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

fcbc20191021_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): October 22, 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 October 22, 2019, First Community Bankshares, Inc. (the “Company”) announced by press release its earnings for the third quarter of 2019. A copy of the press release is attached hereto as Exhibit 99.1.

 

Item 8.01

Other Events.

 

On October 22, 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 November 15, 2019, to shareholders of record on November 1, 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 October 22, 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:

October 22, 2019

 

By:

/s/ David D. Brown

     
   

David D. Brown

   

Chief Financial Officer

 

 

(Back To Top)

Section 2: EX-99.1 (EXHIBIT 99.1)

ex_160644.htm

Exhibit 99.1

 

 

 

NEWS RELEASE

FOR IMMEDIATE RELEASE:

 

FOR MORE INFORMATION, CONTACT:

October 22, 2019

 

David D. Brown

   

(276) 326-9000

 

First Community Bankshares, Inc. Announces Third 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 September 30, 2019. The Company reported net income of $9.16 million, or $0.58 per diluted common share, for the quarter ended September 30, 2019, which was an increase of $0.03, or 5.45%, 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 fourth quarter dividend. The quarterly dividend is payable to common shareholders of record on November 1, 2019, and is expected to be paid on or about November 15, 2019. The current year marks the 34th consecutive year of regular cash dividends paid to shareholders.

 

 

Third Quarter 2019 Highlights

 

General

  o On September 11, 2019, the Company announced the pending acquisition of Highlands Bankshares, Inc., headquartered in Abingdon, Virginia, with total assets of approximately $612 million. Upon completion of the transaction, the Company is expected to have total consolidated assets in excess of $2.8 billion.
 

o

The Company declared a quarterly cash dividend to common shareholders of twenty-five cents ($0.25) per common share, an increase of four cents ($0.04) over last year.

 

o

The Company incurred $592 thousand in merger expenses related to the Highlands Bankshares, Inc. acquisition for the third quarter.

 

o

The Company received $900 thousand from litigation settlements during the third quarter. Year to date, the Company has received $4.60 million.

 

Income Statement

 

o

Diluted earnings per share increased $0.03 to $0.58 compared to the same quarter of 2018, an increase of 5.45%.

 

o

Compared to the same quarter last year, return on average assets for the quarter increased 0.10% to 1.65% and return on average equity for the quarter increased 0.21% to 10.80%.

 

o

Net interest margin increased 24 basis points to 4.56% compared to the same quarter of 2018.

 

Balance Sheet

 

o

Book value per common share increased $0.86 to $21.65, and tangible book value per common share increased $0.74 to a record $15.43, compared to December 31, 2018.

 

o

The Company repurchased 60,500 common shares for $2.00 million during the quarter. Year to date, the Company has repurchased 487,400 common shares for $16.36 million.

 

o

The Company and its subsidiary bank both significantly exceed regulatory “well capitalized” targets as of September 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 September 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 $1.08 billion in combined assets as of September 30, 2019. The Company reported consolidated assets of $2.21 billion as of September 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

   

Nine Months Ended

 
(Amounts in thousands, except share  

September 30,

   

June 30,

   

March 31,

   

December 31,

   

September 30,

   

September 30,

 

and per share data)

 

2019

   

2019

   

2019

   

2018

   

2018

   

2019

   

2018

 

Interest income

                                                       

Interest and fees on loans

  $ 22,068     $ 22,721     $ 22,179     $ 23,938     $ 22,556     $ 66,968     $ 67,733  

Interest on securities

    857       895       1,094       1,249       1,372       2,846       3,837  

Interest on deposits in banks

    680       766       338       194       358       1,784       1,343  

Total interest income

    23,605       24,382       23,611       25,381       24,286       71,598       72,913  

Interest expense

                                                       

Interest on deposits

    1,383       1,392       1,305       1,297       1,269       4,080       3,847  

Interest on borrowings

    1       1       120       205       692       122       2,100  

Total interest expense

    1,384       1,393       1,425       1,502       1,961       4,202       5,947  

Net interest income

    22,221       22,989       22,186       23,879       22,325       67,396       66,966  

Provision for loan losses

    675       1,585       1,220       908       495       3,480       1,485  

Net interest income after provision

    21,546       21,404       20,966       22,971       21,830       63,916       65,481  

Noninterest income

    7,634       8,649       8,080       6,297       6,519       24,363       20,146  

Noninterest expense

    17,444       16,651       16,785       17,366       18,131       50,880       52,407  

Income before income taxes

    11,736       13,402       12,261       11,902       10,218       37,399       33,220  

Income tax expense

    2,580       2,951       2,630       2,596       1,118       8,161       6,186  

Net income

  $ 9,156     $ 10,451     $ 9,631     $ 9,306     $ 9,100     $ 29,238     $ 27,034  
                                                         

Earnings per common share

                                                       

Basic

  $ 0.59     $ 0.67     $ 0.61     $ 0.57     $ 0.55     $ 1.86     $ 1.62  

Diluted

    0.58       0.66       0.60       0.57       0.55       1.85       1.61  

Cash dividends per common share

                                                       

Regular

    0.25       0.25       0.21       0.21       0.21       0.71       1.05  

Weighted average shares outstanding

                                                       

Basic

    15,603,992       15,712,204       15,839,424       16,201,148       16,512,823       15,717,678       16,717,704  

Diluted

    15,664,587       15,775,320       15,920,950       16,280,404       16,612,416       15,785,484       16,810,425  

Performance ratios

                                                       

Return on average assets

    1.65 %     1.89 %     1.75 %     1.63 %     1.55 %     1.76 %     1.53 %

Return on average common equity

    10.80 %     12.57 %     11.77 %     11.01 %     10.59 %     11.70 %     10.52 %

Return on average tangible common equity(1)

    15.19 %     17.57 %     16.66 %     15.58 %     15.06 %     16.52 %     14.93 %
                                                         

(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

   

Nine Months Ended

 
   

September 30,

   

June 30,

   

March 31,

   

December 31,

   

September 30,

   

September 30,

 
(Amounts in thousands, except per  

2019

   

2019

   

2019

   

2018

   

2018

   

2019

   

2018

 

share data)

                                                       

Net income

  $ 9,156     $ 10,451     $ 9,631     $ 9,306     $ 9,100     $ 29,238     $ 27,034  

Non-GAAP adjustments:

                                                       

Net loss on sale of securities

    -       43       -       -       618       43       618  

Loss on extinguishment of debt

    -       -       -       -       1,096       -       1,096  

Goodwill impairment

    -       -       -       -       1,492       -       1,492  

Deferred tax asset revaluation

    -       -       -       -       (1,669 )     -       (1,669 )

Merger, acquisition, and divestiture expense

    592       -       -       -       -       592       -  

Other items(1)

    (900 )     (2,025 )     (1,675 )     254       -       (4,600 )     167  

Total adjustments

    (308 )     (1,982 )     (1,675 )     254       1,537       (3,965 )     1,704  

Tax effect

    (134 )     (550 )     (328 )     61       411       (1,012 )     483  

Adjusted earnings, non-GAAP

  $ 8,982     $ 9,019     $ 8,284     $ 9,499     $ 10,226     $ 26,285     $ 28,255  
                                                         

Adjusted diluted earnings per common share, non-GAAP

  $ 0.57     $ 0.57     $ 0.52     $ 0.58     $ 0.62     $ 1.67     $ 1.68  

Performance ratios, non-GAAP

                                                       

Adjusted return on average assets

    1.62 %     1.63 %     1.51 %     1.67 %     1.74 %     1.59 %     1.60 %

Adjusted return on average common equity

    10.59 %     10.84 %     10.12 %     11.23 %     11.90 %     10.52 %     11.00 %

Adjusted return on average tangible common equity(2)

    14.90 %     15.16 %     14.33 %     15.90 %     16.93 %     14.85 %     15.61 %
                                                         

(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

 

3

 

 

AVERAGE BALANCE SHEETS AND NET INTEREST INCOME ANALYSIS (Unaudited)

 

   

Three Months Ended September 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)

  $ 1,706,936     $ 22,106       5.14 %   $ 1,792,284     $ 22,594       5.00 %

Securities available for sale

    118,450       1,015       3.40 %     188,975       1,455       3.06 %

Securities held to maturity

    -       -       -       25,064       104       1.65 %

Interest-bearing deposits

    122,891       680       2.20 %     66,137       358       2.15 %

Total earning assets

    1,948,277       23,801       4.85 %     2,072,460       24,511       4.69 %

Other assets

    250,142                       253,199                  

Total assets

  $ 2,198,419                     $ 2,325,659                  
                                                 

Liabilities and stockholders' equity

                                               

Interest-bearing deposits

                                               

Demand deposits

  $ 450,650     $ 78       0.07 %   $ 459,759     $ 39       0.03 %

Savings deposits

    500,600       222       0.18 %     502,255       85       0.06 %

Time deposits

    413,012       1,083       1.04 %     463,885       1,145       0.98 %

Total interest-bearing deposits

    1,364,262       1,383       0.40 %     1,425,899       1,269       0.35 %

Borrowings

                                               

Retail repurchase agreements

    2,107       1       0.17 %     3,455       1       0.12 %

Wholesale repurchase agreements

    -       -       -       25,000       203       3.22 %

FHLB advances and other borrowings

    -       -       -       47,826       488       4.06 %

Total borrowings

    2,107       1       0.17 %     76,281       692       3.60 %

Total interest-bearing liabilities

    1,366,369       1,384       0.40 %     1,502,180       1,961       0.52 %

Noninterest-bearing demand deposits

    466,253                       454,126                  

Other liabilities

    29,449                       28,430                  

Total liabilities

    1,862,071                       1,984,736                  

Stockholders' equity

    336,348                       340,923                  

Total liabilities and stockholders' equity

  $ 2,198,419                     $ 2,325,659                  

Net interest income, FTE(1)

          $ 22,417                     $ 22,550          

Net interest rate spread

                    4.44 %                     4.17 %

Net interest margin, FTE(1)

                    4.56 %                     4.32 %
                                                 

(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 $566 thousand and $1.05 million for the three months ended September 30, 2019 and 2018, respectively.

 

4

 

 

AVERAGE BALANCE SHEETS AND NET INTEREST INCOME ANALYSIS (Unaudited)

 

   

Nine Months Ended September 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)

  $ 1,730,940     $ 67,114       5.18 %   $ 1,797,689     $ 67,842       5.05 %

Securities available for sale

    130,029       3,314       3.41 %     181,630       4,091       3.01 %

Securities held to maturity

    4,071       45       1.48 %     25,098       314       1.67 %

Interest-bearing deposits

    101,364       1,784       2.34 %     97,623       1,343       1.84 %

Total earning assets

    1,966,404       72,257       4.91 %     2,102,040       73,590       4.68 %

Other assets

    248,801                       252,797                  

Total assets

  $ 2,215,205                     $ 2,354,837                  
                                                 

Liabilities and stockholders' equity

                                               

Interest-bearing deposits

                                               

Demand deposits

  $ 450,653     $ 192       0.06 %   $ 469,081     $ 206       0.06 %

Savings deposits

    502,241       589       0.16 %     512,897       250       0.07 %

Time deposits

    426,885       3,299       1.03 %     478,265       3,391       0.95 %

Total interest-bearing deposits

    1,379,779       4,080       0.40 %     1,460,243       3,847       0.35 %

Borrowings

                                               

Retail repurchase agreements

    2,792       3       0.13 %     3,836       3       0.10 %

Wholesale repurchase agreements

    5,037       119       3.17 %     25,000       603       3.22 %

FHLB advances and other borrowings

    -       -       -       49,267       1,494       4.05 %

Total borrowings

    7,829       122       2.08 %     78,103       2,100       3.59 %

Total interest-bearing liabilities

    1,387,608       4,202       0.40 %     1,538,346       5,947       0.52 %

Noninterest-bearing demand deposits

    464,958                       444,672                  

Other liabilities

    28,651                       28,257                  

Total liabilities

    1,881,217                       2,011,275                  

Stockholders' equity

    333,988                       343,562                  

Total liabilities and stockholders' equity

  $ 2,215,205                     $ 2,354,837                  

Net interest income, FTE(1)

          $ 68,055                     $ 67,643          

Net interest rate spread

                    4.51 %                     4.16 %

Net interest margin, FTE(1)

                    4.63 %                     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 $2.72 million and $4.26 million for the nine months ended September 30, 2019 and 2018, respectively.

 

5

 

 

CONDENSED CONSOLIDATED QUARTERLY NONINTEREST INCOME AND EXPENSE  (Unaudited)

 

   

Three Months Ended

   

Nine Months Ended

 
   

September 30,

   

June 30,

   

March 31,

   

December 31,

   

September 30,

   

September 30,

 

(Amounts in thousands)

 

2019

   

2019

   

2019

   

2018

   

2018

   

2019

   

2018

 

Noninterest income

                                                       

Wealth management

  $ 952     $ 884     $ 745     $ 854     $ 791     $ 2,581     $ 2,408  

Service charges on deposits

    3,785       3,699       3,408       3,850       3,803       10,892       10,883  

Other service charges and fees

    2,007       2,129       2,049       2,017       1,925       6,185       5,716  

Insurance commissions

    -       -       -       -       299       -       966  

Net loss on sale of securities

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

Net FDIC indemnification asset amortization

    (719 )     (516 )     (552 )     (579 )     (645 )     (1,787 )     (1,602 )

Other income

    900       2,025       1,675       -       -       4,600       -  

Other operating income

    709       471       755       155       964       1,935       2,393  

Total noninterest income

  $ 7,634     $ 8,649     $ 8,080     $ 6,297     $ 6,519     $ 24,363     $ 20,146  

Noninterest expense

                                                       

Salaries and employee benefits

  $ 9,334     $ 9,153     $ 9,166     $ 9,273     $ 8,983     $ 27,653     $ 27,417  

Occupancy expense

    1,042       1,082       1,153       1,134       1,075       3,277       3,408  

Furniture and equipment expense

    1,183       1,062       1,033       1,004       985       3,278       2,976  

Service fees

    1,466       1,231       1,030       1,047       1,134       3,727       2,813  

Advertising and public relations

    795       513       524       550       478       1,832       1,461  

Professional fees

    548       328       414       356       337       1,290       1,074  

Amortization of intangibles

    251       249       246       254       261       746       785  

FDIC premiums and assessments

    -       150       168       209       234       318       697  

Loss on extinguishment of debt

    -       -       -       -       1,096       -       1,096  

Merger, acquisition, and divestiture expense

    592       -       -       -       -       592       -  

Goodwill impairment

    -       -       -       -       1,492       -       1,492  

Other operating expense

    2,233       2,883       3,051       3,539       2,056       8,167       9,188  

Total noninterest expense

  $ 17,444     $ 16,651     $ 16,785     $ 17,366     $ 18,131     $ 50,880     $ 52,407  

 

6

 

 

CONDENSED CONSOLIDATED QUARTERLY BALANCE SHEETS (Unaudited)

 

   

September 30,

   

June 30,

   

March 31,

   

December 31,

   

September 30,

 

(Amounts in thousands, except per share data)

 

2019

   

2019

   

2019

   

2018

   

2018

 

Assets

                                       

Cash and cash equivalents

  $ 182,458     $ 156,478     $ 148,546     $ 76,873     $ 73,679  

Debt securities available for sale

    115,537       119,076       132,597       153,116       163,593  

Debt securities held to maturity

    -       -       -       25,013       25,047  

Loans held for investment, net of unearned income

                                       

Noncovered

    1,679,958       1,705,408       1,719,905       1,756,269       1,770,426  

Covered

    14,158       15,520       17,475       18,815       20,483  

Allowance for loan losses

    (18,493 )     (18,540 )     (18,243 )     (18,267 )     (18,256 )

Loans held for investment, net

    1,675,623       1,702,388       1,719,137       1,756,817       1,772,653  

FDIC indemnification asset

    3,458       4,020       4,578       5,108       5,653  

Premises and equipment, net

    48,521       48,262       46,636       45,785       45,537  

Other real estate owned, noncovered

    2,528       3,810       3,903       3,806       4,754  

Other real estate owned, covered

    -       152       152       32       44  

Interest receivable

    4,842       5,317       5,227       5,481       5,374  

Goodwill

    92,744       92,744       92,744       92,744       94,287  

Other intangible assets

    4,280       4,532       4,780       5,026       5,366  

Other assets

    75,056       75,248       84,035       74,573       73,701  

Total assets

  $ 2,205,047     $ 2,212,027     $ 2,242,335     $ 2,244,374     $ 2,269,688  
                                         

Liabilities

                                       

Deposits

                                       

Noninterest-bearing

  $ 472,478     $ 480,573     $ 479,299     $ 459,550     $ 463,945  

Interest-bearing

    1,364,374       1,367,465       1,399,138       1,396,200       1,411,906  

Total deposits

    1,836,852       1,848,038       1,878,437       1,855,750       1,875,851  

Securities sold under agreements to repurchase

    1,863       3,083       3,700       29,370       30,151  

Interest, taxes, and other liabilities

    28,969       27,220       27,096       26,397       25,284  

Total liabilities

    1,867,684       1,878,341       1,909,233       1,911,517       1,931,286  
                                         

Stockholders' equity

                                       

Common stock(2)

    15,580       15,633       15,818       16,007       21,382  

Additional paid-in capital(2)

    108,222       109,816       115,914       122,486       229,182  

Retained earnings

    213,866       208,618       202,103       195,793       189,902  

Treasury stock, at cost(2)

    -       -       -       -       (99,247 )

Accumulated other comprehensive loss

    (305 )     (381 )     (733 )     (1,429 )     (2,817 )

Total stockholders' equity

    337,363       333,686       333,102       332,857       338,402  

Total liabilities and stockholders' equity

  $ 2,205,047     $ 2,212,027     $ 2,242,335     $ 2,244,374     $ 2,269,688  
                                         

Shares outstanding at period-end

    15,579,740       15,633,388       15,818,368       16,007,263       16,390,502  

Book value per common share

  $ 21.65     $ 21.34     $ 21.06     $ 20.79     $ 20.65  

Tangible book value per common share(1)

    15.43       15.12       14.89       14.69       14.57  
                                         

(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.

 

7

 

 

SELECTED CREDIT QUALITY INFORMATION (Unaudited)

 

   

September 30,

   

June 30,

   

March 31,

   

December 31,

   

September 30,

 

(Amounts in thousands)

 

2019

   

2019

   

2019

   

2018

   

2018

 

Allowance for Loan Losses

                                       

Beginning balance

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

Provision for loan losses charged to operations

    675       1,585       1,220       908       495  

Charge-offs

    (964 )     (2,114 )     (1,622 )     (1,282 )     (2,177 )

Recoveries

    242       826       378       385       355  

Net charge-offs

    (722 )     (1,288 )     (1,244 )     (897 )     (1,822 )

Ending balance

  $ 18,493     $ 18,540     $ 18,243     $ 18,267     $ 18,256  
                                         

Nonperforming Assets

                                       

Non-covered nonperforming assets

                                       

Nonaccrual loans

  $ 16,701     $ 16,368     $ 18,544     $ 19,583     $ 20,542  

Accruing loans past due 90 days or more

    107       37       156       58       46  

Troubled debt restructurings ("TDRs")(1)

    668       821       835       161       189  

Total non-covered nonperforming loans

    17,476       17,226       19,535       19,802       20,777  

OREO

    2,528       3,810       3,903       3,806       4,754  

Total non-covered nonperforming assets

  $ 20,004     $ 21,036     $ 23,438     $ 23,608     $ 25,531  
                                         

Covered nonperforming assets

                                       

Nonaccrual loans

  $ 243     $ 203     $ 237     $ 322     $ 330  

Total covered nonperforming loans

    243       203       237       322       330  

OREO

    -       152       152       32       44  

Total covered nonperforming assets

  $ 243     $ 355     $ 389     $ 354     $ 374  
                                         

Additional Information

                                       

Performing TDRs(2)

  $ 5,635     $ 5,676     $ 5,654     $ 6,266     $ 6,953  

Total Accruing TDRs(3)

    6,303       6,497       6,489       6,427       7,142  
                                         

Non-covered ratios

                                       

Nonperforming loans to total loans

    1.04 %     1.01 %     1.14 %     1.13 %     1.17 %

Nonperforming assets to total assets

    0.91 %     0.96 %     1.05 %     1.06 %     1.14 %

Non-PCI allowance to nonperforming loans

    105.82 %     107.63 %     93.39 %     92.25 %     87.87 %

Non-PCI allowance to total loans

    1.10 %     1.09 %     1.06 %     1.04 %     1.03 %

Annualized net charge-offs to average loans

    0.17 %     0.30 %     0.29 %     0.20 %     0.41 %
                                         

Total ratios

                                       

Nonperforming loans to total loans

    1.05 %     1.01 %     1.14 %     1.13 %     1.18 %

Nonperforming assets to total assets

    0.92 %     0.97 %     1.06 %     1.07 %     1.14 %

Allowance for loan losses to nonperforming loans

    104.37 %     106.37 %     92.27 %     90.77 %     86.49 %

Allowance for loan losses to total loans

    1.09 %     1.08 %     1.05 %     1.03 %     1.02 %

Annualized net charge-offs to average loans

    0.17 %     0.30 %     0.29 %     0.20 %     0.40 %
                                         

(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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