First Community Bancshares (FCBC) appears an attractive pick given a noticeable improvement in the company's earnings outlook. The stock has been a strong performer lately, and the momentum might continue with analysts still raising their earnings estimates for the company.The upward trend in estimate revisions for this holding company for First Community Bank reflects growing optimism of analysts on its earnings prospects, which should get reflected in its stock price. After all, empirical research shows a ...

First Community Bancshares (FCBC) could be a solid addition to your portfolio given its recent upgrade to a Zacks Rank #1 (Strong Buy). This upgrade is essentially a reflection of an upward trend in earnings estimates -- one of the most powerful forces impacting stock prices.A company's changing earnings picture is at the core of the Zacks rating. The system tracks the Zacks Consensus Estimate -- the consensus measure of EPS estimates from the sell-side analysts covering the stock -- for the current and fol ...

Here are three stocks with buy rank and strong momentum characteristics for investors to consider today, May7th:Leidos (LDOS) : This company which is a global science and technology leader that serves the defense, intelligence, civil and health markets, has a Zacks Rank #1(Strong Buy), and witnessed the Zacks Consensus Estimate for its current year earnings increasing 5.9% over the last 60 days.Leidos’ shares gained 25.9% over the last three month compared with the S&P 500’s gain of 3.9%. The company posses ...

Financial Performance - Net income for the first quarter of 2024 was $12.85 million, an increase of $1.06 million or 9.02% compared to the same quarter in 2023[112] - Net interest income increased by $2.22 million, driven by improved net interest margin of 4.47%, which is an increase of 12 basis points year-over-year[113] - Noninterest income increased by approximately $676 thousand, or 7.88%, primarily due to higher interchange income[113] - Noninterest expense rose by $2.57 million, or 12.36%, mainly due to salaries, employee benefits, and the addition of Surrey branches and staff[113] - Total stockholders' equity increased by $3.65 million, or 0.73%, to $506.94 million as of March 31, 2024, driven by net income of $12.85 million[157] Loan and Asset Management - Interest and fees on loans rose by $5.79 million compared to the same quarter in 2023, attributed to both increased yield and average balance[113] - Average loans increased by $155.35 million, contributing to a tax-effected increase in interest on loans of $5.80 million[118] - Total loans as of March 31, 2024, decreased by $52.47 million, or 2.04%, compared to December 31, 2023, with the largest decrease in commercial loans at $34.68 million, or 2.09%[136] - Non-performing loans to total loans slightly increased to 0.78% compared to the same quarter in 2023[113] - Total consumer real estate loans decreased by $11.37 million, or 1.44%, primarily due to a decrease in single family owner occupied loans of $8.33 million, or 1.20%[136] Credit Quality - The allowance for credit losses to total loans was 1.41% at March 31, 2024, unchanged from December 31, 2023[113] - The provision for credit losses decreased by $731 thousand, with a provision of $1.01 million recorded in Q1 2024 compared to $1.97 million in Q1 2023[122] - The ACL decreased by $1.01 million during the first three months of 2024, offset by net charge-offs of $1.74 million[149] - Nonperforming assets increased by $369 thousand, or 1.88%, from December 31, 2023, with total nonperforming loans at $19.647 million as of March 31, 2024[139] Capital and Liquidity - Consolidated assets totaled $3.24 billion as of March 31, 2024[113] - As of March 31, 2024, the company's cash reserves totaled $19.76 million and short-term investment securities amounted to $22.12 million, providing adequate working capital for the next twelve months[155] - Unencumbered cash as of March 31, 2024, was $248.91 million, with unused borrowing capacity from the FHLB at $402.00 million and available credit from the FRB Discount Window at $25.54 million[156] - Common equity Tier 1 ratio as of March 31, 2024, was 15.21%, up from 14.69% as of December 31, 2023, reflecting a decrease in risk-weighted assets[158] Market Conditions and Interest Rates - A 200 basis point increase in interest rates would result in a $2.73 million, or 2.0%, increase in net interest income for the twelve-month period ending March 31, 2024[164] - The Federal Open Market Committee set the benchmark federal funds rate to a range of 525 to 550 basis points as of March 31, 2024[163] - Management believes that interest rates have a greater impact on financial performance than inflation, which is primarily affecting operating costs[165] Regulatory Compliance - The company continues to meet all capital adequacy requirements and is classified as well-capitalized under the regulatory framework for prompt corrective action[158] - The company has discontinued originating LIBOR-based variable rate loans since 2018, now using U.S. Treasury rates as an alternative reference[167]

First Community Bancshares (FCBC) came out with quarterly earnings of $0.71 per share, beating the Zacks Consensus Estimate of $0.60 per share. This compares to earnings of $0.72 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of 18.33%. A quarter ago, it was expected that this holding company for First Community Bank would post earnings of $0.67 per share when it actually produced earnings of $0.79, delivering a surprise of 17.9 ...

[Executive Summary & Highlights](index=1&type=section&id=Executive%20Summary%20%26%20Highlights) [First Quarter 2024 Performance Overview](index=1&type=section&id=First%20Quarter%202024%20Performance%20Overview) First Community Bankshares, Inc. reported a net income of $12.85 million, or $0.71 per diluted common share, for the first quarter ended March 31, 2024, marking a 9.02% increase from the same period in 2023 First Quarter 2024 Performance Overview | Metric | Q1 2024 (Millions) | Q1 2023 (Millions) | YoY Change (%) | | :------------------- | :------------------ | :------------------ | :------------- | | Net Income | $12.85 | $11.78 | 9.02% | | Diluted EPS | $0.71 | $0.72 | -1.39% | [Quarterly Cash Dividend](index=1&type=section&id=Quarterly%20Cash%20Dividend) The Company declared a quarterly cash dividend of $0.29 per common share, payable on or about May 24, 2024, to shareholders of record on May 10, 2024, marking the 39th consecutive year of regular dividends - Quarterly cash dividend declared: **$0.29 per common share**[3](index=3&type=chunk) - Dividend payable on or about May 24, 2024, to shareholders of record on May 10, 2024[3](index=3&type=chunk) - This marks the **39th consecutive year** of regular dividends to common shareholders[3](index=3&type=chunk) [First Quarter 2024 Key Highlights](index=1&type=section&id=First%20Quarter%202024%20Key%20Highlights) The first quarter of 2024 saw significant improvements in net interest income and margin, driven by higher interest rates and loan growth, partially offset by increased noninterest expenses, while asset quality metrics showed slight increases in non-performing loans but stable allowance for credit losses [Income Statement Highlights](index=1&type=section&id=Income%20Statement%20Highlights) - Net interest income increased **$2.22 million** compared to Q1 2023, driven by improved net interest margin due to higher benchmark interest rates[6](index=6&type=chunk) Net Interest Margin and Yield on Earning Assets | Metric | Q1 2024 | Q1 2023 | YoY Change (bps) | | :---------------------- | :------ | :------ | :--------------- | | Net Interest Margin | 4.47% | 4.35% | +12 | | Yield on Earning Assets | 5.09% | 4.47% | +62 | - Interest and fees on loans increased **$5.79 million** from Q1 2023, attributed to both increased yield and average balance, including approximately **$239.08 million** in loans from the Surrey Bancorp acquisition on April 21, 2023[6](index=6&type=chunk) - Noninterest income increased approximately **$676 thousand (7.88%)** YoY, primarily driven by increased interchange income[6](index=6&type=chunk) - Noninterest expense increased **$2.57 million (12.36%)** YoY, mainly due to salaries and employee benefits, service fees, and other operating expenses, largely attributable to the addition of Surrey branches and staff[6](index=6&type=chunk) Annualized Returns | Metric | Q1 2024 | Q1 2023 | YoY Change (bps) | | :----------------------------------- | :------ | :------ | :--------------- | | Annualized Return on Average Assets | 1.60% | 1.55% | +5 | | Annualized Return on Average Equity | 10.18% | 11.15% | -97 | [Balance Sheet and Asset Quality Highlights](index=1&type=section&id=Balance%20Sheet%20and%20Asset%20Quality%20Highlights) - Consolidated assets totaled **$3.24 billion** at March 31, 2024[6](index=6&type=chunk)[8](index=8&type=chunk) - Securities available for sale decreased **$114.71 million (40.83%)** from December 31, 2023, primarily due to the maturity of **$115.75 million** in U.S. Treasury Notes[6](index=6&type=chunk) - Loans decreased **$52.47 million (2.04%)** and deposits decreased **$40.11 million (1.47%)** from December 31, 2023[6](index=6&type=chunk) - Cash and cash equivalents increased **$132.49 million (113.80%)** from December 31, 2023, mainly due to an increase in federal funds sold[6](index=6&type=chunk) - The Company repurchased **89,396 common shares** for **$2.97 million** during Q1 2024[6](index=6&type=chunk) Asset Quality Ratios | Metric | Q1 2024 | Q1 2023 | YoY Change (bps) | | :----------------------------------- | :------ | :------ | :--------------- | | Non-performing loans to total loans | 0.78% | 0.65% | +13 | | Net charge-offs (annualized average) | 0.27% | 0.29% | -2 | Key Balance Sheet Ratios | Metric | Mar 31, 2024 | Dec 31, 2023 | Mar 31, 2023 | | :----------------------------------- | :----------- | :----------- | :----------- | | Allowance for credit losses to total loans | 1.41% | 1.41% | 1.29% | | Book value per share | $27.53 | $27.20 | $26.58 | [Company Information & Disclosures](index=2&type=section&id=Company%20Information%20%26%20Disclosures) [About First Community Bankshares, Inc.](index=2&type=section&id=About%20First%20Community%20Bankshares%2C%20Inc.) First Community Bankshares, Inc. is a financial holding company operating through its subsidiary, First Community Bank, with 53 branch locations across Virginia, West Virginia, North Carolina, and Tennessee, also offering wealth management services, managing and administering $1.55 billion in combined assets - Headquartered in Bluefield, Virginia, operating through First Community Bank[8](index=8&type=chunk) - Operates **53 branch banking locations** in Virginia, West Virginia, North Carolina, and Tennessee[8](index=8&type=chunk) - Wealth management and investment advice services managed and administered **$1.55 billion** in combined assets as of March 31, 2024[8](index=8&type=chunk) - Consolidated assets totaled **$3.24 billion** as of March 31, 2024[8](index=8&type=chunk) [Non-GAAP Financial Measures Disclosure](index=2&type=section&id=Non-GAAP%20Financial%20Measures%20Disclosure) The Company utilizes various non-GAAP financial measures, such as 'tangible book value per common share' and 'adjusted earnings,' to provide additional insights into its financial and operational performance, which are supplemental to GAAP and reconciled in attached tables - Non-GAAP measures 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 FTE basis measures[7](index=7&type=chunk) - These measures are used for financial and operational decision making, evaluating trends, and comparing financial results[7](index=7&type=chunk) - Reconciliations to comparable GAAP measures are provided in the press release tables, emphasizing that non-GAAP measures are supplemental and not a substitute for GAAP[7](index=7&type=chunk) [Forward-Looking Statements](index=2&type=section&id=Forward-Looking%20Statements) This news release contains forward-looking statements based on current expectations, which are subject to various risks, uncertainties, and assumptions, where actual results may differ materially due to factors such as market conditions, regulatory changes, and credit risk, and the Company does not undertake to update these statements - Forward-looking statements are based on current expectations and involve risks, uncertainties, and assumptions[9](index=9&type=chunk) - Risks include changes in market conditions, timely development of products, managing asset/liability levels, credit and interest rate risk, expense growth, banking laws, competition, and geopolitical events[9](index=9&type=chunk) - The Company does not undertake to update forward-looking statements to reflect circumstances or events occurring after their initial release[9](index=9&type=chunk) [Unaudited Financial Statements](index=3&type=section&id=Unaudited%20Financial%20Statements) [Condensed Consolidated Statements of Income](index=3&type=section&id=Condensed%20Consolidated%20Statements%20of%20Income) The condensed consolidated statements of income provide a quarterly overview of the Company's financial performance, highlighting trends in interest income, interest expense, net interest income, provision for credit losses, noninterest income and expense, and ultimately net income and earnings per share Condensed Consolidated Statements of Income | Metric (in thousands) | March 31, 2024 | March 31, 2023 | | :-------------------- | :------------- | :------------- | | Total interest income | $36,029 | $30,189 | | Total interest expense | $4,400 | $777 | | Net interest income | $31,629 | $29,412 | | Provision for credit losses | $1,011 | $1,742 | | Noninterest income | $9,259 | $8,583 | | Noninterest expense | $23,386 | $20,813 | | Net income | $12,845 | $11,782 | | Diluted EPS | $0.71 | $0.72 | | Return on average assets | 1.60% | 1.55% | | Return on average common equity | 10.18% | 11.15% | | Return on average tangible common equity | 14.82% | 16.19% | [Condensed Consolidated Quarterly Noninterest Income and Expense](index=3&type=section&id=Condensed%20Consolidated%20Quarterly%20Noninterest%20Income%20and%20Expense) This section details the quarterly breakdown of noninterest income and expense categories, showing contributions from wealth management, service charges, and other operating income, alongside major expense items like salaries, occupancy, and service fees Condensed Consolidated Quarterly Noninterest Income and Expense | Metric (in thousands) | March 31, 2024 | March 31, 2023 | | :-------------------- | :------------- | :------------- | | **Noninterest income** | | | | Wealth management | $1,099 | $1,017 | | Service charges on deposits | $3,310 | $3,159 | | Other service charges and fees | $3,450 | $3,082 | | Other operating income | $1,400 | $1,318 | | Total noninterest income | $9,259 | $8,583 | | **Noninterest expense** | | | | Salaries and employee benefits | $12,581 | $11,595 | | Occupancy expense | $1,378 | $1,168 | | Furniture and equipment expense | $1,545 | $1,401 | | Service fees | $2,449 | $2,019 | | Other operating expense | $3,366 | $2,727 | | Total noninterest expense | $23,386 | $20,813 | [Reconciliation of GAAP Net Income to Non-GAAP Adjusted Earnings](index=5&type=section&id=Reconciliation%20of%20GAAP%20Net%20Income%20to%20Non-GAAP%20Adjusted%20Earnings) This reconciliation provides a clear bridge between GAAP net income and various non-GAAP adjusted earnings metrics, accounting for specific non-recurring or non-operational items to offer a more normalized view of performance Reconciliation of GAAP Net Income to Non-GAAP Adjusted Earnings | Metric (in thousands) | March 31, 2024 | March 31, 2023 | | :-------------------- | :------------- | :------------- | | Adjusted Net Income for diluted EPS | $13,085 | $11,802 | | Total adjustments | $- | $372 | | Tax effect | $- | $10 | | Adjusted earnings, non-GAAP | $13,085 | $12,163 | | Adjusted diluted EPS, non-GAAP | $0.71 | $0.75 | | Adjusted return on average assets | 1.63% | 1.60% | | Adjusted return on average common equity | 10.37% | 11.51% | | Adjusted return on average tangible common equity | 15.10% | 16.72% | [Average Balance Sheets and Net Interest Income Analysis](index=6&type=section&id=Average%20Balance%20Sheets%20and%20Net%20Interest%20Income%20Analysis) This analysis presents average balance sheet figures and a detailed breakdown of interest income and expense, providing insights into the Company's net interest margin and rate spread on a fully taxable equivalent (FTE) basis Average Balance Sheets and Net Interest Income Analysis | Metric (in thousands) | March 31, 2024 | March 31, 2023 | | :-------------------- | :------------- | :------------- | | **Average Earning Assets** | | | | Loans | $2,549,107 | $2,393,759 | | Securities available for sale | $239,010 | $316,734 | | Interest-bearing deposits | $66,483 | $40,993 | | Total earning assets | $2,854,600 | $2,751,486 | | **Average Interest-Bearing Liabilities** | | | | Total interest-bearing deposits | $1,781,933 | $1,765,075 | | Total borrowings | $3,654 | $6,805 | | Total interest-bearing liabilities | $1,785,587 | $1,771,880 | | Net interest income, FTE | $31,748 | $29,526 | | Net interest rate spread | 4.10% | 4.29% | | Net interest margin, FTE | 4.47% | 4.35% | [Condensed Consolidated Quarterly Balance Sheets](index=7&type=section&id=Condensed%20Consolidated%20Quarterly%20Balance%20Sheets) The condensed consolidated quarterly balance sheets provide a snapshot of the Company's financial position at the end of each quarter, detailing assets, liabilities, and stockholders' equity, including key per-share metrics Condensed Consolidated Quarterly Balance Sheets | Metric (in thousands) | March 31, 2024 | March 31, 2023 | | :-------------------- | :------------- | :------------- | | Cash and cash equivalents | $248,905 | $92,385 | | Debt securities available for sale, at fair value | $166,247 | $308,269 | | Loans held for investment, net | $2,484,372 | $2,358,108 | | Total assets | $3,235,981 | $3,051,672 | | Total deposits | $2,682,215 | $2,584,624 | | Total liabilities | $2,729,037 | $2,619,941 | | Total stockholders' equity | $506,944 | $431,731 | | Book value per common share | $27.53 | $26.58 | | Tangible book value per common share | $18.92 | $18.36 | [Selected Credit Quality Information](index=8&type=section&id=Selected%20Credit%20Quality%20Information) This section provides critical insights into the Company's credit quality, including the allowance for credit losses, nonperforming assets, and key ratios that assess the health of its loan portfolio Selected Credit Quality Information | Metric (in thousands) | March 31, 2024 | March 31, 2023 | | :-------------------- | :------------- | :------------- | | **Allowance for Credit Losses** | | | | Balance at beginning of period | $36,935 | $31,752 | | Provision for credit losses | $1,011 | $1,742 | | Net (charge-offs) recoveries | $(1,739) | $(1,741) | | Ending balance | $36,207 | $31,753 | | **Nonperforming Assets** | | | | Nonaccrual loans | $19,617 | $15,557 | | OREO | $374 | $481 | | Total nonperforming assets | $20,021 | $16,061 | | **Asset Quality Ratios** | | | | Nonperforming loans to total loans | 0.78% | 0.65% | | Nonperforming assets to total assets | 0.62% | 0.53% | | Allowance for credit losses to nonperforming loans | 180.49% | 197.62% | | Allowance for credit losses to total loans | 1.41% | 1.29% | | Annualized net charge-offs (recoveries) to average loans | 0.27% | 0.29% |

BLUEFIELD, Va., April 23, 2024 (GLOBE NEWSWIRE) -- 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 March 31, 2024. The Company reported net income of $12.85 million, or $0.71 per diluted common share, for the quarter ended March 31, 2024.    The Company also declared a quarterly cash dividend to common shareholders of twenty-nine cents $0.29 per common share. T ...

Branch Operations - As of December 31, 2023, First Community Bankshares operated 53 branches across Virginia, West Virginia, North Carolina, and Tennessee[139] Financial Performance - The company reported net income of $48.02 million for 2023, reflecting a 2.91% increase from $46.66 million in 2022[152] - Annual net income for 2023 was $48.02 million, an increase of $1.36 million, or 2.91%, compared to 2022[154] - Net interest income for 2023 was $127.68 million, an increase of 15.02 million or 13.33% compared to $112.66 million in 2022[152] - Net interest income increased by $15.02 million, or 13.33%, driven by higher benchmark interest rates and improved net interest margin[158] - Noninterest income increased by $270 thousand, or 0.73%, in 2023, primarily due to a $1.34 million increase in other service charges and fees[166] - Total revenues for the year ended December 31, 2023, are projected to be $165.14 million, compared to $170.21 million for the year ended December 31, 2022[324] - The effective tax rate slightly increased to 22.51% in 2023 from 22.43% in 2022, with income tax expense rising by $459 thousand, or 3.40%[172] - Net income for 2023 was $48,020,000, a 2.9% increase from $46,662,000 in 2022[230] Asset Management - The Trust Division and First Community Wealth Management managed $1.49 billion in assets as of December 31, 2023[140] - Total assets increased by $132.97 million, or 4.24%, to $3.27 billion as of December 31, 2023, largely due to the acquisition of Surrey Bancorp[174] - Total assets increased to $3,268.55 million as of December 31, 2023, from $3,135.57 million in 2022[224] - Total loans held for investment increased by $172.10 million, or 7.17%, to $2.57 billion as of December 31, 2023, primarily due to the Surrey acquisition[179] - The loan portfolio increased by $172.10 million, or 7.17%, from December 31, 2022, while excluding the Surrey transaction, it decreased by approximately $66.98 million, or 2.79%[154] Acquisition Details - The acquisition of Surrey Bancorp on April 21, 2023, involved total assets of $466.25 million and resulted in $14.38 million in goodwill[141] - The company acquired Surrey Bancorp on April 21, 2023, adding approximately $239.08 million in loans and increasing total assets to $3.39 billion[154] - The merger with Surrey Bancorp was finalized on April 21, 2023, with a total purchase price of $71.37 million, converting each share of Surrey common stock into 0.7159 shares of the Company's common stock[313] - The Company recognized $14.38 million in goodwill from the Surrey acquisition, with core deposit intangibles valued at $12.70 million[315] - The total assets acquired from Surrey amounted to $466.96 million, with total liabilities of $410.85 million[318] Credit Losses and Provisions - The provision for credit losses increased by $1.41 million in 2023, primarily due to a $1.61 million provision related to the acquisition of the Surrey loan portfolio[152] - The allowance for credit losses (ACL) was $36.19 million, or 1.41% of total loans, as of December 31, 2023, reflecting an increase of $5.63 million from $30.56 million at the end of 2022[198] - The provision for credit losses was $7,985,000 in 2023, compared to $6,572,000 in 2022, indicating an increase in expected credit losses[236] - The allowance for credit losses to total loans was 1.41% at December 31, 2023, compared to 1.27% for the same period of 2022[154] - The company recorded a provision for credit losses of $7.99 million for the year ended December 31, 2023, which included a day two provision of $1.61 million for Surrey loans[198] Loan and Deposit Trends - Deposits increased by $43.51 million, or 1.62%, from year-end 2022, but decreased approximately $360.13 million, or 13.44%, excluding the Surrey transaction[154] - Total deposits increased to $2,722.33 million as of December 31, 2023, compared to $2,678.82 million in 2022[224] - The company experienced deposit attrition related to the Surrey merger totaling $70.77 million, with the largest losses in interest-bearing demand accounts[202] - Delinquent loans totaled $33.93 million as of December 31, 2023, an increase of $4.25 million, or 14.32%, from $29.68 million as of December 31, 2022[190] Shareholder Information - The company repurchased 768,079 common shares during 2023 for a total cost of $23.04 million[154] - Book value per share at December 31, 2023, was $27.20, an increase of $1.19 from year-end 2022[154] - Cash dividends per common share increased to $1.16 in 2023, compared to $1.12 in 2022[227] - The Company paid $21,089,000 in common stock dividends in 2023, up from $18,515,000 in 2022[236] Risk Management - The company’s allowance for credit losses (ACL) is sensitive to unemployment rate forecasts, with a projected range of 4.0% to 4.3% for December 31, 2023[145] - The liquidity risk management policy includes ongoing monitoring of credit-sensitive liabilities and sources of liquidity to address potential funding crises[207] - The Company maintains a net book balance threshold of $500,000 for individually-evaluated loans, which are generally on nonaccrual status[260] Securities and Investments - The fair value of available-for-sale debt securities as of December 31, 2023, was $280.96 million, with unrealized losses of $14.11 million[326] - The total amortized cost of available-for-sale municipal securities was $19.53 million, with the majority rated AA or higher, and no credit losses reported[334] - The total amortized cost of available-for-sale corporate notes was $28.57 million, with no credit losses attributed to these securities[335] - The total amortized cost of available-for-sale mortgage-backed Agency securities was $94.55 million, with guarantees of full and timely payments by the issuing agencies[336] Miscellaneous - The Company completed the sale of its Emporia Branch for $1.50 million, with total deposits of $61.05 million acquired by Benchmark Community Bank[312] - The Company incurred $2.99 million in merger expenses related to the Surrey transaction, primarily for data conversion and legal fees[314] - The Company uses derivative instruments to hedge against risks related to price or interest rate movements, with changes in fair value recognized in earnings[293]

Financial Performance - Net income for Q3 2023 was $14.64 million, a 9.66% increase from $13.35 million in Q3 2022, primarily driven by a significant increase in net interest income [150]. - Net income for the first nine months of 2023 increased by $2.16 million compared to the same period in 2022, primarily due to a $13.58 million increase in net interest income [152]. - Total stockholders' equity rose by $73.68 million, or 17.46%, to $495.67 million as of September 30, 2023, largely driven by the acquisition of Surrey Bancorp and net income of $36.24 million [207]. Net Interest Income - Net interest income rose by $4.01 million compared to Q3 2022, with a net interest margin of 4.51%, an increase of 50 basis points year-over-year [150]. - Net interest income for Q3 2023 increased by $4.01 million, or 13.65%, compared to Q3 2022, with a net interest margin on a FTE basis rising by 50 basis points to 4.51% [161]. - For the nine months ended September 30, 2023, net interest income increased by $13.58 million, or 16.55%, with a net interest margin on a FTE basis increasing by 67 basis points to 4.45% [164]. Loan and Deposit Growth - The loan portfolio increased by $193.28 million, or 8.05%, from December 31, 2022, while deposits increased by $67.32 million, or 2.51% [150]. - Total deposits increased by $67.32 million, or 2.51%, to $2.75 billion as of September 30, 2023, primarily due to the acquisition of Surrey Bancorp, which added $403.64 million in deposits [201]. - Average loans increased by $270.29 million, with the yield on loans rising by 61 basis points, resulting in a tax-effected increase in interest on loans of $7.09 million compared to the same quarter in 2022 [161]. Credit Quality - Non-performing loans to total loans remained stable at 0.71%, with net charge-offs of $1.46 million, or 0.22% of annualized average loans for Q3 2023 [150]. - The allowance for credit losses to total loans was 1.39% as of September 30, 2023, compared to 1.38% in the previous quarter [150]. - The total amount of nonperforming assets as of September 30, 2023, was $18.67 million, an increase of $1.27 million, or 7.29%, from December 31, 2022 [188]. Expenses and Liabilities - Total noninterest expense increased by $1.77 million, or 8.36%, in Q3 2023, driven by higher service fees and salaries due to the addition of Surrey branches [171]. - Total liabilities increased by $74.97 million, or 2.76%, as of September 30, 2023, reflecting the impact of the Surrey Bancorp acquisition [179]. - Average interest-bearing liabilities decreased by $100.39 million, or 5.25%, primarily due to a decrease in deposits [166]. Capital and Liquidity - The common equity Tier 1 ratio improved to 14.64% as of September 30, 2023, up from 13.37% at December 31, 2022, indicating a stronger capital position [208]. - The company had unencumbered cash of $113.40 million and unused borrowing capacity from the FHLB of $382.39 million as of September 30, 2023, indicating strong liquidity [206]. - The company continues to meet all capital adequacy requirements and is classified as well-capitalized under the regulatory framework for prompt corrective action [208]. Acquisitions and Mergers - The Company experienced a $3.80 million increase in the provision for credit losses, partly due to the acquisition of Surrey Bancorp [152]. - The company recorded merger expenses of $2.39 million in 2023 related to the Surrey Bancorp acquisition [172]. - Total assets increased by $148.65 million, or 4.74%, as of September 30, 2023, primarily due to the acquisition of Surrey Bancorp [179].

Financial Performance - Net income for Q2 2023 was $9.81 million, a decrease of 12.48% or $1.40 million compared to $11.21 million in Q2 2022, primarily due to $2.01 million in merger-related costs and $1.61 million in additional credit loss provision [147]. - Adjusted net income for Q2 2023, excluding merger-related costs and provisions, was $12.95 million, reflecting a 16.20% increase from the same quarter last year [147]. - Noninterest income decreased by $69 thousand, or 0.78%, in Q2 2023, primarily driven by a $201 thousand decrease in service charges on deposits [167]. - Total noninterest expense increased by $3.42 million, or 16.07%, in Q2 2023, including merger expenses of $2.01 million related to the Surrey Bancorp acquisition [169]. - The effective tax rate increased to 23.75% in Q2 2023 from 23.39% in Q2 2022, despite a decrease in income tax expense [172]. Asset and Loan Growth - The Company completed the acquisition of Surrey Bancorp on April 21, 2023, acquiring total assets of $466.25 million and increasing consolidated assets to $3.39 billion [147]. - The loan portfolio increased by $220.88 million, or 9.20% from December 31, 2022, while deposits increased by $173.86 million, or 6.49% [147]. - As of June 30, 2023, total loans held for investment increased by $220.88 million, or 9.20%, compared to December 31, 2022, primarily due to the Surrey acquisition [183]. - Total deposits increased by $173.86 million, or 6.49%, to $2.85 billion as of June 30, 2023, primarily due to the acquisition of Surrey Bancorp, which added $403.64 million in deposits [199]. - The company’s total loans held for investment, net of unearned income and allowance, was $2.58 billion as of June 30, 2023 [183]. Credit Quality - Non-performing loans to total loans rose to 0.71% from 0.65% as of March 31, 2023, with net charge-offs of $728 thousand for Q2 2023 [147]. - The allowance for credit losses to total loans was 1.38% at June 30, 2023, compared to 1.29% for Q1 2023 [147]. - Provision for credit losses for loans increased to $4.11 million in Q2 2023 from $510 thousand in Q2 2022, reflecting changes in economic forecasts and growth in the loan portfolio [165]. - Total nonperforming loans amounted to $18.63 million as of June 30, 2023, compared to $16.70 million as of December 31, 2022 [186]. - The allowance for credit losses (ACL) to nonperforming loans ratio was 194.21% as of June 30, 2023, indicating strong coverage for potential losses [186]. Capital and Equity - Total stockholders' equity rose by $76.74 million, or 18.18%, to $498.72 million as of June 30, 2023, largely driven by the acquisition of Surrey Bancorp and net income of $21.60 million [205]. - The common equity Tier 1 ratio as of June 30, 2023, was 14.38%, up from 13.37% at December 31, 2022, indicating improved capital adequacy [206]. - The company issued 2.99 million common shares in the purchase of Surrey Bancorp, resulting in an increase in capital of $71.37 million [176]. Interest Income and Margin - Net interest income increased by $5.32 million compared to Q2 2022, with a net interest margin of 4.48%, up 70 basis points year-over-year [147]. - Net interest income for the first six months of 2023 totaled $62.27 million, an increase of $9.57 million compared to the same period in 2022 [150]. - Average loans increased by $296.63 million, with a yield increase of 45 basis points, resulting in a tax-effected increase in interest on loans of $6.28 million compared to 2022 [159]. - The yield on earning assets increased by 91 basis points, or 23.70%, primarily due to rate increases compared to the same period of 2022 [160]. - The sensitivity of net interest income to a 200 basis point increase in interest rates would result in an increase of $796 thousand, or 0.6%, as of June 30, 2023 [211]. Other Financial Metrics - Book value per share increased to $26.29 at June 30, 2023, up $0.28 from year-end 2022 [147]. - Total interest-bearing liabilities decreased by $63.90 million, or 3.31%, primarily due to a decrease in deposits [161]. - Average earning assets rose by $19.46 million, or 0.66%, primarily due to increases in average loans and securities available for sale [160]. - The average loan to deposit ratio increased to 91.92% from 81.20% reported in the same quarter of 2022 [160]. - The company recorded a recovery for credit losses on unfunded commitments of $232 thousand in the first half of 2023, compared to a provision of $278 thousand in the same period of 2022 [198].