• First Community Bankshares, Inc. Announces Fourth Quarter 2023 Results and Quarterly Cash Dividend

    Source: Nasdaq GlobeNewswire / 23 Jan 2024 16:30:11   America/New_York

    BLUEFIELD, Va., Jan. 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 December 31, 2023. The Company reported net income of $11.78 million, or $0.66 per diluted common share, for the quarter ended December 31, 2023. Net income for the twelve months ended December 31, 2023, was $48.02 million or $2.72 per diluted common share.

    The Company also declared a quarterly cash dividend to common shareholders of twenty-nine cents $0.29 per common share. The quarterly dividend is payable to common shareholders of record on February 9, 2024, and is expected to be paid on or about February 23, 2024. This marks the 39th consecutive year of regular dividends to common shareholders.

    Fourth Quarter 2023 and Full Year Highlights

    Income Statement

    • Net income of $11.78 million for the fourth quarter and $48.02 million for the year were negatively impacted by a $3.00 million accrual for estimated litigation expenses.
    • Adjusted for non-recurring items, fourth quarter net income increased $1.84 million to $14.59 million compared to fourth quarter 2022 on improved net interest margin and lower provision for credit losses. Also adjusted for non-recurring items, current year net income of $54.74 million was $9.12 million, or 19.99%, greater than last year.
    • Net interest income increased $1.44 million compared to the same quarter in 2022, as increases in benchmark interest rates have improved net interest margin. Provision for credit losses was approximately $2.39 million lower than the same quarter last year.
    • Interest and fees on loans increased $5.80 million from the same quarter of 2022 and is attributable to both an increase in yield and an increase in average balance compared to the yield and average balance of the prior year. The Company acquired Surrey Bancorp on April 21, 2023, adding approximately $239.08 million in loans. Interest income on deposits in banks decreased $777 thousand to $438 thousand for the fourth quarter, primarily due to a significant decrease in the average balance compared to the fourth quarter of 2022.
    • Annualized return on average assets (“ROA”) was 1.43% for the fourth quarter and 1.48% for the twelve months of 2023 compared to 1.59% and 1.45% for the same periods, respectively of 2022. Annualized return on average common equity (“ROE”) was 9.39% for the fourth quarter and 10.02% for the twelve months of 2023 compared to 11.99% and 11.04%, for the same periods, respectively of 2022. Adjusted for non-recurring items, ROA was 1.77% and ROE was 11.63% for the fourth quarter of 2023.

    Balance Sheet and Asset Quality

    • The Company’s loan portfolio increased by $172.10 million, or 7.17%, from December 31, 2022. Excluding the Surrey transaction, the loan portfolio decreased approximately $66.98 million, or 2.79%.
    • Deposits increased $43.51 million, or 1.62%, from year-end 2022. Excluding the Surrey transaction, deposits decreased approximately $360.13 million, or 13.44%, from December 31, 2022.
    • The Company repurchased 189,500 common shares during the fourth quarter of 2023 for a total cost of $5.98 million. The Company repurchased 768,079 common shares during 2023 for a total cost of $23.04 million. The Company recently announced a new 2.7 million share repurchase program that replaced the remainder of the prior program.
    • Non-performing loans to total loans increased to 0.76% when compared with the same quarter of 2022. The Company experienced net charge-offs for the fourth quarter of 2023 of $883 thousand, or 0.14%, of annualized average loans, compared to net charge-offs of $2.25 million, or 0.37%, of annualized average loans for the same period in 2022.
    • 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.
    • The accumulated other comprehensive loss of $10.95 million at December 31, 2023, decreased $4.77 million compared to the accumulated other comprehensive loss of $15.71 million at December 31, 2022.
    • Book value per share at December 31, 2023, was $27.20, an increase of $1.19 from year-end 2022.

    Non-GAAP Financial Measures

    In addition to financial statements prepared in accordance with U.S. generally accepted accounting principles (“GAAP”), the Company uses certain non-GAAP financial measures that provide useful information for financial and operational decision making, evaluating trends, and comparing financial results to other financial institutions. The non-GAAP financial measures presented in this news release include “tangible book value per common share,” “return on average tangible common equity,” “adjusted earnings,” “adjusted diluted earnings per share,” “adjusted return on average assets,” “adjusted return on average common equity,” “adjusted return on average tangible common equity,” and certain financial measures presented on a fully taxable equivalent (“FTE”) basis. FTE basis is calculated using the federal statutory income tax rate of 21%. Where non-GAAP financial measures are used, the comparable GAAP financial measure, as well as a reconciliation to that comparable GAAP financial measure can be found in the attached tables to this press release. While the Company believes certain non-GAAP financial measures enhance the understanding of its business and performance, they are supplemental and not a substitute for, or more important than, financial measures prepared in accordance with GAAP and may not be comparable to those reported by other financial institutions.

    About First Community Bankshares, Inc.

    First Community Bankshares, Inc., a financial holding company headquartered in Bluefield, Virginia, provides banking products and services through its wholly owned subsidiary First Community Bank. First Community Bank operated 53 branch banking locations in Virginia, West Virginia, North Carolina, and Tennessee as of December 31, 2023. First Community Bank offers wealth management and investment advice and services through its Trust Division and through its wholly owned subsidiary, First Community Wealth Management, which collectively managed and administered $1.49 billion in combined assets as of December 31, 2023. The Company reported consolidated assets of $3.27 billion as of December 31, 2023. The Company’s common stock is listed on the NASDAQ Global Select Market under the trading symbol, “FCBC”. Additional investor information is available on the Company’s website at www.firstcommunitybank.com.

    This news release may include forward-looking statements. These forward-looking statements are based on current expectations that involve risks, uncertainties, and assumptions. Should one or more of these risks or uncertainties materialize or should underlying assumptions prove incorrect, actual results may differ materially. These risks include: changes in business or other market conditions; the timely development, production and acceptance of new products and services; the challenge of managing asset/liability levels; the management of credit risk and interest rate risk; the difficulty of keeping expense growth at modest levels while increasing revenues; changes in banking laws and regulations; the degree of competition by traditional and non-traditional competitors; the impact of natural disasters, extreme weather events, military conflict , terrorism or other geopolitical events; and other risks detailed from time to time in the Company’s Securities and Exchange Commission reports including, but not limited to, the Annual Report on Form 10-K for the most recent fiscal year end. Pursuant to the Private Securities Litigation Reform Act of 1995, the Company does not undertake to update forward-looking statements to reflect circumstances or events that occur after the date the forward-looking statements are made.

    CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Unaudited)
     
     Three Months Ended  Year Ended  
     December
    31,    		  September
    30,    		  June 30,  March 31,  December
    31,    		  December 31,  
    (Amounts in thousands,
    except share and per
    share data)    		2023  2023  2023  2023  2022  2023  2022  
    Interest income                            
    Interest and fees on
    loans    		$33,676  $33,496  $31,927  $27,628  $27,873  $126,727  $104,570  
    Interest on securities 1,888   1,912   2,057   2,099   1,900   7,956   5,986  
                                 
    Interest on deposits in
    banks    		 438   697   885   462   1,215   2,482   3,763  
    Total interest income 36,002   36,105   34,869   30,189   30,988   137,165   114,319  
    Interest expense                            
    Interest on deposits 3,935   2,758   1,930   718   366   9,341   1,654  
    Interest on borrowings 4   0   77   59   1   140   2  
    Total interest expense 3,939   2,758   2007   777   367   9,481   1,656  
    Net interest income 32,063   33,347   32,862   29,412   30,621   127,684   112,663  
    Provision for credit
    losses    		 1,029   1,109   4,105   1,742   3,416   7,985   6,572  
    Net interest income
    after provision    		 31,034   32,238   28,757   27,670   27,205   119,699   106,091  
    Noninterest income 10,462   9,622   8,785   8,583   9,184   37,452   37,182  
    Noninterest expense 26,780   22,913   24,671   20,813   20,730   95,177   83,116  
    Income before income
    taxes    		 14,716   18,947   12,871   15,440   15,659   61,974   60,157  
    Income tax expense 2,932   4,307   3,057   3,658   3,076   13,954   13,495  
    Net income$11,784  $14,640  $9,814  $11,782  $12,583  $48,020  $46,662  
                                 
    Adjustment to Net
    Income for Fair Value
    Changes to Restricted
    Stock Units (tax-
    effected)    		$530  $215  $335  $20  $-  $1,100  $-  
    Adjusted Net Income
    for diluted earnings per
    share    		$12,314  $14,855  $10,149  $11,802  $12,583  $49,120  $46,662  
                                 
    Earnings per common
    share    		                            
    Basic$0.64  $0.78  $0.53  $0.73  $0.78  $2.67  $2.82  
    Diluted$0.66  $0.79  $0.55  $0.72  $0.77  $2.72  $2.82  
    Cash dividends per
    common share    		                            
    Regular 0.29   0.29   0.29   0.29   0.29   1.16   1.12  
    Weighted average
    shares outstanding    		                            
    Basic 18,530,114   18,786,032   18,407,078   16,228,297   16,229,289   17,996,373   16,519,848  
    Diluted 18,575,226   18,831,836   18,431,598   16,289,489   16,281,922   18,027,151   16,562,257  
    Performance ratios                            
    Return on average assets 1.43%  1.74%  1.18%  1.55%  1.59%  1.48%  1.45% 
    Return on average
    common equity    		 9.39%  11.63%  8.04%  11.15%  11.99%  10.02%  11.04% 
    Return on average
    tangible common
    equity (1)    		 13.82%  17.11%  11.65%  16.19%  17.75%  14.65%  16.17% 
      
    (1) A non-GAAP financial measure defined as net income divided by average stockholders' equity less average goodwill and other intangible assets.
     

     

    CONDENSED CONSOLIDATED QUARTERLY NONINTEREST INCOME AND EXPENSE (Unaudited)
     
     Three Months Ended Year Ended 
     December
    31,    		 September
    30,    		 June 30, March 31, December
    31,    		 December 31, 
    (Amounts in thousands)2023 2023 2023 2023 2022 2023 2022 
    Noninterest income                     
    Wealth management$1,052 $1,145 $965 $1,017 $958 $4,179 $3,855 
    Service charges on deposits 3,637  3,729  3,471  3,159  3,354  13,996  14,213 
    Other service charges and fees 3,541  3,564  3,460  3,082  3,006  13,647  12,308 
    (Loss) gain on sale of securities -  -  (28) 7  -  (21) - 
    Gain on divestiture -  -  -  -  -  -  1,658 
    Other operating income 2,232  1,184  917  1,318  1866  5,651  5,148 
    Total noninterest income$10,462 $9,622 $8,785 $8,583 $9,184 $37,452 $37,182 
    Noninterest expense                      
    Salaries and employee benefits$12,933 $12,673 $12,686 $11,595 $11,913 $49,887 $47,183 
    Occupancy expense 1,252  1,271  1,276  1,168  1,196  4,967  4,818 
    Furniture and equipment expense 1,489  1,480  1,508  1,401  1,413  5,878  6,001 
    Service fees 2,255  2,350  2,284  2,019  1,905  8,908  7,606 
    Advertising and public relations 843  968  846  643  574  3,300  2,409 
    Professional fees 787  172  281  327  98  1,567  1,303 
    Amortization of intangibles 536  536  425  234  364  1,731  1,446 
    FDIC premiums and assessments 376  392  423  320  330  1,511  1,126 
    Merger expense -  -  2,014  379  596  2,393  596 
    Divestiture expense -  -  -  -  -  -  153 
    Litigation expense 3,000  -  -  -  -  3,000  - 
    Other operating expense 3,309  3,071  2,928  2,727  2,341  12,035  10,475 
    Total noninterest expense$26,780 $22,913 $24,671 $20,813 $20,730 $95,177 $83,116 
     


    RECONCILIATION OF GAAP NET INCOME TO NON-GAAP ADJUSTED EARNINGS (Unaudited)
     
     Three Months Ended  Year Ended  
     December
    31,    		  September
    30,    		  June 30,  March 31,  December
    31,    		  December 31,  
    (Amounts in thousands, except per
    share data)
    2023    		  2023  2023  2023  2022  2023  2022  
    Adjusted Net Income for diluted
    earnings per share    		$12,314  $14,855  $10,149  $11,802  $12,583  $49,120  $46,662  
    Non-GAAP adjustments:                            
    Loss (gain) on sale of securities -   -   28   (7)  -   21   -  
    Merger expense -   -   2,014   379   596   2,393   596  
    Day 2 provision for allowance for
    credit losses - Surrey    		 -   -   1,614   -   -   1,614   -  
    Divestiture expense -   -   -   -   -   -   153  
    Gain on divestiture -   -   -   -   -   -   (1,658) 
    Litigation expense 3,000   -   -   0   -   3,000      
    Other items (1) -   (204)  -   -   (450)  (204)  (542) 
    Total adjustments 3,000   (204)  3,656   372   146   6,824   (1,451) 
    Tax effect 720   (49)  522   10   (29)  1,203   (412) 
    Adjusted earnings, non-GAAP$14,594  $14,700  $13,283  $12,163  $12,758  $54,741  $45,623  
                                 
    Adjusted diluted earnings per common
    share, non-GAAP    		$0.79  $0.78  $0.72  $0.75  $0.78  $3.04  $2.75  
    Performance ratios, non-GAAP                            
    Adjusted return on average assets 1.77%  1.75%  1.60%  1.60%  1.61%  1.68%  1.42% 
    Adjusted return on average common
    equity    		 11.63%  11.68%  10.88%  11.51%  12.16%  11.43%  10.80% 
    Adjusted return on average tangible
    common equity (2)    		 17.11%  17.18%  15.77%  16.72%  17.93%  16.70%  15.84% 
      
    (1) Includes other non-recurring income and expense items.
    (2) A non-GAAP financial measure defined as adjusted earnings divided by average stockholders' equity less average goodwill and other intangible assets.
     


    AVERAGE BALANCE SHEETS AND NET INTEREST INCOME ANALYSIS (Unaudited)
     
     Three Months Ended December 31,  
     2023  2022  
    (Amounts in thousands)Average
    Balance    		  Interest(1)  Average
    Yield/
    Rate(1)    		  Average
    Balance    		  Interest(1)  Average
    Yield/
    Rate(1)    		  
    Assets                        
    Earning assets                        
    Loans (2) (3)$2,581,528  $33,758   5.19% $2,383,161  $27,944   4.65% 
    Securities available for sale 274,513   1,924   2.78%  299,488   1,942   2.57% 
    Interest-bearing deposits 31,293   438   5.55%  130,363   1,218   3.71% 
    Total earning assets 2,887,334   36,120   4.96%  2,813,012   31,104   4.39% 
    Other assets 379,960           326,043          
    Total assets$3,267,294          $3,139,055          
                             
    Liabilities and stockholders' equity      
    		                       
    Interest-bearing deposits                        
    Demand deposits$697,555  $180   0.10% $666,517  $27   0.02% 
    Savings deposits 838,455   3,050   1.44%  856,755   106   0.05% 
    Time deposits 254,668   705   1.10%  293,520   232   0.31% 
    Total interest-bearing deposits 1,790,678   3,935   0.87%  1,816,792   365   0.08% 
    Borrowings                        
    Federal funds purchased 293   4   5.35%  -   -   0.00% 
    Retail repurchase agreements 1,090   -   0.05%  2,473   1   0.07% 
    Total borrowings 1,383   4   0.87%  2,473   1   0.07% 
    Total interest-bearing liabilities 1,792,061   3,939   0.87%  1,819,265   366   0.08% 
    Noninterest-bearing demand deposits 931,681           864,537          
    Other liabilities 45,819           38,993          
    Total liabilities 2,769,561           2,722,795          
    Stockholders' equity 497,733           416,260          
    Total liabilities and stockholders'
    equity    		$3,267,294          $3,139,055          
    Net interest income, FTE (1)    $32,181          $30,738      
    Net interest rate spread         4.09%          4.31% 
    Net interest margin, FTE (1)         4.42%          4.34% 
      
    (1) Interest income and average yield/rate are presented on a FTE, non-GAAP, basis using the federal statutory income tax rate of
         21%.
    (2) Nonaccrual loans are included in the average balance; however, no related interest income is recorded during the period of nonaccrual.
    (3) Interest on loans includes non-cash and accelerated purchase accounting accretion of $792 thousand and $395 thousand for the
         three months ended December 31, 2023 and 2022, respectively.
     


    AVERAGE BALANCE SHEETS AND NET INTEREST INCOME ANALYSIS (Unaudited)
     
     Year Ended December 31,  
     2023  2022  
    (Amounts in thousands)Average
    Balance    		  Interest(1)  Average
    Yield/
    Rate(1)    		  Average
    Balance    		  Interest(1)  Average
    Yield/
    Rate(1)    		  
    Assets                        
    Earning assets                        
    Loans (2) (3)$2,538,361  $127,019   5.00% $2,298,503  $104,830   4.56% 
    Securities available for sale 298,389   8,115   2.72%  256,221   6,172   2.41% 
    Interest-bearing deposits 46,601   2,485   5.33%  330,785   3,767   1.14% 
    Total earning assets 2,883,351   137,619   4.77%  2,885,509   114,769   3.98% 
    Other assets 369,700           328,635          
    Total assets$3,253,051          $3,214,144          
                             
    Liabilities and stockholders' equity                        
    Interest-bearing deposits                        
    Demand deposits$686,534  $405   0.06% $683,502  $112   0.02% 
    Savings deposits 847,397   6,781   0.80%  880,171   306   0.03% 
    Time deposits 267,957   2,155   0.80%  322,158   1,235   0.38% 
    Total interest-bearing deposits 1,801,888   9,341   0.52%  1,885,831   1,653   0.09% 
    Borrowings                        
    Federal funds purchased 2,715   139   5.12%  -   -   0.00% 
    Retail repurchase agreements 1,528   1   0.06%  2,239   2   0.07% 
    Total borrowings 4,243   140   3.30%  2,239   2   0.07% 
    Total interest-bearing liabilities 1,806,131   9,481   0.52%  1,888,070   1,655   0.09% 
    Noninterest-bearing demand deposits 926,378           864,224          
    Other liabilities 41,477           39,363          
    Total liabilities 2,773,986           2,791,657          
    Stockholders' equity 479,065           422,487          
    Total liabilities and stockholders'
    equity    		$3,253,051          $3,214,144          
    Net interest income, FTE (1)    $128,138          $113,114      
    Net interest rate spread         4.25%          3.89% 
    Net interest margin, FTE (1)         4.44%          3.92% 
      
    (1) Interest income and average yield/rate are presented on a FTE, non-GAAP, basis using the federal statutory income tax rate of
          21%.
    (2) Nonaccrual loans are included in the average balance; however, no related interest income is recorded during the period of nonaccrual.
    (3) Interest on loans includes non-cash and accelerated purchase accounting accretion of $2.74 million and $2.62 million for the
          twelve months ended December 31, 2023 and 2022, respectively.
     


    CONDENSED CONSOLIDATED QUARTERLY BALANCE SHEETS (Unaudited)
     
    (Amounts in thousands, except per share data)December
    31,
    2023    		  September
    30,
    2023    		  June 30,
    2023    		  March 31,
    2023    		  December
    31,
    2022    		  
    Assets                    
    Cash and cash equivalents$116,420  $113,397  $152,660  $92,385  $170,846  
    Debt securities available for sale 280,961   275,332   314,373   308,269   300,349  
    Loans held for investment, net of unearned income 2,572,298   2,593,472   2,621,073   2,388,897   2,400,197  
    Allowance for credit losses (36,189)  (36,031)  (36,177)  (30,789)  (30,556) 
    Loans held for investment, net 2,536,109   2,557,441   2,584,896   2,358,108   2,369,641  
    Premises and equipment, net 50,680   51,205   53,546   47,407   47,340  
    Other real estate owned 192   243   339   481   703  
    Interest receivable 10,881   10,428   10,185   8,646   9,279  
    Goodwill 143,946   143,946   143,946   129,565   129,565  
    Other intangible assets 15,145   15,681   16,217   3,942   4,176  
    Other assets 114,854   116,552   115,275   102,869   103,673  
    Total assets$3,269,188  $3,284,225  $3,391,437  $3,051,672  $3,135,572  
                         
    Liabilities                    
    Deposits                    
    Noninterest-bearing$931,920  $944,301  $974,995  $823,297  $872,168  
    Interest-bearing 1,790,405   1,801,835   1,877,683   1,761,327   1,806,647  
    Total deposits 2,722,325   2,746,136   2,852,678   2,584,624   2,678,815  
    Securities sold under agreements to repurchase 1,119   1,029   1,348   1,866   1,874  
    Interest, taxes, and other liabilities 42,450   41,393   38,691   33,451   32,898  
    Total liabilities 2,765,894   2,788,558   2,892,717   2,619,941   2,713,587  
                         
    Stockholders' equity                    
    Common stock 18,502   18,671   18,969   16,243   16,225  
    Additional paid-in capital 175,841   180,951   189,917   128,666   128,508  
    Retained earnings 319,902   313,489   304,295   300,047   292,971  
    Accumulated other comprehensive loss (10,951)  (17,444)  (14,461)  (13,225)  (15,719) 
    Total stockholders' equity 503,294   495,667   498,720   431,731   421,985  
    Total liabilities and stockholders' equity$3,269,188  $3,284,225  $3,391,437  $3,051,672  $3,135,572  
                         
    Shares outstanding at period-end 18,502,396   18,671,470   18,969,281   16,243,551   16,225,399  
    Book value per common share$27.20  $26.55  $26.29  $26.58  $26.01  
    Tangible book value per common share (1) 18.60   18.00   17.85   18.36   17.76  
      
    (1) A non-GAAP financial measure defined as stockholders' equity less goodwill and other intangible assets, divided by shares
         outstanding.
     


    SELECTED CREDIT QUALITY INFORMATION (Unaudited)
     
    (Amounts in thousands)December
    31,
    2023    		  September
    30,
    2023    		  June 30,
    2023    		  March 31,
    2023    		  December
    31,
    2022    		  
    Allowance for Credit Losses                    
    Balance at beginning of period:                    
    Allowance for credit losses - loans$36,031  $36,177  $30,789  $30,556  $29,388  
    Allowance for credit losses - loan commitments (1) 758   964   964   1,196   1,416  
    Total allowance for credit losses beginning of period 36,789   37,141   31,753   31,752   30,804  
    Adjustments to beginning balance:                    
    Allowance for credit losses - loans - Surrey
    acquisition for purchased credit deteriorated loans    		 -   -   2,011   -   -  
    Allowance for credit losses - loan commitments (1) -   -   -   -   -  
    Net Adjustments -   -   2,011   -   -  
    Provision for credit losses:                    
    Provision for credit losses - loans 1,041   1,315   4,105   1,974   3,416  
    (Recovery of) provision for credit losses - loan
    commitments (1)    		 (12)  (206)  -   (232)  (220) 
    Total provision for credit losses - loans and loan
    commitments    		 1,029   1,109   4,105   1,742   3,196  
    Charge-offs (2,105)  (2,157)  (1,993)  (2,570)  (2,873) 
    Recoveries 1,222   696   1,265   829   625  
    Net (charge-offs) recoveries (883)  (1,461)  (728)  (1,741)  (2,248) 
    Balance at end of period:                    
    Allowance for credit losses - loans 36,189   36,031   36,177   30,789   30,556  
    Allowance for credit losses - loan commitments (1) 746   758   964   964   1,196  
    Ending balance$36,935  $36,789  $37,141  $31,753  $31,752  
                         
    Nonperforming Assets                    
    Nonaccrual loans$19,356  $18,366  $18,628  $15,557  $15,208  
    Accruing loans past due 90 days or more 104   59   -   23   142  
    Modified loans past due 90 days or more (2) -   -   -   -   -  
    Troubled debt restructurings (“TDRs”) (3) -   -   -   -   1,346  
    Total nonperforming loans 19,460   18,425   18,628   15,580   16,696  
    OREO 192   243   339   481   703  
    Total nonperforming assets$19,652  $18,668  $18,967  $16,061  $17,399  
                         
                         
    Additional Information                    
    Total modified loans (2)$1,873  $1,674  $642  $429  $-  
    Total accruing TDRs (4)$-  $-  $-  $-  $7,112  
                         
    Asset Quality Ratios                    
    Nonperforming loans to total loans 0.76%  0.71%  0.71%  0.65%  0.70% 
    Nonperforming assets to total assets 0.60%  0.57%  0.56%  0.53%  0.55% 
    Allowance for credit losses to nonperforming loans 185.97%  195.55%  194.21%  197.62%  183.01% 
    Allowance for credit losses to total loans 1.41%  1.39%  1.38%  1.29%  1.27% 
    Annualized net charge-offs (recoveries) to average
    loans    		 0.14%  0.22%  0.11%  0.29%  0.37% 
      
    (1) Prior quarter information for loan commitments has been reclassed for presentation purposes.
    (2) ASU 2022-02, Financial Instruments-Credit Losses (Topic 326), Troubled Debt Restructurings and Vintage Disclosures. ASU
         adopted effective January 1, 2023.
    (3) Accruing TDRs restructured within the past six months or nonperforming as reported prior to the adoption of ASU 2022-02
         Financial Instruments-Credit Losses (Topic 326), Troubled Debt Restructurings and Vintage Disclosures.
    (4) Accruing total TDRs as reported prior to the adoption of ASU 2022-02 Financial Instruments-Credit Losses (Topic 326), Troubled
         Debt Restructurings and Vintage Disclosures.
     

    FOR MORE INFORMATION, CONTACT:
    David D. Brown
    (276) 326-9000


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