First Community (FCCO) Q1 2025 earnings summary

Executive summary

• Net income for Q1 2025 was $4.0 million ($0.51 diluted EPS), up from $2.6 million ($0.34 diluted EPS) year-over-year, driven by higher net interest and non-interest income, but down from $4.2 million sequentially.

• Total assets grew 4.2% to $2.0 billion at March 31, 2025, with loan growth and higher interest-bearing balances.

• Total deposits reached $1.73 billion, with customer deposit growth of $49.8 million (12.1% annualized) and loan growth of $31.4 million (10.4% annualized) during the quarter.

• Net interest margin improved to 3.13% from 2.78% year-over-year, reflecting a shift to higher-yielding loans and short-term investments.

• Board approved a $0.15 per share cash dividend, marking the 93rd consecutive quarter of dividends.

Financial highlights

• Net interest income increased to $14.4 million, up 19.2% year-over-year and $500,000 sequentially, with average earning assets up $126 million.

• Non-interest income rose to $4.0 million, led by mortgage banking and investment advisory fees.

• Non-interest expense increased to $12.8 million, mainly from higher salaries, equipment, and FDIC assessments.

• Provision for credit losses was $437,000, up from $129,000, reflecting loan growth and qualitative factor adjustments.

• Tangible book value per share increased to $17.56 from $16.93 at year-end and $15.51 a year ago.

Outlook and guidance

• Management expects to remain well-capitalized for at least the next 12 months and believes liquidity and capital are sufficient to support operations and growth.

• Loan portfolio yield is expected to improve as new and renewed loans are priced above the current average.

• Interest rate risk modeling indicates net interest income is projected to decline in rising rate scenarios but increase in declining rate environments.

• Mortgage and investment advisory lines face headwinds from higher rates and low housing inventory, but recent production and AUM trends are positive.

• No material changes to risk factors or critical accounting estimates; continued focus on quality loan growth and deposit mix.