Executive Summary

Q1 2025 EPS was $0.64, exactly in line with S&P Global consensus; total revenue modestly under consensus by ~$0.3M, reflecting net interest margin pressure and lower average loan balances, while noninterest income grew double-digits year over year * *.
Net interest margin (FTE) compressed to 4.34% (vs. 4.41% in Q3 and 4.36% in Q4), driven by lower earning asset yields and higher deposit costs; net interest income declined sequentially .
Asset quality remained solid: NPLs/loans were 0.85% (up vs. 0.83% in Q4); net charge-offs improved vs. Q1 2024; ACL/loans steady at ~1.42% .
The Board maintained the regular dividend at $0.31 and previously paid a special $2.07 dividend in Q1, reducing book value per share; liquidity rose as cash and equivalents increased to $414.7M .
Strategic activity featured government-guaranteed lending press releases (SBA/USDA) that highlight capabilities and potential fee income tailwinds through subsidiaries, an incremental narrative positive .

What Went Well and What Went Wrong

What Went Well

Noninterest income rose ~10.48% YoY driven by service charges (+15.89%) and other operating income (+35.07%), supporting total revenue resilience despite NIM pressure .
Liquidity strengthened: cash and cash equivalents increased by $37.23M QoQ to $414.68M, positioning the balance sheet to navigate rate and funding dynamics .
Government-guaranteed lending momentum: “This is exactly the type of impact we built Phoenix Lender Services to deliver,” underscoring origination and fee income opportunities across SBA/USDA programs .

What Went Wrong

NIM compression: FTE NIM declined to 4.34% as earning asset yields fell 5 bps YoY and interest-bearing liability yields rose 11 bps; net interest income decreased sequentially .
Core balances contracted: loans fell $33.39M QoQ and AFS securities declined $40.19M, while deposits slipped modestly ($6.77M), reflecting de-risking and funding cost discipline .
Asset quality mix: NPLs/loans rose to 0.85% (vs. 0.83% in Q4), though net charge-offs improved vs. Q1 2024; reserve ratio (ACL/loans) held ~1.42% .

Financial Results

Metric	Q3 2024	Q4 2024	Q1 2025
Net Interest Income ($USD Millions)	$31.59	$31.33	$30.30
Noninterest Income ($USD Millions)	$10.45	$10.34	$10.23
Net Interest Margin (FTE, %)	4.41%	4.36%	4.34%
ROA (%)	1.60%	1.60%	1.49%
ROE (%)	10.04%	9.89%	9.49%
Net Income ($USD Millions)	$13.03	$13.04	$11.82
Diluted EPS ($USD)	$0.71	$0.71	$0.64

Segment/Noninterest Income Breakdown

Category ($USD Millions)	Q3 2024	Q4 2024	Q1 2025
Wealth Management	$1.07	$1.25	$1.16
Service Charges on Deposits	$3.66	$3.61	$3.84
Other Service Charges & Fees	$3.70	$3.58	$3.34
Other Operating Income	$2.02	$1.90	$1.89
Total Noninterest Income	$10.45	$10.34	$10.23

Key KPIs and Balance Sheet

KPI	Q3 2024	Q4 2024	Q1 2025
Total Assets ($USD Billions)	$3.22	$3.26	$3.23
Loans HFI, Net ($USD Billions)	$2.41	$2.38	$2.35
Total Deposits ($USD Billions)	$2.66	$2.69	$2.68
Cash & Equivalents ($USD Millions)	$315.34	$377.45	$414.68
Book Value/Share ($)	$28.47	$28.73	$27.09
Tangible BV/Share ($)	$19.86	$20.16	$18.55
NPLs/Total Loans (%)	0.82%	0.83%	0.85%
ACL/Total Loans (%)	1.44%	1.44%	1.42%
Net Charge-offs to Avg Loans (Annualized, %)	0.18%	0.24%	0.24%

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Regular Quarterly Dividend ($/share)	Q1 2025	$0.31 (Q4 2024)	$0.31 payable May 23, record May 9	Maintained
Special Dividend ($/share)	Announced Jan 28, 2025	N/A	$2.07, paid Feb 28	Declared (capital return)

Note: No formal revenue/margin/expense guidance provided in Q1 2025 materials .

Earnings Call Themes & Trends

No Q1 2025 earnings call transcript was available; company appears not to have published a call or transcript for the period (searched and none found). Themes tracked via Q3/Q4 press releases and the Q1 press release.

Topic	Previous Mentions (Q3 2024, Q4 2024)	Current Period (Q1 2025)	Trend
Net Interest Margin dynamics	NIM at 4.41% (Q3); deposit costs up; asset yields up but balances down	NIM 4.34% with 5 bps YoY earning asset yield decline and +11 bps liability yield increase	Slightly negative
Deposit pricing/funding costs	Higher rates on interest-bearing deposits drove expense; yields +26 bps YoY (Q4)	Interest expense +$472k YoY; deposit yields +11 bps	Persistent headwind
Asset quality	NPLs/loans 0.82% (Q3), 0.83% (Q4); net charge-offs trending up late 2024	NPLs/loans 0.85%; net charge-offs 0.24% annualized; ACL/loans ~1.42%	Stable-to-slightly weaker mix
Noninterest income drivers	Q3 included $825k gain on branch sales; categories stable	Strong service charges and other operating income growth YoY	Positive
Macro/weather events	Hurricane Helene relief efforts noted (Q3)	Not mentioned in Q1 release	Event-specific, not ongoing

Management Commentary

Capital return framing (Q4 release): “The Company’s capital management plan… intends to return current earnings not needed to fund growth… through regular cash dividends and stock repurchases… may declare special dividends from time to time,” supporting the special cash dividend in Q1 .
Government-guaranteed lending momentum: “This is exactly the type of impact we built Phoenix Lender Services to deliver… empowering community banks with the tools and expertise they need to deliver transformative capital…” (Chris Hurn, President & CEO of Phoenix Lender Services) .
Rural infrastructure financing: “These partnerships represent the impact we strive to achieve—empowering rural businesses to grow…” (Phoenix Lender Services) .

Q&A Highlights

No Q1 2025 earnings call transcript found; therefore, no Q&A themes or clarifications were available in the public document set for this quarter (search returned none).

Estimates Context

Metric	Consensus (Q1 2025)	Reported Actual
EPS ($)	0.64*	0.64
Total Revenue ($USD Millions)	40.50*	40.21*

EPS met consensus; total revenue was modestly below consensus, reflecting NIM pressure and lower average loan balances (while noninterest income strengthened) * *.
Values with asterisk were retrieved from S&P Global.

Key Takeaways for Investors

EPS inline with consensus; total revenue modest miss amid NIM compression and higher deposit costs, a dynamic likely to persist if liability pricing remains elevated * *.
Sequential NII drift lower and NIM at 4.34% highlight sensitivity to asset yields and funding mix; focus near-term on deposit repricing cadence and earning asset deployment .
Noninterest income strength (service charges, other operating income) provides a stabilizing offset and could be supplemented by government-guaranteed lending activity/fees .
Asset quality remains solid with manageable NPLs and stable reserve coverage; monitor any macro-sensitive categories as rate environment evolves .
Capital return remains a core pillar (regular dividend maintained; special dividend paid), but investors should note the impact on book/tangible book values and evaluate capital flexibility vs. growth opportunities .
Near-term trading: expect shares to be sensitive to incremental NIM commentary and deposit pricing trends; in-line EPS removes immediate estimate risk, but slight revenue shortfall may temper reactions. Medium-term thesis: stable credit, disciplined capital return, and fee income growth can underpin returns once NIM stabilizes * *.
With only one analyst estimate for the quarter, consensus signals are thin; estimate updates may be modest, with attention on margin trajectory and noninterest income durability *.

S&P Global disclaimer: Values marked with * were retrieved from S&P Global.

Document availability note: No Q1 2025 earnings call transcript was found in the FCBC document set for the quarter.

FIRST COMMUNITY BANKSHARES INC /VA/ (FCBC)·Q1 2025 Earnings Summary