

8

 

 

SELECTED CREDIT QUALITY INFORMATION (Unaudited)

 

   

June 30,

   

March 31,

   

December 31,

   

September 30,

   

June 30,

 

(Amounts in thousands)

 

2019

   

2019

   

2018

   

2018

   

2018

 

Allowance for Loan Losses

                                       

Beginning balance

  $ 18,243     $ 18,267     $ 18,256     $ 19,583     $ 19,500  

Provision for loan losses charged to operations

    1,585       1,220       908       495       495  

Charge-offs

    (2,114 )     (1,622 )     (1,282 )     (2,177 )     (750 )

Recoveries

    826       378       385       355       338  

Net charge-offs

    (1,288 )     (1,244 )     (897 )     (1,822 )     (412 )

Ending balance

  $ 18,540     $ 18,243     $ 18,267     $ 18,256     $ 19,583  
                                         

Nonperforming Assets

                                       

Non-covered nonperforming assets

                                       

Nonaccrual loans

  $ 16,368     $ 18,544     $ 19,583     $ 20,542     $ 21,467  

Accruing loans past due 90 days or more

    37       156       58       46       -  

Troubled debt restructurings ("TDRs")(1)

    821       835       161       189       133  

Total non-covered nonperforming loans

    17,226       19,535       19,802       20,777       21,600  

OREO

    3,810       3,903       3,806       4,754       4,805  

Total non-covered nonperforming assets

  $ 21,036     $ 23,438     $ 23,608     $ 25,531     $ 26,405  
                                         

Covered nonperforming assets

                                       

Nonaccrual loans

  $ 203     $ 237     $ 322     $ 330     $ 509  

Total covered nonperforming loans

    203       237       322       330       509  

OREO

    152       152       32       44       44  

Total covered nonperforming assets

  $ 355     $ 389     $ 354     $ 374     $ 553  
                                         

Additional Information

                                       

Performing TDRs(2)

  $ 5,676     $ 5,654     $ 6,266     $ 6,953     $ 6,847  

Total TDRs(3)

    6,497       6,489       6,427       7,142       6,980  
                                         

Non-covered ratios

                                       

Nonperforming loans to total loans

    1.01 %     1.14 %     1.13 %     1.17 %     1.22 %

Nonperforming assets to total assets

    0.96 %     1.05 %     1.06 %     1.14 %     1.14 %

Non-PCI allowance to nonperforming loans

    107.63 %     93.39 %     92.25 %     87.87 %     90.66 %

Non-PCI allowance to total loans

    1.09 %     1.06 %     1.04 %     1.03 %     1.10 %

Annualized net charge-offs to average loans

    0.30 %     0.29 %     0.20 %     0.41 %     0.09 %
                                         

Total ratios

                                       

Nonperforming loans to total loans

    1.01 %     1.14 %     1.13 %     1.18 %     1.23 %

Nonperforming assets to total assets

    0.97 %     1.06 %     1.07 %     1.14 %     1.15 %

Allowance for loan losses to nonperforming loans

    106.37 %     92.27 %     90.77 %     86.49 %     88.57 %

Allowance for loan losses to total loans

    1.08 %     1.05 %     1.03 %     1.02 %     1.09 %

Annualized net charge-offs to average loans

    0.30 %     0.29 %     0.20 %     0.40 %     0.09 %

 


(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 

 

8

 

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