"First Community Bankshares: A Solid 2024, But Can It Keep Up?"

First Community Bankshares (NASDAQ:FCBC) has just released its full-year 2024 earnings, and the results are a mixed bag. On one hand, the company beat revenue expectations, reporting a 3.3% increase to US$162.3 million. On the other hand, earnings per share (EPS) were mostly in line with analyst estimates, and the company's shares are up only 6.1% from a week ago. So, what does this mean for income-seeking investors like you?

First, let's look at the positives. First Community Bankshares reported a net income of US$51.6 million for 2024, up 7.5% from the previous year. This increase was driven by higher revenue, which also helped to boost the company's profit margin to 32%, up from 31% in 2023. The company's net interest margin (NIM) remained stable at 4.44%, and it declared a quarterly cash dividend of $0.31 per share and a special cash dividend of $2.07 per share. This marks the 40th consecutive year of regular dividends, a testament to the company's strong capital management.

However, there are some red flags to watch. The company's net interest income decreased by $730 thousand in Q4 2024 due to higher interest rates on deposits. This could indicate potential challenges in maintaining profitability in the future. Additionally, loans decreased by 6.07% from December 31, 2023, which could suggest weakening demand or issues in loan origination. Non-performing loans to total loans also increased to 0.83%, signaling a potential deterioration in loan quality.

So, should you invest in First Community Bankshares? It depends on your risk tolerance and investment goals. If you're looking for a stable dividend stock with a long history of payouts, First Community Bankshares could be a good fit. However, if you're concerned about the company's ability to maintain profitability in a rising interest rate environment, you may want to look elsewhere.

One thing is clear: First Community Bankshares is not keeping pace with the broader banking industry. The company's revenue growth of 3.3% is modest compared to the 7.3% growth forecast for the US banking industry over the next two years. This could be a sign that the company is struggling to compete with larger banks or that it is facing unique challenges in its market.



In conclusion, First Community Bankshares' 2024 earnings report is a mixed bag. The company beat revenue expectations and reported strong net income growth, but it also faced challenges in maintaining profitability and loan quality. As an income-seeking investor, you should weigh these factors carefully before making a decision. And remember, always do your own research and consult with a financial advisor before making any investment decisions.