Title of each class Trading Symbol(s)Name of each exchange on which registered Common Stock ($1.00 par value) FCBC NASDAQ Global Select Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q ☑ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2022 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission file number: 000-19297 FIRST COMMUN ...

Financial Performance - Annual net income for 2021 was $51.17 million, or $2.94 per diluted common share, representing a 45.54% increase in diluted earnings per share compared to 2020 [195]. - Net income for the year 2021 was $51,168,000, compared to $35,926,000 in 2020, reflecting a growth of 42.24% [295]. - Basic earnings per common share rose to $2.95 in 2021 from $2.02 in 2020, an increase of 46.02% [295]. - Total comprehensive income for 2021 was $51,545,000, compared to $35,509,000 in 2020, reflecting a growth of 45.24% [297]. - The company earned $51.17 million in 2021, offset by repurchasing 949,386 shares totaling $28.88 million and declaring dividends of $18.06 million [276]. Asset Management - As of December 31, 2021, the Company managed and administered $1.32 billion in combined assets through its Trust Division and First Community Wealth Management [165]. - Total assets increased to $3,194,519,000 in December 2021 from $3,011,136,000 in December 2020, representing a growth of 6.08% [292]. - Total assets increased to $3,134,828 thousand, reflecting growth in earning assets [200]. - Total liabilities grew to $2,766,744,000 in December 2021, up from $2,584,406,000 in December 2020, a rise of 7.03% [292]. Loan and Credit Quality - The allowance for credit losses increased by $13.11 million due to the adoption of ASU 2016-13 on January 1, 2021, but a reversal of provision for credit losses of $8.47 million occurred in 2021 [170]. - The allowance for credit losses to total loans was 1.29% as of December 31, 2021, compared to 1.20% for 2020, indicating strong credit quality metrics [195]. - The provision for credit/loan losses decreased by $21.14 million, or 166.87%, due to improved economic forecasts and strong credit quality metrics [211]. - The company modified a total of 4,066 loans for $475.82 million related to COVID-19 relief, which are not considered TDRs under the CARES Act [247]. - Nonperforming assets decreased by $1.33 million, or 5.42%, from December 31, 2020, primarily due to a $1.24 million decrease in nonaccrual loans [244]. Income and Expenses - Non-interest income increased by 14.98% to $34.30 million, attributed to increased customer activity in local economies [195]. - Noninterest expense decreased by $907 thousand, or 1.14%, primarily due to residual merger expenses recognized in the previous year [217]. - Income tax expense increased by $5.17 million, or 50.80%, primarily attributable to the increase in pre-tax net income [220]. - Net interest income decreased by $6.10 million, or 5.62%, due to a historically low interest rate environment [195]. Capital and Liquidity - The Company maintained capital ratios in excess of minimum standards under Basel III capital rules as of December 31, 2021 [175]. - The company continues to meet all capital adequacy requirements and is classified as well-capitalized under regulatory frameworks [175]. - The common equity Tier 1 ratio was 14.39% as of December 31, 2021, compared to 14.28% in 2020 [279]. - The total risk-based capital ratio was 15.65% as of December 31, 2021, up from 15.53% in 2020 [279]. - The company maintained a liquidity risk management policy to detect potential liquidity issues and protect stakeholders [269]. Shareholder Activities - The company repurchased 949,386 common shares, representing 5.62% of outstanding shares, for $28.88 million [195]. - Cash dividends per common share increased to $1.04 in 2021 from $1.00 in 2020, a growth of 4% [295]. - The total stockholders' equity increased by $1.05 million, or 0.24%, to $427.78 million as of December 31, 2021, from $426.73 million in 2020 [276]. Economic Impact and COVID-19 Response - As of December 31, 2021, current COVID-19 loan deferrals stood at $2.92 million, a decrease from $32.26 million as of December 31, 2020 [182]. - The Company modified 4,066 commercial and consumer loans totaling $475.82 million under the CARES Act provisions by December 31, 2021 [182]. - The SBA forgave $56.86 million, or 93.20%, of the company's first round Paycheck Protection Program loan balances through December 31, 2021 [195]. Investment and Securities - Total securities available for sale amounted to $76,273,000 as of December 31, 2021, a slight decrease from $81,958,000 in 2020, representing a decline of 7.5% [230]. - The fair value of total securities available for sale was $76,292,000 as of December 31, 2021, compared to $83,358,000 in 2020, a decrease of 8.5% [230]. - The total carrying value of long-term equity investments was $3.85 million as of December 31, 2021, down from $3.93 million as of December 31, 2020 [322].

Branch and Employee Information - As of September 30, 2021, First Community Bank operated 49 branches across Virginia, West Virginia, North Carolina, and Tennessee, with a total of 598 full-time equivalent employees[161]. Asset Management - The Trust Division and First Community Wealth Management Inc. managed and administered $1.27 billion in combined assets under various fee-based arrangements as fiduciary or agent as of September 30, 2021[164]. Credit Losses and Provisions - The allowance for credit losses increased by $13.11 million due to the uncertainty around the impact of COVID-19, but a reversal of provision for credit losses of $7.63 million occurred in the first nine months of 2021[178]. - The economic forecasts improved significantly in 2021, contributing to a reversal of provision for credit losses, but future economic conditions could lead to increased credit losses[178]. - The allowance for credit losses (ACL) for loans was $29.88 million, representing 1.39% of total loans, an increase of $5.68 million from $26.18 million prior to the adoption of ASU 2016-13[258]. - The company recorded an additional allowance for credit losses (ACL) for loans of $13.11 million as a result of adopting ASU 2016-13[55]. Financial Performance - Net income for Q3 2021 increased by $4.34 million to $12.61 million compared to Q3 2020, driven by a reversal of $1.39 million in allowance for credit losses[196]. - For the nine-month period ended September 30, 2021, net income increased by $16.24 million compared to the same period in 2020, largely due to a reversal of $7.63 million in allowance for credit losses[196]. - Diluted earnings per share for Q3 2021 increased by $0.26 to $0.73 compared to Q3 2020, and for the nine-month period, it increased by $0.95 to $2.32[196]. - Annualized return on average equity increased to 11.65% in Q3 2021 compared to 7.83% in Q3 2020, and for the first nine months, it increased to 12.70% compared to 7.76%[196]. - Annualized return on average assets increased to 1.59% in Q3 2021 compared to 1.11% in Q3 2020, while year-to-date annualized return on average assets increased to 1.74% compared to 1.14%[196]. Loan Modifications and Deferrals - The Company modified a total of 3,958 commercial and consumer loans totaling $472.43 million under the CARES Act, primarily consisting of short-term payment deferrals[188]. - As of September 30, 2021, current COVID-19 loan deferrals stood at $4.71 million, with potential for extensions under the CARES Act[188]. - As of September 30, 2021, total COVID-19 loan deferrals were $4.71 million, significantly down from $115.63 million at September 30, 2020[237]. Deposits and Liquidity - Total deposits increased by $127.60 million, or 5.01%, as of September 30, 2021, primarily due to increases in savings and interest-bearing demand deposits of $76.82 million (10.18%) and $52.46 million (8.77%) respectively[261]. - The Company maintains access to multiple sources of liquidity, although short-term funding rates have been volatile throughout the pandemic[183]. Noninterest Income and Expenses - Noninterest income increased by $1.08 million, or 14.17%, in Q3 2021 compared to Q3 2020, with service charges on deposits increasing by $349 thousand, or 10.74%[216]. - Noninterest expense decreased by $335 thousand, or 1.75%, in Q3 2021 compared to Q3 2020, largely due to prior year charges for early contract termination[219]. Tax and Regulatory Compliance - The effective tax rate increased to 23.23% in Q3 2021 from 22.00% in Q3 2020, with income tax expense rising by $1.48 million, or 63.64%[222]. - The Company and Bank met all capital adequacy requirements and were classified as well-capitalized under the regulatory framework as of September 30, 2021[182]. Shareholder Information - The Company repurchased 277,386 common shares for $8.46 million during the quarter, totaling 726,686 shares repurchased for $21.43 million year-to-date[196]. - Common dividends declared increased from $0.25 per share in Q3 2020 to $0.27 per share in Q3 2021, reflecting a growth of 8%[17]. Loan Portfolio and Quality - Total loans held for investment as of September 30, 2021, amounted to $2,152,103 thousand, a decrease from $2,186,632 thousand at December 31, 2020[73]. - Commercial loans represented 57.01% of total loans as of September 30, 2021, down from 58.76% at December 31, 2020[73]. - The total amount of loans under special mention was $57,306,000, which is a notable concern for the company's future performance[86]. - The company continues to monitor loan performance closely, with a focus on identifying loans that may not meet contractual terms[87]. COVID-19 Impact - The COVID-19 pandemic has resulted in changes in consumer spending behaviors, negatively impacting the demand for loans and other services offered by the Company[165]. - The Company continues to monitor customers in significantly impacted industries, including energy, hotel/lodging, and retail, which may take longer to recover[165].

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q ☑ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2021 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission file number: 000-19297 FIRST COMMUNITY BANKSHARES, INC. (Exact name of registrant as specified in its charter) Virginia 55-0694814 (State or other jurisdiction of incorpora ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q ☑ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2021 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission file number: 000-19297 FIRST COMMUNITY BANKSHARES, INC. (Exact name of registrant as specified in its charter) | --- | --- | --- | --- | |--------------------------------- ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2020 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission file number 000-19297 FIRST COMMUNITY BANKSHARES, INC. (Exact name of registrant as specified in its charter) (State or other jurisdiction of incorporation or organization) Vir ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q ☑ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2020 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission file number: 000-19297 FIRST COMMUNITY BANKSHARES, INC. (Exact name of registrant as specified in its charter) | --- | --- | --- | --- | |----------------------------- ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q ☑ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2020 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission file number: 000-19297 FIRST COMMUNITY BANKSHARES, INC. (Exact name of registrant as specified in its charter) | --- | --- | --- | --- | |---------------------------------- ...

Financial Performance - For the three months ended March 31, 2020, net income decreased by $1.76 million to $7.87 million, an 18.26% decline compared to the same period in 2019[160] - The diluted earnings per share for the current quarter was $0.44, down 26.67% from $0.60 in the first quarter of 2019[160] - Return on average assets decreased to 1.16%, down 33.71% from 1.75% in the first quarter of 2019[160] - Noninterest income decreased by $531 thousand, or 6.57%, primarily due to a lack of litigation settlements compared to the previous year[171] - The effective tax rate increased to 21.80% in Q1 2020 from 21.45% in Q1 2019, while income tax expense decreased by $435 thousand, or 16.54%[175] - Total stockholders' equity decreased by $17.21 million, or 4.01%, to $411.61 million as of March 31, 2020, due to stock repurchases and dividends declared[210] Loan Loss Provisions and Asset Quality - The provision for loan losses increased by $2.28 million to $3.50 million, reflecting the impact of the coronavirus slowdown[158] - The provision for loan losses increased by $2.28 million, or 186.89%, to $3.50 million in the first quarter of 2020, reflecting the impact of the coronavirus slowdown[168] - Non-covered nonperforming assets increased by $2.77 million, or 13.23%, from December 31, 2019, primarily due to an increase in non-covered nonaccrual loans[191] - Non-covered nonaccrual loans rose by $4.15 million, or 25.76%, as of March 31, 2020, with 40.54% attributed to single-family owner-occupied loans[191] - Non-covered delinquent loans totaled $45.23 million as of March 31, 2020, an increase of $9.61 million, or 26.97%, compared to December 31, 2019[193] - The allowance for loan losses increased by $2.71 million, or 14.71%, from December 31, 2019, due to increased potential for loan defaults related to the COVID-19 pandemic[198] - Nonperforming loans to total loans ratio was 1.02% as of March 31, 2020, compared to 0.81% as of December 31, 2019[190] - Nonperforming assets to total assets ratio was 0.87% as of March 31, 2020, up from 0.75% as of December 31, 2019[190] Interest Income and Margin - The net interest margin increased by 11 basis points to 4.71% compared to the same quarter of 2019, attributed to the acquisition of Highlands Bankshares, Inc.[158] - Net interest income increased by $5.50 million, or 24.77%, compared to the same quarter of 2019, with a net interest margin on a FTE basis rising by 11 basis points[165] - Net interest income on a GAAP basis was $27.68 million for Q1 2020, up from $22.19 million in Q1 2019, reflecting a growth of 24.73%[177] - The net interest margin on a GAAP basis improved to 4.68% in Q1 2020 from 4.55% in Q1 2019[177] - The yield on earning assets increased by 13 basis points, or 2.66%, due to a 32 basis point increase in yield on loans[166] - The net interest rate spread on a FTE basis increased by 10 basis points, while the net interest margin increased by 11 basis points[165] Regulatory Compliance and Capitalization - As of March 31, 2020, the Company continues to exceed regulatory "well capitalized" targets[158] - The company continues to meet all capital adequacy requirements and is classified as well-capitalized under regulatory standards as of March 31, 2020[213] - Common equity Tier 1 ratio was 13.54% as of March 31, 2020, down from 14.31% as of December 31, 2019[213] Acquisitions and Expenses - The Company incurred $1.89 million in residual merger expenses related to the Highlands acquisition that occurred on December 31, 2019[158] - The total purchase price for the Highlands Bankshares acquisition was $86.65 million[153] - The company incurred $1.89 million in merger expenses related to the Highlands acquisition during Q1 2020[172] Deposits and Borrowings - Total deposits decreased by $41.50 million, or 1.78%, compared to December 31, 2019, primarily due to an $42.38 million decrease in time deposits[203] - Total borrowings increased by $747 thousand as of March 31, 2020, driven by a $1.00 million draw on a correspondent line of credit[204] - Total interest-bearing deposits increased by $280.59 million, or 20.23%, following the Highlands acquisition[167] Cash Flow and Liquidity - Net cash provided by operating activities was $11.37 million for the three months ended March 31, 2020, compared to $14.09 million for the same period in 2019[209] - Cash reserves totaled $8.33 million, with an additional $15.00 million available on an unsecured line of credit as of March 31, 2020[206] - Cash and cash equivalents increased by $24.60 million for the three months ended March 31, 2020, compared to an increase of $71.67 million for the same period in the prior year[209] - The liquidity model incorporates various funding crisis scenarios to manage liquidity risk effectively[205] LIBOR Transition - The company is transitioning from LIBOR to an equivalent rate index for new loans, ensuring interest rates remain consistent[221] - The company is quantifying the dollar amount and number of current variable loans tied to LIBOR that extend beyond 2021[221] - The company is transitioning from the LIBOR swap curve to treasury rates for certain loans[221] - The first phase of the LIBOR transition includes adding language to new loans to replace LIBOR with an equivalent rate index[221] Economic Outlook - Management believes that inflation will not materially impact financial performance, as interest rates have a greater effect[220] - The U.S. inflation rate remains relatively stable, with no significant changes expected to affect operations[220]

Financial Performance - Net interest income for 2019 was $89.453 million, slightly down from $90.845 million in 2018[131]. - Noninterest income rose to $33.677 million in 2019, up from $26.443 million in 2018, reflecting growth in service fees and commissions[131]. - Net income available to common shareholders for 2019 was $38.802 million, an increase from $36.340 million in 2018[131]. - Basic earnings per common share increased to $2.47 in 2019, compared to $2.19 in 2018[131]. - Pre-tax income increased by $4.67 million, or 10.36%, due to an increase in noninterest income of $7.23 million[149]. - Net interest income decreased by $1.39 million, or 1.53%, compared to the previous year, with a net interest margin increase of 18 basis points[159]. - Noninterest expense decreased by $10 thousand, or 0.01%, in 2019, primarily due to one-time charges recognized in 2018, while total noninterest expense for 2018 increased by $2.87 million, or 4.29%[170][171]. - The effective tax rate increased to 22.08% in 2019 from 19.46% in 2018, with income tax expense rising by $2.21 million, or 25.19%[173]. Asset and Liability Management - As of December 31, 2019, total assets increased to $2.80 billion following the acquisition of Highlands Bankshares, Inc. with total assets of $563 million[135]. - Total liabilities decreased to $1,881,103 million from $1,989,092 million, a decline of 5.45% year-over-year[156]. - Stockholders' equity decreased to $336,138 million from $341,519 million, a decrease of 1.11% year-over-year[156]. - Total assets increased by $554.47 million, or 24.71%, to $2.80 billion as of December 31, 2019, primarily due to the acquisition of Highlands[176]. - Total liabilities increased by $458.51 million, or 23.99%, to $2.37 billion as of December 31, 2019, also attributed to the Highlands acquisition[176]. - Total stockholders' equity increased by $95.96 million, or 28.83%, to $428.82 million as of December 31, 2019, largely due to the acquisition of Highlands[220]. Loan and Credit Quality - The provision for loan losses was $3.571 million, compared to $2.393 million in 2018, indicating an increase in expected loan losses[131]. - The allowance for loan losses was $18.425 million, slightly up from $18.267 million in 2018, indicating a stable approach to risk management[131]. - Total loans held for investment increased by $339.38 million, or 19.12%, compared to the previous year, primarily due to a $345.33 million, or 19.66%, increase in non-covered loans[183]. - Nonperforming assets decreased by $2.66 million, or 11.28%, from December 31, 2018, primarily due to a $3.47 million, or 17.72%, decrease in non-covered nonaccrual loans[199]. - Non-covered delinquent loans totaled $35.62 million as of December 31, 2019, an increase of $5.74 million, or 19.19%, compared to $29.89 million as of December 31, 2018[201]. - The allowance for loan losses was maintained at a level deemed sufficient to absorb probable loan losses, reflecting stable risk factors as of December 31, 2019[202]. Capital Management - The common equity Tier 1 ratio stood at 14.31% as of December 31, 2019, consistent with the previous year[131]. - Common equity Tier 1 ratio improved to 14.31% as of December 31, 2019, compared to 13.72% in 2018[223]. - The company repurchased 487,400 common shares for approximately $16.36 million[147]. - Book value per common share increased by $2.54 to $23.33 compared to December 31, 2018[147]. Interest Rate Risk Management - The company maintained interest rate swap agreements with notional amounts totaling $17.43 million to manage exposure to interest rate risk[234]. - A 300 basis point increase in interest rates would result in a $171 thousand increase in interest income, while a 200 basis point decrease would lead to an $8.571 million decrease[230]. - The company’s exposure to interest rate risk was deemed adequately mitigated as of December 31, 2019[233]. - Interest rate risk management strategies include periodic reviews of internal and third-party simulation models to project net interest income at risk[229]. Deposits and Funding - Total deposits as of December 31, 2019, increased by $474.16 million, or 25.55%, compared to December 31, 2018[209]. - The acquisition of Highlands added $501.74 million in deposits, including $155.71 million in non-interest bearing demand deposits[209]. - Total borrowings decreased by $27.73 million, or 94.41%, to $1.55 million as of December 31, 2019, primarily due to the maturity of a $25.00 million wholesale repurchase agreement[211]. - Cash reserves totaled $24.00 million, with an additional $15.00 million available on an unsecured line of credit as of December 31, 2019[215].