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FC

FIRST COMMUNITY BANKSHARES INC /VA/ (FCBC)·Q4 2024 Earnings Summary

Executive Summary

  • Q4 2024 diluted EPS was $0.71 on net income of $13.04M; net interest margin was 4.36% (down 6 bps YoY) as higher deposit costs offset modest asset yield gains .
  • Asset quality remained sound but showed pressure: nonperforming loans rose to 0.83% of total loans and annualized net charge-offs increased to 0.24% .
  • Capital returns were significant: the Board declared a regular $0.31 quarterly dividend and a special dividend of $2.07 per share, citing surplus capital after anticipated growth needs .
  • Operating leverage aided results vs prior year, with noninterest expense down 9.98% YoY largely due to litigation expense in Q4 2023 not repeating in Q4 2024 .

What Went Well and What Went Wrong

What Went Well

  • Stable earnings power: Net income of $13.04M and diluted EPS of $0.71 matched Q3 and improved YoY by 10.65% despite funding cost headwinds .
  • Balance sheet flexibility: Cash and cash equivalents increased 224% YoY to $377.45M, providing liquidity amid lower loans and AFS securities .
  • Shareholder returns: 40th consecutive year of regular dividends and a $2.07 special dividend reflecting surplus capital after supporting anticipated growth .

What Went Wrong

  • Funding cost pressure: Net interest margin fell to 4.36% (down 6 bps YoY) as rates on interest-bearing deposits rose 26 bps YoY; net interest income declined $0.73M YoY .
  • Loan contraction: Loans decreased 6.07% YoY (-$156.21M), with securities AFS down 39.55%, constraining earning asset growth .
  • Credit costs: Annualized net charge-offs rose to 0.24% from 0.14% a year ago and the nonperforming loans ratio increased to 0.83% .

Financial Results

MetricQ4 2023Q2 2024Q3 2024Q4 2024
Net Interest Income ($USD Millions)$32.06 $31.91 $31.59 $31.33
Provision for Credit Losses ($USD Millions)$1.03 $0.14 $1.36 $1.08
Noninterest Income ($USD Millions)$10.46 $9.34 $10.45 $10.34
Noninterest Expense ($USD Millions)$26.78 $24.90 $24.18 $24.11
Income Before Income Taxes ($USD Millions)$14.72 $16.21 $16.51 $16.48
Net Income ($USD Millions)$11.78 $12.69 $13.03 $13.04
Diluted EPS ($USD)$0.66 $0.71 $0.71 $0.71
Net Interest Margin (FTE, %)4.42% 4.51% 4.41% 4.36%
Balance Sheet SnapshotsQ4 2023Q2 2024Q3 2024Q4 2024
Total Assets ($USD Billions)$3.27 $3.23 $3.22 $3.26
Loans Held for Investment, Net ($USD Billions)$2.54 $2.44 $2.41 $2.38
Debt Securities AFS ($USD Millions)$280.96 $129.69 $166.67 $169.85
Cash & Equivalents ($USD Millions)$116.42 $329.88 $315.34 $377.45
Total Deposits ($USD Billions)$2.72 $2.68 $2.66 $2.69
KPIsQ4 2023Q2 2024Q3 2024Q4 2024
ROA (Annualized, %)1.43 1.58 1.60 1.60
ROE (Annualized, %)9.39 10.02 10.04 9.89
ROTCE (Annualized, %)13.82 14.54 14.46 14.12
NPLs / Total Loans (%)0.76 0.80 0.82 0.83
Annualized Net Charge-offs / Avg Loans (%)0.14 0.16 0.18 0.24
ACL / Total Loans (%)1.41 1.41 1.44 1.44
Book Value per Share ($)27.20 27.85 28.47 28.73
Tangible Book Value per Share ($)18.60 19.20 19.86 20.16

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Regular Quarterly Dividend per ShareQ4 2024$0.31 (Q3 2024 declared) $0.31 (payable Feb 28, 2025 to record Feb 14, 2025) Maintained
Special Dividend per ShareQ4 2024None$2.07 (payable Feb 28, 2025; record Feb 14, 2025) Raised/New
Share RepurchasesQ4 202412,854 shares repurchased in Q3 2024 None in Q4 2024 Lowered

Note: No revenue, margin, OpEx, OI&E, tax rate, or segment-specific guidance ranges were provided in the Q4 materials .

Earnings Call Themes & Trends

No earnings call transcript was available for Q4 2024; the company’s disclosures were via press release and 8‑K .

TopicPrevious Mentions (Q2 2024)Previous Mentions (Q3 2024)Current Period (Q4 2024)Trend
Net Interest Margin & Funding CostsNIM 4.51%; deposit liability yields +67 bps YoY; NII down $0.95M YoY NIM 4.41%; deposit yields +58 bps YoY; NII down $1.75M YoY NIM 4.36%; deposit yields +26 bps YoY; NII down $0.73M YoY Gradual NIM compression; funding cost pressure easing vs Q3
Balance Sheet RepositioningAFS down $151M (Treasury maturities); loans -$99M; cash +$213M Loans -$128M YTD; AFS -$114M; cash +$199M Loans -$156M YoY; AFS -$111M YoY; cash +$261M YoY Continued de-risking and liquidity build
Asset QualityNPLs 0.80%; NCOs 0.16%; ACL/loans 1.41% NPLs 0.82%; NCOs 0.18%; ACL/loans 1.44% NPLs 0.83%; NCOs 0.24%; ACL/loans 1.44% Slight deterioration in NCOs/NPLs
Nonrecurring Items$1.80M litigation expense; Q2 2023 had merger charges $0.825M gain on branch sales; litigation expense in Q3 (not repeating YoY commentary) No litigation expense; YoY opex decline as Q4 2023 had $3.0M litigation Cleaner opex base in Q4
Capital Returns (Dividends/Buybacks)Regular $0.31; buybacks 155k shares in Q2 Regular $0.31; buybacks 12.9k shares in Q3 Regular $0.31; special $2.07; no Q4 buybacks Elevated returns via special dividend

Management Commentary

  • “The Company’s capital management plan and philosophy require the maintenance of a strong capital base… [and] intends to return current earnings not needed to fund growth… through regular cash dividends and stock repurchases… [and] may declare special dividends from time to time.”
  • “The Board of Directors determined that the Company will have sufficient surplus capital to support anticipated growth opportunities and other needs after payment of the special dividend totaling approximately $37.92 million.”

Q&A Highlights

No Q&A section available; the company did not publish an earnings call transcript for Q4 2024 .

Estimates Context

Wall Street consensus estimates via S&P Global were unavailable at the time of this analysis due to a Capital IQ daily request limit; therefore, formal comparisons to consensus EPS or revenue are not provided [functions.GetEstimates error].

Key Takeaways for Investors

  • Earnings resilience: Q4 EPS of $0.71 and ROA of 1.60% underscore stable profitability despite funding cost pressures and a smaller loan book .
  • NIM headwinds moderating: NIM slipped to 4.36% (from 4.41% in Q3), with a smaller YoY deterioration vs earlier quarters as deposit rate repricing pressures abate incrementally .
  • Liquidity optionality: Elevated cash balances ($377M) and AFS repositioning provide flexibility to redeploy when risk-adjusted returns improve .
  • Credit normalization watch: Rising NCOs (0.24% annualized) and marginally higher NPLs (0.83%) merit monitoring, though ACL/loans at 1.44% remains steady .
  • Capital return catalyst: A $2.07 special dividend and continued regular dividends are supportive of near-term total return, signaling surplus capital over growth needs .
  • Expense control: YoY noninterest expense down nearly 10% as prior-year litigation charges rolled off; supports margin of safety if NII remains pressured .
  • Positioning: With loans contracting and deposit costs elevated, reinvestment discipline and asset mix shifts will be central to sustaining NIM and EPS run-rate through 2025 .