Attached files
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| 8-K - FIRST COMMUNITY BANKSHARES INC /VA/ | v238219_8k.htm |
NEWS RELEASE
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FOR IMMEDIATE RELEASE:
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FOR MORE INFORMATION,
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October 26, 2011
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CONTACT:
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David D. Brown
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(276) 326-9000
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First Community Bancshares, Inc. Announces Third Quarter 2011 Results
and Quarterly Cash Dividend to Common Stockholders
Bluefield, Virginia – First Community Bancshares, Inc. (NASDAQ: FCBC) (www.fcbinc.com) (the “Company”) today reported net income for the quarter ended September 30, 2011, of $5.32 million. Net income to common shareholders for the quarter ended September 30, 2011, totaled $5.03 million, or $0.28 per diluted common share. Net income for the nine months ended September 30, 2011, totaled $16.80 million. Net income to common shareholders for the nine months ended September 30, 2011, totaled $16.38 million, or $0.91 per diluted common share.
Additionally, the Company announced today that the board of directors declared a quarterly cash dividend to common stockholders of $1.79 million, or ten cents ($0.10), per common share. The quarterly dividend is payable to common stockholders of record November 11, 2011, and is expected to be paid on or about November 25, 2011. The current year marks the 26th consecutive year of cash dividend payments to stockholders.
Third Quarter 2011 Highlights –
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Loan loss provisions were reduced by $1.89 million, or 49.61%, from the third quarter of 2010.
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·
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Tangible book value per common share increased to $11.25, up $1.22, or 12.16%, from December 31, 2010.
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·
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The Company’s efficiency ratio of 56.84% for the third quarter of 2011 was an improvement over the ratios reported in the second quarter of 2011 of 59.03% and the third quarter of 2010 of 58.92%.
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During the third quarter of 2011, the Company repurchased 48,310 shares.
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The Company significantly exceeds regulatory “well-capitalized” targets with a total risk-based capital ratio of 17.91%, Tier 1 risk-based capital ratio of 16.65%, and a Tier 1 leverage ratio of 11.24% at September 30, 2011.
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Net Interest Income
Tax-equivalent net interest margin for the third quarter of 2011 was 3.77% compared to 3.87% in the comparable quarter of 2010. Net interest income was $17.73 million for the third quarter of 2011, a decrease of $863 thousand, or 4.64%, from the third quarter of 2010. Total interest income was $23.05 million for the third quarter of 2011, a decrease of $2.79 million, or 10.80%, from the third quarter of 2010. The decrease in interest income reflects continued slow loan demand and the Company’s conservative deployment of excess cash to manage its long-term risk profile. The yield on loans was 5.79% for the third quarter of 2011, a decrease from 6.07% in the same period of the prior year, while average loans decreased $25.60 million between the comparable periods to $1.38 billion as loan demand remains low. The Company continued to maintain a high level of liquidity with average overnight liquidity of $140.29 million during the third quarter of 2011.
Total interest expense for the third quarter of 2011 was $5.32 million, a decrease of $1.93 million, or 26.60%, from the third quarter of 2010. Third quarter 2011 deposit costs decreased $1.87 million compared to the third quarter of 2010, which was primarily due to a decrease in the average rate paid on interest-bearing deposits of 47 basis points to 0.88%. Third quarter 2011 borrowing costs decreased $53 thousand compared to the third quarter of 2010, while the average borrowings balance decreased $41.75 million between the comparable periods due to the redemption of various wholesale borrowings. The cost of interest-bearing liabilities decreased 35 basis points to 1.27% during the third quarter of 2011 compared to same quarter of the prior year. Average interest-bearing liabilities decreased $117.58 million, or 6.62% for the third quarter of 2011 compared with the third quarter of 2010, which included a decrease of $26.34 million in Federal Home Loan Bank (“FHLB”) borrowings and other long-term debt.
Provision
The provision for loan losses for the third quarter and nine months ended September 30, 2011, totaled $1.92 million and $6.61 million, respectively, which compares favorably to the provision for loan losses for the third quarter and nine months ended September 30, 2010, of $3.81 million and $11.07 million, respectively. The third quarter of 2011 marks the fifth consecutive quarter of provision decreases when compared to the prior year’s comparable quarter.
Noninterest Income
Noninterest income for the third quarter of 2011 decreased $2.87 million, or 26.26%, compared to the third quarter of 2010 largely due to a reduction in realized gains on the investment securities portfolio. During the third quarter of 2011, wealth management income totaled $868 thousand, a decrease of $41 thousand, or 4.51%, from the third quarter of 2010. The Trust and Wealth Management Divisions reported $829 million in assets under management at September 30, 2011. Service charges on deposit accounts totaled $3.40 million for the third quarter of 2011, a decrease of $53 thousand, or 1.53%, from the third quarter of 2010. Insurance commissions were $1.52 million for the third quarter of 2011, a decrease of $140 thousand, or 8.42%, from the comparable quarter of 2010. Net gains on the sales of securities decreased $2.40 million, or 93.08%, in the third quarter of 2011 compared to the same period of the prior year. Included in noninterest income are net gains of $67 thousand on the sale of two insurance agencies that occurred during the third quarter of 2011. The Company has the potential to recognize $650 thousand in additional gain over time as earn-out payments are received.
Noninterest Expenses
Noninterest expenses for the third quarter of 2011 decreased $1.37 million, or 7.85%, compared to the third quarter of 2010. Salaries and employee benefits decreased $344 thousand, or 3.93%, in the third quarter of 2011 compared to the same period in the prior year. Occupancy, furniture, and equipment expense for the third quarter of 2011 decreased $161 thousand, or 6.44%, compared to the third quarter of 2010. Federal Deposit Insurance Corporation (“FDIC”) deposit insurance premiums decreased $370 thousand, or 51.53% in the third quarter of 2011, compared to the third quarter of 2010, primarily due to the FDIC’s change in assessment methodology for deposit insurance to one based on tangible assets. Other operating expenses were $4.72 million for the third quarter of 2011, a decrease of $484 thousand, or 9.31%, from the third quarter of 2010. Included in other operating expenses are expenses and losses associated with other real estate that amounted to $675 thousand in the third quarter of 2011, compared to $1.76 million in the second quarter of 2011 and $801 thousand in the third quarter of 2010.
Credit Quality
The Company’s loan quality measures at September 30, 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 2.30% at September 30, 2011, compared to 2.62% at 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 4.10%. The ratio of the allowance for loan losses as a percent of loans held for investment was 1.92% at September 30, 2011, compared to 1.91% at December 31, 2010.
Total non-performing assets, which include unseasoned loan restructurings and other real estate owned, were 1.34% of total assets at September 30, 2011, and non-performing loans as a percentage of loans held for investment were 1.73%. These levels are much better by comparison with those in the Federal Reserve peer group which were last reported at 3.21% for total non-performing assets to total assets and 3.43% for non-performing loans to total loans. Included in non-performing assets are $964 thousand of unseasoned loan restructurings at September 30, 2011.
Annualized net charge-offs were 0.57% of average loans held for investment for the third quarter of 2011. This represents a decrease of 33 basis points from 0.90% for the second quarter of 2011 and continues a general downward trend in net charge-offs.
- 2 -
Balance Sheet
Consolidated assets were $2.22 billion at September 30, 2011. Total stockholders’ equity was $304.12 million at September 30, 2011, resulting in a book value per common share, on an as-converted basis, of $15.86, 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 third quarter of 2011, the Company paid a $0.10 per share dividend on common shares.
The Company will host an investor and media teleconference and webcast on Thursday, October 27, 2011, 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 third 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 non-interest expense by the sum of net interest income on a tax equivalent basis and core non-interest 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 $2.22 billion financial holding company and is the parent company of First Community Bank. First Community Bank operates through fifty-two 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 $829 million at September 30, 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.
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.
- 3 -
First Community Bancshares, Inc.
Condensed Consolidated Statements of Income
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Three Months Ended
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Nine Months Ended
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(Unaudited)
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September 30,
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September 30,
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(In Thousands, Except Share and Per Share Data)
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2011
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2010
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2011
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2010
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Interest Income
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Interest and fees on loans held for investment
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$ | 20,084 | $ | 21,440 | $ | 60,633 | $ | 63,791 | ||||||||
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Interest on securities -- taxable
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1,711 | 2,895 | 6,094 | 10,411 | ||||||||||||
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Interest on securities -- nontaxable
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1,180 | 1,451 | 4,004 | 4,271 | ||||||||||||
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Interest on deposits in banks
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75 | 54 | 244 | 134 | ||||||||||||
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Total interest income
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23,050 | 25,840 | 70,975 | 78,607 | ||||||||||||
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Interest Expense
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Interest on deposits
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2,998 | 4,872 | 10,151 | 15,480 | ||||||||||||
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Interest on borrowings
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2,318 | 2,371 | 7,061 | 7,369 | ||||||||||||
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Total interest expense
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5,316 | 7,243 | 17,212 | 22,849 | ||||||||||||
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Net interest income
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17,734 | 18,597 | 53,763 | 55,758 | ||||||||||||
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Provision for loan losses
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1,920 | 3,810 | 6,611 | 11,071 | ||||||||||||
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Net interest income after provision for loan losses
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15,814 | 14,787 | 47,152 | 44,687 | ||||||||||||
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Noninterest Income
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Wealth management income
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868 | 909 | 2,692 | 2,806 | ||||||||||||
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Service charges on deposit accounts
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3,404 | 3,457 | 9,788 | 9,796 | ||||||||||||
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Other service charges and fees
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1,426 | 1,244 | 4,293 | 3,775 | ||||||||||||
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Insurance commissions
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1,523 | 1,663 | 5,027 | 5,253 | ||||||||||||
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Net impairment losses recognized in earnings
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(210 | ) | - | (737 | ) | (185 | ) | |||||||||
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Net gains on sale of securities
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178 | 2,574 | 5,238 | 4,025 | ||||||||||||
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Other operating income
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877 | 1,091 | 2,627 | 2,950 | ||||||||||||
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Total noninterest income
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8,066 | 10,938 | 28,928 | 28,420 | ||||||||||||
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Noninterest Expense
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Salaries and employee benefits
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8,409 | 8,753 | 26,223 | 25,209 | ||||||||||||
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Occupancy expense of bank premises
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1,476 | 1,573 | 4,691 | 4,852 | ||||||||||||
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Furniture and equipment expense
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862 | 926 | 2,686 | 2,748 | ||||||||||||
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Amortization of intangible assets
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250 | 260 | 770 | 769 | ||||||||||||
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FDIC premiums and assessments
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348 | 718 | 1,640 | 2,129 | ||||||||||||
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Prepayment penalties on FHLB advances
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- | - | 471 | - | ||||||||||||
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Other operating expense
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4,715 | 5,199 | 15,380 | 14,392 | ||||||||||||
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Total noninterest expense
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16,060 | 17,429 | 51,861 | 50,099 | ||||||||||||
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Income before income taxes
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7,820 | 8,296 | 24,219 | 23,008 | ||||||||||||
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Income tax expense
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2,502 | 1,743 | 7,422 | 6,046 | ||||||||||||
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Net income
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5,318 | 6,553 | 16,797 | 16,962 | ||||||||||||
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Dividends on preferred stock
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286 | - | 417 | - | ||||||||||||
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Net income available to common shareholders
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$ | 5,032 | $ | 6,553 | $ | 16,380 | $ | 16,962 | ||||||||
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Per Share
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Basic earnings per common share
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$ | 0.28 | $ | 0.37 | $ | 0.92 | $ | 0.95 | ||||||||
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Diluted earnings per common share
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$ | 0.28 | $ | 0.37 | $ | 0.91 | $ | 0.95 | ||||||||
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Weighted average shares outstanding:
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Basic
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17,896,534 | 17,808,348 | 17,886,902 | 17,787,233 | ||||||||||||
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Diluted
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19,205,634 | 17,832,882 | 18,533,364 | 17,812,895 | ||||||||||||
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For the period:
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Return on average assets
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0.91 | % | 1.14 | % | 0.99 | % | 1.00 | % | ||||||||
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Return on average common equity
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6.94 | % | 9.49 | % | 7.76 | % | 8.49 | % | ||||||||
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Cash dividends per common share
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$ | 0.10 | $ | 0.10 | $ | 0.30 | $ | 0.30 | ||||||||
- 4 -
First Community Bancshares, Inc.
Condensed Quarterly Statements of Income
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As of and for the Quarter Ended
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(Unaudited)
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September 30,
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June 30,
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March 31,
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December 31,
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September 30,
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(In Thousands, Except Share and Per Share Data)
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2011
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2011
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2011
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2010
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2010
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Interest Income
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Interest and fees on loans held for investment
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$ | 20,084 | $ | 20,094 | $ | 20,455 | $ | 20,950 | $ | 21,440 | ||||||||||
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Interest on securities -- taxable
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1,711 | 1,850 | 2,533 | 2,293 | 2,895 | |||||||||||||||
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Interest on securities -- nontaxable
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1,180 | 1,291 | 1,533 | 1,672 | 1,451 | |||||||||||||||
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Interest on deposits in banks
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75 | 100 | 69 | 60 | 54 | |||||||||||||||
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Total interest income
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23,050 | 23,335 | 24,590 | 24,975 | 25,840 | |||||||||||||||
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Interest Expense
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Interest on deposits
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2,998 | 3,273 | 3,880 | 4,407 | 4,872 | |||||||||||||||
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Interest on borrowings
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2,318 | 2,308 | 2,435 | 2,469 | 2,371 | |||||||||||||||
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Total interest expense
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5,316 | 5,581 | 6,315 | 6,876 | 7,243 | |||||||||||||||
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Net interest income
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17,734 | 17,754 | 18,275 | 18,099 | 18,597 | |||||||||||||||
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Provision for loan losses
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1,920 | 3,079 | 1,612 | 3,686 | 3,810 | |||||||||||||||
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Net interest income after provision for loan losses
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15,814 | 14,675 | 16,663 | 14,413 | 14,787 | |||||||||||||||
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Noninterest Income
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Wealth management income
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868 | 930 | 894 | 1,022 | 909 | |||||||||||||||
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Service charges on deposit accounts
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3,404 | 3,353 | 3,031 | 3,332 | 3,457 | |||||||||||||||
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Other service charges and fees
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1,426 | 1,461 | 1,406 | 1,299 | 1,244 | |||||||||||||||
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Insurance commissions
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1,523 | 1,561 | 1,943 | 1,474 | 1,663 | |||||||||||||||
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Net impairment losses recognized in earnings
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(210 | ) | - | (527 | ) | - | - | |||||||||||||
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Net gains on sale of securities
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178 | 3,224 | 1,836 | 4,248 | 2,574 | |||||||||||||||
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Other operating income
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877 | 834 | 916 | 713 | 1,091 | |||||||||||||||
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Total noninterest income
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8,066 | 11,363 | 9,499 | 12,088 | 10,938 | |||||||||||||||
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Noninterest Expense
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Salaries and employee benefits
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8,409 | 8,685 | 9,129 | 9,319 | 8,753 | |||||||||||||||
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Occupancy expense of bank premises
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1,476 | 1,568 | 1,647 | 1,586 | 1,573 | |||||||||||||||
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Furniture and equipment expense
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862 | 909 | 915 | 965 | 926 | |||||||||||||||
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Amortization of intangible assets
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250 | 261 | 259 | 263 | 260 | |||||||||||||||
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FDIC premiums and assessments
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348 | 414 | 878 | 727 | 718 | |||||||||||||||
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Prepayment penalties on FHLB advances
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- | - | 471 | - | - | |||||||||||||||
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Goodwill impairment
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- | - | - | 1,039 | - | |||||||||||||||
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Other operating expense
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4,715 | 5,901 | 4,764 | 5,945 | 5,199 | |||||||||||||||
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Total noninterest expense
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16,060 | 17,738 | 18,063 | 19,844 | 17,429 | |||||||||||||||
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Income before income taxes
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7,820 | 8,300 | 8,099 | 6,657 | 8,296 | |||||||||||||||
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Income tax expense
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2,502 | 2,572 | 2,348 | 1,772 | 1,743 | |||||||||||||||
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Net income
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5,318 | 5,728 | 5,751 | 4,885 | 6,553 | |||||||||||||||
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Dividends on preferred stock
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286 | 131 | - | - | - | |||||||||||||||
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Net income available to common shareholders
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$ | 5,032 | $ | 5,597 | $ | 5,751 | $ | 4,885 | $ | 6,553 | ||||||||||
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Per Share
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Basic earnings per common share
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$ | 0.28 | $ | 0.31 | $ | 0.32 | $ | 0.27 | $ | 0.37 | ||||||||||
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Diluted earnings per common share
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$ | 0.28 | $ | 0.31 | $ | 0.32 | $ | 0.27 | $ | 0.37 | ||||||||||
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Cash dividends per common share
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$ | 0.10 | $ | 0.10 | $ | 0.10 | $ | 0.10 | $ | 0.10 | ||||||||||
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Weighted average shares outstanding:
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Basic
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17,896,534 | 17,895,904 | 17,867,953 | 17,845,857 | 17,808,348 | |||||||||||||||
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Diluted
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19,205,634 | 18,534,489 | 17,887,118 | 17,891,807 | 17,832,882 | |||||||||||||||
- 5 -
First Community Bancshares, Inc.
Reconciliation of GAAP Net Income to Core Earnings
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Three Months Ended
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Nine Months Ended
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(Unaudited)
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September 30,
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September 30,
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(In Thousands, Except Per Share Data)
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2011
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2010
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2011
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2010
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Net income, GAAP
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$ | 5,318 | $ | 6,553 | $ | 16,797 | $ | 16,962 | ||||||||
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Non-GAAP adjustments:
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Security gains
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(178 | ) | (2,574 | ) | (5,238 | ) | (4,025 | ) | ||||||||
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FHLB debt prepayment fees
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- | - | 471 | - | ||||||||||||
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Other-than-temporary security impairments
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210 | - | 737 | 185 | ||||||||||||
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Intangibles amortization
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250 | 260 | 770 | 769 | ||||||||||||
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Other non-core items
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59 | - | 59 | 4 | ||||||||||||
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Total adjustments to core earnings
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341 | (2,314 | ) | (3,201 | ) | (3,067 | ) | |||||||||
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Tax effect
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128 | (868 | ) | (1,200 | ) | (1,150 | ) | |||||||||
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Core earnings, non-GAAP
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$ | 5,531 | $ | 5,107 | $ | 14,796 | $ | 15,045 | ||||||||
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Core return on average assets
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1.00 | % | 0.89 | % | 0.90 | % | 0.89 | % | ||||||||
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Core return on average common equity
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7.63 | % | 7.39 | % | 7.01 | % | 7.53 | % | ||||||||
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Core diluted earnings per common share
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$ | 0.29 | $ | 0.29 | $ | 0.80 | $ | 0.84 | ||||||||
Efficiency Ratio Calculation
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Three Months Ended
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Nine Months Ended
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(Unaudited)
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September 30,
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September 30,
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(In Thousands)
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2011
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2010
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2011
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2010
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Noninterest expense, GAAP
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$ | 16,060 | $ | 17,429 | $ | 51,861 | $ | 50,099 | ||||||||
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Non-GAAP adjustments:
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FHLB debt prepayment fees
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- | - | (471 | ) | - | |||||||||||
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OREO expenses
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(675 | ) | (801 | ) | (2,747 | ) | (1,961 | ) | ||||||||
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Intangibles amortization
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(250 | ) | (260 | ) | (770 | ) | (769 | ) | ||||||||
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Other non-core items
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(77 | ) | - | (77 | ) | - | ||||||||||
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Adjusted noninterest expense
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15,058 | 16,368 | 47,796 | 47,369 | ||||||||||||
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Net interest income, GAAP
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17,734 | 18,597 | 53,763 | 55,758 | ||||||||||||
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Noninterest income, GAAP
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8,066 | 10,938 | 28,928 | 28,420 | ||||||||||||
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Non-GAAP adjustments:
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||||||||||||||||
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Tax-equivalency adjustment
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676 | 819 | 2,278 | 2,422 | ||||||||||||
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Security gains
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(178 | ) | (2,574 | ) | (5,238 | ) | (4,025 | ) | ||||||||
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Other-than-temporary security impairments
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210 | - | 737 | 185 | ||||||||||||
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Other non-core items
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(18 | ) | - | (18 | ) | 4 | ||||||||||
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Adjusted net interest and noninterest income
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26,490 | 27,780 | 80,450 | 82,764 | ||||||||||||
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Efficiency Ratio
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56.84 | % | 58.92 | % | 59.41 | % | 57.23 | % | ||||||||
- 6 -
First Community Bancshares, Inc.
Quarterly Balance Sheets
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For the Quarter Ended
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|
(Unaudited)
|
September 30,
|
June 30,
|
March 31,
|
December 31,
|
September 30,
|
|||||||||||||||
|
(Dollars In Thousands)
|
2011
|
2011
|
2011
|
2010
|
2010
|
|||||||||||||||
|
Cash and due from banks
|
$ | 38,776 | $ | 31,451 | $ | 52,684 | $ | 28,816 | $ | 37,120 | ||||||||||
|
Federal funds sold
|
103,179 | 162,629 | 121,974 | 81,526 | 93,281 | |||||||||||||||
|
Interest-bearing balances with banks
|
6,365 | 36,539 | 809 | 1,847 | 1,363 | |||||||||||||||
|
Total cash and cash equivalents
|
148,320 | 230,619 | 175,467 | 112,189 | 131,764 | |||||||||||||||
|
Securities available-for-sale
|
449,387 | 349,976 | 430,965 | 480,064 | 480,587 | |||||||||||||||
|
Securities held-to-maturity
|
3,342 | 4,106 | 4,524 | 4,637 | 5,931 | |||||||||||||||
|
Loans held for sale
|
3,575 | 920 | 2,614 | 4,694 | 3,386 | |||||||||||||||
|
Loans held for investment, net of unearned income
|
1,374,656 | 1,373,944 | 1,375,685 | 1,386,206 | 1,398,251 | |||||||||||||||
|
Less allowance for loan losses
|
26,407 | 26,482 | 26,482 | 26,482 | 26,420 | |||||||||||||||
|
Net loans
|
1,351,824 | 1,348,382 | 1,351,817 | 1,364,418 | 1,375,217 | |||||||||||||||
|
Premises and equipment, net
|
54,860 | 55,808 | 56,189 | 56,244 | 56,042 | |||||||||||||||
|
Other real estate owned
|
5,942 | 5,585 | 5,644 | 4,910 | 5,501 | |||||||||||||||
|
Interest receivable
|
6,264 | 6,202 | 7,288 | 7,675 | 7,899 | |||||||||||||||
|
Goodwill
|
83,832 | 85,132 | 84,930 | 84,914 | 85,176 | |||||||||||||||
|
Other intangible assets
|
4,576 | 5,205 | 5,466 | 5,725 | 5,989 | |||||||||||||||
|
Other assets
|
111,745 | 115,385 | 118,690 | 123,462 | 143,319 | |||||||||||||||
|
Total assets
|
$ | 2,220,092 | $ | 2,206,400 | $ | 2,240,980 | $ | 2,244,238 | $ | 2,297,425 | ||||||||||
|
Deposits:
|
||||||||||||||||||||
|
Noninterest-bearing demand
|
$ | 233,683 | $ | 219,488 | $ | 222,072 | $ | 205,151 | $ | 216,167 | ||||||||||
|
Interest-bearing demand
|
295,804 | 271,622 | 287,006 | 262,420 | 270,927 | |||||||||||||||
|
Savings
|
396,767 | 405,409 | 420,481 | 426,547 | 425,661 | |||||||||||||||
|
Time
|
664,237 | 683,157 | 707,458 | 726,837 | 744,468 | |||||||||||||||
|
Total deposits
|
1,590,491 | 1,579,676 | 1,637,017 | 1,620,955 | 1,657,223 | |||||||||||||||
|
Interest, taxes and other liabilities
|
20,030 | 20,563 | 20,459 | 21,318 | 21,377 | |||||||||||||||
|
Securities sold under agreements to repurchase
|
139,510 | 137,778 | 139,472 | 140,894 | 153,413 | |||||||||||||||
|
FHLB borrowings
|
150,000 | 150,000 | 150,000 | 175,000 | 175,000 | |||||||||||||||
|
Other indebtedness
|
15,941 | 16,179 | 16,186 | 16,193 | 16,209 | |||||||||||||||
|
Total liabilities
|
1,915,972 | 1,904,196 | 1,963,134 | 1,974,360 | 2,023,222 | |||||||||||||||
|
Preferred stock, net of discount
|
18,921 | 18,921 | - | - | - | |||||||||||||||
|
Common stock
|
18,083 | 18,083 | 18,083 | 18,083 | 18,083 | |||||||||||||||
|
Additional paid-in capital
|
188,243 | 188,278 | 188,742 | 189,239 | 189,811 | |||||||||||||||
|
Retained earnings
|
92,498 | 89,257 | 85,450 | 81,486 | 78,385 | |||||||||||||||
|
Treasury stock, at cost
|
(5,651 | ) | (5,137 | ) | (5,851 | ) | (6,740 | ) | (7,729 | ) | ||||||||||
|
Accumulated other comprehensive loss
|
(7,974 | ) | (7,198 | ) | (8,578 | ) | (12,190 | ) | (4,347 | ) | ||||||||||
|
Total stockholders' equity
|
304,120 | 302,204 | 277,846 | 269,878 | 274,203 | |||||||||||||||
|
Total liabilities and stockholders' equity
|
$ | 2,220,092 | $ | 2,206,400 | $ | 2,240,980 | $ | 2,244,238 | $ | 2,297,425 | ||||||||||
|
Actual shares outstanding at period end
|
17,869,514 | 17,917,824 | 17,894,899 | 17,866,335 | 17,834,601 | |||||||||||||||
|
Book value per common share at period end (1)
|
$ | 15.86 | $ | 15.72 | $ | 15.53 | $ | 15.11 | $ | 15.37 | ||||||||||
|
Tangible book value per common share at period end (2)
|
$ | 11.25 | $ | 11.02 | $ | 10.48 | $ | 10.03 | $ | 10.26 | ||||||||||
|
(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.
|
- 7 -
First Community Bancshares, Inc.
Selected Credit Quality Information
|
As of and for the Quarter Ended
|
||||||||||||||||||||
|
(Unaudited)
|
September 30,
|
June 30,
|
March 31,
|
December 31,
|
September 30,
|
|||||||||||||||
|
(Dollars in Thousands)
|
2011
|
2011
|
2011
|
2010
|
2010
|
|||||||||||||||
|
Summary of Loan Loss Experience
|
||||||||||||||||||||
|
Allowance for loan losses:
|
||||||||||||||||||||
|
Beginning balance
|
$ | 26,482 | $ | 26,482 | $ | 26,482 | $ | 26,420 | $ | 25,011 | ||||||||||
|
Provision for loan losses
|
1,920 | 3,079 | 1,612 | 3,686 | 3,810 | |||||||||||||||
|
Charge-offs
|
(3,062 | ) | (3,456 | ) | (2,027 | ) | (3,846 | ) | (2,651 | ) | ||||||||||
|
Recoveries
|
1,067 | 377 | 415 | 222 | 250 | |||||||||||||||
|
Net charge-offs
|
(1,995 | ) | (3,079 | ) | (1,612 | ) | (3,624 | ) | (2,401 | ) | ||||||||||
|
Ending balance
|
$ | 26,407 | $ | 26,482 | $ | 26,482 | $ | 26,482 | $ | 26,420 | ||||||||||
|
Summary of Asset Quality
|
||||||||||||||||||||
|
Non-accrual loans
|
$ | 22,877 | $ | 22,037 | $ | 17,703 | $ | 19,414 | $ | 16,645 | ||||||||||
|
Restructured loans
|
964 | 878 | 1,509 | 5,325 | 7,904 | |||||||||||||||
|
Loans 90 days or more past due and still accruing
|
- | - | - | - | - | |||||||||||||||
|
Total non-performing loans
|
23,841 | 22,915 | 19,212 | 24,739 | 24,549 | |||||||||||||||
|
Other real estate owned
|
5,942 | 5,585 | 5,644 | 4,910 | 5,501 | |||||||||||||||
|
Total non-performing assets
|
$ | 29,783 | $ | 28,500 | $ | 24,856 | $ | 29,649 | $ | 30,050 | ||||||||||
|
Restructured loans performing in accordance with terms
|
$ | 1,156 | $ | 7,044 | $ | 7,519 | $ | 3,911 | $ | 849 | ||||||||||
|
Asset Quality Ratios
|
||||||||||||||||||||
|
Non-performing loans as a percentage of loans held for investment
|
1.73 | % | 1.67 | % | 1.40 | % | 1.78 | % | 1.76 | % | ||||||||||
|
Non-performing assets as a percentage of total assets
|
1.34 | % | 1.29 | % | 1.11 | % | 1.32 | % | 1.31 | % | ||||||||||
|
Annualized net charge-offs as a percentage of average loans held for investment
|
0.57 | % | 0.90 | % | 0.47 | % | 1.03 | % | 0.68 | % | ||||||||||
|
Allowance for loan losses as a percentage of loans held for investment
|
1.92 | % | 1.93 | % | 1.93 | % | 1.91 | % | 1.89 | % | ||||||||||
|
Ratio of allowance for loan losses to non-performing loans
|
1.11 | 1.16 | 1.38 | 1.07 | 1.08 | |||||||||||||||
- 8 -
First Community Bancshares, Inc.
Non-accrual Loan Detail
|
As of September 30, 2011
|
||||||||||||
|
Non-accrual
|
||||||||||||
|
(Unaudited)
|
Loans
|
Non-accrual
|
Loans to Loans
|
|||||||||
|
(Dollars in Thousands)
|
Outstanding
|
Loans
|
Outstanding
|
|||||||||
|
Commercial
|
||||||||||||
|
Construction -- commercial
|
$ | 32,279 | $ | 331 | 1.03 | % | ||||||
|
Land development
|
3,304 | - | 0.00 | % | ||||||||
|
Other land loans
|
23,001 | 68 | 0.30 | % | ||||||||
|
Commercial and industrial
|
92,894 | 4,299 | 4.63 | % | ||||||||
|
Single family residential
|
107,879 | 4,011 | 3.72 | % | ||||||||
|
Multi-family residential
|
82,939 | 1,138 | 1.37 | % | ||||||||
|
Non-farm, non-residential
|
325,830 | 7,935 | 2.44 | % | ||||||||
|
Agricultural
|
1,570 | - | 0.00 | % | ||||||||
|
Farmland
|
36,605 | 475 | 1.30 | % | ||||||||
|
Total commercial
|
706,301 | 18,257 | 2.58 | % | ||||||||
|
Consumer real estate
|
||||||||||||
|
Home equity lines
|
109,444 | 886 | 0.81 | % | ||||||||
|
Single family residential mortgage
|
461,104 | 3,561 | 0.77 | % | ||||||||
|
Owner-occupied construction
|
19,279 | 119 | 0.62 | % | ||||||||
|
Total consumer real estate
|
589,827 | 4,566 | 0.77 | % | ||||||||
|
Consumer and other
|
||||||||||||
|
Consumer loans
|
67,020 | 54 | 0.08 | % | ||||||||
|
Other loans
|
11,508 | - | 0.00 | % | ||||||||
|
Total consumer and other
|
78,528 | 54 | 0.07 | % | ||||||||
|
Total loans
|
$ | 1,374,656 | $ | 22,877 | 1.66 | % | ||||||
- 9 -
First Community Bancshares, Inc.
Selected Financial Information
|
As of and for the Quarter Ended
|
||||||||||||||||||||
|
(Unaudited)
|
September 30,
|
June 30,
|
March 31,
|
December 31,
|
September 30,
|
|||||||||||||||
|
(Dollars in Thousands)
|
2011
|
2011
|
2011
|
2010
|
2010
|
|||||||||||||||
|
Ratios
|
||||||||||||||||||||
|
Return on average assets
|
0.91 | % | 1.02 | % | 1.05 | % | 0.85 | % | 1.14 | % | ||||||||||
|
Return on average common equity
|
6.94 | % | 7.91 | % | 8.47 | % | 7.00 | % | 9.49 | % | ||||||||||
|
Net interest margin
|
3.77 | % | 3.83 | % | 3.96 | % | 3.78 | % | 3.87 | % | ||||||||||
|
Efficiency ratio for the quarter
|
56.84 | % | 59.03 | % | 62.27 | % | 64.82 | % | 58.92 | % | ||||||||||
|
Efficiency ratio year-to-date
|
59.41 | % | 60.67 | % | 62.27 | % | 59.09 | % | 57.23 | % | ||||||||||
|
Equity as a percent of total assets at end of period
|
13.70 | % | 13.70 | % | 12.40 | % | 12.03 | % | 11.94 | % | ||||||||||
|
Average earning assets as a percentage of average total assets
|
88.39 | % | 88.11 | % | 88.07 | % | 87.69 | % | 87.67 | % | ||||||||||
|
Average loans as a percentage of average deposits
|
87.15 | % | 85.57 | % | 84.78 | % | 85.54 | % | 85.59 | % | ||||||||||
|
Average Balances
|
||||||||||||||||||||
|
Investments
|
$ | 417,291 | $ | 386,706 | $ | 470,833 | $ | 498,090 | $ | 503,686 | ||||||||||
|
Loans
|
1,379,144 | 1,373,988 | 1,382,526 | 1,402,178 | 1,404,746 | |||||||||||||||
|
Earning assets
|
1,936,720 | 1,935,470 | 1,961,538 | 1,996,106 | 1,990,953 | |||||||||||||||
|
Total assets
|
2,191,145 | 2,196,691 | 2,227,255 | 2,276,257 | 2,270,984 | |||||||||||||||
|
Deposits
|
1,582,481 | 1,605,694 | 1,630,701 | 1,639,154 | 1,641,339 | |||||||||||||||
|
Interest bearing deposits
|
1,357,938 | 1,386,292 | 1,418,807 | 1,427,746 | 1,433,770 | |||||||||||||||
|
Borrowings
|
300,751 | 297,857 | 316,864 | 344,704 | 342,497 | |||||||||||||||
|
Interest bearing liabilities
|
1,658,689 | 1,684,149 | 1,735,671 | 1,772,450 | 1,776,267 | |||||||||||||||
|
Equity
|
306,524 | 291,474 | 275,350 | 276,723 | 274,001 | |||||||||||||||
|
Tax-equivalent net interest income
|
18,410 | 18,490 | 19,141 | 19,040 | 19,416 | |||||||||||||||
- 10 -
First Community Bancshares, Inc.
Consolidated Average Balance Sheets, Yields, and Rates
|
Three Months Ended September 30,
|
||||||||||||||||||||||||
|
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)
|
$ | 1,379,144 | $ | 20,126 | 5.79 | % | $ | 1,404,746 | $ | 21,478 | 6.07 | % | ||||||||||||
|
Securities available-for-sale
|
413,538 | 3,447 | 3.31 | % | 497,602 | 4,999 | 3.99 | % | ||||||||||||||||
|
Securities held-to-maturity
|
3,753 | 78 | 8.25 | % | 6,084 | 128 | 8.35 | % | ||||||||||||||||
|
Interest-bearing deposits with banks
|
140,285 | 75 | 0.21 | % | 82,521 | 54 | 0.26 | % | ||||||||||||||||
|
Total earning assets
|
1,936,720 | 23,726 | 4.86 | % | 1,990,953 | 26,659 | 5.31 | % | ||||||||||||||||
|
Other assets
|
254,425 | 280,031 | ||||||||||||||||||||||
|
Total
|
$ | 2,191,145 | $ | 2,270,984 | ||||||||||||||||||||
|
Interest-bearing liabilities
|
||||||||||||||||||||||||
|
Interest-bearing demand deposits
|
$ | 279,722 | $ | 80 | 0.11 | % | $ | 257,560 | $ | 274 | 0.42 | % | ||||||||||||
|
Savings deposits
|
403,688 | 171 | 0.17 | % | 423,827 | 672 | 0.63 | % | ||||||||||||||||
|
Time deposits
|
674,528 | 2,747 | 1.62 | % | 752,383 | 3,926 | 2.07 | % | ||||||||||||||||
|
Retail repurchase agreements
|
84,813 | 126 | 0.59 | % | 100,217 | 245 | 0.97 | % | ||||||||||||||||
|
Wholesale repurchase agreements
|
50,000 | 474 | 3.76 | % | 50,000 | 471 | 3.74 | % | ||||||||||||||||
|
FHLB borrowings & other long-term debt
|
165,938 | 1,718 | 4.11 | % | 192,280 | 1,655 | 3.41 | % | ||||||||||||||||
|
Total interest-bearing liabilities
|
1,658,689 | 5,316 | 1.27 | % | 1,776,267 | 7,243 | 1.62 | % | ||||||||||||||||
|
Noninterest-bearing demand deposits
|
224,543 | 207,569 | ||||||||||||||||||||||
|
Other liabilities
|
1,389 | 13,147 | ||||||||||||||||||||||
|
Stockholders' equity
|
306,524 | 274,001 | ||||||||||||||||||||||
|
Total
|
$ | 2,191,145 | $ | 2,270,984 | ||||||||||||||||||||
|
Net interest income, tax-equivalent
|
$ | 18,410 | $ | 19,416 | ||||||||||||||||||||
|
Net interest rate spread (3)
|
3.59 | % | 3.69 | % | ||||||||||||||||||||
|
Net interest margin (4)
|
3.77 | % | 3.87 | % | ||||||||||||||||||||
|
(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.
|
- 11 -
First Community Bancshares, Inc.
Consolidated Average Balance Sheets, Yields, and Rates
|
Nine Months Ended September 30,
|
||||||||||||||||||||||||
|
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)
|
$ | 1,378,540 | $ | 60,755 | 5.89 | % | $ | 1,399,347 | $ | 63,913 | 6.11 | % | ||||||||||||
|
Securities available-for-sale
|
420,544 | 11,991 | 3.81 | % | 492,603 | 16,561 | 4.49 | % | ||||||||||||||||
|
Securities held-to-maturity
|
4,203 | 263 | 8.37 | % | 6,713 | 421 | 8.38 | % | ||||||||||||||||
|
Interest-bearing deposits with banks
|
141,198 | 244 | 0.23 | % | 77,319 | 134 | 0.23 | % | ||||||||||||||||
|
Total earning assets
|
1,944,485 | 73,253 | 5.04 | % | 1,975,982 | 81,029 | 5.48 | % | ||||||||||||||||
|
Other assets
|
260,413 | 282,628 | ||||||||||||||||||||||
|
Total
|
$ | 2,204,898 | $ | 2,258,610 | ||||||||||||||||||||
|
Interest-bearing liabilities
|
||||||||||||||||||||||||
|
Interest-bearing demand deposits
|
$ | 277,109 | $ | 404 | 0.19 | % | $ | 247,596 | $ | 724 | 0.39 | % | ||||||||||||
|
Savings deposits
|
415,197 | 769 | 0.25 | % | 419,550 | 2,284 | 0.73 | % | ||||||||||||||||
|
Time deposits
|
695,150 | 8,978 | 1.73 | % | 768,882 | 12,472 | 2.17 | % | ||||||||||||||||
|
Retail repurchase agreements
|
85,064 | 440 | 0.69 | % | 95,494 | 773 | 1.08 | % | ||||||||||||||||
|
Wholesale repurchase agreements
|
50,000 | 1,409 | 3.77 | % | 50,000 | 1,402 | 3.75 | % | ||||||||||||||||
|
FHLB borrowings & other long-term debt
|
170,034 | 5,212 | 4.10 | % | 195,586 | 5,194 | 3.55 | % | ||||||||||||||||
|
Total interest-bearing liabilities
|
1,692,554 | 17,212 | 1.36 | % | 1,777,108 | 22,849 | 1.72 | % | ||||||||||||||||
|
Noninterest-bearing demand deposits
|
218,659 | 204,706 | ||||||||||||||||||||||
|
Other liabilities
|
2,454 | 9,799 | ||||||||||||||||||||||
|
Stockholders' equity
|
291,231 | 266,997 | ||||||||||||||||||||||
|
Total
|
$ | 2,204,898 | $ | 2,258,610 | ||||||||||||||||||||
|
Net interest income, tax-equivalent
|
$ | 56,041 | $ | 58,180 | ||||||||||||||||||||
|
Net interest rate spread (3)
|
3.68 | % | 3.76 | % | ||||||||||||||||||||
|
Net interest margin (4)
|
3.85 | % | 3.94 | % | ||||||||||||||||||||
|
(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.
|
- 12 -