Special Dividends Cannot Make Me A Buyer Of First Community Bankshares

2026-01-07 05:19:10 ET

On December 16, First Community Bankshares ( FCBC ) declared a special dividend of $1 per share to be distributed to shareholders on January 16. This is the second year that the company has issued such a payout, as FCBC paid a special dividend of $2.07 in February of last year . This is a curious behavior for a small-cap regional bank holding company that is only expected to report earnings of $2.62 per share in FY 2025 and already pays a regular quarterly dividend of $0.31 per share. As part of its press release for this most recent dividend, the company stated the following:

The Company’s capital management plan and philosophy require the maintenance of a strong capital base from which to grow and serve customers. If current earnings are not needed to increase the capital base to fund growth in core operations or other uses, the capital management plan directs those earnings be returned to shareholders through regular cash dividends and/or stock repurchases. To the extent current earnings exceed those capital uses, the Company may declare special dividends from time to time.

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