BLUEFIELD, Va., Jan. 25, 2012 (GLOBE NEWSWIRE) -- First Community Bancshares, Inc. (Nasdaq:FCBC) (www.fcbinc.com) (the "Company") today reported net income for the quarter and twelve months ended December 31, 2011. Net income to common shareholders was $2.95 million, or $0.17 per diluted common share, for the quarter ended December 31, 2011. Net income to common shareholders amounted to $19.33 million, or $1.07 per diluted common share, for the year ended December 31, 2011.
The Company also announced today that the board of directors declared a quarterly cash dividend to common stockholders of $1.78 million or ten cents ($0.10) per common share. The quarterly dividend is payable to common stockholders of record February 10, 2012, and is expected to be paid on or about February 24, 2012. The current year marks the 26th consecutive year of cash dividends to stockholders.
Fourth Quarter 2011 Highlights –
- The loan loss provision was lower by $1.25 million, or 33.91%, as compared to the fourth quarter of 2010.
- Tax-equivalent net interest margin improved to 3.93%, an increase of 15 basis points when compared to the fourth quarter of 2010.
- Deposit service charges increased 3.54% over the fourth quarter of 2010.
- Operating costs decreased 14.06%, as compared to the fourth quarter of 2010.
- The Company's efficiency ratio of 54.93% for the fourth quarter of 2011 showed improvement over the ratios reported in the third quarter of 2011 of 56.84% and the fourth quarter of 2010 of 64.82%.
- The Company's loan portfolio grew $21.41 million, or 1.56%, during the fourth quarter of 2011.
- The Company significantly exceeds regulatory "well-capitalized" targets with a total risk-based capital ratio of 18.15%, Tier 1 risk-based capital ratio of 16.89%, and a Tier 1 leverage ratio of 11.50% at December 31, 2011.
- Tangible book value per common share increased to $11.40, an increase of $1.37, or 13.66%, since December 31, 2010.
Net Interest Income
Tax-equivalent net interest margin for the fourth quarter of 2011 was 3.93%, compared to 3.78% in the comparable quarter of 2010. Net interest income was $18.27 million for the fourth quarter of 2011, an increase of $167 thousand, or 0.01%, from the fourth quarter of 2010. Total interest income was $23.20 million for the fourth quarter of 2011, a decrease of $1.77 million, or 7.10%, from the fourth quarter of 2010. The decrease in interest income reflects a degree of continued loan and investment repricing, effectively reducing the average yields. The yield on loans was 5.69% for the fourth quarter of 2011, a decrease from 5.94% in the same period of the prior year, while average loans decreased slightly between the comparable periods to $1.39 billion as loan demand remains low.
Total interest expense for the fourth quarter of 2011 was $4.94 million, a decrease of $1.94 million, or 28.23%, from the fourth quarter of 2010. Fourth quarter 2011 deposit costs decreased $1.77 million compared to the fourth quarter of 2010, which was primarily due to a decrease in the average rate paid on interest-bearing deposits of 43 basis points to 0.79%. Fourth quarter 2011 borrowing costs decreased $171 thousand compared to the fourth quarter of 2010, while the average borrowings balance decreased $49.40 million between the comparable periods due to the redemption of various wholesale borrowings and declining commercial cash management balances. The cost of interest-bearing liabilities decreased 33 basis points to 1.21% during the fourth quarter of 2011 as compared to the same quarter of the prior year. Average interest-bearing liabilities decreased $156.96 million, or 8.86%, for the fourth quarter of 2011 compared with the fourth quarter of 2010, which included a decrease of $25.24 million in Federal Home Loan Bank ("FHLB") borrowings and other long-term debt.
Provision
The provision for loan losses for the fourth quarter and twelve months ended December 31, 2011, totaled $2.44 million and $9.05 million, respectively, which compares very favorably to the provision for loan losses for the fourth quarter and twelve months ended December 31, 2010, of $3.69 million and $14.76 million, respectively. The fourth quarter of 2011 marks the sixth consecutive quarter of provision decreases when compared to the prior year's comparable quarter.
Noninterest Income
Noninterest income for the fourth quarter of 2011 decreased $5.48 million, or 45.35%, compared to the fourth quarter of 2010, largely due to a reduction in realized gains on the investment securities portfolio. During the fourth quarter of 2011, wealth management income totaled $818 thousand, a decrease of $204 thousand, or 19.96%, from the fourth quarter of 2010. The Trust and Wealth Management Divisions reported $873 million in assets under management at December 31, 2011. Service charges on deposit accounts totaled $3.45 million for the fourth quarter of 2011, an increase of $118 thousand, or 3.54%, from the fourth quarter of 2010. Insurance commissions were $1.17 million for the fourth quarter of 2011, a decrease of $304 thousand, or 20.62%, from the comparable quarter of 2010. Net gains on the sales of securities decreased $4.22 million, or 99.39%, in the fourth quarter of 2011 as compared to the same period of the prior year.
Noninterest Expenses
Noninterest expenses for the fourth quarter of 2011 decreased $2.79 million, or 14.06%, compared to the fourth quarter of 2010. Salaries and employee benefits decreased $1.42 million, or 15.19%, in the fourth quarter of 2011 compared to the same period in the prior year. Occupancy, furniture, and equipment expense for the fourth quarter of 2011 decreased $158 thousand, or 6.19%, compared to the fourth quarter of 2010. Federal Deposit Insurance Corporation ("FDIC") deposit insurance premiums decreased $383 thousand, or 52.68%, in the fourth quarter of 2011, compared to the fourth quarter of 2010, primarily due to the FDIC's change in assessment methodology for deposit insurance to one based on tangible assets. As of December 31, 2011, the Company recognized a technical goodwill impairment of $1.24 million at the insurance agency despite strong operating earnings and good realization on recent sales of non-strategic segments of that business. Other operating expenses were $4.93 million for the fourth quarter of 2011, a decrease of $1.02 million, or 17.16%, from the fourth quarter of 2010. Included in other operating expenses are expenses and losses associated with other real estate that amounted to $694 thousand in the fourth quarter of 2011, compared to $675 thousand in the third quarter of 2011, and $1.12 million in the fourth quarter of 2010. The efficiency ratio for the fourth quarter of 2011 declined to 54.93%, a significant improvement over both the third quarter of 2011 and the fourth quarter of 2010.
Credit Quality
The Company's loan quality measures at December 31, 2011, continue to compare favorably to the industry. Total loan delinquencies of 30 days or more, including non-accrual loans, as a percent of total loans were 2.62% at both December 31, 2011 and December 31, 2010. This compares favorably to the most recent Federal Reserve report of the Company's peer group of bank holding companies with total assets between $1 and $3 billion, which reports peer total loan delinquencies of 3.86%. The ratio of the allowance for loan losses as a percent of loans held for investment was 1.88% at December 31, 2011, compared to 1.91% at December 31, 2010.
Total non-performing assets, which include unseasoned loan restructurings and other real estate owned, were 1.57% of total assets at December 31, 2011, and non-performing loans as a percentage of loans held for investment were 2.00%. These levels are much better by comparison with those in the Federal Reserve peer group which were last reported at 3.08% for total non-performing assets to total assets and 3.26% for non-performing loans to total loans. Included in non-performing assets are $3.50 million of unseasoned loan restructurings at December 31, 2011.
Annualized net charge-offs were 0.75% of average loans held for investment for the fourth quarter of 2011. This represents a decrease of 28 basis points from 1.03% for the fourth quarter of 2010 and continues a general downward trend in net charge-offs.
Balance Sheet and Capital
Consolidated assets were $2.16 billion at December 31, 2011. Total stockholders' equity was $305.73 million at December 31, 2011, resulting in a book value per common share, on an as-converted basis, of $15.96, compared to total stockholders' equity of $269.88 million and a book value per common share of $15.11 at December 31, 2010. During the fourth quarter of 2011, the Company repurchased 33,200 treasury shares. The Company also paid a $0.10 per share cash dividend on common shares during the fourth quarter of 2011.
The Company will host an investor and media teleconference and webcast on Thursday, January 26, 2012, at 11:00 a.m. To access the teleconference, the toll-free number is (877) 407-8033. Alternatively, individuals may listen to the live or archived webcast of the conference call. To listen to the webcast, visit www.fcbinc.com and follow the link under the Investor Relations section. The Company's press release and financial summary will be available in this section, as well. Copies of the Company's fourth quarter 2011 earnings press release and financial summary will also be made available upon request via fax, email or postal service mail. To request a copy, contact David D. Brown, Chief Financial Officer, at (276) 326-9000.
Non-GAAP Presentations
The Company prepares its financial statements under accounting principles generally accepted in the United States, or "GAAP." However, this press release also refers to certain non-GAAP financial measures that we believe, when considered together with GAAP financial measures, provide investors with important information regarding our operational performance. An analysis of any non-GAAP financial measure should be used in conjunction with results presented in accordance with GAAP.
Core earnings are a non-GAAP financial measure that reflect net income excluding non-recurring income and expense items, taxes, loan loss provisions, losses on other real estate owned, as well as gains, losses, impairment losses on securities, and goodwill impairments from net income. These excluded items are difficult to predict and we believe that core earnings provide the Company and investors with a valuable tool to evaluate the Company's financial results.
The adjusted efficiency ratio is a non-GAAP financial measure that is computed by dividing core noninterest expense by the sum of net interest income on a tax equivalent basis and core noninterest income. We believe that this measure provides investors with important information about our operating efficiency. Comparison of our adjusted efficiency ratio with those of other companies may not be possible because other companies may calculate the adjusted efficiency ratio differently.
Tangible book value per share is a non-GAAP financial measure that is defined as stockholders' equity less goodwill and other intangible assets, divided by as-converted common shares outstanding.
About First Community Bancshares, Inc.
First Community Bancshares, Inc., headquartered in Bluefield, Virginia, is a $2.16 billion financial holding company and is the parent company of First Community Bank. First Community Bank operates through fifty-one locations in the four states of Virginia, West Virginia, North Carolina, and Tennessee. First Community Bank offers wealth management and investment services through its Trust & Financial Services Division and First Community Wealth Management, a registered investment advisory firm. The Company's Trust and Wealth Management Divisions managed assets with a market value of $873 million at December 31, 2011. The Company is also the parent company of Greenpoint Insurance Group, Inc., a full-service insurance agency headquartered in High Point, North Carolina, that operates six offices. The Company's common stock is traded on the NASDAQ Global Select Market under the symbol, "FCBC". Additional investor information can be found on the Internet at www.fcbinc.com.
The First Community Bancshares, Inc. logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=6960
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 year ended. Pursuant to the Private Securities Litigation Reform Act of 1995, the Company does not undertake to update forward-looking statements contained within this news release.
| First Community Bancshares, Inc. | ||||
| Condensed Consolidated Statements of Income | ||||
| Three Months Ended | Year Ended | |||
| (Unaudited) | December 30, | December 30, | ||
| (In Thousands, Except Share and Per Share Data) | 2011 | 2010 | 2011 | 2010 |
| Interest Income | ||||
| Interest and fees on loans held for investment | $ 19,947 | $ 20,950 | $ 80,580 | $ 84,741 |
| Interest on securities --- taxable | 2,023 | 2,293 | 8,117 | 12,704 |
| Interest on securities --- nontaxable | 1,190 | 1,672 | 5,194 | 5,943 |
| Interest on deposits in banks | 41 | 60 | 285 | 194 |
| Total interest income | 23,201 | 24,975 | 94,176 | 103,582 |
| Interest Expense | ||||
| Interest on deposits | 2,637 | 4,407 | 12,788 | 19,887 |
| Interest on borrowings | 2,298 | 2,469 | 9,359 | 9,838 |
| Total interest expense | 4,935 | 6,876 | 22,147 | 29,725 |
| Net interest income | 18,266 | 18,099 | 72,029 | 73,857 |
| Provision for loan losses | 2,436 | 3,686 | 9,047 | 14,757 |
| Net interest income after provision for loan losses | 15,830 | 14,413 | 62,982 | 59,100 |
| Noninterest Income | ||||
| Wealth management income | 818 | 1,022 | 3,510 | 3,828 |
| Service charges on deposit accounts | 3,450 | 3,332 | 13,238 | 13,128 |
| Other service charges and fees | 1,429 | 1,299 | 5,722 | 5,074 |
| Insurance commissions | 1,170 | 1,474 | 6,197 | 6,727 |
| Net impairment losses recognized in earnings | (1,548) | -- | (2,285) | (185) |
| Net gains on sale of securities | 26 | 4,248 | 5,264 | 8,273 |
| Other operating income | 1,261 | 713 | 3,888 | 3,663 |
| Total noninterest income | 6,606 | 12,088 | 35,534 | 40,508 |
| Noninterest Expense | ||||
| Salaries and employee benefits | 7,903 | 9,319 | 34,126 | 34,528 |
| Occupancy expense of bank premises | 1,589 | 1,586 | 6,280 | 6,438 |
| Furniture and equipment expense | 804 | 965 | 3,490 | 3,713 |
| Amortization of intangible assets | 250 | 263 | 1,020 | 1,032 |
| FDIC premiums and assessments | 344 | 727 | 1,984 | 2,856 |
| Prepayment penalties on FHLB advances | -- | -- | 471 | -- |
| Goodwill impairment | 1,239 | 1,039 | 1,239 | 1,039 |
| Other operating expense | 4,925 | 5,945 | 20,305 | 20,337 |
| Total noninterest expense | 17,054 | 19,844 | 68,915 | 69,943 |
| Income before income taxes | 5,382 | 6,657 | 29,601 | 29,665 |
| Income tax expense | 2,151 | 1,772 | 9,573 | 7,818 |
| Net income | 3,231 | 4,885 | 20,028 | 21,847 |
| Dividends on preferred stock | 286 | -- | 703 | -- |
| Net income available to common shareholders | $ 2,945 | $ 4,885 | $ 19,325 | $ 21,847 |
| Per Share | ||||
| Basic earnings per common share | $ 0.16 | $ 0.27 | $ 1.08 | $ 1.23 |
| Diluted earnings per common share | $ 0.17 | $ 0.27 | $ 1.07 | $ 1.23 |
| Weighted average shares outstanding: | ||||
| Basic | 17,849,286 | 17,845,857 | 17,877,421 | 17,802,009 |
| Diluted | 19,159,090 | 17,891,807 | 18,691,081 | 17,822,944 |
| For the period: | ||||
| Return on average assets | 0.54% | 0.85% | 0.88% | 0.97% |
| Return on average common equity | 4.06% | 7.00% | 6.81% | 8.11% |
| Cash dividends per common share | $ 0.10 | $ 0.10 | $ 0.40 | $ 0.40 |
| First Community Bancshares, Inc. | |||||
| Condensed Quarterly Statements of Income | |||||
| As of and for the Quarter Ended | |||||
| (Unaudited) | December 31, | September 30, | June 30, | March 31, | December 31, |
| (In Thousands, Except Share and Per Share Data) | 2011 | 2011 | 2011 | 2011 | 2010 |
| Interest Income | |||||
| Interest and fees on loans held for investment | $ 19,947 | $ 20,084 | $ 20,094 | $ 20,455 | $ 20,950 |
| Interest on securities --- taxable | 2,023 | 1,711 | 1,850 | 2,533 | 2,293 |
| Interest on securities --- nontaxable | 1,190 | 1,180 | 1,291 | 1,533 | 1,672 |
| Interest on deposits in banks | 41 | 75 | 100 | 69 | 60 |
| Total interest income | 23,201 | 23,050 | 23,335 | 24,590 | 24,975 |
| Interest Expense | |||||
| Interest on deposits | 2,637 | 2,998 | 3,273 | 3,880 | 4,407 |
| Interest on borrowings | 2,298 | 2,318 | 2,308 | 2,435 | 2,469 |
| Total interest expense | 4,935 | 5,316 | 5,581 | 6,315 | 6,876 |
| Net interest income | 18,266 | 17,734 | 17,754 | 18,275 | 18,099 |
| Provision for loan losses | 2,436 | 1,920 | 3,079 | 1,612 | 3,686 |
| Net interest income after provision for loan losses | 15,830 | 15,814 | 14,675 | 16,663 | 14,413 |
| Noninterest Income | |||||
| Wealth management income | 818 | 868 | 930 | 894 | 1,022 |
| Service charges on deposit accounts | 3,450 | 3,404 | 3,353 | 3,031 | 3,332 |
| Other service charges and fees | 1,429 | 1,426 | 1,461 | 1,406 | 1,299 |
| Insurance commissions | 1,170 | 1,523 | 1,561 | 1,943 | 1,474 |
| Net impairment losses recognized in earnings | (1,548) | (210) | -- | (527) | -- |
| Net gains on sale of securities | 26 | 178 | 3,224 | 1,836 | 4,248 |
| Other operating income | 1,261 | 877 | 834 | 916 | 713 |
| Total noninterest income | 6,606 | 8,066 | 11,363 | 9,499 | 12,088 |
| Noninterest Expense | |||||
| Salaries and employee benefits | 7,903 | 8,409 | 8,685 | 9,129 | 9,319 |
| Occupancy expense of bank premises | 1,589 | 1,476 | 1,568 | 1,647 | 1,586 |
| Furniture and equipment expense | 804 | 862 | 909 | 915 | 965 |
| Amortization of intangible assets | 250 | 250 | 261 | 259 | 263 |
| FDIC premiums and assessments | 344 | 348 | 414 | 878 | 727 |
| Prepayment penalties on FHLB advances | -- | -- | -- | 471 | -- |
| Goodwill impairment | 1,239 | -- | -- | -- | 1,039 |
| Other operating expense | 4,925 | 4,715 | 5,901 | 4,764 | 5,945 |
| Total noninterest expense | 17,054 | 16,060 | 17,738 | 18,063 | 19,844 |
| Income before income taxes | 5,382 | 7,820 | 8,300 | 8,099 | 6,657 |
| Income tax expense | 2,151 | 2,502 | 2,572 | 2,348 | 1,772 |
| Net income | 3,231 | 5,318 | 5,728 | 5,751 | 4,885 |
| Dividends on preferred stock | 286 | 286 | 131 | -- | -- |
| Net income available to common shareholders | $ 2,945 | $ 5,032 | $ 5,597 | $ 5,751 | $ 4,885 |
| Per Share | |||||
| Basic earnings per common share | $ 0.16 | $ 0.28 | $ 0.31 | $ 0.32 | $ 0.27 |
| Diluted earnings per common share | $ 0.17 | $ 0.28 | $ 0.31 | $ 0.32 | $ 0.27 |
| Cash dividends per common share | $ 0.10 | $ 0.10 | $ 0.10 | $ 0.10 | $ 0.10 |
| Weighted average shares outstanding: | |||||
| Basic | 17,849,286 | 17,896,534 | 17,895,904 | 17,867,953 | 17,845,857 |
| Diluted | 19,159,090 | 19,205,634 | 18,534,489 | 17,887,118 | 17,891,807 |
| First Community Bancshares, Inc. | ||||
| Reconciliation of GAAP Net Income to Core Earnings | ||||
| Three Months Ended | Year Ended | |||
| (Unaudited) | December 31, | December 31, | ||
| (In Thousands, Except Per Share Data) | 2011 | 2010 | 2011 | 2010 |
| Net income, GAAP | $ 3,231 | $ 4,885 | $ 20,028 | $ 21,847 |
| Non-GAAP adjustments: | ||||
| Security gains | (26) | (4,248) | (5,264) | (8,273) |
| FHLB debt prepayment fees | -- | -- | 471 | -- |
| Other-than-temporary security impairments | 1,548 | -- | 2,285 | 185 |
| Goodwill impairment | 1,239 | 1,039 | 1,239 | 1,039 |
| Intangibles amortization | 250 | 263 | 1,020 | 1,032 |
| Other non-core items | -- | -- | 59 | 4 |
| Total adjustments to core earnings | 3,011 | (2,946) | (190) | (6,013) |
| Tax effect | 1,129 | (1,105) | (71) | (2,255) |
| Core earnings, non-GAAP | $ 5,113 | $ 3,044 | $ 19,909 | $ 18,089 |
| Core return on average assets | 0.94% | 0.53% | 0.91% | 0.80% |
| Core return on average common equity | 7.05% | 4.36% | 7.02% | 6.71% |
| Core diluted earnings per common share | $0.27 | $0.17 | $1.07 | $1.01 |
| Efficiency Ratio Calculation | ||||
| Three Months Ended | Year Ended | |||
| (Unaudited) | December 31, | December 31, | ||
| (In Thousands) | 2011 | 2010 | 2011 | 2010 |
| Noninterest expense, GAAP | $ 17,054 | $ 19,844 | $ 68,915 | $ 69,943 |
| Non-GAAP adjustments: | ||||
| FHLB debt prepayment fees | -- | -- | (471) | -- |
| OREO expenses | (694) | (1,118) | (3,441) | (3,079) |
| Goodwill impairment | (1,239) | (1,039) | (1,239) | (1,039) |
| Intangibles amortization | (250) | (263) | (1,020) | (1,032) |
| Other non-core items | -- | -- | (77) | (4) |
| Adjusted noninterest expense | 14,871 | 17,424 | 62,667 | 64,789 |
| Net interest income, GAAP | 18,266 | 18,099 | 72,029 | 73,857 |
| Noninterest income, GAAP | 6,606 | 12,088 | 35,534 | 40,508 |
| Non-GAAP adjustments: | ||||
| Tax-equivalency adjustment | 681 | 941 | 2,959 | 3,364 |
| Security gains | (26) | (4,248) | (5,264) | (8,273) |
| Other-than-temporary security impairments | 1,548 | -- | 2,285 | 185 |
| Other non-core items | -- | -- | (18) | -- |
| Adjusted net interest and noninterest income | 27,075 | 26,880 | 107,525 | 109,641 |
| Efficiency Ratio | 54.93% | 64.82% | 58.28% | 59.09% |
| First Community Bancshares, Inc. | |||||
| Quarterly Balance Sheets | |||||
| For the Quarter Ended | |||||
| (Unaudited) | December 31, | September 30, | June 30, | March 31, | December 31, |
| (Dollars In Thousands) | 2011 | 2011 | 2011 | 2011 | 2010 |
| Cash and due from banks | $ 34,578 | $ 38,776 | $ 31,451 | $ 52,684 | $ 28,816 |
| Federal funds sold | 1,909 | 103,179 | 162,629 | 121,974 | 81,526 |
| Interest-bearing balances with banks | 10,807 | 6,365 | 36,539 | 809 | 1,847 |
| Total cash and cash equivalents | 47,294 | 148,320 | 230,619 | 175,467 | 112,189 |
| Securities available-for-sale | 482,430 | 449,387 | 349,976 | 430,965 | 480,064 |
| Securities held-to-maturity | 3,490 | 3,342 | 4,106 | 4,524 | 4,637 |
| Loans held for sale | 5,820 | 3,575 | 920 | 2,614 | 4,694 |
| Loans held for investment, net of unearned income | 1,396,067 | 1,374,656 | 1,373,944 | 1,375,685 | 1,386,206 |
| Less allowance for loan losses | 26,205 | 26,407 | 26,482 | 26,482 | 26,482 |
| Net loans | 1,375,682 | 1,351,824 | 1,348,382 | 1,351,817 | 1,364,418 |
| Premises and equipment, net | 54,721 | 54,860 | 55,808 | 56,189 | 56,244 |
| Other real estate owned | 5,914 | 5,942 | 5,585 | 5,644 | 4,910 |
| Interest receivable | 6,193 | 6,264 | 6,202 | 7,288 | 7,675 |
| Goodwill | 83,056 | 83,832 | 85,132 | 84,930 | 84,914 |
| Other intangible assets | 4,326 | 4,576 | 5,205 | 5,466 | 5,725 |
| Other assets | 101,683 | 111,745 | 115,385 | 118,690 | 123,462 |
| Total assets | $ 2,164,789 | $ 2,220,092 | $ 2,206,400 | $ 2,240,980 | $ 2,244,238 |
| Deposits: | |||||
| Noninterest-bearing demand | $ 240,268 | $ 233,683 | $ 219,488 | $ 222,072 | $ 205,151 |
| Interest-bearing demand | 275,156 | 295,804 | 271,622 | 287,006 | 262,420 |
| Savings | 394,707 | 396,767 | 405,409 | 420,481 | 426,547 |
| Time | 633,336 | 664,237 | 683,157 | 707,458 | 726,837 |
| Total deposits | 1,543,467 | 1,590,491 | 1,579,676 | 1,637,017 | 1,620,955 |
| Interest, taxes and other liabilities | 20,452 | 20,030 | 20,563 | 20,459 | 21,318 |
| Securities sold under agreements to repurchase | 129,208 | 139,510 | 137,778 | 139,472 | 140,894 |
| FHLB borrowings | 150,000 | 150,000 | 150,000 | 150,000 | 175,000 |
| Other indebtedness | 15,933 | 15,941 | 16,179 | 16,186 | 16,193 |
| Total liabilities | 1,859,060 | 1,915,972 | 1,904,196 | 1,963,134 | 1,974,360 |
| Preferred stock, net of discount | 18,921 | 18,921 | 18,921 | -- | -- |
| Common stock | 18,083 | 18,083 | 18,083 | 18,083 | 18,083 |
| Additional paid-in capital | 188,118 | 188,243 | 188,278 | 188,742 | 189,239 |
| Retained earnings | 93,656 | 92,498 | 89,257 | 85,450 | 81,486 |
| Treasury stock, at cost | (5,721) | (5,651) | (5,137) | (5,851) | (6,740) |
| Accumulated other comprehensive loss | (7,328) | (7,974) | (7,198) | (8,578) | (12,190) |
| Total stockholders' equity | 305,729 | 304,120 | 302,204 | 277,846 | 269,878 |
| Total liabilities and stockholders' equity | $ 2,164,789 | $ 2,220,092 | $ 2,206,400 | $ 2,240,980 | $ 2,244,238 |
| Actual shares outstanding at period end | 17,849,376 | 17,869,514 | 17,917,824 | 17,894,899 | 17,866,335 |
| Book value per common share at period end (1) | $ 15.96 | $ 15.86 | $ 15.72 | $ 15.53 | $ 15.11 |
| Tangible book value per common share at period end (2) | $ 11.40 | $ 11.25 | $ 11.02 | $ 10.48 | $ 10.03 |
| (1) Book value per common share is defined as stockholders' equity divided by as-converted common shares outstanding. | |||||
| (2) Tangible book value per common share is defined as stockholders' equity less goodwill and other intangibles divided by as-converted common shares outstanding. | |||||
| First Community Bancshares, Inc. | |||||
| Selected Credit Quality Information | |||||
| As of and for the Quarter Ended | |||||
| (Unaudited) | December 31, | September 30, | June 30, | March 31, | December 31, |
| (Dollars in Thousands) | 2011 | 2011 | 2011 | 2011 | 2010 |
| Summary of Loan Loss Experience | |||||
| Allowance for loan losses: | |||||
| Beginning balance | $ 26,407 | $ 26,482 | $ 26,482 | $ 26,482 | $ 26,420 |
| Provision for loan losses | 2,436 | 1,920 | 3,079 | 1,612 | 3,686 |
| Charge-offs | (2,915) | (3,062) | (3,456) | (2,027) | (3,846) |
| Recoveries | 277 | 1,067 | 377 | 415 | 222 |
| Net charge-offs | (2,638) | (1,995) | (3,079) | (1,612) | (3,624) |
| Ending balance | $ 26,205 | $ 26,407 | $ 26,482 | $ 26,482 | $ 26,482 |
| Summary of Asset Quality | |||||
| Non-accrual loans | $ 24,487 | $ 22,877 | $ 22,037 | $ 17,703 | $ 19,414 |
| Restructured loans | 3,496 | 964 | 878 | 1,509 | 5,325 |
| Loans 90 days or more past due and still accruing | -- | -- | -- | -- | -- |
| Total non-performing loans | 27,983 | 23,841 | 22,915 | 19,212 | 24,739 |
| Other real estate owned | 5,914 | 5,942 | 5,585 | 5,644 | 4,910 |
| Total non-performing assets | $ 33,897 | $ 29,783 | $ 28,500 | $ 24,856 | $ 29,649 |
| Restructured loans performing in accordance with terms | $ 827 | $ 1,156 | $ 7,044 | $ 7,519 | $ 3,911 |
| Asset Quality Ratios | |||||
| Non-performing loans as a percentage of loans held for investment | 2.00% | 1.73% | 1.67% | 1.40% | 1.78% |
| Non-performing assets as a percentage of total assets | 1.57% | 1.34% | 1.29% | 1.11% | 1.32% |
| Annualized net charge-offs as a percentage of average loans held for investment | 0.75% | 0.57% | 0.90% | 0.47% | 1.03% |
| Allowance for loan losses as a percentage of loans held for investment | 1.88% | 1.92% | 1.93% | 1.93% | 1.91% |
| Ratio of allowance for loan losses to non-performing loans | 0.94 | 1.11 | 1.16 | 1.38 | 1.07 |
| First Community Bancshares, Inc. | |||
| Non-accrual Loan Detail | |||
| As of December 31, 2011 | |||
| Non-accrual | |||
| (Unaudited) | Loans | Non-accrual | Loans to Loans |
| (Dollars in Thousands) | Outstanding | Loans | Outstanding |
| Commercial | |||
| Construction -- commercial | $ 35,482 | $ 461 | 1.30% |
| Land development | 2,902 | 297 | 10.23% |
| Other land loans | 23,384 | 279 | 1.19% |
| Commercial and industrial | 91,939 | 4,312 | 4.69% |
| Multi-family residential | 77,050 | 341 | 0.44% |
| Single family non-owner occupied | 106,743 | 1,639 | 1.54% |
| Non-farm, non-residential | 336,005 | 8,063 | 2.40% |
| Agricultural | 1,374 | -- | 0.00% |
| Farmland | 37,161 | 271 | 0.73% |
| Total commercial | 712,040 | 15,663 | 2.20% |
| Consumer real estate | |||
| Home equity lines | 111,387 | 516 | 0.46% |
| Single family owner occupied | 473,067 | 8,255 | 1.74% |
| Owner occupied construction | 19,577 | 1 | 0.01% |
| Total consumer real estate | 604,031 | 8,772 | 1.45% |
| Consumer and other | |||
| Consumer loans | 67,129 | 52 | 0.08% |
| Other loans | 12,867 | -- | 0.00% |
| Total consumer and other | 79,996 | 52 | 0.07% |
| Total loans | $ 1,396,067 | $ 24,487 | 1.75% |
| First Community Bancshares, Inc. | |||||
| Selected Financial Information | |||||
| As of and for the Quarter Ended | |||||
| (Unaudited) | December 31, | September 30, | June 30, | March 31, | December 31, |
| (Dollars in Thousands) | 2011 | 2011 | 2011 | 2011 | 2010 |
| Ratios | |||||
| Return on average assets | 0.54% | 0.91% | 1.02% | 1.05% | 0.85% |
| Return on average common equity | 4.06% | 6.94% | 7.91% | 8.47% | 7.00% |
| Net interest margin | 3.93% | 3.77% | 3.83% | 3.96% | 3.78% |
| Efficiency ratio for the quarter | 54.93% | 56.84% | 59.03% | 62.27% | 64.82% |
| Efficiency ratio year-to-date | 58.28% | 59.41% | 60.67% | 62.27% | 59.09% |
| Equity as a percent of total assets at end of period | 14.12% | 13.70% | 13.70% | 12.40% | 12.03% |
| Average earning assets as a percentage of average total assets | 88.27% | 88.39% | 88.11% | 88.07% | 87.69% |
| Average loans as a percentage of average deposits | 89.45% | 87.15% | 85.57% | 84.78% | 85.54% |
| Average Balances | |||||
| Investments | $ 479,638 | $ 417,291 | $ 386,706 | $ 470,833 | $ 498,090 |
| Loans | 1,392,650 | 1,379,144 | 1,373,988 | 1,382,526 | 1,402,178 |
| Earning assets | 1,913,768 | 1,936,720 | 1,935,470 | 1,961,538 | 1,996,106 |
| Total assets | 2,168,166 | 2,191,145 | 2,196,691 | 2,227,255 | 2,276,257 |
| Deposits | 1,556,990 | 1,582,481 | 1,605,694 | 1,630,701 | 1,639,154 |
| Interest-bearing deposits | 1,320,186 | 1,357,938 | 1,386,292 | 1,418,807 | 1,427,746 |
| Borrowings | 295,303 | 300,751 | 297,857 | 316,864 | 344,704 |
| Interest-bearing liabilities | 1,615,489 | 1,658,689 | 1,684,149 | 1,735,671 | 1,772,450 |
| Equity | 306,779 | 306,524 | 291,474 | 275,350 | 276,723 |
| Tax-equivalent net interest income | 18,947 | 18,410 | 18,490 | 19,141 | 19,040 |
| First Community Bancshares, Inc. | ||||||
| Consolidated Average Balance Sheets, Yields, and Rates | ||||||
| Three Months Ended December 31, | ||||||
| 2011 | 2010 | |||||
| (Unaudited) | Average | Interest | Average | Average | Interest | Average |
| (Dollars in Thousands) | Balance | (1) | Rate (1) | Balance | (1) | Rate (1) |
| Earning assets | ||||||
| Loans held for investment (2) | $ 1,392,650 | $ 19,987 | 5.69% | $ 1,402,178 | $ 20,992 | 5.94% |
| Securities available-for-sale | 476,244 | 3,784 | 3.15% | 493,018 | 4,751 | 3.82% |
| Securities held-to-maturity | 3,394 | 70 | 8.18% | 5,072 | 113 | 8.84% |
| Interest-bearing deposits with banks | 41,480 | 41 | 0.39% | 95,838 | 60 | 0.25% |
| Total earning assets | 1,913,768 | 23,882 | 4.95% | 1,996,106 | 25,916 | 5.15% |
| Other assets | 254,398 | 280,151 | ||||
| Total | $ 2,168,166 | $ 2,276,257 | ||||
| Interest-bearing liabilities | ||||||
| Interest-bearing demand deposits | $ 277,722 | $ 27 | 0.04% | $ 266,938 | $ 256 | 0.38% |
| Savings deposits | 395,530 | 117 | 0.12% | 426,030 | 468 | 0.44% |
| Time deposits | 646,934 | 2,493 | 1.53% | 734,778 | 3,683 | 1.99% |
| Fed funds purchased | 308 | -- | 0.00% | -- | -- | -- |
| Retail repurchase agreements | 79,114 | 103 | 0.52% | 103,580 | 219 | 0.84% |
| Wholesale repurchase agreements | 50,000 | 479 | 3.80% | 50,000 | 469 | 3.72% |
| FHLB borrowings & other long-term debt | 165,881 | 1,716 | 4.10% | 191,124 | 1,781 | 3.70% |
| Total interest-bearing liabilities | 1,615,489 | 4,935 | 1.21% | 1,772,450 | 6,876 | 1.54% |
| Noninterest-bearing demand deposits | 236,804 | 211,408 | ||||
| Other liabilities | 9,094 | 15,676 | ||||
| Stockholders' equity | 306,779 | 276,723 | ||||
| Total | $ 2,168,166 | $ 2,276,257 | ||||
| Net interest income, tax-equivalent | $ 18,947 | $ 19,040 | ||||
| Net interest rate spread (3) | 3.74% | 3.61% | ||||
| Net interest margin (4) | 3.93% | 3.78% | ||||
| (1) Fully taxable equivalent at the rate of 35%. | ||||||
| (2) Non-accrual loans are included in average balances outstanding but with no related interest income during the period of non-accrual. | ||||||
| (3) Represents the difference between the yield on earning assets and cost of funds. | ||||||
| (4) Represents tax-equivalent net interest income divided by average earning assets. | ||||||
| First Community Bancshares, Inc. | ||||||
| Consolidated Average Balance Sheets, Yields, and Rates | ||||||
| Year Ended December 31, | ||||||
| 2011 | 2010 | |||||
| (Unaudited) | Average | Interest | Average | Average | Interest | Average |
| (Dollars in Thousands) | Balance | (1) | Rate (1) | Balance | (1) | Rate (1) |
| Earning assets | ||||||
| Loans held for investment (2) | $ 1,382,097 | $ 80,742 | 5.84% | $ 1,400,061 | $ 84,906 | 6.06% |
| Securities available-for-sale | 434,583 | 15,775 | 3.63% | 492,703 | 21,313 | 4.33% |
| Securities held-to-maturity | 3,999 | 333 | 8.32% | 6,299 | 533 | 8.46% |
| Interest-bearing deposits with banks | 116,063 | 285 | 0.25% | 81,987 | 194 | 0.24% |
| Total earning assets | 1,936,742 | 97,135 | 5.01% | 1,981,050 | 106,946 | 5.40% |
| Other assets | 258,897 | 282,005 | ||||
| Total | $ 2,195,639 | $ 2,263,055 | ||||
| Interest-bearing liabilities | ||||||
| Interest-bearing demand deposits | $ 277,263 | $ 431 | 0.16% | $ 252,471 | $ 980 | 0.39% |
| Savings deposits | 410,240 | 886 | 0.22% | 421,184 | 2,751 | 0.65% |
| Time deposits | 682,997 | 11,471 | 1.68% | 760,286 | 16,156 | 2.12% |
| Fed funds purchased | 77 | -- | 0.00% | -- | -- | -- |
| Retail repurchase agreements | 83,564 | 544 | 0.65% | 97,531 | 992 | 1.02% |
| Wholesale repurchase agreements | 50,000 | 1,887 | 3.77% | 50,000 | 1,872 | 3.74% |
| FHLB borrowings & other long-term debt | 168,988 | 6,928 | 4.10% | 194,461 | 6,974 | 3.59% |
| Total interest-bearing liabilities | 1,673,129 | 22,147 | 1.32% | 1,775,933 | 29,725 | 1.67% |
| Noninterest-bearing demand deposits | 223,233 | 206,396 | ||||
| Other liabilities | 4,127 | 11,280 | ||||
| Stockholders' equity | 295,150 | 269,446 | ||||
| Total | $ 2,195,639 | $ 2,263,055 | ||||
| Net interest income, tax-equivalent | $ 74,988 | $ 77,221 | ||||
| Net interest rate spread (3) | 3.69% | 3.73% | ||||
| Net interest margin (4) | 3.87% | 3.90% | ||||
| (1) Fully taxable equivalent at the rate of 35%. | ||||||
| (2) Non-accrual loans are included in average balances outstanding but with no related interest income during the period of non-accrual. | ||||||
| (3) Represents the difference between the yield on earning assets and cost of funds. | ||||||
| (4) Represents tax-equivalent net interest income divided by average earning assets. | ||||||