FIRST COMMUNITY BANKSHARES INC /VA/
For the period ended Jun 30, 2025. Filed Aug 1, 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.
Jun 30, 2025 · Filed Aug 1, 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 2025-03-31; filed 2025-05-02.
0001437749-25-014259
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-06-30; filed 2025-08-01.
0001437749-25-024338
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 87 previous paragraphs and 99 current paragraphs.
59 unchanged; 26 reworded; 11 added; 2 removed; 0 previous and 3 current paragraphs rearranged.
Tables are not compared: 22 previous and 23 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 (11)
Current report
In the second quarter of 2025, the United States implemented new tariffs as part of U.S. trade policy. Other countries have responded with retaliatory actions or plans for retaliatory actions. Some of these tariff announcements have since been followed by announcements of limited exemptions and temporary pauses. The duration and extent of the tariffs and any reciprocal tariffs, as well as any available opportunities to lessen the impact, continue to evolve. To date, these actions have not had a material impact on our results of operations, financial condition or cash flows.
Current report
Net income decreased $440 thousand, or 3.47%, in the second quarter of 2025 compared to the same period in 2024. The decrease is primarily attributable to a decrease in net interest income of $1.26 million, or 3.93%; as well as an increase in non-interest expense of $558 thousand, or 2.24%. The decreases in income were offset by an increase in total noninterest income of $998 thousand, or 10.68%, as well as a decrease in provision for credit losses of $429 thousand, or 297.92%, compared to the same period in 2024.
Current report
Six-Month Comparison.
Current report
Net income decreased $1.47 million, or 5.75%, in the first six months of 2025 compared to the same period in 2024. The decrease is primarily attributable to a decrease in net interest income of $2.59 million, or 4.07%, as well as an increase in non-interest expense of $2.12 million, or 4.38%. The decreases in income were offset by an increase in total noninterest income of $1.97 million, or 10.58%, as well as a decrease in provision for credit losses of $1.12 million, or 96.88%, compared to the same period in 2024.
Current report
Average earning assets decreased $27.71 million, or 0.97%, primarily due to a decrease in the average balance for loans of $134.85 million, or 5.40%. In addition, the average balance for available-for-sale securities decreased $16.30 million, or 11.26%. These decreases to earning assets were offset by an increase in the average balance for interest-bearing balances with banks of $123.44 million, or 58.66%. The yield on earning assets decreased 16 basis points, or 3.08%, with loans experiencing a decrease of 6 basis points and securities available for sale experiencing a decrease of 16 basis points. The average loan to deposit ratio decreased to 88.93% from 93.60% reported in the same quarter of 2024. Non-cash accretion income was $430 thousand for the second quarter compared to $661 thousand reported in the same period of 2024.
Current report
Average interest-bearing liabilities, which consist of interest-bearing deposits and borrowings, experienced an increase in interest expense of $326 thousand, or 3.52%, primarily due to an increase in the average balance of deposits of $1.03 million, or 0.06%. The yield on interest-bearing liabilities increased 4 basis points primarily due to the increase in yield on time deposits.
Current report
Six-Month Comparison. The provision charged to operations decreased $1.12 million, or 96.88%, in the six months ending June 30, 2025 compared to the same quarter of 2024. Provision for credit losses for loans of $58 thousand was recorded in the six months ending June 30, 2025 compared to the provision of $1.46 million recorded in the same period of 2024. As noted above, the decrease was primarily due to a decrease in the balance of loan portfolio, as well as a decrease in net charge-offs. There was a recovery of provision for the allowance for unfunded commitments during the first six months of 2025 of $22 thousand. Compared to a recovery of provision for unfunded commitments of $305 thousand during the first six months of 2024.
Current report
Three*-*Month Comparison. Noninterest expense increased $558 thousand, or 2.24%, in the second quarter of 2025 compared to the same quarter of 2024. The increase was primarily due to an increase in salaries and employee benefits of $1.86 million, or 14.87%.
Current report
Six-Month Comparison. Income tax expense decreased $148 thousand, or 2.06%. The decrease is primarily due to the decrease in net income before taxes. The effective tax rate increased to 22.60% in the six months ending June 30, 2025 from 21.93% in the same quarter of 2024.
Current report
Subsequent Event
Current report
As reported on Form 8-K filed with the SEC on July 21, 2025, the Company, along with Hometown Bancshares, Inc. (“Hometown”) announced the execution of an Agreement and Plan of Merger (the “Agreement”) whereby the Company will acquire Hometown and its banking subsidiary, Union Bank, Inc for a total valuation of approximately $41.5 million based on closing price for the Company’s common stock of $40.33 as of July 18, 2025. Pursuant to the terms of the Agreement, Hometown shareholders will receive 11.706 shares of the Company common stock for each share of Hometown common stock that they own as of the closing date. Currently, the transaction is expected to close in the first quarter of 2026. Please refer to Note 15 of the Notes to Condensed Consolidated Financial Statements for more information on this acquisition.
Removed paragraphs (2)
Previous 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.
Previous report
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.
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 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.
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 June 30, 2025, the Bank operated 53 branches in Virginia, West Virginia, North Carolina and Tennessee. As of June 30, 2025, full-time equivalent employees, calculated using the number of hours worked, totaled 594. 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 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.
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 June 30, 2025, the Trust Division and FCWM managed and administered $1.66 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 months ended March 31, 2025, and financial condition as of March 31, 2025, include the following:
Current wording
Highlights of our results of operations for the three and six months ended June 30, 2025, and financial condition as of June 30, 2025, include the following:
Previous 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.
Current wording
Three*-*Month Comparison. Net interest income comprised 74.78% of total net interest and noninterest income in the second quarter of 2025 compared to 77.35% in the same quarter of 2024. Net interest income on a GAAP basis decreased $1.26 million, or 3.93%. Net interest income on a FTE basis decreased $1.25 million, with a percentage decrease of 3.91%. The net interest margin on a FTE basis decreased 14 basis points while the net interest spread on a FTE basis decreased 13 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 yield and average balance in both the loan and the securities available for sale portfolios.
Previous 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.
Current wording
Average interest-bearing liabilities, which consist of interest-bearing deposits and borrowings, decreased $3.73 million, or 0.21%, primarily due to a decrease in time deposits of $17.81 million, or 7.23%, and a decrease in demand deposits of $6.82 million, or 1.03%. The decreases in average interest-bearing liabilities were offset by an increase in average saving deposits of $20.60 million, of 2.36%. The yield on interest-bearing liabilities decreased 4 basis points and is primarily due to the decrease in yield on savings deposits.
Previous 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.
Current wording
Average earning assets decreased $21.05 million, or 0.74%, primarily due to a decrease in the average balance for loans of $144.53 million, or 5.73%. In addition, the average balance for available-for-sale securities decreased $53.08 million, or 27.66%. These decreases to earning assets were offset by an increase in the average balance for interest-bearing balances with banks of $176.55 million, or 127.51%. The yield on earning assets decreased 11 basis points, or 2.14%, primarily due to a decrease in the yield on loans of 7 basis points, or 1.33%. The average loan to deposit ratio decreased to 89.68% from 94.56% reported in the same quarter of 2024. Non-cash accretion income was $986 thousand for the first six months of 2025 compared to $ 1.44 million reported in the same period of 2024.
Previous 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.
Current wording
Three*-*Month Comparison. The provision charged to operations decreased $429 thousand, or 297.92%, in the second quarter of 2025 compared to the same quarter of 2024. There was a recovery of provision for credit losses for loans of $292 thousand was recorded in the second quarter of 2025 compared to the provision of $449 thousand recorded in the same period of 2024. The decrease in provision was primarily due to a decrease in the balance of the loan portfolio, as well as a decrease in net charge-offs. There was a provision recorded for the allowance for unfunded commitments during the second quarter of 2025 of $7 thousand. A recovery of provision for the allowance for unfunded commitments was recorded during the second quarter of 2024, in the amount of $305 thousand.
Previous wording
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%.
Current wording
Six-Month Comparison. Noninterest income comprised 25.23% of total net interest and noninterest income in the six months ending June 30, 2025 compared to 22.64% in the same quarter of 2024. Noninterest income increased $1.97 million or 10.58%. The increase is primarily attributable to an increase in service charges on deposits of $1.22 million, or 18.08%, and an increase in other operating income of $518 thousand, or 20.08%.
Previous 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%.
Current wording
Six-Month Comparison. Noninterest expense increased $2.12 million, or 4.38%, in the six months ending June 30, 2025 compared to the same quarter of 2024. The largest increases were primarily due to increases in salaries and employee benefits of $2.61 million, or 10.42%, and other operating expense of $622 thousand, or 9.73%.
Previous 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.
Current wording
Three-Month Comparison. Income tax expense increased $54 thousand, or 1.53%. The effective tax rate increased to 22.63% in the second quarter of 2025 from 21.75% in the same quarter of 2024.
Previous 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%.
Current wording
Total assets as of June 30, 2025, decreased $80.20 million, or 2.46%, 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 $56.64 million, or 2.07%, and was primarily driven by a decrease in deposits. Stockholders' equity decreased $23.56 million, or 4.48%.
Previous 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.
Current wording
Available-for-sale debt securities as of June 30, 2025, decreased $37.31 million, or 21.97%, compared to December 31, 2024. The decrease is primarily due to the maturities and calls of securities of $90.45 million during the first six months of 2025 offset by purchases of $50.11 million. The market value of debt securities available-for-sale as a percentage of amortized cost was 91.52% as of June 30, 2025, compared to 91.97% as of December 31, 2024.
Previous wording
The following table presents loans, net of unearned income, with non-covered loans by loan class as of the dates indicated:
Current wording
The following table presents loans, net of unearned income, by loan class as of the dates indicated:
Previous 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%.
Current wording
Total loans as of June 30, 2025, decreased $62.81 million, or 2.60%, compared to December 31, 2024. The largest decrease occurred in the commercial loans segment with an overall decrease of $27.18 million, or 1.72%. Within this segment, the largest decreases occurred in non-farm, non-residential loans, single family non-owner occupied, and multi-family residential loans with decreases of $11.58 million, $10.55 million, and $10.25 million, respectively. These decreases were offset by an increase in commercial and industrial loans of $16.82 million. The consumer real estate segment decreased $20.72 million, or 2.78%, primarily due to a decrease in single family owner occupied of $15.41 million, or 2.37%.
Previous wording
We seek to mitigate credit risk by following specific underwriting practices and by ongoing monitoring of our loan portfolio. Our underwriting practices include the analysis of borrowers’ prior credit histories, financial statements, tax returns, and cash flow projections; valuation of collateral based on independent appraisers’ reports; and verification of liquid assets. We believe our underwriting criteria are appropriate for the various loan types we offer; however, losses may occur that exceed the reserves established in our allowance for loan losses. We track certain credit quality indicators that include: trends related to the risk rating of commercial loans, the level of classified commercial loans, net charge-offs, nonperforming loans, and general economic conditions. The Company's loan review function performs an independent credit analysis on a risk-based sample of commercial loan relationships annually, and performs a qualitative review of a sample of smaller commercial and retail loans.
Current wording
We seek to mitigate credit risk by following specific underwriting practices and by ongoing monitoring of our loan portfolio. Our underwriting practices include the analysis of borrowers’ prior credit histories, financial statements, tax returns, and cash flow projections; valuation of collateral based on independent appraisers’ reports; and verification of liquid assets. We believe our underwriting criteria are appropriate for the various loan types we offer; however, losses may occur that exceed the reserves established in our allowance for credit losses. We track certain credit quality indicators that include: trends related to the risk rating of commercial loans, the level of classified commercial loans, net charge-offs, nonperforming loans, and general economic conditions. The Company's loan review function performs an independent credit analysis on a risk-based sample of commercial loan relationships annually and performs a qualitative review of a sample of smaller commercial and retail loans.
Previous 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.
Current wording
Nonperforming assets as of June 30, 2025, decreased $1.43 million, or 6.97%, from December 31, 2024. Nonaccrual loans decreased $1.79 million, or 8.98%. OREO decreased $66 thousand, or 12.67%. In addition, accruing loans past due 90 days or more increased $419 thousand from year-end. As of June 30, 2025, nonaccrual loans were largely attributed to single family owner occupied (45.37%), non-farm, non-residential (14.19%), and single family non-owner occupied of (9.39%). Certain loans included in the nonaccrual category have been written down to estimated realizable value or assigned specific reserves in the allowance for credit 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 $33.49 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%).
Current wording
Delinquent loans, comprised of loans 30 days or more past due and nonaccrual loans, totaled $28.92 million as of June 30, 2025, a decrease of $8.62 million, or 22.98%, compared to $37.55 million as of December 31, 2024. Delinquent loans as a percent of total loans totaled 1.23% as of June 30, 2025, which includes past due loans (0.46%) and nonaccrual loans (0.77%).
Previous 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.
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 June 30, 2025, were $2.13 million. As of June 30, 2025, $322 thousand of these loans were 30-89 days past due. Modified loans past due 90 days or more totaled $58 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, 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:
Current wording
OREO, which is carried at the lesser of estimated net realizable value or cost, decreased $66 thousand, or 12.67%, as of June 30, 2025, from December 31, 2024, and consisted of 5 properties with an average holding period of approximately 9 months. The net loss on the sale of OREO totaled $93 thousand for the six months ended June 30, 2025, compared to a net loss of $32 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 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.
Current wording
As of June 30, 2025, the balance of the ACL for loans was $33.02 million, or 1.40% of total loans. The ACL at June 30, 2025, decreased $1.81 million from the balance of $34.83 million recorded at December 31, 2024. This decrease included a provision of $36 thousand offset by net charge-offs for the six months of $1.86 million.
Previous 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.
Current wording
At June 30, 2025, the Company also had an allowance for unfunded commitments of $319 thousand which was recorded in Other Liabilities on the Balance Sheet. During the first six months of 2025, the Company recorded a recovery of provision for credit losses for loan commitments of $22 thousand There was a recovery of provision of $305 thousand recorded in the same period of 2024.
Previous 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%.
Current wording
Total deposits as of June 30, 2025, decreased $55.88 million, or 2.08%, compared to December 31, 2024. The largest decreases in deposits occurred in interest-bearing demand of $26.18 million, or 3.88%, time deposits of $18.42 million, or 7.66%, and noninterest-bearing demand deposits of $9.82 million or 1.11%.
Previous 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.
Current wording
Total borrowings in the form of retail repurchase agreements as of June 30, 2025, increased $110 thousand, or 12.14%, 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 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.
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 June 30, 2025, the Company’s cash reserves and short-term investment securities totaled $395.06 million and $10.91 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 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.
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 June 30, 2025, our unencumbered cash totaled $395.06 million, unused borrowing capacity from the FHLB totaled $326.43 million, available credit from the FRB Discount Window totaled $5.84 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 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.
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 June 30, 2025, decreased $23.56 million, or 4.48%, to $502.83 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 dividends paid in first and second quarter of $0.31 per share. The decrease was offset by net income of $24.06 million. Book value per share at June 30, 2025, was $27.46 compared to $28.73 at year-end 2024.
Rearranged current paragraphs (3)
Current report — wording carried from elsewhere
AVERAGE BALANCE SHEETS AND NET INTEREST INCOME ANALYSIS (Unaudited)
Current report — wording carried from elsewhere
Six-Month Comparison. Net interest income comprised 74.77% of total net interest and noninterest income in the six months ending June 30, 2025 compared to 77.36% for the same period of 2024. Net interest income on a GAAP basis decreased $2.59 million, or 4.07%. Net interest income on a FTE basis decreased $2.59 million, with a percentage decrease of 4.06%. The net interest margin on a FTE basis decreased 14 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 yield and average balance in both the loan and the securities available for sale portfolios.
Current report — wording carried from elsewhere
Three*-*Month Comparison. Noninterest income comprised 25.22% of total net interest and noninterest income in the second quarter of 2025 compared to 22.65% in the same quarter of 2024. Noninterest income increased $998 thousand or 10.68%. The increase is primarily attributable to an increase in service charges on deposits of $692 thousand, or 20.19%.