 BLUEFIELD, Va., July 28, 2020 GLOBE NEWSWIRE -- First Community Bankshares, Inc. NASDAQ: FCBC the Company today reported its unaudited results of operations and other financial information for the quarter ended June 30, 2020. The Company reported net income of 8.24 million, or 0.46 per diluted common share, for the quarter ended June 30, 2020, which was a decrease of 0.20, or 30.30, over the same quarter of 2019. Net income was 16.11 million, or 0.90 per diluted common share, for the six months ended June 30, 2020, which represents a 29.13 decrease in per share diluted earnings compared to the same period of 2019.Additionally, today the Company declared a quarterly cash dividend to common shareholders of twenty-five cents 0.25 per common share. The quarterly dividend is payable to common shareholders of record on August 7, 2020, and is expected to be paid on or about August 21, 2020. The current year is the 35th consecutive year of regular dividends to common shareholders.Second Quarter 2020 and Current Highlights Pandemic and General The Companys social distancing practices at its branches and corporate offices continue today. Remote working environments remain in place for approximately 60 of the Companys back office workforce. The Company implemented a pay differential for employees working at branch and back-office locations which ended May 31, 2020. As a result of the pay differential and other COVID-19 related expenses, the Company incurred approximately 612 thousand in additional expenses for the quarter. In order to aid its affected customers, the Company modified or deferred payments on 1,277 commercial loans totaling 340.00 million in principal balances and 1,820 retail loans totaling 96.11 million in principal balances. Through June 30, 2020, the Company processed 758 loans with original principal balances totaling 60.23 million through the SBAs Paycheck Protection Program. As a result of the low interest rate environment, the Companys pipeline for mortgage loans grew to approximately 99.75 million at June 30, 2020, and stood at 101.39 million at July 24, 2020. Income Statement Second quarter earnings reflect a loan loss provision of 3.83 million, an increase of 2.25 million over second quarter of 2019, to recognize the impact of the coronavirus slowdown. Coupled with the provision in the first quarter of 2020, the second quarter provision had the cumulative effect of increasing loan loss reserve 5.33 million. Despite the significant increase in loan loss provision, return on average assets remained strong at 1.15 for both the second quarter and the six month period. The significant increase in loan loss provision over previous quarterly provisions reduced return on average assets for the quarter by 0.24. Net interest margin decreased 50 basis points to 4.22 compared to the same quarter of 2019. Net interest margin decreased 20 basis points to 4.46 for the six months compared to the same period of 2019. Both period decreases are reflective of the current historic low interest rate environment. Pandemic shutdowns and stay-at-home orders had a significant negative impact on deposit service charges. Balance Sheet As of June 30, 2020, the Company continues to significantly exceed regulatory well capitalized targets, as well as all capital targets of its capital management plan. The Company completed its previous share repurchase authorization in the first quarter of 2020, prior to the onset of the current coronavirus pandemic, which completed a strategic objective of acquiring 6.6 million shares, returning over 149 million in surplus capital to shareholders. In light of the uncertain economic forecast, the Company has temporarily delayed consideration of a new share repurchase authorization to preserve and further accumulate surplus capital. Total deposits have grown 167.93 million, or 7.21, during 2020 with 125.03 million of the increase coming in interest free categories.Non-GAAP Financial MeasuresIn 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. 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 58 branch banking locations in Virginia, West Virginia, North Carolina, and Tennessee as of June 30, 2020. First Community Bank offers wealth management and investment advice through its Trust Division and First Community Wealth Management, which collectively managed and administered 1.10 billion in combined assets as of June 30, 2020. The Company reported consolidated assets of 2.95 billion as of June 30, 2020. The Companys common stock is listed on the NASDAQ Global Select Market under the trading symbol, FCBC. Additional investor information is available on the Companys website at 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 assetliability levels; the management of credit risk and interest rate risk; the difficulty of keeping expense growth at modest levels while increasing revenues; and other risks detailed from time to time in the Companys 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 Six Months Ended June 30, March 31, December 31, September 30, June 30, June 30, Amounts in thousands, except share and per share data2020 2020 2019 2019 2019 2020 2019 Interest income Interest and fees on loans 26,991 28,058 21,837 22,068 22,721 55,049 44,900 Interest on securities713 918 870 857 895 1,631 1,989 Interest on deposits in banks82 533 663 680 766 615 1,104 Total interest income27,786 29,509 23,370 23,605 24,382 57,295 47,993 Interest expense Interest on deposits1,445 1,825 1,312 1,383 1,392 3,270 2,697 Interest on borrowings2 2 1 1 1 4 121 Total interest expense1,447 1,827 1,313 1,384 1,393 3,274 2,818 Net interest income26,339 27,682 22,057 22,221 22,989 54,021 45,175 Provision for loan losses3,831 3,500 91 675 1,585 7,331 2,805 Net interest income after provision22,508 24,182 21,966 21,546 21,404 46,690 42,370 Noninterest income6,913 7,549 9,314 7,634 8,649 14,462 16,729 Noninterest expense18,913 21,664 18,883 17,444 16,651 40,577 33,436 Income before income taxes10,508 10,067 12,397 11,736 13,402 20,575 25,663 Income tax expense2,270 2,195 2,833 2,580 2,951 4,465 5,581 Net income 8,238 7,872 9,564 9,156 10,451 16,110 20,082 Earnings per common share Basic 0.47 0.44 0.61 0.59 0.67 0.90 1.27 Diluted0.46 0.44 0.61 0.58 0.66 0.90 1.27 Cash dividends per common share Regular0.25 0.25 0.25 0.25 0.25 0.50 0.46 Weighted average shares outstanding Basic17,701,853 17,998,994 15,611,093 15,603,992 15,712,204 17,850,423 15,775,462 Diluted17,728,300 18,050,071 15,670,047 15,664,587 15,775,320 17,888,325 15,847,498 Performance ratios Return on average assets1.15 1.16 1.71 1.65 1.89 1.15 1.82 Return on average common equity7.97 7.49 11.08 10.80 12.57 7.73 12.17 Return on average tangible common equity111.91 11.12 15.33 15.19 17.57 11.51 17. 