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 28, 2020

 
 
 

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 28, 2020, First Community Bankshares, Inc. (the “Company”) announced by press release its earnings for the second quarter of 2020. A copy of the press release is attached hereto as Exhibit 99.1.

 

Item 8.01     Other Events.     

 

On July 28, 2020, 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 21, 2020, to shareholders of record on August 7, 2020. 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 release dated July 28, 2020

 

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 28, 2020

 

By:

/s/ David D. Brown

     
   

David D. Brown

   

Chief Financial Officer

 

 

 
ex_195449.htm

Exhibit 99.1

 

 

 

 

NEWS RELEASE

FOR IMMEDIATE RELEASE:

 

FOR MORE INFORMATION, CONTACT:

 July 28, 2020

 

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, 2020. The Company reported net income of $8.24 million, or $0.46 per diluted common share, for the quarter ended June 30, 2020, which was a decrease of $0.20, or 30.30%, over the same quarter of 2019. Net income was $16.11 million, or $0.90 per diluted common share, for the six months ended June 30, 2020, which represents a 29.13% decrease in per share diluted earnings compared to the same period of 2019.

 

Additionally, today the Company declared a quarterly cash dividend to common shareholders of twenty-five cents ($0.25) per common share. The quarterly dividend is payable to common shareholders of record on August 7, 2020, and is expected to be paid on or about August 21, 2020. The current year is the 35th consecutive year of regular dividends to common shareholders.

 

Second Quarter 2020 and Current Highlights

 

Pandemic and General

 

o

The Company’s social distancing practices at its branches and corporate offices continue today. Remote working environments remain in place for approximately 60% of the Company’s back office workforce.

 

o

The Company implemented a pay differential for employees working at branch and back-office locations which ended May 31, 2020. As a result of the pay differential and other COVID-19 related expenses, the Company incurred approximately $612 thousand in additional expenses for the quarter.

 

o

In order to aid its affected customers, the Company modified or deferred payments on 1,277 commercial loans totaling $340.00 million in principal balances and 1,820 retail loans totaling $96.11 million in principal balances.

 

o

Through June 30, 2020, the Company processed 758 loans with original principal balances totaling $60.23 million through the SBA’s Paycheck Protection Program.

 

o

As a result of the low interest rate environment, the Company’s pipeline for mortgage loans grew to approximately $99.75 million at June 30, 2020, and stood at $101.39 million at July 24, 2020.

 

Income Statement

 

o

Second quarter earnings reflect a loan loss provision of $3.83 million, an increase of $2.25 million over second quarter of 2019, to recognize the impact of the coronavirus slowdown. Coupled with the provision in the first quarter of 2020, the second quarter provision had the cumulative effect of increasing loan loss reserve $5.33 million.

 

o

Despite the significant increase in loan loss provision, return on average assets remained strong at 1.15% for both the second quarter and the six month period. The significant increase in loan loss provision over previous quarterly provisions reduced return on average assets for the quarter by 0.24%.

 

o

Net interest margin decreased 50 basis points to 4.22% compared to the same quarter of 2019. Net interest margin decreased 20 basis points to 4.46% for the six months compared to the same period of 2019. Both period decreases are reflective of the current historic low interest rate environment.

 

o

Pandemic shutdowns and stay-at-home orders had a significant negative impact on deposit service charges.

 

Balance Sheet

 

o

As of June 30, 2020, the Company continues to significantly exceed regulatory “well capitalized” targets, as well as all capital targets of its capital management plan. The Company completed its previous share repurchase authorization in the first quarter of 2020, prior to the onset of the current coronavirus pandemic, which completed a strategic objective of acquiring 6.6 million shares, returning over $149 million in surplus capital to shareholders.  In light of the uncertain economic forecast, the Company has temporarily delayed consideration of a new share repurchase authorization to preserve and further accumulate surplus capital. 

 

o

Total deposits have grown $167.93 million, or 7.21%, during 2020 with $125.03 million of the increase coming in interest free categories.

 

 

1

 

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.

 

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 58 branch banking locations in Virginia, West Virginia, North Carolina, and Tennessee as of June 30, 2020. First Community Bank offers wealth management and investment advice through its Trust Division and First Community Wealth Management, which collectively managed and administered $1.10 billion in combined assets as of June 30, 2020. The Company reported consolidated assets of $2.95 billion as of June 30, 2020. 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

 
   

June 30,

   

March 31,

   

December 31,

   

September 30,

   

June 30,

   

June 30,

 

(Amounts in thousands, except share and per share data)

 

2020

   

2020

   

2019

   

2019

   

2019

   

2020

   

2019

 

Interest income

                                                       

Interest and fees on loans

  $ 26,991     $ 28,058     $ 21,837     $ 22,068     $ 22,721     $ 55,049     $ 44,900  

Interest on securities

    713       918       870       857       895       1,631       1,989  

Interest on deposits in banks

    82       533       663       680       766       615       1,104  

Total interest income

    27,786       29,509       23,370       23,605       24,382       57,295       47,993  

Interest expense

                                                       

Interest on deposits

    1,445       1,825       1,312       1,383       1,392       3,270       2,697  

Interest on borrowings

    2       2       1       1       1       4       121  

Total interest expense

    1,447       1,827       1,313       1,384       1,393       3,274       2,818  

Net interest income

    26,339       27,682       22,057       22,221       22,989       54,021       45,175  

Provision for loan losses

    3,831       3,500       91       675       1,585       7,331       2,805  

Net interest income after provision

    22,508       24,182       21,966       21,546       21,404       46,690       42,370  

Noninterest income

    6,913       7,549       9,314       7,634       8,649       14,462       16,729  

Noninterest expense

    18,913       21,664       18,883       17,444       16,651       40,577       33,436  

Income before income taxes

    10,508       10,067       12,397       11,736       13,402       20,575       25,663  

Income tax expense

    2,270       2,195       2,833       2,580       2,951       4,465       5,581  

Net income

  $ 8,238     $ 7,872     $ 9,564     $ 9,156     $ 10,451     $ 16,110     $ 20,082  
                                                         

Earnings per common share

                                                       

Basic

  $ 0.47     $ 0.44     $ 0.61     $ 0.59     $ 0.67     $ 0.90     $ 1.27  

Diluted

    0.46       0.44       0.61       0.58       0.66       0.90       1.27  

Cash dividends per common share

                                                       

Regular

    0.25       0.25       0.25       0.25       0.25       0.50       0.46  

Weighted average shares outstanding

                                                       

Basic

    17,701,853       17,998,994       15,611,093       15,603,992       15,712,204       17,850,423       15,775,462  

Diluted

    17,728,300       18,050,071       15,670,047       15,664,587       15,775,320       17,888,325       15,847,498  

Performance ratios

                                                       

Return on average assets

    1.15 %     1.16 %     1.71 %     1.65 %     1.89 %     1.15 %     1.82 %

Return on average common equity

    7.97 %     7.49 %     11.08 %     10.80 %     12.57 %     7.73 %     12.17 %

Return on average tangible common equity(1)

    11.91 %     11.12 %     15.33 %     15.19 %     17.57 %     11.51 %     17.04 %
                                                         

(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

   

Six Months Ended

 
   

June 30,

   

March 31,

   

December 31,

   

September 30,

   

June 30,

   

June 30,

 
   

2020

   

2020

   

2019

   

2019

   

2019

   

2020

   

2019

 

(Amounts in thousands, except per share data)

                                                       

Net income

  $ 8,238     $ 7,872     $ 9,564     $ 9,156     $ 10,451     $ 16,110     $ 20,082  

Adjustments:

                                                       

Net (gain) loss on sale of securities

    -       (385 )     -       -       43       (385 )     43  

Merger, acquisition, and divestiture expense

    -       1,893       1,532       592       -       1,893       -  

Other items(1)

    -       -       (2,395 )     (900 )     (2,025 )     -       (3,700 )

Total adjustments

    -       1,508       (863 )     (308 )     (1,982 )     1,508       (3,657 )

Tax effect

    -       354       (331 )     (134 )     (550 )     354       (878 )

Adjusted earnings, non-GAAP

  $ 8,238     $ 9,026     $ 9,032     $ 8,982     $ 9,019     $ 17,264     $ 17,303  
                                                         

Adjusted diluted earnings per common share, non-GAAP

  $ 0.46     $ 0.50     $ 0.58     $ 0.57     $ 0.57     $ 0.97     $ 1.09  

Performance ratios, non-GAAP

                                                       

Adjusted return on average assets

    1.15 %     1.33 %     1.61 %     1.62 %     1.63 %     1.24 %     1.57 %

Adjusted return on average common equity

    7.97 %     8.59 %     10.46 %     10.59 %     10.84 %     8.28 %     10.48 %

Adjusted return on average tangible common equity(2)

    11.91 %     12.75 %     14.48 %     14.90 %     15.16 %     12.33 %     14.68 %
                                                         

(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 June 30,

 
   

2020

   

2019

 
   

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)

  $ 2,129,513     $ 27,040       5.11 %   $ 1,721,392     $ 22,772       5.31 %

Securities available for sale

    103,378       839       3.26 %     126,153       1,068       3.41 %

Interest-bearing deposits

    293,791       81       0.11 %     125,759       766       2.44 %

Total earning assets

    2,526,682       27,960       4.45 %     1,973,304       24,606       5.00 %

Other assets

    356,913                       248,270                  

Total assets

  $ 2,883,595                     $ 2,221,574                  
                                                 

Liabilities and stockholders' equity

                                               

Interest-bearing deposits

                                               

Demand deposits

  $ 547,445     $ 98       0.07 %   $ 454,246     $ 77       0.07 %

Savings deposits

    707,298       240       0.14 %     504,854       192       0.15 %

Time deposits

    465,212       1,107       0.96 %     429,469       1,123       1.05 %

Total interest-bearing deposits

    1,719,955       1,445       0.34 %     1,388,569       1,392       0.40 %

Borrowings

                                               

Retail repurchase agreements

    1,244       1       0.14 %     3,024       1       0.13 %

FHLB advances and other borrowings

    -       -       -       -       -       -  

Total borrowings

    1,244       1       0.32 %     3,024       1       0.13 %

Total interest-bearing liabilities

    1,721,199       1,446       0.34 %     1,391,593       1,393       0.40 %

Noninterest-bearing demand deposits

    711,174                       468,782                  

Other liabilities

    35,467                       27,604                  

Total liabilities

    2,467,840                       1,887,979                  

Stockholders' equity

    415,755                       333,595                  

Total liabilities and stockholders' equity

  $ 2,883,595                     $ 2,221,574                  

Net interest income, FTE(1)

          $ 26,514                     $ 23,213          

Net interest rate spread

                    4.11 %                     4.60 %

Net interest margin, FTE(1)

                    4.22 %                     4.72 %
                                                 

(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 $1.50 million and $1.39 million for the three months ended June 30, 2020 and 2019, respectively.

 

4

 

AVERAGE BALANCE SHEETS AND NET INTEREST INCOME ANALYSIS (Unaudited)

 

   

Six Months Ended June 30,

 
   

2020

   

2019

 
   

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)

  $ 2,105,323     $ 55,145       5.27 %   $ 1,743,141     $ 45,008       5.21 %

Securities available for sale

    119,744       1,899       3.19 %     135,914       2,299       3.41 %

Securities held to maturity

    -       -       -       6,140       45       1.48 %

Interest-bearing deposits

    228,636       616       0.53 %     90,423       1,104       2.46 %

Total earning assets

    2,453,703       57,660       4.73 %     1,975,618       48,456       4.95 %

Other assets

    355,280                       248,118                  

Total assets

  $ 2,808,983                     $ 2,223,736                  
                                                 

Liabilities and stockholders' equity

                                               

Interest-bearing deposits

                                               

Demand deposits

  $ 525,024     $ 188       0.07 %   $ 450,655     $ 114       0.05 %

Savings deposits

    693,477       654       0.19 %     503,075       367       0.15 %

Time deposits

    475,149       2,429       1.03 %     433,936       2,216       1.03 %

Total interest-bearing deposits

    1,693,650       3,271       0.39 %     1,387,666       2,697       0.39 %

Borrowings

                                               

Retail repurchase agreements

    1,346       3       0.39 %     3,141       2       0.13 %

Wholesale repurchase agreements

    -       -       -       7,597       119       3.16 %

FHLB advances and other borrowings

    72       1       2.23 %     -       -       -  

Total borrowings

    1,418       4       0.57 %     10,738       121       2.27 %

Total interest-bearing liabilities

    1,695,068       3,275       0.39 %     1,398,404       2,818       0.41 %

Noninterest-bearing demand deposits

    655,906                       464,299                  

Other liabilities

    38,820                       28,245                  

Total liabilities

    2,389,794                       1,890,948                  

Stockholders' equity

    419,189                       332,788                  

Total liabilities and stockholders' equity

  $ 2,808,983                     $ 2,223,736                  

Net interest income, FTE(1)

          $ 54,385                     $ 45,638          

Net interest rate spread

                    4.34 %                     4.54 %

Net interest margin, FTE(1)

                    4.46 %                     4.66 %
                                                 

(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 $3.46 million and $2.15 million for the six months ended June 30, 2020 and 2019, respectively.

 

5

 

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)

 

2020

   

2020

   

2019

   

2019

   

2019

   

2020

   

2019

 

Noninterest income

                                                       

Wealth management

  $ 854     $ 844     $ 842     $ 952     $ 884     $ 1,698     $ 1,629  

Service charges on deposits

    2,560       3,731       3,702       3,785       3,699       6,291       7,107  

Other service charges and fees

    2,617       2,231       2,096       2,007       2,129       4,848       4,178  

Net gain (loss) on sale of securities

    -       385       -       -       (43 )     385       (43 )

Net FDIC indemnification asset amortization

    (483 )     (486 )     (590 )     (719 )     (516 )     (969 )     (1,068 )

Other income

    -       -       2,395       900       2,025       -       3,700  

Other operating income

    1,365       844       869       709       471       2,209       1,226  

Total noninterest income

  $ 6,913     $ 7,549     $ 9,314     $ 7,634     $ 8,649     $ 14,462     $ 16,729  

Noninterest expense

                                                       

Salaries and employee benefits

  $ 11,015     $ 11,386     $ 9,495     $ 9,334     $ 9,153     $ 22,401     $ 18,319  

Occupancy expense

    1,275       1,315       1,057       1,042       1,082       2,590       2,235  

Furniture and equipment expense

    1,316       1,384       1,179       1,183       1,062       2,700       2,095  

Service fees

    1,329       1,523       721       1,053       1,231       2,852       2,261  

Advertising and public relations

    475       512       478       795       513       987       1,037  

Professional fees

    307       233       408       375       328       540       742  

Amortization of intangibles

    360       361       251       251       249       721       495  

FDIC premiums and assessments

    33       -       -       -       150       33       318  

Merger, acquisition, and divestiture expense

    -       1,893       1,532       592       -       1,893       -  

Other operating expense

    2,803       3,057       3,762       2,819       2,883       5,860       5,934  

Total noninterest expense

  $ 18,913     $ 21,664     $ 18,883     $ 17,444     $ 16,651     $ 40,577     $ 33,436  

 

6

 

CONDENSED CONSOLIDATED QUARTERLY BALANCE SHEETS (Unaudited)

 

   

June 30,

   

March 31,

   

December 31,

   

September 30,

   

June 30,

 

(Amounts in thousands, except per share data)

 

2020

   

2020

   

2019

   

2019

   

2019

 

Assets

                                       

Cash and cash equivalents

  $ 421,492     $ 241,613     $ 217,009     $ 182,458     $ 156,478  

Debt securities available for sale

    98,367       107,753       169,574       115,537       119,076  

Loans held for sale

    -       -       263       -       -  

Loans held for investment, net of unearned income

                                       

Noncovered

    2,125,560       2,084,610       2,101,599       1,679,958       1,705,408  

Covered

    11,257       12,115       12,861       14,158       15,520  

Allowance for loan losses

    (23,758 )     (21,137 )     (18,425 )     (18,493 )     (18,540 )

Loans held for investment, net

    2,113,059       2,075,588       2,096,035       1,675,623       1,702,388  

FDIC indemnification asset

    1,943       2,433       2,883       3,458       4,020  

Premises and equipment, net

    62,658       63,319       62,824       48,521       48,262  

Other real estate owned, noncovered

    2,181       2,502       3,969       2,528       3,810  

Other real estate owned, covered

    -       -       -       -       152  

Interest receivable

    8,380       6,117       6,677       4,842       5,317  

Goodwill

    129,565       129,565       129,565       92,744       92,744  

Other intangible assets

    7,798       8,159       8,519       4,280       4,532  

Other assets

    103,623       101,912       101,529       75,056       75,248  

Total assets

  $ 2,949,066     $ 2,738,961     $ 2,798,847     $ 2,205,047     $ 2,212,027  
                                         

Liabilities

                                       

Deposits

                                       

Noninterest-bearing

  $ 752,899     $ 620,292     $ 627,868     $ 472,478     $ 480,573  

Interest-bearing

    1,744,947       1,668,122       1,702,044       1,364,374       1,367,465  

Total deposits

    2,497,846       2,288,414       2,329,912       1,836,852       1,848,038  

Securities sold under agreements to repurchase

    1,100       1,348       1,601       1,863       3,083  

FHLB and other borrowings

    -       1,000       -       -       -  

Interest, taxes, and other liabilities

    34,290       36,593       38,515       28,969       27,220  

Total liabilities

    2,533,236       2,327,355       2,370,028       1,867,684       1,878,341  
                                         

Stockholders' equity

                                       

Common stock

    17,710       17,700       18,377       15,580       15,633  

Additional paid-in capital

    172,601       172,231       192,413       108,222       109,816  

Retained earnings

    226,627       222,814       219,535       213,866       208,618  

Accumulated other comprehensive loss

    (1,108 )     (1,139 )     (1,506 )     (305 )     (381 )

Total stockholders' equity

    415,830       411,606       428,819       337,363       333,686  

Total liabilities and stockholders' equity

  $ 2,949,066     $ 2,738,961     $ 2,798,847     $ 2,205,047     $ 2,212,027  
                                         

Shares outstanding at period-end

    17,709,569       17,700,140       18,376,991       15,579,740       15,633,388  

Book value per common share

  $ 23.48     $ 23.25     $ 23.33     $ 21.65     $ 21.34  

Tangible book value per common share(1)

    15.72       15.47       15.82       15.43       15.12  
                                         

(1)

A non-GAAP financial measure defined as stockholders' equity less goodwill and other intangible assets, divided by shares outstanding

 

7

 

SELECTED CREDIT QUALITY INFORMATION (Unaudited)

 

   

June 30,

   

March31,

   

December 31,

   

September 30,

   

June 30,

 

(Amounts in thousands)

 

2020

   

2020

   

2019

   

2019

   

2019

 

Allowance for Loan Losses

                                       

Beginning balance

  $ 21,137     $ 18,425     $ 18,493     $ 18,540     $ 18,243  

Provision for loan losses charged to operations

    3,831       3,500       91       675       1,585  

Charge-offs

    (1,672 )     (1,194 )     (1,353 )     (964 )     (2,114 )

Recoveries

    462       406       1,194       242       826  

Net charge-offs

    (1,210 )     (788 )     (159 )     (722 )     (1,288 )

Ending balance

  $ 23,758     $ 21,137     $ 18,425     $ 18,493     $ 18,540  
                                         

Nonperforming Assets

                                       

Non-covered nonperforming assets

                                       

Nonaccrual loans

  $ 24,471     $ 20,263     $ 16,113     $ 16,701     $ 16,368  

Accruing loans past due 90 days or more

    284       329       144       107       37  

Troubled debt restructurings ("TDRs")(1)

    598       623       720       668       821  

Total non-covered nonperforming loans

    23,353       21,215       16,977       17,476       17,226  

OREO

    2,181       2,502       3,969       2,528       3,810  

Total non-covered nonperforming assets

  $ 27,534     $ 23,717     $ 20,946     $ 20,004     $ 21,036  
                                         

Covered nonperforming assets

                                       

Nonaccrual loans

  $ 299     $ 145     $ 244     $ 243     $ 203  

Total covered nonperforming loans

    299       145       244       243       203  

OREO

    -       -       -       -       152  

Total covered nonperforming assets

  $ 299     $ 145     $ 244     $ 243     $ 355  
                                         

Additional Information

                                       

Performing TDRs(2)

  $ 10,822     $ 8,429     $ 5,855     $ 5,635     $ 5,676  

Total Accruing TDRs(3)

    11,420       9,052       6,575       6,303       6,497  
                                         

Non-covered ratios

                                       

Nonperforming loans to total loans

    1.19 %     1.02 %     0.81 %     1.04 %     1.01 %

Nonperforming assets to total assets

    0.94 %     0.87 %     0.75 %     0.91 %     0.96 %

Non-PCI allowance to nonperforming loans

    93.71 %     99.63 %     108.53 %     105.82 %     107.63 %

Non-PCI allowance to total loans

    1.12 %     1.01 %     0.88 %     1.10 %     1.09 %

Annualized net charge-offs to average loans

    0.23 %     0.15 %     0.04 %     0.17 %     0.30 %
                                         

Total ratios

                                       

Nonperforming loans to total loans

    1.20 %     1.02 %     0.81 %     1.05 %     1.01 %

Nonperforming assets to total assets

    0.94 %     0.87 %     0.76 %     0.92 %     0.97 %

Allowance for loan losses to nonperforming loans

    92.62 %     98.96 %     106.99 %     104.37 %     106.37 %

Allowance for loan losses to total loans

    1.11 %     1.01 %     0.87 %     1.09 %     1.08 %

Annualized net charge-offs to average loans

    0.23 %     0.15 %     0.04 %     0.17 %     0.30 %
                                         

(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