The Company also declared a quarterly cash dividend to common shareholders of thirty-one cents, $0.31, per common share. The quarterly dividend is payable to common shareholders of record on November 14, 2025, and is expected to be paid on November 28, 2025. This year marks the 40th consecutive year of regular dividends to common shareholders and the prior year was the 15th consecutive year of regular dividend increases.
Third Quarter 2025 Highlights
Income Statement
Net income of $12.27 million for the third quarter of 2025, was a decrease of $768 thousand, or 5.89%, from the same quarter of 2024. Net income of $36.33 million for the first nine months of 2025, was a decrease of $2.24 million, or 5.80%, from the same period of 2024.
When adjusted for merger and non-recurring expenses, net income of $12.90 million was an increase of $495 thousand, or 4.00% from the third quarter of 2024.
Net interest margin for the third quarter of 2025 remained strong at 4.43% and was an increase of 2 basis points over the same quarter of 2024. The yield on earning assets decreased 10 basis points, or 1.94%, from the same period of 2024 and is primarily attributable to a decrease in average loan balance and interest income. The average balance of loans decreased $116.18 million, or 4.73%, with interest income decreasing $1.30 million, or 4.05%. The decrease in interest income on loans was somewhat offset by an increase in interest income on interest-bearing deposits with banks of $144 thousand, or 3.89%. Interest expense on interest-bearing liabilities decreased $896 thousand, which is primarily attributable to a decrease in the average balance of time deposits of $31.42 million, or 12.82%, as well as a decrease in total interest expense of $896 thousand, or 16.91%. Tax equivalent net interest income decreased $293 thousand, or 0.92%, compared to the same quarter of 2024.
Net interest income after provision for loan losses increased $1.06 million, or 3.52%, compared to the same quarter of 2024. The increase is attributable to a reduction in the allowance for loan losses driven by a $84.78 million loan balance reduction from the December 31, 2024, balance of $2.42 billion.
Noninterest income increased approximately $437 thousand, or 4.18%, when compared to the same quarter of 2024. The increase is attributable to an increase in service charges on deposits of $859 thousand, or 23.46%, an increase in wealth management fees of $300 thousand, or 28.01%, and a decrease in other operating income of $872 thousand, or 43.12%. Noninterest expense increased $2.10 million, or 8.69%, when compared to the same period of 2024. The increase is attributable to increases in salaries and benefits of $1.22 million, or 9.31%, service fees of $267 thousand, or 10.86%, and merger expense of $787 thousand. The merger expense is related to the forthcoming merger with Hometown Bank, with an anticipated completion date of January 2026.
Annualized return on average assets ("ROA") was 1.53% for the third quarter of 2025 compared to 1.60% for the same period of 2024. ROA for the nine months ended September 30, 2025, was 1.52% compared to 1.60% for the same period of 2024. Annualized return on average common equity ("ROE") was 9.58% for the third quarter of 2025 compared to 10.04% for the same period of 2024. ROE was 9.64% for the nine months ended September 30, 2025, compared to 10.08% for the same period of 2024. Additionally, return on average tangible common equity continues to remain strong at 13.82% for the third quarter of 2025.
Balance Sheet and Asset Quality
Consolidated assets totaled $3.19 billion on September 30, 2025.
Consolidated loan balances decreased $84.78 million, or 3.51%, and securities available for sale decreased $38.53 million, or 22.69%, from December 31, 2024. Deposits decreased $60.65 million, or 2.25%, which was due to a decrease in interest and noninterest-bearing demand deposits and declining higher-rate time deposits. Stockholder equity decreased $15.67 million, or 2.98%, primarily due to the payment of a special cash dividend in the first quarter of 2025. The net effect of these balance sheet changes resulted in an increase in cash and cash equivalents of $50.25 million, or 13.31%.
The Company's average loan-to-deposits ratio of 89.38%, on September 30, 2025, continues to represent a stable utilization of deposit funding.
The Company did not repurchase any common shares during the third quarter of 2025. However, 50,338 shares have been repurchased in 2025 at an aggregate cost of $1.85 million. In comparison, during the third quarter of 2024, the Company purchased 12,854 common shares for $469 thousand, contributing to a total of 257,294 shares repurchased in the first nine months of 2024 at a total cost of $8.72 million.
Total non-performing assets as of September 30, 2025, were $16.90 million, compared with $20.54 million as of December 31, 2024, and $20.28 million as of September 30, 2024. The Company has realized a declining trend in non-performing assets since December 31, 2024.
Non-performing loans to total loans decreased to 0.71%; a 0.11% reduction when compared with the same quarter of 2024. The Company experienced net charge-offs for the third quarter of 2025 of $1.42 million, or 0.24% of annualized average loans, compared to net charge-offs of $1.13 million, or 0.18%, of annualized average loans for the same period in 2024.
The allowance for credit losses to total loans was 1.36% on September 30, 2025, compared to 1.44% on December 31, 2024, and 1.44% on September 30, 2024.
Book value per share on September 30, 2025, was $ 27.89, a decrease of $0.84 from year-end 2024. The decrease is primarily attributable to the payment of the special cash dividend in the first quarter of 2025 of $2.07 per share totaling approximately $37.93 million.
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 52 branch banking locations in Virginia, West Virginia, North Carolina, and Tennessee as of September 30, 2025. 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 $1.75 billion in combined assets as of September 30, 2025. The Company reported consolidated assets of $3.19 billion as of September 30, 2025. 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
Nine Months Ended
September 30,
June 30,
March 31,
December 31,
September 30,
September 30,
(Amounts in thousands, except shareand per share data)
2025
2025
2025
2024
2024
2025
2024
Interest income
Interest and fees on loans
$
30,805
$
30,637
$
30,669
$
31,637
$
32,120
$
92,111
$
98,234
Interest on securities
1,050
1,029
1,238
1,447
1,070
3,317
3,979
Interest on deposits in banks
3,844
3,722
3,262
3,348
3,702
10,828
7,497
Total interest income
35,699
35,388
35,169
36,432
36,892
106,256
109,710
Interest expense
Interest on deposits
4,402
4,731
4,871
5,099
5,298
14,004
14,540
Interest on borrowings
-
-
-
-
-
-
35
Total interest expense
4,402
4,731
4,871
5,099
5,298
14,004
14,575
Net interest income
31,297
30,657
30,298
31,333
31,594
92,252
95,135
Provision for credit losses
-
(285
)
321
1,082
1,360
36
2,515
Net interest income after provision
31,297
30,942
29,977
30,251
30,234
92,216
92,620
Noninterest income
10,889
10,340
10,229
10,337
10,452
31,458
29,053
Noninterest expense
26,279
25,455
24,944
24,107
24,177
76,679
72,460
Income before income taxes
15,907
15,827
15,262
16,481
16,509
46,995
49,213
Income tax expense
3,641
3,581
3,444
3,441
3,476
10,666
10,649
Net income
$
12,266
$
12,246
$
11,818
$
13,040
$
13,033
$
36,329
$
38,564
Earnings per common share
Basic
$
0.67
$
0.67
$
0.64
$
0.71
$
0.71
$
1.98
$
2.10
Diluted
$
0.67
$
0.67
$
0.64
$
0.71
$
0.71
$
1.97
$
2.09
Cash dividends per common share
Regular
0.31
0.31
0.31
0.31
0.31
0.93
0.89
Special cash dividend
-
-
2.07
-
-
2.07
-
Weighted average shares outstanding
Basic
18,314,865
18,295,465
18,324,760
18,299,612
18,279,612
18,311,661
18,366,249
Diluted
18,400,289
18,400,793
18,451,321
18,418,441
18,371,907
18,417,066
18,432,023
Performance ratios
Return on average assets
1.53
%
1.53
%
1.49
%
1.60
%
1.60
%
1.52
%
1.60
%
Return on average common equity
9.58
%
9.84
%
9.49
%
9.89
%
10.04
%
9.64
%
10.08
%
Return on average tangible common equity(1)
13.82
%
14.32
%
13.79
%
14.12
%
14.46
%
13.97
%
14.61
%
_____________
(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
Nine Months Ended
September 30,
June 30,
March 31,
December 31,
September 30,
September 30,
(Amounts in thousands)
2025
2025
2025
2024
2024
2025
2024
Noninterest income
Wealth management
$
1,371
$
1,222
$
1,162
$
1,251
$
1,071
$
3,755
$
3,234
Service charges on deposits
4,520
4,120
3,836
3,613
3,661
12,476
10,399
Other service charges and fees
3,847
3,791
3,340
3,575
3,697
10,978
10,817
Other operating income
1,151
1,207
1,891
1,898
2,023
4,249
4,603
Total noninterest income
$
10,889
$
10,340
$
10,229
$
10,337
$
10,452
$
31,458
$
29,053
Noninterest expense
Salaries and employee benefits
$
14,351
$
14,349
$
13,335
$
13,501
$
13,129
$
42,035
$
38,201
Occupancy expense
1,508
1,290
1,576
1,329
1,270
4,374
3,957
Furniture and equipment expense
1,502
1,587
1,575
1,562
1,574
4,664
4,806
Service fees
2,728
2,475
2,484
2,305
2,461
7,687
7,337
Advertising and public relations
939
1,154
1,055
1,165
967
3,148
2,696
Professional fees
293
360
372
295
221
1,025
923
Amortization of intangibles
433
526
524
535
536
1,483
1,596
FDIC premiums and assessments
362
