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UNITED
STATES
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SECURITIES
AND EXCHANGE COMMISSION
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WASHINGTON,
D.C. 20549
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FORM
8-K
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CURRENT
REPORT
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PURSUANT
TO SECTION 13 OR 15(d) OF THE
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SECURITIES
EXCHANGE ACT OF 1934
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April
26, 2010
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Date
of Report (Date of earliest event reported)
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FIRST
COMMUNITY BANCSHARES, INC.
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(Exact
name of registrant as specified in its charter)
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Nevada
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000-19297
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55-0694814
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(State
or other jurisdiction of incorporation)
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(Commission
File Number)
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(IRS
Employer
Identification
No.)
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P.O.
Box 989
Bluefield,
Virginia
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24605-0989
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(Address
of principal executive offices)
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(Zip
Code)
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(276)
326-9000
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(Registrant’s
telephone number, including area code)
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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:
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o
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Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
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o
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Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
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o
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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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o
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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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Item
7.01 Regulation FD
Disclosure
On April
26, 2010, First Community Bancshares, Inc. (the “Company”) held a public
conference call to discuss its financial results for the quarter ended March 31,
2010. The conference call was announced in the earnings release dated
April 26, 2010. The following are the prepared remarks.
John M.
Mendez, President and Chief Executive Officer –
I am
assuming that most of you have had the opportunity to view our earnings press
release from this morning. We accelerated the release of earnings,
originally scheduled for Wednesday. With our annual meeting of
stockholders tomorrow, we felt that it was important to get earnings released
and be in a position to discuss those results at that meeting.
From this
schedule change you can probably see that we are pleased with our results for
the quarter. It is refreshing to publish these results which are more
indicative of our company and its operations. The quarter’s results
are marked by improvement in net interest margin and net interest income and
vigilance over asset quality as we held non-performing assets flat at 97 basis
points. Our credit provisions were down markedly from the fourth
quarter but leave much room for improvement. I would like to mention
our second order of business on the agenda for the stockholders’
meeting. We will be asking for authorization of an additional 25
million shares of common stock. We feel that it is important to
increase our capacity for common, particularly as we move into a new and
refreshed strategic plan and in an environment that we feel will offer up
opportunities for consolidation. Our authorized, but unissued common
has fallen to about 7 million shares and we believe we may find that wanting
over the long-term, if opportunities are presented for strategic
consolidation. Shares authorized under this increase could be used
directly in merger transactions, such as our TriStone and Coddle Creek
transactions, or they could be used to augment capital, as may be necessary
following other transactions including our intended participation in one or more
future FDIC assisted transactions. In any case, we would reserve the
use of additional common equity for instances where we have assessed strong
probabilities for EPS accretion.
In
furtherance of our possible capital needs associated with planned expansion, we
have filed an updated S-3 shelf registration for up to $200 million comprised of
common and preferred as well as possible debt issuance. We believe
this will give us maximum flexibility and speed to market.
David D.
Brown, Chief Financial Officer –
As you
saw from this morning’s release, we reported net income for the first quarter of
$5.28 million, or $0.30 per share. This is the first quarter in a
long time that we don’t have to be focused on impairment charges on our pooled
trust preferred holdings.
We had
another uptick in margin from fourth quarter, increasing to 4.02% from 3.92%
last quarter. Asset yields picked up by a couple of basis points on
the quarter. But again, we saw the most meaningful action in the CD
portfolio, where we saw a decline of 12 basis points from last
quarter. We also saw continued migration of CD’s to lower yielding
money market accounts.
I think
we have seen the largest declines in the CD portfolio pricing pass
us. We will continue to reprice slightly downward, but at nowhere
near the velocity we have seen over the last five quarters. I also
expect we will see some more run-off and switch to money market in that
portfolio.
We made a
$3.7 million provision for loan losses during the first quarter, which covered
charge-offs and built the allowance to 1.58% of loans.
Wealth
revenues decreased a little on a linked basis. Much of the decline is
seasonal as investment advisory revenues tend to dip in the first
quarter. Linked-quarter, deposit account service charges
decreased $593 thousand on declining NSF incidents. Other service
charges and fees were up $33 thousand. Insurance revenues were up
$736 thousand, linked-quarter, as the bulk of the contingency revenues came in
during the quarter.
In the
area of non-interest expense, first quarter efficiency ratio decreased to
54.5%. Salaries and benefits were down $285 thousand from fourth the
quarter. TriStone branches were down $64 thousand as we fully
integrate that deal. The remainder of the decrease was due to
lessened non-wage accruals. Total FTE at quarter-end was
654. We are still expecting quarterly salaries and benefits to
average in the $8.5 to $9.0 million range for 2010 as annual raises begin to
kick in during the second quarter of 2010.
Other
operating expenses were $4.5 million, which was a decrease of $269 thousand on a
linked-quarter basis. Marketing and account acquisition expenses were
down $119 thousand, professional service fees were down $145 thousand, while ORE
loss provisions were up $486 thousand, on a linked quarter
basis. FDIC charges were $701 thousand for the quarter. We
continue to see those charges normalizing higher towards the $850 thousand per
quarter range.
Total
assets held steady at $2.3 billion and the loan portfolio stayed
flat. We have continued to shrink the CD portfolio and a good deal of
that run-off has found a home in the money market area of our
offerings.
Total
risk-based capital at the holding company is expected to be approximately
14.1%. The Company and the Bank continue to be well-capitalized and
in a strong position, with the Bank’s leverage ratio building to almost
8.0%.
Gary R.
Mills, Chief Credit Officer –
The total
loan portfolio remained relatively flat during the quarter, declining
approximately $3 million since December 31, 2009, to $1.39 billion as of March
31, 2010. During the quarter, the Company originated or renewed 1,649
loans with an aggregate dollar volume of approximately $109
million. The Construction, land development, and vacant land segment
declined approximately $13.50 million during the quarter. The largest
component of this decline was the result of 2 construction/mini-perm loans
totaling $10.20 million converting to permanent financing, and thus migrating to
the Commercial Real Estate segment. The residential real estate
segment declined approximately $10.70 million primarily due to a $6.40 million
loan being re-categorized into the commercial non-real estate
segment. At origination, the loan was secured by a single family
residence and the assignment of marketable securities. As a result of
loan amortization and appreciation of the marketable securities collateral, the
loan now presents a properly margined securities secured loan.
By almost
all measures, credit quality metrics continued to compare favorably to peer at
quarter-end. Total delinquency as of March 31, 2010, measured 2.35%
as compared to 2.32% as of December 31, 2009. Non-accrual loans
remained at 1.25%, while declining in dollar terms by
$50,000. Likewise, non-performing assets as a percentage of assets
remained flat with year-end at 0.97%. Net charge-offs of $3.40
million for the quarter were somewhat elevated as compared to the $2.70 million
recorded in the fourth quarter of 2009. Approximately half of the net
charge-offs can be attributed to the residential real estate and the C & I
segments. Geographically, the Richmond, Virginia, and the
Winston-Salem, North Carolina markets account for approximately 65% of total net
charge-offs. The allowance for loan losses totaled $22.00 million, or
1.58% of loans, at March 31, 2010, as compared to $21.73 million, or 1.56% of
loans, at December 31, 2009. The provision during the quarter was
$3.73 million, which covered net charge-offs by 109%.
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
contained within this news release.
In
accordance with General Instruction B.2 of Form 8-K, the information in this
Current Report on Form 8-K shall not be deemed to be “filed” for purposes of
Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise
subject to the liability of that Section, and shall not be incorporated by
reference into any registration statement or other document filed under the
Securities Act of 1933, as amended, except as shall be expressly set forth by
specific reference in such filing or document.
SIGNATURE
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 thereunto
duly authorized.
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FIRST
COMMUNITY BANCSHARES, INC.
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Date:
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April
26, 2010
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By:
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/s/
David D. Brown
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David
D. Brown
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Chief
Financial Officer
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