FIRST COMMUNITY BANKSHARES INC /VA/
For the period ended Mar 31, 2025. Filed May 2, 2025.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Mar 31, 2025 · Filed May 2, 2025
FCBC$45.48+0.2%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-09-30; filed 2024-11-07.
0001437749-24-033895
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-03-31; filed 2025-05-02.
0001437749-25-014259
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 97 previous paragraphs and 87 current paragraphs.
58 unchanged; 26 reworded; 3 added; 12 removed; 1 previous and 0 current paragraphs rearranged.
Tables are not compared: 25 previous and 22 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (3)
Current report
Economic and Trade Policy Uncertainty
Current report
The Company continues to monitor the potential impact of evolving trade policies, including the threat of additional tariffs imposed by the United States. While no specific tariffs have been implemented during the reporting period that materially affect the Company’s operations, the potential for future changes in cross-border trade arrangements and import/export duties contributes to broader economic uncertainty. Management has considered these risks in its forward-looking assessments and determined that, as of the reporting date, there are no material adverse effects on the Company’s financial position, results of operations, or estimates related to credit losses or asset impairments.
Current report
Three*-*Month Comparison. Noninterest income comprised 25.24% of total net interest and noninterest income in the first quarter of 2025 compared to 22.64% in the same quarter of 2024. Noninterest income increased $970 thousand or 10.48%. The increase is primarily attributable to an increase in service charges on deposits of $526 thousand, or 15.89%, and an increase in other operating income of $491 thousand, or 35.07%.
Removed paragraphs (12)
Previous report
During the last week of September 2024, Hurricane Helene made landfall in Florida’s panhandle, and brought the full suite of hurricane impacts to the southern Appalachian region resulting in widespread flooding and washing out of towns and roadways. Hurricane Helene had a significant impact on western North Carolina. Millions have lost access to critical services like water and sewer, electricity, and telecommunications. Thousands of miles of roads and bridges were damaged. The hurricane resulted in property damage to our customers, the closing or disruption of many businesses and damage to infrastructure in communities that we serve. Our branch in Banner Elk, North Carolina was temporarily closed due to lack of power and water, but it is now open to the public. We continue to evaluate the impact of Hurricane Helene on our customers and the Bank’s loans. Based on our assessment to date, we do not expect the losses related to Hurricane Helene to have a material impact on the Bank’s financial condition or results of operations.
Previous report
Nine-MonthComparison*.*
Previous report
Net income increased $2.33 million in the first nine months of 2024 compared to the same period in 2023. The increase is primarily attributable to a decrease in provision for credit losses of $4.44 million. Noninterest income increased by $2.06 million, as well. These increases were offset by an increase in noninterest expense of $4.06 million compared to the same period in 2023.
Previous report
*Nine-*Month Comparison. Net interest income comprised 76.61% of total net interest and noninterest income for the nine months ending September 30, 2024 compared to 77.99% in the same period of 2023. Net interest income on a GAAP basis decreased $486 thousand, or 0.51%. Net interest income on a FTE basis decreased $481 thousand, with a percentage decrease of 0.50%. The net interest margin on a FTE basis increased 1 basis point while the net interest spread on a FTE basis decreased 24 basis points. The 24 basis point decrease in net interest spread is primarily due to the increase in yield for interest-bearing liabilities of 68 basis points versus the increase in yield for earning assets of 44 basis points.
Previous report
Average earning assets decreased $25.70 million, or 0.89%, primarily due to decreases in both securities available for sale and loans. Securities available for sale decrease $134.10 million, or 43.76%. Loans decreased $22.61 million , or 0.90%. These decreases were offset by an increase in the average balance of interest-bearing deposits with banks of $131.01 million, or 253.12%. The yield on earning assets increased 44 basis points, or 9.34%, primarily due to an increase in benchmark rates as compared to the same period of 2023. The average loan to deposit ratio increased to 93.74% from 92.44% reported in the same period of 2023. Non-cash accretion income increased to $2.04 million from $1.95 million reported in the same period of 2023.
Previous report
Average interest-bearing liabilities, which consist of interest-bearing deposits and borrowings, decreased $23.65 million, or 1.31%, primarily due to a decrease in deposits. Time deposits decreased $25.35 million, or 9.30%, while interest-bearing demand deposits decreased $20.39 million, or 2.99%. These decreases were offset by an increase in savings deposits of $25.39 million, or 2.99%. The yield on interest-bearing liabilities increased 68 basis points and is primarily due to increases in benchmark rates throughout 2023.
Previous report
*Nine-*Month Comparison. The provision charged to operations decreased $4.44 million for the nine months ending September 30, 2024 compared to the same period of 2023. Provision for credit losses for loans of $2.82 million was recorded in the first nine months of 2024 compared to the provision of $7.39 million recorded in the same period of 2023. The provision of $7.39 million recorded in the first nine months of 2023 included $1.61 million of Day 2 provision associated with the Surrey Bancorp acquisition. The remaining decrease in provision is primarily due a much smaller required credit loss provision as the loan portfolio has experienced a decrease in balance of $149.36 million from the same period of 2023. In addition, there was a recovery of provision recorded for the allowance for unfunded commitments during the first nine months of 2024 of $305 thousand. There was a recovery of provision for the allowance for unfunded commitments for the same period of 2023 of $438 thousand.
Previous report
Three*-*Month Comparison. Noninterest income comprised 24.86% of total net interest and noninterest income in the third quarter of 2024 compared to 22.39% in the same quarter of 2023. Noninterest income increased $830 thousand or 8.63%. Noninterest income for the third quarter of 2024 included a gain of $825 thousand from the sale of two closed branch properties; while noninterest income for the same period of 2023 included a gain of $204 thousand for the sale of a closed branch property. Both of these gains are reflected in other operating income are primarily attributable for the change in total noninterest income.
Previous report
*Nine-*Month Comparison. Noninterest income comprised 23.39% of total net interest and noninterest income for the nine months ending September 30, 2024 compared to 22.01% in the same period of 2023. Noninterest income increased $2.06 million or 7.64%. Other operating income increased $1.18 million. As noted above, other operating income for the third quarter of 2024 included a gain of $825 thousand from the sale of two closed branch properties; while other operating income for the same period of 2023 included a gain of $204 thousand for the sale of a closed branch property. In addition, other operating income for 2024, included a holdback payment of $184 thousand related to a prior divestiture of an insurance agency. Other service charges and fees increased $711 thousand and was primarily driven by an increase in interchange income.
Previous report
*Nine-*Month Comparison. Noninterest expense increased $4.06 million, or 5.94%, for the nine months ending September 30, 2024 compared to the same period of 2023. Noninterest expense for the second quarter of 2024 included a non-recurring charge of $1.80 million to settle a putative class action lawsuit. Noninterest expense for the nine month period of 2023 included non-recurring expense of $2.39 million in merger charges related to the Surrey acquisition. Other increases include an increase in salaries and employee benefits, other operating expense, and service fees. The increases are largely attributable to the addition of Surrey branches and inflationary increases.
Previous report
Nine-Month Comparison. Income tax expense decreased $373 thousand, or 3.38%. The effective tax rate decreased to 21.64% for the first nine months of 2024 from 23.32% in the same period of 2023.
Previous report
The Company is working with borrowers and customers in North Carolina, Tennessee, Virginia, and southern West Virginia affected by the devastating floods, power outages, and water shortages from Hurricane Helene. This includes payment relief for affected borrowers. We will continue to monitor the situation over the coming weeks as it relates to asset quality.
Reworded paragraphs (26)
Previous wording
First Community Bankshares, Inc. (the “Company”) is a financial holding company, headquartered in Bluefield, Virginia, that provides banking products and services through its wholly owned subsidiary First Community Bank (the “Bank”), a Virginia chartered bank institution. As of September 30, 2024, the Bank operated 53 branches in Virginia, West Virginia, North Carolina and Tennessee. As of September 30, 2024, full-time equivalent employees, calculated using the number of hours worked, totaled 578. Our primary source of earnings is net interest income, the difference between interest earned on assets and interest paid on liabilities, which is supplemented by fees for services, commissions on sales, and various deposit service charges. We fund our lending and investing activities primarily through the retail deposit operations of our branch banking network. We invest our funds primarily in loans to retail and commercial customers and various investment securities. Our common stock is traded on the NASDAQ Global Select Market under the symbol FCBC.
Current wording
First Community Bankshares, Inc. (the “Company”) is a financial holding company, headquartered in Bluefield, Virginia, that provides banking products and services through its wholly owned subsidiary First Community Bank (the “Bank”), a Virginia chartered bank institution. As of March 31, 2025, the Bank operated 53 branches in Virginia, West Virginia, North Carolina and Tennessee. As of March 31, 2025, full-time equivalent employees, calculated using the number of hours worked, totaled 583. Our primary source of earnings is net interest income, the difference between interest earned on assets and interest paid on liabilities, which is supplemented by fees for services, commissions on sales, and various deposit service charges. We fund our lending and investing activities primarily through the retail deposit operations of our branch banking network. We invest our funds primarily in loans to retail and commercial customers and various investment securities. Our common stock is traded on the NASDAQ Global Select Market under the symbol FCBC.
Previous wording
The Bank offers trust management, estate administration, and investment advisory services through its Trust Division and wholly owned subsidiary First Community Wealth Management Inc. (“FCWM”). The Trust Division manages inter vivos trusts and trusts under will, develops and administers employee benefit and individual retirement plans, and manages and settles estates. Fiduciary fees for these services are charged on a schedule related to the size, nature, and complexity of the account. Revenues consist primarily of investment advisory fees and commissions on assets under management and administration. As of September 30, 2024, the Trust Division and FCWM managed and administered $1.64 billion in combined assets under various fee-based arrangements as fiduciary or agent. The Bank also offers a full range of commercial and personal insurance products through its strategic partnership with Bankers Insurance, LLC.
Current wording
The Bank offers trust management, estate administration, and investment advisory services through its Trust Division and wholly owned subsidiary First Community Wealth Management Inc. (“FCWM”). The Trust Division manages inter vivos trusts and trusts under will, develops and administers employee benefit and individual retirement plans, and manages and settles estates. Fiduciary fees for these services are charged on a schedule related to the size, nature, and complexity of the account. Revenues consist primarily of investment advisory fees and commissions on assets under management and administration. As of March 31, 2025, the Trust Division and FCWM managed and administered $1.62 billion in combined assets under various fee-based arrangements as fiduciary or agent. The Bank also offers a full range of commercial and personal insurance products through its strategic partnership with Bankers Insurance, LLC.
Previous wording
Highlights of our results of operations for the three and nine months ended September 30, 2024, and financial condition as of September 30, 2024, include the following:
Current wording
Highlights of our results of operations for the three months ended March 31, 2025, and financial condition as of March 31, 2025, include the following:
Previous wording
Net income decreased $1.61 million in the third quarter of 2024 compared to the same period in 2023. The decrease is primarily attributable to a decrease in net interest income of $1.75 million. While interest income increased $787 thousand for the third quarter of 2024, interest expense increased $2.54 million. The increase in interest expense is primarily attributable to an increase in deposit rates.
Current wording
Net income decreased $1.03 million in the first quarter of 2025 compared to the same period in 2024. The decrease is primarily attributable to a decrease in net interest income of $1.33 million. Interest income decreased $860 thousand, or 2.39%, for the first quarter of 2025 when compared with the same period of 2024. Interest expense increased $471 thousand, or 10.70%, when compared with the same period of 2024. The increase in interest expense is primarily attributable to an increase in yield on time deposits.
Previous wording
Three*-*Month Comparison. Net interest income comprised 75.14% of total net interest and noninterest income in the third quarter of 2024 compared to 77.61% in the same quarter of 2023. Net interest income on a GAAP basis decreased $1.75 million, or 5.26%. Net interest income on a FTE basis decreased $1.75 million, with a percentage decrease of 5.24%. The net interest margin on a FTE basis decreased 10 basis points while the net interest spread on a FTE basis decreased 32 basis points. The decrease in both the net interest margin and the net interest spread was primarily driven by an increase in the yield on interest-bearing liabilities of 58 basis points when compared with the same period of 2023 and is primarily attributable to increased rates on interest-bearing deposit liabilities.
Current wording
Three*-*Month Comparison. Net interest income comprised 74.76% of total net interest and noninterest income in the first quarter of 2025 compared to 77.36% in the same quarter of 2024. Net interest income on a GAAP basis decreased $1.33 million, or 4.21%. Net interest income on a FTE basis decreased $1.34 million, with a percentage decrease of 4.22%. The net interest margin on a FTE basis decreased 13 basis points while the net interest spread on a FTE basis decreased 16 basis points. The decrease in both the net interest margin and the net interest spread was primarily the result of a decrease in interest income driven by a decrease in the average balance in both the loan and the securities available for sale portfolios. In addition interest expense increased and was primarily driven by an increase in yield paid on time deposits.
Previous wording
Average earning assets decreased $80.50 million, or 2.74%, primarily due to a decrease in average securities available for sale of $151.01 million, or 53.05%. In addition, the average balance for loans decreased $149.08 million, or 5.72%. These decreases to earning assets were offset by an increase in the average balance for interest-bearing balances with banks of $219.59 million, or 431.79%. The yield on earning assets increased 26 basis points, or 5.32%, primarily due to an increase in benchmark rates as compared to the same period of 2023. The average loan to deposit ratio decreased to 92.11% from 93.39% reported in the same quarter of 2023. Non-cash accretion income was $592 thousand for the third quarter compared to $874 thousand reported in the same period of 2023.
Current wording
Average earning assets decreased $14.33 million, or 0.50%, primarily due to a decrease in the average balance for loans of $154.04 million, or 6.04%. In addition, the average balance for available-for-sale securities decreased $89.74 million, or 37.55%. These decreases to earning assets were offset by an increase in the average balance for interest-bearing balances with banks of $229.46 million, or 345.13%. The yield on earning assets decreased 5 basis points, or 0.98%, primarily due to a decrease in the yield on loans of 8 basis points, or 1.51%. The average loan to deposit ratio decreased to 90.45% from 95.51% reported in the same quarter of 2024. Non-cash accretion income was $556 thousand for the first quarter compared to $781 thousand reported in the same period of 2024.
Previous wording
Average interest-bearing liabilities, which consist of interest-bearing deposits and borrowings, decreased $36.76 million, or 2.01%, primarily due to a decrease in deposits. Interest-bearing demand deposits decreased $42.29 million, or 6.05%, while time deposits decreased $18.92 million, or 7.17%. These decreases were offset by an increase in savings deposits of $24.65 million, or 2.86%. The yield on interest-bearing liabilities increased 58 basis points and is primarily due to increases in benchmark rates throughout 2023.
Current wording
Average interest-bearing liabilities, which consist of interest-bearing deposits and borrowings, increased $3.54 million, or 0.20%, primarily due to a increase in deposits of $6.12 million, or 0.34%. Savings deposits increased $25.06 million, or 2.89%. Time deposits decreased $11.72 million, or 4.69% and interest-bearing demand deposits decreased $7.22 million, or 1.08%. The yield on interest-bearing liabilities increased 11 basis points and is primarily due to the increase in yield on time deposits.
Previous wording
Three*-*Month Comparison. The provision charged to operations increased $251 thousand in the third quarter of 2024 compared to the same quarter of 2023. Provision for credit losses for loans of $1.36 was recorded in the third quarter of 2024 compared to the provision of $1.32 million recorded in the same period of 2023. There was a recovery of provision recorded for the allowance for unfunded commitments during the third quarter of 2023 of $206 thousand. There was no provision recorded for unfunded commitments during the third quarter of 2024.
Current wording
Three*-*Month Comparison. The provision charged to operations decreased $690 thousand in the first quarter of 2025 compared to the same quarter of 2024. Provision for credit losses for loans of $350 thousand was recorded in the first quarter of 2025 compared to the provision of $1.01 million recorded in the same period of 2024. There was a recovery of provision recorded for the allowance for unfunded commitments during the first quarter of 2025 of $29 thousand. There was no provision or recovery of provision recorded for unfunded commitments during the first quarter of 2024.
Previous wording
Three*-*Month Comparison. Noninterest expense increased $1.26 million, or 5.52%, in the third quarter of 2024 compared to the same quarter of 2023. The largest increases were primarily due to increases in other operating expense and salaries and employee benefits. The increase in other operating expense of $583 thousand is largely attributable to an increase in loan and deposit fraud losses. The increase in salaries and employee benefits of $456 thousand is attributable to inflationary increases in employee salaries.
Current wording
Three*-*Month Comparison. Noninterest expense increased $1.56 million, or 6.66%, in the first quarter of 2025 compared to the same quarter of 2024. The largest increases were primarily due to increases in salaries and employee benefits of $754 thousand, or 5.99%, other operating expense of $295 thousand, or 8.76%, and advertising and public relations of $259 thousand, or 32.54%.
Previous wording
Three-Month Comparison. Income tax expense decreased $831 thousand, or 19.29%. The effective tax rate decreased to 21.05% in the third quarter of 2024 from 22.73% in the same quarter of 2023.
Current wording
Three-Month Comparison. Income tax expense decreased $202 thousand, or 5.54%. The effective tax rate increased to 22.57% in the first quarter of 2025 from 22.11% in the same quarter of 2024.
Previous wording
Total assets as of September 30, 2024, decreased $44.18 million, or 1.35%, from December 31, 2023. The decrease in assets was primarily driven by decreases in the securities available-for-sale portfolio and loans. Total liabilities decreased $61.58 million, or 2.23%, and was primarily driven by a decrease in deposits. Stockholders' equity increased $17.40 million or 3.46%.
Current wording
Total assets as of March 31, 2025, decreased $35.44 million, or 1.09%, from December 31, 2024. The decrease in assets was primarily driven by decreases in the loans and securities available-for-sale portfolios. Total liabilities decreased $5.47 million, or 0.20%, and was primarily driven by a decrease in deposits. Stockholders' equity decreased $29.98 million, or 5.69%.
Previous wording
Available-for-sale debt securities as of September 30, 2024, decreased $114.29 million, or 40.68%, compared to December 31, 2023. The decrease is primarily due to the maturity of securities of $157.96 million during the first nine months of 2024 offset by purchases of $39.99 million. The market value of debt securities available-for-sale as a percentage of amortized cost was 93.88% as of September 30, 2024, compared to 95.23% as of December 31, 2023.
Current wording
Available-for-sale debt securities as of March 31, 2025, decreased $40.19 million, or 23.66%, compared to December 31, 2024. The decrease is primarily due to the maturities and calls of securities of $81.39 million during the first quarter of 2025 offset by purchases of $38.75 million. The market value of debt securities available-for-sale as a percentage of amortized cost was 91.06% as of March 31, 2025, compared to 91.97% as of December 31, 2024.
Previous wording
Total loans as of September 30, 2024, decreased $128.19 million, or 4.98%, compared to December 31, 2023. The largest decrease occurred in the commercial loans segment with an overall decrease of $72.76 million, or 4.38%. Within this segment, the largest decreases occurred in construction and non-farm, non-residential loans with decreases of $31.37 million and $31.22 million, respectively. The consumer real estate segment decreased $36.58 million, or 4.62%, primarily due to a decrease in single family owner occupied of $34.05 million, or 4.89%.
Current wording
Total loans as of March 31, 2025, decreased $33.39 million, or 1.38%, compared to December 31, 2024. The largest decrease occurred in the commercial loans segment with an overall decrease of $12.84 million, or 0.81%. Within this segment, the largest decreases occurred in non-farm, non-residential loans, multi-family, and single family non-owner occupied loans with decreases of $11.48 million, $7.33 million, and $4.06 million, respectively. These decreases were offset by an increase in commercial and industrial loans of $13.75 million. The consumer real estate segment decreased $12.49 million, or 1.68%, primarily due to a decrease in single family owner occupied of $9.64 million, or 1.48%.
Previous wording
Nonperforming assets as of September 30, 2024, increased $624 thousand, or 3.18%, from December 31, 2023. Nonaccrual loans increased $398 thousand, or 2.06%. OREO increased $154 thousand, or 80.21% and accruing loans past due 90 days or more increased $72 thousand from year-end. As of September 30, 2024, nonaccrual loans were largely attributed to single family owner occupied (45.49%), non-farm, non-residential (13.00%), and commercial and industrial of (10.63%). Certain loans included in the nonaccrual category have been written down to estimated realizable value or assigned specific reserves in the allowance for loan losses based on management’s estimate of loss at ultimate resolution.
Current wording
Nonperforming assets as of March 31, 2025, decreased $150 thousand, or 0.73%, from December 31, 2024. Nonaccrual loans increased $105 thousand, or 0.53%. OREO decreased $223 thousand, or 42.80%. In addition, accruing loans past due 90 days or more decreased $32 thousand from year-end. As of March 31, 2025, nonaccrual loans were largely attributed to single family owner occupied (43.93%), non-farm, non-residential (12.39%), and commercial and industrial of (10.83%). Certain loans included in the nonaccrual category have been written down to estimated realizable value or assigned specific reserves in the allowance for loan losses based on management’s estimate of loss at ultimate resolution.
Previous wording
Delinquent loans, comprised of loans 30 days or more past due and nonaccrual loans, totaled $33.92 million as of September 30, 2024, a decrease of $10 thousand, or 0.03%, compared to $33.93 million as of December 31, 2023. Delinquent loans as a percent of total loans totaled 1.35% as of September 30, 2024, which includes past due loans (0.58%) and nonaccrual loans (0.81%).
Current wording
Delinquent loans, comprised of loans 30 days or more past due and nonaccrual loans, totaled $33.49 million as of March 31, 2025, a decrease of $4.06 million, or 10.81%, compared to $37.55 million as of December 31, 2024. Delinquent loans as a percent of total loans totaled 1.33% as of March 31, 2025, which includes past due loans (0.57%) and nonaccrual loans (0.84%).
Previous wording
When restructuring loans for borrowers experiencing financial difficulty, we generally make concessions in interest rates, loan terms, or amortization terms. Total loans modified as of September 30, 2024, were $2.32 million. As of September 30, 2024, $326 thousand of these loans were 30-89 days past due.
Current wording
When restructuring loans for borrowers experiencing financial difficulty, we generally make concessions with respect to interest rates, loan terms, or amortization terms. Total loans modified as of March 31, 2025, were $2.12 million. As of March 31, 2025, $176 thousand of these loans were 30-89 days past due. Modified loans past due 90 days or more totaled $125 thousand and are included in the total for nonaccrual loans.
Previous wording
OREO, which is carried at the lesser of estimated net realizable value or cost, increased $154 thousand, or 80.21%, as of September 30, 2024, compared to December 31, 2023, and consisted of 6 properties with an average holding period of approximately 2 months. The net loss on the sale of OREO totaled $29 thousand for the nine months ended September 30, 2024, compared to a net loss of $94 thousand for the same period of the prior year. The following table presents the changes in OREO during the periods indicated:
Current wording
OREO, which is carried at the lesser of estimated net realizable value or cost, decreased $223 thousand, or 42.80%, as of March 31, 2025, compared to December 31, 2024, and consisted of 5 properties with an average holding period of approximately 8 months. The net loss on the sale of OREO totaled $80 thousand for the three months ended March 31, 2025, compared to a net loss of $14 thousand for the same period of the prior year. The following table presents the changes in OREO during the periods indicated:
Previous wording
As of September 30, 2024, the balance of the ACL for loans was $35.12 million, or 1.44% of total loans. The ACL at September 30, 2024, decreased $1.07 million from the balance of $36.19 million recorded at December 31, 2023. This decrease included a $2.82 million provision offset by net charge-offs for the nine months of $3.89 million.
Current wording
As of March 31, 2025, the balance of the ACL for loans was $33.78 million, or 1.42% of total loans. The ACL at March 31, 2025, decreased $1.04 million from the balance of $34.83 million recorded at December 31, 2024. This decrease included a $350 thousand provision offset by net charge-offs for the three months of $1.39 million.
Previous wording
At September 30, 2024, the Company also had an allowance for unfunded commitments of $441 thousand which was recorded in Other Liabilities on the Balance Sheet. During the first nine months of 2024, the Company recorded a recovery of provision for credit losses for loan commitments of $305 thousand compared to a provision of provision of $438 thousand recorded in the same period of 2023.
Current wording
At March 31, 2025, the Company also had an allowance for unfunded commitments of $312 thousand which was recorded in Other Liabilities on the Balance Sheet. During the first three months of 2025, the Company recorded a recovery of provision for credit losses for loan commitments of $29 thousand There was no provision or recovery of provision recorded in the same period of 2024.
Previous wording
Total deposits as of September 30, 2024, decreased $63.07 million, or 2.32%, compared to December 31, 2023. The largest decreases in deposits occurred in noninterest-bearing demand of $62.20 million, or 6.67%, and interest-bearing demand of $36.22 million, or 5.22%. Time deposits decreased $9.04 million or 3.57%. Theses decreases were offset by an increase in savings of $44.38 million or 5.26%.
Current wording
Total deposits as of March 31, 2025, decreased $6.77 million, or 0.25%, compared to December 31, 2024. The largest decreases in deposits occurred in interest-bearing demand of $20.78 million, or 3.08%, and time deposits of $5.58 million, or 2.32%. These decreases were offset by an increase in noninterest-bearing demand of $10.30 million, or 1.17% and savings of $9.3 million, or 1.04%.
Previous wording
Total borrowings in the form of retail repurchase agreements as of September 30, 2024, decreased $165 thousand, or 14.75%, compared to December 31, 2023.
Current wording
Total borrowings in the form of retail repurchase agreements as of March 31, 2025, decreased $2 thousand, or 0.22%, compared to December 31, 2024.
Previous wording
As a financial holding company, the Company’s primary source of liquidity is dividends received from the Bank, which are subject to certain regulatory limitations. Other sources of liquidity include cash, investment securities, and borrowings. As of September 30, 2024, the Company’s cash reserves and short-term investment securities totaled $6.50 million and $7.71 million, respectively. The Company’s cash reserves and investments provide adequate working capital to meet obligations for the next twelve months.
Current wording
As a financial holding company, the Company’s primary source of liquidity is dividends received from the Bank, which are subject to certain regulatory limitations. Other sources of liquidity include cash, investment securities, and borrowings. As of March 31, 2025, the Company’s cash reserves and short-term investment securities totaled $18.14 million and $10.92 million, respectively. The Company’s cash reserves and investments provide adequate working capital to meet obligations for the next twelve months.
Previous wording
In addition to cash on hand and deposits with other financial institutions, we rely on customer deposits, cash flows from loans and investment securities, and lines of credit from the FHLB and the Federal Reserve Bank (“FRB”) Discount Window to meet potential liquidity demands. These sources of liquidity are immediately available to satisfy deposit withdrawals, customer credit needs, and our operations. Secondary sources of liquidity include approved lines of credit with correspondent banks and unpledged available-for-sale securities. As of September 30, 2024, our unencumbered cash totaled $315.34 million, unused borrowing capacity from the FHLB totaled $353.31 million, available credit from the FRB Discount Window totaled $5.85 million, available lines from correspondent banks totaled $100.00 million, and unpledged available-for-sale securities totaled $139.56 million.
Current wording
In addition to cash on hand and deposits with other financial institutions, we rely on customer deposits, cash flows from loans and investment securities, and lines of credit from the FHLB and the Federal Reserve Bank (“FRB”) Discount Window to meet potential liquidity demands. These sources of liquidity are immediately available to satisfy deposit withdrawals, customer credit needs, and our operations. Secondary sources of liquidity include approved lines of credit with correspondent banks and unpledged available-for-sale securities. As of March 31, 2025, our unencumbered cash totaled $414.68 million, unused borrowing capacity from the FHLB totaled $330.83 million, available credit from the FRB Discount Window totaled $5.82 million, available lines from correspondent banks totaled $100.00 million, and unpledged available-for-sale securities totaled $104.22 million.
Previous wording
We are committed to effectively managing our capital to protect our depositors, creditors, and shareholders. Failure to meet certain capital requirements may result in actions by regulatory agencies that could have a material impact on our operations. Total stockholders’ equity as of September 30, 2024, increased $17.40 million, or 3.46%, to $520.69 million from $503.29 million as of December 31, 2023. Capital increased due to net income of $38.56 million. The increase was offset by dividends declared of $16.35 million as well as the repurchase of our common stock totaling $8.72 million. Book value per share at September 30, 2024, was $28.47, an increase of $1.27 from year-end 2023.
Current wording
We are committed to effectively managing our capital to protect our depositors, creditors, and shareholders. Failure to meet certain capital requirements may result in actions by regulatory agencies that could have a material impact on our operations. Total stockholders’ equity as of March 31, 2025, decreased $29.98 million, or 5.69%, to $496.42 million from $526.39 million as of December 31, 2024. The decrease in capital 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 in addition to the regular cash dividend of $0.31 per share totaling approximately $5.65 million. The decrease was offset by net income of $11.82 million. Book value per share at March 31, 2025, was $27.09 compared to $28.73 at year-end 2024.
Previous wording
Our risk-based capital ratios as of September 30, 2024, increased from December 31, 2023, primarily due to a decrease in risk weighted assets and increased capital levels. The decrease in risk-weighted assets was primarily driven by a decrease in both the loan and securities available for sale portfolios. As of September 30, 2024, we continued to meet all capital adequacy requirements and were classified as well-capitalized under the regulatory framework for prompt corrective action. Management believes there have been no conditions or events that would change the Bank’s classification. Additionally, our capital ratios were in excess of the minimum standards under the Basel III capital rules as of September 30, 2024.
Current wording
The Company's risk-based capital ratios as of March 31, 2025, decreased from December 31, 2024, primarily due to a decrease in capital levels. The decrease in capital was primarily driven by the payment of a special cash dividend of $2.07 per share totaling approximately $37.93 million during the first quarter of 2025. While the Company's risk-based capital ratios decreased, the Bank's risk-based capital ratios increased. The increase in the Bank's risk-based capital ratios was primarily due to a decrease in risk-weighted assets. As of March 31, 2025, we continued to meet all capital adequacy requirements and were classified as well-capitalized under the regulatory framework for prompt corrective action. Management believes there have been no conditions or events that would change the Bank’s classification. Additionally, our capital ratios were in excess of the minimum standards under the Basel III capital rules as of March 31, 2025.
Previous wording
As of September 30, 2024, the Federal Open Market Committee had set the benchmark federal funds rate to a range of 475 to 500 basis points. The following table presents the sensitivity of net interest income from immediate and sustained rate shocks in various interest rate scenarios over a twelve-month period for the periods indicated:
Current wording
As of March 31, 2025, the Federal Open Market Committee had set the benchmark federal funds rate to a range of 425 to 450 basis points. The following table presents the sensitivity of net interest income from immediate and sustained rate shocks in various interest rate scenarios over a twelve-month period for the periods indicated:
Rearranged previous paragraphs (1)
Previous report — wording carried elsewhere
AVERAGE BALANCE SHEETS AND NET INTEREST INCOME ANALYSIS (Unaudited)