First Community Bankshares, Inc.

What they do

The company provides banking products and services to individual and commercial customers through its wholly owned subsidiary First Community Bank, a Virginia-chartered bank founded in 1874. It funds lending and investing primarily through retail deposits gathered from its branch network, and invests mainly in loans to retail and commercial customers plus investment securities. Wealth management, trust administration and investment advisory services are offered through the Bank's Trust Division and First Community Wealth Management Inc. Following the January 2026 Hometown Bancshares acquisition, it operates 61 branches as of June 30, 2026, with 614 full-time equivalent employees.

Revenue drivers

• Net interest income — The primary source of earnings, being the difference between interest earned on loans and securities and interest paid on deposits and liabilities. Tax-equivalent net interest income rose $4.27 million, or 13.87%, year over year in Q2 2026 on a net interest margin of 4.38%.
• Wealth management and trust fees — The Trust Division and First Community Wealth Management manage and administer $1.83 billion in combined assets under fee-based arrangements as fiduciary or agent, charging fees based on account size, nature and complexity. Revenues consist primarily of investment advisory fees and commissions on assets under management.
• Noninterest income — Includes fees for services, commissions on sales, and deposit service charges. Noninterest income increased about $12.00 million, or 116.06%, year over year in Q2 2026, primarily from a $10.38 million gain on the sale of the company's stake in Bearing Insurance.

Recent performance

Q2 2026 net income was a record $22.51 million, or $1.19 per diluted share, up $10.27 million or 83.84% from $12.25 million in Q2 2025. Six-month 2026 net income was $34.54 million, or $1.82 per diluted share, up 43.54% from the prior-year period. Adjusted for merger-related and non-recurring items, Q2 2026 net income was $14.38 million, up 17.47%, with the largest non-recurring item being a $10.39 million pre-tax gain on the Bearing Insurance sale. Annualized ROA was 2.49% and ROE was 16.90% for the quarter; adjusted ROA was 1.59% and adjusted ROE 10.80%. Consolidated assets totaled $3.61 billion at June 30, 2026, with the loan portfolio up $145.00 million, or 6.26%, from year-end 2025.

Strategy

Management states its strategy focuses on organic growth supplemented by strategic acquisitions of complementary financial institutions. The January 23, 2026 acquisition of Hometown Bancshares, parent of Union Bank, added eight West Virginia branches, bringing the network to 61 branches as of June 30, 2026. The company also invests in fee-based wealth management through its Trust Division and First Community Wealth Management. It returned capital via 504,652 shares repurchased for $20.33 million in Q1 2026 and declared a quarterly dividend of $0.33 per share in July 2026, its 41st consecutive year of regular dividends. Loan production in Q2 2026 was $134.45 million, up 70.43% from Q2 2025.

Risks

• Economic conditions in footprint — The company states its performance is highly dependent on business conditions in Virginia, West Virginia, North Carolina and Tennessee, which may be slow or uneven and are subject to significant uncertainty.
• Credit quality and borrower repayment — Results depend on borrowers' ability to pay interest and repay principal and on the value of collateral securing loans, which can deteriorate in unfavorable economic conditions.
• Interest rate and funding cost pressure — The company cites fluctuations in interest rates and inflation as factors that can adversely affect its financial condition and results.
• Integration of Hometown Bancshares — The January 2026 acquisition added eight branches and $2.31 million of pre-tax merger-related costs in the first six months of 2026, and integration may not deliver expected benefits.

Outlook

Management has not provided specific forward financial guidance in the excerpts. It reported that economic indicators in its market areas show relatively stable employment and business conditions. The most recent earnings release highlights record quarterly net income and continued capital return through dividends and share repurchases. Results will reflect the contribution of the Hometown Bancshares acquisition, which management said drove the increase in average earning assets.