8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 OR 15(d) of The Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): July 28, 2021

	FIRST COMMUNITY BANKSHARES, INC.
(Exact name of registrant as specified in its charter)
Virginia	000-19297	55-0694814
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(State or other jurisdiction	(Commission	(IRS Employer
of incorporation)	File Number)	Identification No.)
P.O. Box 989<br><br> <br>Bluefield , Virginia		24605-0989
(Address of principal executive offices)		(Zip Code)
Registrant’s telephone number, including area code: (276) 326-9000

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
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☐	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
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☐	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
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Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock ($1.00 par value)	FCBC	NASDAQ Global Select

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

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Item 2.02         Results of Operations and Financial Condition.

On July 28, 2021, First Community Bankshares, Inc. (the “Company”) announced by press release its earnings for the second quarter of 2021. A copy of the press release is attached hereto as Exhibit 99.1.

Item 8.01         Other Events.

On July 28, 2021, the Company announced by press release its quarterly cash dividend to common shareholders of twenty-seven cents ($0.27) per common share, payable on or about August 23, 2021, to shareholders of record on August 9, 2021. A copy of the press release is attached hereto as Exhibit 99.1.

Item 9.01         Financial Statements and Exhibits.

(d)	The following exhibit is included with this report:
Exhibit No.	Exhibit Description
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99.1<br><br> <br>104	Earnings release dated July 28, 2021<br><br> <br>Cover Page Interactive Data File (formatted as Inline XBRL).

Forward-Looking Statements

This Current Report on Form 8-K contains 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; 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 year ended. 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.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

		FIRST COMMUNITY BANKSHARES, INC.
Date:	July 28, 2021	By:	/s/ David D. Brown
			David D. Brown
			Chief Financial Officer

ex_266362.htm

Exhibit 99.1

NEWS RELEASE
FOR IMMEDIATE RELEASE:	FOR MORE INFORMATION, CONTACT:
July 28, 2021	David D. Brown
	(276) 326-9000

First Community Bankshares, Inc. Announces Record Second Quarter Results and

Increased Quarterly Cash Dividend

Bluefield, Virginia – 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 June 30, 2021. The Company reported net income of $13.40 million, or $0.76 per diluted common share, for the quarter ended June 30, 2021, which was an increase of $0.30 per diluted common share, or 65.22%, over the same quarter of 2020. Net income for the six months ended June 30, 2021 was $28.01 million or $1.59 per diluted common share, which represents a 76.67% increase in diluted earnings per share compared to the same period of 2020.

The Company also declared a quarterly cash dividend to common shareholders of twenty-seven cents ($0.27) per common share, which is an increase of 8.00% over last quarter and last year. The quarterly dividend is payable to common shareholders of record on August 9, 2021, and is expected to be paid on or about August 23, 2021. 2021 is the 36^th^ consecutive year of regular dividends to common shareholders.

Second Quarter 2021 and Current Highlights

General

o	Net income for the quarter increased $5.17 million to $13.40 million compared to the same quarter of 2020. The large increase in net income includes the reversal of $2.23 million in allowance for credit losses for the second quarter of 2021. Net income for the six month period increased $11.90 million compared to the same period of 2020. Similarly, for the six month period, a reversal of $6.23 million in the allowance for credit losses accounts for a large part of the increase in income over the same period in 2020. The decreases in credit loss provisioning are primarily due to significantly improved economic forecasts and GDP growth in the current year, and prior year provisioning driven by the pandemic.
o	During the second quarter, the Company repurchased 261,600 common shares for $7.98 million. Year-to-date the Company has repurchased 449,300 common shares for $12.96 million.
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Income Statement

o	Diluted earnings per share increased $0.30 to $0.76 compared to the same quarter of 2020. Diluted earnings per share for the six month period increased $0.69 to $1.59 compared to 2020.
o	Due to forecasted continued improving jobless rates and other economic indicators, as well as strong credit quality metrics, the Company released a substantial amount of allowance for credit losses for the quarter resulting in a reversal of $2.23 million in the provision for credit losses; a significant improvement from the $3.83 million loan loss provision recorded in the second quarter of 2020 at the onset of the COVID-19 pandemic. For the six month period, the Company reversed $6.23 million compared to $7.33 million in loan loss provision recorded for the same period in 2020.
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o	Annualized return on average equity increased to 12.55% compared to 7.97% from the same quarter of 2020, and return on on average equity for the first six months increase to 13.24% compared to 7.73% from the same period last year.
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o	Annualized return on average assets increased to 1.70% compared to 1.15% from the same quarter of 2020, while year-to-date return on average assets increased to 1.82% compared to 1.15% for the same period of 2020.
o	Non-interest income for the second quarter of 2021 increased $1.88 million, or 27.25%, compared to the prior year.  Year-to-date non-interest income increased 13.17% to $16.37 million compared to last year.  Both increases are largely attributable to the more vibrant state of local economies with increased customer activity compared with last spring.
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o	Other income includes $946 thousand of accelerated amortization that eliminates the carrying value of the indemnification asset with no anticipated claims in the future.
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1

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Balance Sheet and Asset Quality

o	Net charge-offs for the first quarter of 2021 were $476 thousand and the allowance for credit losses remains very strong at 1.48% of total loans.
o	As of June 30, 2021, total COVID-19 loan deferrals stood at $4.02 million, down significantly from the peak of $436.11 million at June 30, 2020.
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o	The SBA had forgiven $48.27 million, or 79.15%, of the Company’s first round Paycheck Protection Program loan balances through June 30, 2021. Current PPP loan balances at June 30, 2021, which include second round originations were, $41.63 million.
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o	Book value per share at June 30, 2021, was $24.66, an increase of $0.58 from year-end 2020.
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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%.  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 49 branch banking locations in Virginia, West Virginia, North Carolina, and Tennessee as of June 30, 2021. First Community Bank offers wealth management and investment advice through its Trust Division and First Community Wealth Management, which collectively managed and administered $1.27 billion in combined assets as of June 30, 2021. The Company reported consolidated assets of $3.13 billion as of June 30, 2021. 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; 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.

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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 data)	2021			2021			2020			2020			2020			2021			2020
Interest income	****	****	****	****	****	****	****	****	****	****	****	****	****	****	****	****	****	****	****	****	****
Interest and fees on loans	$	25,937		$	26,540		$	28,101		$	27,297		$	26,991		$	52,477		$	55,049
Interest on securities		435			495			549			609			713			930			1,631
Interest on deposits in banks		166			116			96			89			82			282			615
Total interest income		26,538			27,151			28,746			27,995			27,786			53,689			57,295
Interest expense	****	****	****	****	****	****	****	****	****	****	****	****	****	****	****	****	****	****	****	****	****
Interest on deposits		724			869			1,029			1,161			1,445			1,593			3,270
Interest on borrowings		-			-			-			-			2			-			4
Total interest expense		724			869			1,029			1,161			1,447			1,593			3,274
Net interest income		25,814			26,282			27,717			26,834			26,339			52,096			54,021
(Recovery of) provision for credit losses		(2,230	)		(4,001	)		634			4,703			3,831			(6,231	)		7,331
Net interest income after provision		28,044			30,283			27,083			22,131			22,508			58,327			46,690
Noninterest income		8,797			7,569			7,733			7,638			6,913			16,366			14,462
Noninterest expense		19,361			18,820			19,877			19,171			18,913			38,181			40,577
Income before income taxes		17,480			19,032			14,939			10,598			10,508			36,512			20,575
Income tax expense		4,077			4,430			3,389			2,332			2,270			8,507			4,465
Net income	$	13,403		$	14,602		$	11,550		$	8,266		$	8,238		$	28,005		$	16,110
Earnings per common share
Basic	$	0.77		$	0.83		$	0.65		$	0.47		$	0.47		$	1.59		$	0.90
Diluted		0.76			0.82			0.65			0.47			0.46			1.59			0.90
Cash dividends per common share
Regular		0.25			0.25			0.25			0.25			0.25			0.50			0.50
Weighted average shares outstanding
Basic		17,486,182			17,669,937			17,717,356			17,710,283			17,701,853			17,577,552			17,850,423
Diluted		17,536,144			17,729,185			17,751,805			17,732,428			17,728,300			17,631,330			17,888,325
Performance ratios
Return on average assets		1.70	%		1.94	%		1.54	%		1.11	%		1.15	%		1.82	%		1.15	%
Return on average common equity		12.55	%		13.94	%		10.82	%		7.83	%		7.97	%		13.24	%		7.73	%
Return on average tangible common equity^(1)^		18.40	%		20.54	%		15.96	%		11.62	%		11.91	%		19.45	%		11.51	%
(1)	A non-GAAP financial measure defined as net income divided by average stockholders' equity less average goodwill and other intangible assets
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CONDENSED CONSOLIDATED QUARTERLY NONINTEREST INCOME AND EXPENSE (Unaudited)
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	Three Months Ended															Six Months Ended
	June 30,			March 31,			December 31,			September 30,			June 30,			June 30,
(Amounts in thousands)	2021			2021			2020			2020			2020			2021			2020
Noninterest income	****	****	****	****	****	****	****	****	****	****	****	****	****	****	****	****	****	****	****	****	****
Wealth management	$	1,058		$	881		$	810		$	909		$	854		$	1,939		$	1,698
Service charges on deposits		3,098			3,031			3,478			3,250			2,560			6,129			6,291
Other service charges and fees		3,166			3,022			2,737			2,748			2,617			6,188			4,848
Net gain on sale of securities		-			-			-			-			-			-			385
Net FDIC indemnification asset amortization		(946	)		(280	)		(338	)		(383	)		(483	)		(1,226	)		(969	)
Other operating income		2,421			915			1,046			1,114			1,365			3,336			2,209
Total noninterest income	$	8,797		$	7,569		$	7,733		$	7,638		$	6,913		$	16,366		$	14,462
Noninterest expense	****	****	****	****	****	****	****	****	****	****	****	****	****	****	****	****	****	****	****	****	****
Salaries and employee benefits	$	10,216		$	10,884		$	11,119		$	10,485		$	11,015		$	21,100		$	22,401
Occupancy expense		1,115			1,275			1,225			1,228			1,275			2,390			2,590
Furniture and equipment expense		1,457			1,367			1,446			1,412			1,316			2,824			2,700
Service fees		1,513			1,335			1,232			1,581			1,329			2,848			2,852
Advertising and public relations		616			335			534			430			475			951			987
Professional fees		290			466			276			408			307			756			540
Amortization of intangibles		360			357			364			365			360			717			721
FDIC premiums and assessments		204			199			202			191			33			403			33
Merger, acquisition, and divestiture expense		-			-			-			-			-			-			1,893
Other operating expense		3,590			2,602			3,479			3,071			2,803			6,192			5,860
Total noninterest expense	$	19,361		$	18,820		$	19,877		$	19,171		$	18,913		$	38,181		$	40,577

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RECONCILIATION OF GAAP NET INCOME TO NON-GAAP ADJUSTED EARNINGS (Unaudited)
	Three Months Ended															Six Months Ended
	June 30,			March 31,			December 31,			September 30,			June 30,			June 30,
	2021			2021			2020			2020			2020			2021			2020
(Amounts in thousands, except per share data)
Net income	$	13,403		$	14,602		$	11,550		$	8,266		$	8,238		$	28,005		$	16,110
Non-GAAP adjustments:
Net (gain) loss on sale of securities		-			-			-			-			-			-			(385	)
Merger, acquisition, and divestiture expense		-			-			-			-			-			-			1,893
Other items^(1)^		-			-			-			-			-			-			-
Total adjustments		-			-			-			-			-			-			1,508
Tax effect		-			-			-			-			-			-			354
Adjusted earnings, non-GAAP	$	13,403		$	14,602		$	11,550		$	8,266		$	8,238		$	28,005		$	17,264
Adjusted diluted earnings per common share,
non-GAAP	$	0.76		$	0.82		$	0.65		$	0.47		$	0.46		$	1.59		$	0.97
Performance ratios, non-GAAP
Adjusted return on average assets		1.70	%		1.94	%		1.54	%		1.11	%		1.15	%		1.82	%		1.24	%
Adjusted return on average common equity		12.55	%		13.94	%		10.82	%		7.83	%		7.97	%		13.24	%		8.28	%
Adjusted return on average tangible
common equity^(2)^		18.40	%		20.54	%		15.96	%		11.62	%		11.91	%		19.45	%		12.33	%
(1)	A non-GAAP financial measure defined as adjusted earnings divided by average stockholders' equity less average goodwill and other intangible assets.
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AVERAGE BALANCE SHEETS AND NET INTEREST INCOME ANALYSIS (Unaudited)
	Three Months Ended June 30,
	2021							2020		****	****	****	****	****
	Average		****	****	Average Yield/			Average		****	****	Average Yield/
(Amounts in thousands)	Balance		Interest^(1)^		Rate^(1)^			Balance		Interest^(1)^		Rate^(1)^
Assets	****	****	****	****	****	****	****	****	****	****	****	****	****	****
Earning assets
Loans^(2)(3)^	$	2,134,136	$	25,979		4.88	%	$	2,129,513	$	27,040		5.11	%
Securities available for sale		84,099		508		2.42	%		103,378		839		3.26	%
Interest-bearing deposits		610,148		166		0.11	%		293,791		81		0.11	%
Total earning assets		2,828,383		26,653		3.78	%		2,526,682		27,960		4.45	%
Other assets		331,563							356,913
Total assets	$	3,159,946						$	2,883,595
Liabilities and stockholders' equity	****	****	****	****	****	****	****	****	****	****	****	****	****	****
Interest-bearing deposits
Demand deposits	$	654,767	$	33		0.02	%	$	547,445	$	98		0.07	%
Savings deposits		818,490		63		0.03	%		707,298		240		0.14	%
Time deposits		394,889		628		0.64	%		465,212		1,107		0.96	%
Total interest-bearing deposits		1,868,146		724		0.15	%		1,719,955		1,445		0.34	%
Borrowings
Retail repurchase agreements		1,266		-	N/M				1,244		1		0.14	%
Total borrowings		1,266		-		-			1,244		1		0.32	%
Total interest-bearing liabilities		1,869,412		724		0.16	%		1,721,199		1,446		0.34	%
Noninterest-bearing demand deposits		824,888							711,174
Other liabilities		37,306							35,467
Total liabilities		2,731,606							2,467,840
Stockholders' equity		428,340							415,755
Total liabilities and stockholders' equity	$	3,159,946						$	2,883,595
Net interest income, FTE^(1)^			$	25,929						$	26,514
Net interest rate spread						3.62	%						4.11	%
Net interest margin, FTE^(1)^						3.68	%						4.22	%
(1)	Interest income and average yield/rate are presented on a FTE, non-GAAP, basis using the federal statutory income tax rate of 21%.
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(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 $1.25 million and $1.50 million for the three months ended June 30, 2021 and 2020, respectively.

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AVERAGE BALANCE SHEETS AND NET INTEREST INCOME ANALYSIS (Unaudited)
	Six Months Ended June 30,
	2021							2020		****	****	****	****	****
	Average		****	****	Average Yield/			Average		****	****	Average Yield/
(Amounts in thousands)	Balance		Interest^(1)^		Rate^(1)^			Balance		Interest^(1)^		Rate^(1)^
Assets	****	****	****	****	****	****	****	****	****	****	****	****	****	****
Earning assets
Loans^(2)(3)^	$	2,149,509	$	52,561		4.93	%	$	2,105,323	$	55,145		5.27	%
Securities available for sale		83,868		1,081		2.60	%		119,744		1,899		3.19	%
Interest-bearing deposits		539,500		284		0.11	%		228,636		616		0.53	%
Total earning assets		2,772,877		53,926		3.92	%		2,453,703		57,660		4.73	%
Other assets		331,524							355,280
Total assets	$	3,104,401						$	2,808,983
Liabilities and stockholders' equity	****	****	****	****	****	****	****	****	****	****	****	****	****	****
Interest-bearing deposits
Demand deposits	$	634,000	$	72		0.02	%	$	525,024	$	188		0.07	%
Savings deposits		798,571		154		0.04	%		693,477		654		0.19	%
Time deposits		403,888		1,367		0.68	%		475,149		2,429		1.03	%
Total interest-bearing deposits		1,836,459		1,593		0.16	%		1,693,650		3,271		0.39	%
Borrowings
Retail repurchase agreements		1,250		-	N/M				1,346		3		0.39	%
FHLB advances and other borrowings		-		-		-			72		1		2.23	%
Total borrowings		1,250		-		-			1,418		4		0.57	%
Total interest-bearing liabilities		1,837,709		1,593		0.17	%		1,695,068		3,275		0.39	%
Noninterest-bearing demand deposits		801,512							655,906
Other liabilities		38,609							38,820
Total liabilities		2,677,830							2,389,794
Stockholders' equity		426,571							419,189
Total liabilities and stockholders' equity	$	3,104,401						$	2,808,983
Net interest income, FTE^(1)^			$	52,333						$	54,385
Net interest rate spread						3.75	%						4.34	%
Net interest margin, FTE^(1)^						3.81	%						4.46	%
(1)	Interest income and average yield/rate are presented on a FTE, non-GAAP, basis using the federal statutory income tax rate of 21%.
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(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 $2.44 million and $3.46 million for the six months ended June 30, 2021 and 2020, respectively.

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CONDENSED CONSOLIDATED QUARTERLY BALANCE SHEETS (Unaudited)
			March 31,			December 31,			September 30,			June 30,
(Amounts in thousands, except per share data)			2021			2020			2020			2020
Assets	****	****	****	****	****	****	****	****	****	****	****	****	****	****
Cash and cash equivalents	618,738		$	628,745		$	456,561		$	375,664		$	421,492
Debt securities available for sale	79,842			87,643			83,358			90,972			98,367
Loans held for investment, net of unearned income (includes covered loans of 7,503, 9,041, 9,680, 10,744, and 11,257, for the stated periods, respectively)	2,153,731			2,146,640			2,186,632			2,194,995			2,136,817
Allowance for credit losses (1)	(31,857	)		(34,563	)		(26,182	)		(27,277	)		(23,758	)
Loans held for investment, net	2,121,874			2,112,077			2,160,450			2,167,718			2,113,059
FDIC indemnification asset	-			946			1,223			1,598			1,943
Premises and equipment, net	53,560			57,371			57,700			60,488			62,658
Other real estate owned, noncovered	1,324			1,740			2,083			2,103			2,181
Interest receivable	8,480			8,724			9,052			9,151			8,380
Goodwill	129,565			129,565			129,565			129,565			129,565
Other intangible assets	6,352			6,712			7,069			7,433			7,798
Other assets	109,548			106,543			104,075			103,236			103,623
Total assets	3,129,283		$	3,140,066		$	3,011,136		$	2,947,928		$	2,949,066
Liabilities	****	****	****	****	****	****	****	****	****	****	****	****	****	****
Deposits
Noninterest-bearing	819,138		$	824,576		$	772,795		$	750,277		$	752,899
Interest-bearing	1,846,556			1,848,524			1,773,452			1,741,962			1,744,947
Total deposits	2,665,694			2,673,100			2,546,247			2,492,239			2,497,846
Securities sold under agreements to repurchase	994			1,519			964			956			1,100
Interest, taxes, and other liabilities	35,061			39,448			37,195			34,816			34,290
Total liabilities	2,701,749			2,714,067			2,584,406			2,528,011			2,533,236
Stockholders' equity	****	****	****	****	****	****	****	****	****	****	****	****	****	****
Common stock	17,335			17,592			17,723			17,717			17,710
Additional paid-in capital	161,853			169,173			173,345			172,980			172,601
Retained earnings	250,911			241,889			237,585			230,464			226,627
Accumulated other comprehensive loss	(2,565	)		(2,655	)		(1,923	)		(1,244	)		(1,108	)
Total stockholders' equity	427,534			425,999			426,730			419,917			415,830
Total liabilities and stockholders' equity	3,129,283		$	3,140,066		$	3,011,136		$	2,947,928		$	2,949,066
Shares outstanding at period-end	17,334,547			17,592,009			17,722,507			17,716,522			17,709,569
Book value per common share	24.66		$	24.22		$	24.08		$	23.70		$	23.48
Tangible book value per common share(2)	16.82			16.47			16.37			15.97			15.72

All values are in US Dollars.

(1)	Effective January 1, 2021, the Company adopted the current expected credit loss methodology ("CECL"); prior to January 1, 2021, the Company utilized the incurred credit loss methodology.
(2)	A non-GAAP financial measure defined as stockholders' equity less goodwill and other intangible assets, divided by shares outstanding
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7

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SELECTED CREDIT QUALITY INFORMATION (Unaudited)
	June 30,			March 31,			December 31,			September 30,			June 30,
(Amounts in thousands)	2021			2021			2020			2020			2020
Allowance for Credit Losses ^(1)^	****	****	****	****	****	****	****	****	****	****	****	****	****	****	****
Beginning balance	$	34,563		$	26,182		$	27,277		$	23,758		$	21,137
Cumulative effect of adoption of ASU 2016-13		-			13,107			-			-			-
(Recovery of) provision for credit/loan losses charged to operations		(2,230	)		(4,001	)		634			4,703			3,831
Charge-offs		(1,902	)		(1,730	)		(2,194	)		(1,563	)		(1,672	)
Recoveries		1,426			1,005			465			379			462
Net charge-offs		(476	)		(725	)		(1,729	)		(1,184	)		(1,210	)
Ending balance	$	31,857		$	34,563		$	26,182		$	27,277		$	23,758
Nonperforming Assets	****	****	****	****	****	****	****	****	****	****	****	****	****	****	****
Nonaccrual loans	$	24,085		$	26,106		$	22,003		$	24,756		$	24,770
Accruing loans past due 90 days or more		327			171			295			43			284
Troubled debt restructurings ("TDRs")^(2)^		133			308			187			456			598
Total nonperforming loans		24,545			26,585			22,485			25,255			25,652
OREO		1,324			1,740			2,083			2,103			2,181
Total nonperforming assets	$	25,869		$	28,325		$	24,568		$	27,358		$	27,833
Additional Information	****	****	****	****	****	****	****	****	****	****	****	****	****	****	****
Total Accruing TDRs^(3)^	$	8,309		$	9,027		$	10,248		$	10,936		$	11,420
Asset Quality Ratios	****	****	****	****	****	****	****	****	****	****	****	****	****	****	****
Nonperforming loans to total loans		1.14	%		1.24	%		1.03	%		1.15	%		1.20	%
Nonperforming assets to total assets		0.83	%		0.90	%		0.82	%		0.93	%		0.94	%
Allowance for credit/loan losses to nonperforming loans		129.79	%		130.01	%		116.44	%		108.01	%		92.62	%
Allowance for credit/loan losses to total loans		1.48	%		1.61	%		1.20	%		1.24	%		1.11	%
Annualized net charge-offs to average loans		0.09	%		0.14	%		0.26	%		0.22	%		0.23	%
(1)	Effective January 1, 2021, the Company adopted the current expected credit loss methodology ("CECL"); prior to January 1, 2021, the Company utilized the incurred credit loss methodology.
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(2)	Accruing TDRs restructured within the past six months or nonperforming
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(3)	Accruing total TDRs
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8