FIRST CENTURY BANKSHARES INC - 10-Q Quarterly Report

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D. C., 20549

FORM 10-Q

x	Quarterly Report Pursuant to Section 13 or 15 (d) of the Securities Exchange Act of 1934

For the quarterly period ended: September 30, 2004

¨	Transition Report Pursuant to Section 13 or 15 (d) of the Securities Exchange Act of 1934

For the transition period from to

Commission file number: 0-11671

FIRST CENTURY BANKSHARES, INC.

(Exact name of registrant as specified in its charter)

West Virginia

55-0628089

(State or other jurisdiction of

incorporation or organization)

(IRS Employer

Identification No.)


500 Federal Street, Bluefield, WV		24701
(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number, including area code: (304) 325-8181

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No ¨

Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act). Yes ¨ No x

The number of shares outstanding of the registrant’s $1.25 par value common stock,

as of November 10, 2004, was 1,991,000 shares.

FIRST CENTURY BANKSHARES, INC.

INDEX


		Page
PART I. FINANCIAL INFORMATION

Item 1.	Financial Statements

	Consolidated Statements of Financial Condition	3

	Consolidated Statements of Income and Comprehensive Income	4

	Consolidated Statements of Cash Flows	5

	Consolidated Statements of Changes in Stockholders’ Equity	6

	Notes to Consolidated Financial Statements	7 - 11

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	12 -16

Item 3.	Quantitative and Qualitative Disclosures about Market Risk	16

Item 4.	Controls and Procedures	17

PART II. OTHER INFORMATION

Item 6.	Exhibits and Reports on Form 8-K	17

	Signatures and Certifications	17 - 21

The total number of pages of the Form 10-Q Quarterly Report is twenty-one (21) pages.

FIRST CENTURY BANKSHARES, INC.

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION

(Dollars in thousands, except per share data)


	September 30, 2004 (Unaudited)			December 31, 2003 (Audited)
ASSETS
Cash and due from banks	$	11,900		$	14,576
Interest-bearing balances with banks		273			1,002
Federal funds sold		—			4,000
Securities available for sale: (cost approximated $77,065 at September 30, 2004, and $64,486 at December 31, 2003)		77,391			65,258
Securities held to maturity: (fair value approximated $12,996 at September 30, 2004 and $12,449 at December 31, 2003)		12,776			12,163
Federal Home Loan Bank and Federal Reserve Bank Stock		1,233			1,023
Loans		248,788			246,950
Less allowance for loan losses		3,020			3,075

Net loans		245,768			243,875
Premises and equipment		12,374			11,697
Real estate owned other than bank premises		112			383
Other assets		4,063			4,567
Goodwill		5,183			5,183

TOTAL ASSETS	$	371,073		$	363,727

LIABILITIES AND STOCKHOLDERS’ EQUITY
Deposits:
Noninterest-bearing	$	42,801		$	41,163
Interest-bearing		274,626			266,556

Total deposits		317,427			307,719
Federal funds purchased and securities sold under agreements to repurchase		16,116			19,141
Demand notes to U. S. Treasury and other liabilities for borrowed money		26			26
Other liabilities		1,943			1,847

TOTAL LIABILITIES		335,512			328,733

STOCKHOLDERS’ EQUITY
Common stock - par value per share $1.25
Shares authorized: 10,000,000
Shares issued: 2,000,000
Shares outstanding: 1,991,000		2,500			2,500
Paid-in capital		785			785
Retained earnings		32,208			31,347
Treasury stock, at cost; 9,000 shares		(147	)		(147	)
Accumulated other comprehensive income, net of tax		215			509

TOTAL STOCKHOLDERS’ EQUITY		35,561			34,994

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	371,073		$	363,727

See accompanying notes to unaudited consolidated financial statements

FIRST CENTURY BANKSHARES, INC.

AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF INCOME

AND COMPREHENSIVE INCOME

(Unaudited)


	Three Months Ended September 30,					Nine Months Ended September 30,
	(Dollars in thousands, except per share data)
	2004		2003			2004			2003
INTEREST INCOME
Interest and fees on loans	$	3,653	$	3,770		$	10,819		$	11,226
Interest on balances with banks		5		2			8			13
Interest and dividends from securities available for sale:
Taxable		669		589			1,949			2,071
Interest and dividends from securities held to maturity:
Taxable		18		9			55			35
Tax-exempt		111		103			351			310
Interest on federal funds sold		10		10			21			44

TOTAL INTEREST INCOME		4,466		4,483			13,203			13,699

INTEREST EXPENSE
Interest on time certificates of $100,000 or more		206		215			592			682
Interest on other deposits		658		680			1,902			2,344
Interest on federal funds purchased and securities sold under agreements to repurchase		19		18			45			59
Interest on demand notes to U. S. Treasury and other liabilities for borrowed money		2		—			9			1

TOTAL INTEREST EXPENSE		885		913			2,548			3,086

Net interest income		3,581		3,570			10,655			10,613
Provision for loan losses		53		156			66			571

Net interest income after provision for loan losses		3,528		3,414			10,589			10,042

NONINTEREST INCOME
Income from fiduciary activities		328		396			955			1,075
Other operating income		584		578			1,654			1,807
Securities gains (losses)		—		—			(16	)		67

TOTAL NONINTEREST INCOME		912		974			2,593			2,949

NONINTEREST EXPENSE
Salaries, wages, and other employee benefits		1,901		1,632			5,298			5,483
Premises and equipment expense		529		480			1,597			1,477
Other noninterest expense		892		977			2,979			2,798

TOTAL NONINTEREST EXPENSE		3,322		3,089			9,874			9,758

Income before income taxes		1,118		1,299			3,308			3,233
Provision for income taxes		403		475			1,192			1,177

NET INCOME		715		824			2,116			2,056

Other comprehensive income (loss), net of tax		826		(435	)		(294	)		(471	)

COMPREHENSIVE INCOME	$	1,541	$	389		$	1,822		$	1,585

NET INCOME PER COMMON SHARE:
Basic	$	0.36	$	0.41		$	1.06		$	1.03
Diluted	$	0.36	$	0.41		$	1.06		$	1.03
WEIGHTED AVERAGE SHARES OUTSTANDING:
Basic		1,991,000		1,991,000			1,991,000			1,991,000
Diluted		1,998,098		1,996,254			1,997,234			1,993,337

See accompanying notes to consolidated financial statements

FIRST CENTURY BANKSHARES, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)


	Nine Months Ended September 30,
	(Dollars in thousands)
	2004		2003
CASH FLOWS FROM OPERATING ACTIVITIES
Net income	$	2,116	$	2,056
Adjustments to reconcile net income to net cash provided by operating activities:
Provision for loan losses		66		571
Depreciation and amortization		647		589
Securities (gains) losses		16		(67	)
Amortization of securities premiums, net		233		342
Decrease in interest receivable and other assets		425		682
Increase in interest payable and other liabilities		197		14

NET CASH PROVIDED BY OPERATING ACTIVITIES		3,700		4,187

CASH FLOWS FROM INVESTING ACTIVITIES

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