Back to GetFilings.com
First Community Bancshares, Inc.
P.O. Box 5909
Princeton, West Virginia 24740
March 31, 1998
Securities and Exchange Commission
Washington, DC 20549
Gentlemen:
Pursuant to the requirements of the Securities Exchange Act
of 1934, we are
transmitting herewith the attached Form 10-K.
Additionally, there have been no changes in the accounting
principles or
practices used or in the method of applying any such
principles or practices
to the financial information included in the Form 10-K or
its supporting
schedules.
Sincerely,
First Community Bancshares, Inc.
Kenneth P. Mulkey
Controller
UNITED STATES
SECURITIES AND EXCHANGE
COMMISSION
Washington, D.C. 20549
Form 10-K
[X] Annual Report Pursuant to
Section 13 or 15(d)
of the Securities Exchange Act of 1934 (Fee
Required)
For the Fiscal Year Ended
December 31, 1997
or
[ ] Transition Report Pursuant to Section
13 or 15(d)
of the Securities Exchange Act of 1934
(Fee Required)
For the transition period from ---------------- Commission
File Number 0-19297
First Community
Bancshares, Inc.
(Exact name of
Registrant as specified in its charter)
Nevada
55-0694814
(State or other jurisdiction (IRS Employer
Identification No.)
of incorporation or organization)
1001 Mercer Street, Princeton, West Virginia
24740-5909
(Address of principal executive offices)
( Zip Code)
Registrant's telephone number, including area code: (304)
487-9000
Securities registered pursuant to Section 12(b) of the Act:
Title of each class Name of each exchange on
which registered
NONE
NONE
Securities registered pursuant to Section 12(g) of the Act:
Common stock, par
value $1 per share
(Title of Class)
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 if disclosure of delinquent filers
pursuant to Item
405 of Regulation S-K is not contained herein and will not
be contained, to
the best of Registrant's knowledge, in definitive proxy or
information
statement incorporated by reference in Part III of this Form
10-K or any
amendment to this Form 10-K. X
State the aggregate market value of the voting stock held by
non-affiliates
of the Registrant as of March 27,1998.
$207,192,369 based on the sales
price at that date
Common
Stock, $1 par value
Indicate the number of shares outstanding of each of the
issuer's classes of
common stock as of March 27, 1998.
Common Stock, $1 par
value- 5,650,932
DOCUMENTS INCORPORATED BY
REFERENCE
Portions of the First Community Bancshares, Inc. 1997 Annual
Report to
Security Holders are incorporated by reference in Part I and
II hereof.
Portions of the First Community Bancshares, Inc. 1997 Annual
Proxy Statement
are incorporated by reference in Part III.
1
Form 10-K Information
Table of Contents
1997 Form 10-K Annual Report
Part I Page
Item 1.
Business....................................................
............................................................
......... 3
Item 2.
Properties..................................................
............................................................
......... 14
Item 3. Legal
Proceedings.................................................
.........................................................
15
Item 4. Submission of Matters to a Vote of Security
Holders.....................................................
. 16
Part II
Item 5. Market for Registrant's Common Equity and Related
Stockholder Matters..................... 17
Item 6. Selected Financial
Data........................................................
.......................................... 17
Item 7. Management's Discussion and Analysis of Financial
Condition and Results
of
Operations..................................................
............................................................
.... 17
Item 7A. Quantitative and Qualitative Disclosures About
Market Risk........................................ 18
Item 8. Financial Statements and Supplementary
Data........................................................
........ 19
Item 9. Changes in and Disagreements with Accountants on
Accounting and
Financial
Disclosure..................................................
..................................................... 19
Part III
Item 10. Directors and Executive Officers of the
Registrant..................................................
....... 20
Item 11. Executive
Compensation................................................
................................................ 20
Item 12. Security Ownership of Certain Beneficial Owners
and Management............................... 20
Item 13. Certain Relationships and Related
Transactions................................................
............. 20
Part IV.
Item 14. Exhibits, Financial Statement Schedules and
Reports on Form 8-K................................ 20
Signatures..................................................
............................................................
....................... 22
2
Part I
Item 1. Business
First Community Bancshares, Inc., formerly FCFT, Inc.,
(Registrant) was
incorporated in November 1989, under the laws of the State
of Delaware to
serve as the holding company for and to facilitate the
merger of First
Community Bancshares, Inc. (FCBI) and Flat Top Bankshares,
Inc. (Flat Top).
FCFT, Inc. was a Delaware bank holding company with one
wholly-owned
subsidiary, First Community Bank, Inc. (FCB), a state-
chartered West Virginia
bank headquartered in Princeton, West Virginia. Flat Top
was a West Virginia
bank holding company headquartered in Bluefield, West
Virginia, with two
wholly-owned subsidiaries, The Flat Top National Bank of
Bluefield (FTNB),
a National Association, and Peoples Bank of Bluewell (PBB),
a state-chartered
West Virginia bank. After the mergers, FCFT, Inc. operated
as the surviving
holding company for the three constituent banks described
above as well as
First Federal Savings Bank (FFSB) which was acquired in
November 1990. On
December 30, 1994, FFSB was merged into FCB. Subsequently
on January 4,
1995, FTNB and PBB were also merged into FCB. On September
30, 1997 the
Company, formerly known as FCFT, Inc., merged with and into
First Community
Bancshares, Inc. (FCBI), a Nevada corporation, formed to
facilitate the change
of the Company's state of domicile from Delaware to Nevada
and to effect the
change in name.
On December 29, 1995, FCFT, Inc. reorganized its existing
bank subsidiary,
First Community Bank, Inc., Princeton, West Virginia, by
splitting it into two
separate banks. This was accomplished by chartering a
second, affiliated,
Federal Deposit Insurance Corporation (FDIC) insured state
commercial bank
formed through the acquisition of assets and assumption of
the liabilities
of six of First Community Bank, Inc.'s operating divisions
and branches
located within Mercer County, West Virginia. This new bank,
First Community
Bank of Mercer County, Inc., headquartered in Princeton,
West Virginia,
consists of six divisions with offices in Princeton,
Bluefield, and Bluewell,
as well as the Credit Card Division, Trust Division, and
Corporate/Administrative Division. The main office of the
reorganized First
Community Bank, Inc., was relocated to Buckhannon, West
Virginia.
At the close of business on July 3, 1996, FCFT, Inc.
acquired Citizens Bank
of Tazewell (Citizens), headquartered in Tazewell, Virginia.
Pursuant to the
Agreement and Plan of merger, FCFT exchanged 3.51 shares of
its common stock
for each share of Citizen's common stock. Accordingly,
263,159 shares of
FCFT, Inc. common stock were issued to holders of Citizens
common stock.
The merger was accounted for under the pooling of interests
method.
Accordingly, all financial reporting periods presented have
been restated to
properly reflect this business combination. Subsequent to
the merger,
Citizens operates as a wholly-owned subsidiary of FCFT, Inc.
On June 2,
1997, the corporate name of Citizens was changed to First
Community Bank of
Southwest Virginia, Inc.
At the close of business on September 26, 1996, First
Community Bank, Inc.
acquired the Grafton and Rowlesburg, West Virginia branches
of Huntington
National Bank West Virginia. The acquisition of these
branches added
approximately $21 million in deposits. The intangible value
of this
transaction totaled approximately $1 million which is being
amortized over a
15 year period. This acquisition was accounted for under
the purchase method
of accounting. Accordingly, the consolidated results in
periods after
September 26, 1996 include the operations of the Grafton and
Rowlesburg
branches only from the date of acquisition.
On April 9, 1997, FCFT, Inc. acquired 100% of the common
stock of Blue
Ridge Bank (Blue Ridge), headquartered in Sparta, North
Carolina. Blue Ridge
is a $105 million state-chartered bank with offices located
in Sparta, Elkin,
Hays and Taylorsville, North Carolina. Pursuant to the
Agreement and
Plan of merger, FCBI exchanged cash of $19.50 for each of
Blue Ridge's
1,212,148 common shares. In conjunction with the
acquisition, Blue Ridge
cancelled outstanding stock options through the payment of
$727,948
representing the difference between $19.50 and the
respective option prices.
Total consideration including the payment for cancellation
of the options
was $24.7 million and resulted in an intangible asset of
approximately $13.2
million which is being amortized over a 15 year period. The
acquisition
was partially funded with loan proceeds of $11.5 million
which the Company
borrowed from an outside source. The loan agreement has
certain covenants
that may restrict the payment of dividends to stockholders
in the event of
default along with other customary borrowing provisions.
The acquisition
was accounted for under the purchase method of accounting.
Accordingly,
results of operations of Blue Ridge are included in
consolidated results
of FCBI from the date of acquisition. Subsequent to the
merger, Blue Ridge
operates as a wholly-owned subsidiary of FCBI.
First Community Bank of Southwest Virginia, the Virginia
subsidiary of
First Community Bancshares, Inc., opened a branch in
Wytheville, Virginia,
located at 910 E. Main Street on August 1, 1997.
3
Currently, the Registrant is a multi-bank holding company
and the banking
operations are expected to remain the principal business and
major source of
revenue. The Registrant provides a mechanism for ownership
of the
subsidiaries banking operations, provides capital funds as
required and
serves as a conduit for distribution of dividends to
stockholders. The
Registrant also considers and evaluates options for growth
and expansion of
the existing subsidiaries' banking operations.
The Registrant currently derives substantially all of its
revenues from
dividends paid by the subsidiary banks. Dividend payments
by the banks are
determined in relation to earnings, asset growth and capital
position and are
subject to certain restrictions by regulatory agencies as
described more fully
under Supervision and Regulation of this item.
First Community Bank of Mercer County, Inc.
First Community Bank of Mercer County, Inc. (FCB, Mercer) is
a state
chartered bank organized under the banking laws of the State
of West Virginia.
FCB, Mercer engages in general commercial and retail banking
business in
Mercer County, West Virginia. It provides safe deposit
services and makes
all types of loans, including commercial, mortgage and
personal loans. FCB,
Mercer also provides trust services and its deposits are
insured by the FDIC.
FCB, Mercer is a member of the Federal Reserve System.
First Community Bank, Inc.
First Community Bank, Inc. (FCB, Inc.) is a state chartered
bank organized
under the banking laws of the State of West Virginia. FCB,
Inc. engages in
general commercial and retail banking business in Upshur,
Wyoming, Taylor,
Nicholas, Preston, and Webster Counties, West Virginia. It
provides safe
deposit services and makes all types of loans, including
commercial, mortgage
and personal loans. FCB, Inc. deposits are insured by the
FDIC. FCB, Inc.
is a member of the Federal Reserve System.
First Community Bank of Southwest Virginia, Inc.
First Community Bank of Southwest Virginia, Inc., (FCB-SWV,
Inc.), formerly
Citizens Bank of Tazewell, Inc. is a state chartered bank
organized under the
banking laws of the State of Virginia. FCB-SWV, Inc.
engages in general
commercial and retail banking business in Southwestern
Virginia. It provides
safe deposit services and makes all types of loans including
commercial,
mortgage and personal loans. FCB-SWV, Inc. deposits are
insured by the
FDIC. FCB-SWV, Inc. is a member of the Federal Reserve
System.
Blue Ridge Bank
Blue Ridge Bank (Blue Ridge) is a state chartered bank
organized under
the laws of the state of North Carolina. Blue Ridge engages
in general
commercial and retail banking business in North Central
North Carolina. It
provides safe deposit services and makes all types of loans
including
commercial, mortgage and personal loans. Blue Ridge
deposits are insured
by the FDIC. Blue Ridge is a member of the Federal Reserve
System.
Lending Activities
The Company's banking subsidiaries generate revenues
primarily through
the investment of borrowed and deposited funds in earning
assets. These
assets are comprised of securities available for sale,
investment securities,
short-term investment vehicles and loans to businesses and
individuals.
Average loans represent approximately 71% of average earning
assets and
present a greater level of credit risk to the Company when
contrasted with
investment securities.
The principal lending activities of the banks are
concentrated primarily
within the market areas immediately surrounding its banking
operations.
These are areas with which bank personnel are most
acquainted and are
within reasonable distances of the banks which allows for
timely communications
with customers as well as periodic inspections of
collateral.
4
Loan portfolios total $671.8 million at December 31, 1997
and are comprised of
commercial, real estate and consumer loans including credit
cards and home
equity loans. Commercial and commercial real estate loans
comprise 42.5% of
the total loan portfolio. Commercial loans include loans to
small to mid-size
industrial and commercial and service companies which
include but are not
limited to, coal mining companies, manufacturers, automobile
dealers, and
retail and wholesale merchants. Collateral securing these
loans include
equipment, machinery, inventory, receivables, vehicles and
commercial real
estate. Commercial loans are considered to contain a higher
level of risk
than other loan types although care is taken to minimize
these risks.
Underwriting standards require a comprehensive review and
independent
evaluation of virtually all commercial loans by Credit
Administration and
Discount Committees prior to approval with updates to these
credit reviews
performed periodically on a quarterly or annual basis
depending on the
size of the loan relationship.
Real estate mortgage loans comprise 35% of the total loan
portfolio.
Mortgage loans to consumers are secured primarily by first
lien deeds of
trust. These loans generally do not exceed an 80% loan to
value ratio at
the loan origination date and are considered to contain
normal risk. Loans
in the real estate mortgage category have historically
yielded the lowest
loss ratio of all loan types.
Consumer loans comprise 22% of the total loan portfolio.
Collateral for
these loans include automobiles, boats, recreational
vehicles, and other
personal property. Personal loans, home equity loans and
unsecured credit
card receivables are also included as consumer loans.
Historically, losses
on these types of loans have been minimal; however, indirect
lending through
various automobile dealerships in 1996 and 1997 led to a
significant increase
in consumer loan chargeoffs in 1997.
The average yield on a tax equivalent basis on all loans in
1997 was 9.77%
and average loans expressed as a percentage of average
deposits were 81%
in 1997. This percentage represents an average level of
outstanding loans
when compared with historical loan to deposit ratios of 84%
in 1996 and
79% in 1995.
Employees
The Registrant and its subsidiaries had 514 employees at
December 31, 1997.
Management considers employee relations to be excellent.
Competition
The Company's subsidiaries have been able to compete
effectively with other
financial institutions in their respective market areas.
The subsidiaries
emphasize customer service in an effort to establish long-
term customer
relationships and build customer loyalty. The subsidiaries
of the Company
have consolidated services such as data processing,
accounting, loan review
and compliance, and internal audit services to enhance the
ability to compete
effectively in its respective markets.
Principal competition for the banking subsidiaries is
provided by other
local and regional commercial banking companies as well as
Thrift institutions
and Credit unions. Other non-bank organizations including
regional and
national mortgage origination firms and manufacturer captive
credit
corporations also provide competition for residential real
estate loans and
consumer loans.
Supervision and Regulation
The Registrant is a bank holding company within the meaning
of the Bank
Holding Act of 1956 (Act), as amended, and is registered as
such with the
Board of Governors of the Federal Reserve System. The
Registrant is required
to file with the Board of Governors quarterly reports of the
Registrant and
the subsidiary and such other information as the Board of
Governors may
require. The Federal Reserve makes periodic examinations of
the Registrant
typically on an annual basis. The Act requires every bank
holding company to
obtain prior approval of the Board of Governors before
acquiring
substantially all the assets or direct or indirect ownership
or control of
more than 5% of the voting shares of any bank which is not
already
majority-owned. The Act also prohibits a bank holding
company, with
certain exceptions, from engaging in, or acquiring direct or
indirect control
of more than 5% of the voting shares of any company engaged
in non-banking
activities.
5
Bank holding companies and their subsidiary banks are also
subject to the
provisions of the Community Reinvestment Act of 1977
("CRA"). Under the
CRA, the Federal Reserve Board is required, in connection
with its examination
of a bank, to assess such bank's record in meeting the
credit needs of the
communities served by that bank, including low and moderate
income
neighborhoods. Further, such assessment is also required of
any bank holding
company which has applied to (i) charter a National bank,
(ii) obtain deposit
insurance coverage for a newly chartered institution, (iii)
establish a
new branch office that will accept deposits, (iv) relocate
an office, or (v)
merge or consolidate with, or acquire the assets or assume
the liabilities of
a federally-regulated financial institution. In the case of
a banking holding
company applying for approval to acquire a bank or other
bank holding
company, the Federal Reserve Board will assess the record of
each subsidiary
of the applicant bank holding company, and such records may
be the basis for
denying the application or imposing conditions in connection
with approval
of the application. On July 1, 1995, the federal bank
regulators amended the
CRA regulations to simplify enforcement of the CRA by
substituting the prior
twelve assessment categories with three performance
categories for use in
calculating CRA ratings. The federal bank regulators will
evaluate banks
under the lending, investment, and service tests. The
effective date for
compliance with the amended CRA depends on the size of the
institution, but
no later than July 1, 1997. Additional data collection and
reporting
requirements have been imposed on larger institutions.
The Financial Institutions Reform, Recovery, and Enforcement
Act of 1989
("FIRREA") was enacted by Congress on August 9, 1989. Among
the more
significant consequences of FIRREA with respect to bank
holding companies
is the impact of the "cross-guarantee" provision and the
significantly
expanded enforcement powers of bank regulatory agencies.
Under the
cross-guarantee provision, if one depository institution
subsidiary of a
multi-unit holding company fails or requires FDIC
assistance, the FDIC may
assess a commonly controlled depository institution for the
estimated losses
suffered by the FDIC. While the FDIC's claim is junior to
the claims of
non-affiliated depositors, holders of secured liabilities,
general creditors,
and subordinated creditors, it is superior to the claims of
shareholders.
Among the significantly expanded enforcement powers of the
bank regulatory
agencies are the powers to (i) obtain cease and desist
orders, (ii) remove
officers and directors, (iii) approve new directors and
senior executive
officers of certain depository institutions, and (iv) assess
criminal and
civil money penalties for violations of law, regulations. or
conditions
imposed by, or agreements with, regulatory agencies.
In September 1994, the Riegle-Neal Interstate Banking and
Branching Efficiency
Act of 1994 was passed. This legislation significantly
changes the laws
governing interstate banking. Beginning on September 29,
1995, bank holding
companies may acquire banks located in any state, despite
former
prohibitive state statutes, subject to certain conditions.
Beginning on June
1, 1997, banks may merge or consolidate on an interstate
basis. States may
elect to "opt-out" of this provision by expressly
prohibiting interstate
bank mergers. This Act also permits banks to branch into
other states on a
de novo basis provided that the state has enacted a law that
permits de novo
interstate branch banking.
The banking subsidiaries of the Registrant are subject to
certain restrictions
by regulatory bodies which limit the amounts and the manner
in which it may
loan funds to the Registrant. The banks are further subject
to restrictions
on the amount of dividends that can be paid to the
Registrant in any one
calendar year without prior approval by primary regulators.
Payment of
dividends by the subsidiary banks to the Registrant cannot
exceed net
profits, as defined, for the current year combined with net
profits for the
two preceding years. In addition, any distribution which
might reduce the
bank's equity capital to unsafe levels or which, in the
opinion of regulatory
agencies, is not in the best interests of the public, could
be prohibited.
(For additional information concerning these restrictions,
see Note 14 of the
Notes to Consolidated Financial Statements incorporated by
reference in
Part II of this report.)
Governmental Monetary Policies and Economic Controls
The earnings of the Registrant and its subsidiaries are
affected by the
monetary policies of the Federal Reserve System. An
important function of
the Federal Reserve System is to regulate the National
supply of credit in
order to deal with economic conditions. The instruments
employed by the
Federal Reserve are open market operations of U.S.
Government securities,
changes in the discount rate on member bank borrowings,
changes in Federal
Funds rates and changes in reserve requirements. These
policies influence, in
various ways, the level of the company's investments, loans
and deposits and
rates earned on its earning assets and interest rates paid
on liabilities.
6
I. Distribution of Assets, Liabilities and Stockholders'
Equity, Interest Rates and Interest Differential
A. & B. Average Balance Sheets--Net Interest Income
Analysis
(Amounts in Thousands, except %)
1997
1996 1995
Average Interest Yield/Rate Average
Interest Yield/Rate Average Interest Yield/Rate
Balance (1) (1)
Balance (1) (1) Balance (1) (1)
Earning Assets:
Loans (2)
Taxable $601,492 $ 58,676 9.76% $507,554 $49,443 9.74%
$428,242 $41,451 9.68%
Tax-Exempt 15,993 1,657 10.36% 15,401
1,708 11.09% 16,755 1,866 11.14%
Total 617,485 60,333 9.77% 522,955 51,151
9.78% 444,997 43,317 9.73%
Reserve for Possible
Loan Losses (9770) (8,797) ______ ______
(8,238) _______ ______
Net Total 607,715 60,333 9.93% 514,158
51,151 9.95% 436,759 43,317 9.92%
Securities Available For
Sale:
Taxable 122,326 8,226 6.72% 104,112 6,690 6.43%
92,550 5,925 6.40%
Tax-Exempt 17,162 1,388 8.09% 15,472
1,333 8.61% 156 12 7.69%
Total 139,488 9,614 6.89% 119,584 8,023 6.71%
92,706 5,937 6.40%
Investment Securities:
Taxable 45,581 2,820 6.19% 65,857 4,233 6.43%
112,021 7,043 6.29%
Tax-Exempt 59,547 4,830 8.11% 47,026
3,776 8.03% 55,216 4,659 8.44%
Total 105,128 7,650 7.28% 112,883 8,009
7.09% 167,237 11,702 7.00%
Interest-Bearing
Deposits 418 44 10.53% 750 28 3.73%
388 22 5.67%
Federal Funds Sold 17,127 949 5.54% 2,188
117 5.35% 4,473 263 5.88%
Total Earning Assets 869,876 78,590 9.03% 749,563
67,328 8.98% 701,563 61,241 8.73%
Other Assets 79,604 _______ ______ 54,758 ______
______ 52,114 ______ ______
Total $949,480 $804,321
$753,677
======= ====== ======
Interest-Bearing
Liabilities:
Demand Deposits $111,177 3,064 2.76% $ 92,857 2,519
2.71% $ 98,405 2,656 2.70%
Savings Deposits 141,827 4,350 3.07% 134,178 4,150
3.09% 140,810 4,352 3.09%
Time Deposits 406,208 21,359 5.26% 313,899
16,501 5.26% 290,725 13,913 4.79%
Short-Term Borrowings 59,462 2,623 4.41% 64,933
2,886 4.44% 45,868 1,945 4.24%
Long-Term Borrowings 22,654 1,494 6.59%
15,130 877 5.80% 10,401 616
5.92%
Total Interest-Bearing
Liabilities 741,328 32,890 4.43% 620,997
26,933 4.34% 586,209 23,482 4.01%
Demand Deposits 100,158 84,265 80,447
Other Liabilities 13,955 13,465 10,761
Stockholders' Equity 94,039 85,594 76,260
________ _______ _______
Total $949,480 $804,321 $753,677
======= ====== ======
Net Interest Income $45,700 ______ $
40,395 _______ $37,759 ______
Net Interest Rate Spread (3) 4.60% 4.64%
4.72%
Net Interest Margin (4) 5.25% 5.39%
5.38%
===== =====
=====
(1) Fully Taxable Equivalent-Using the Federal statutory
rate of 35% as
applied to non-taxable loans and securities in periods in
which related tax benefits arise.
(2) Non-accrual loans are included in average balances
outstanding but with
no related interest income.
(3) Represents the difference between the yield on earning
assets and cost
of funds.
(4) Represents tax equivalent net interest income divided
by average interest
earning assets.
7
C. Rate and Volume Analysis of Interest (1)
(Amounts in Thousands)
1997 Compared to 1996 1996
Compared to 1995
Increase/(Decrease) due to
Increase/(Decrease) due to
Volume Rate Total Volume Rate Total
Interest Earned On:
Loans $9,228 $(46)$9,182 $7,574 $260 $7,834
Investment securities available
for sale1,353 238 1,591 2,062 24 2,086
Investment securities
held to maturity(245) (114) (359)(3,630) (63)
(3,693)
Interest bearing deposits
with other banks (17) 33 16 15 (9)
6
Federal funds sold 828 4 832 (124) (22)
(146)
_____ _____ ______ ______ ______ ______
Total interest earning
assets 11,147 115 11,262 5,897 190 6,087
_____ _____ ______ ______ ______ ______
Interest Paid On:
Demand deposits504 41 545 (150) 13 (
137)
Savings deposits 235 (35) 200 (205)
3 (202)
Time deposits4,854 4 4,858 1,158 1,430 2,588
Short-term borrowings(241)(22) (263) 843 98
941
Long-term debt483 134 617 274 (13)
261
____________________ ______ ______ ______
Total interest bearing
liabilities5,835 122 5,957 1,920 1,531 3,451
____________________ ______ ______ ______
Change in net interest
income $5,312 $(7)$5,305 $3,977$(1,341) $2,636
====== ===== ====== ===== ===== =====
(1) Fully Taxable Equivalent-using the federal statutory
rate of 35% as
applied to non-taxable loans and securities in periods in
which related tax
benefits arise.
The preceding table sets forth a summary of the changes in
interest earned and
paid resulting from changes in volume of earning assets and
paying liabilities
and changes in rates thereon. For purposes of this
analysis, the change in
interest due to both rate and volume has been allocated to
volume and rate
changes in proportion to the relationship of the absolute
dollar amounts.
II. Investment Portfolio
A. Amortized Cost of Investment Securities Held to
Maturity:
December 31
(Amounts in Thousands) 1997 1996 1995
U.S. Treasury securities $ 4,098 $ 8,247 $ 16,563
U.S. Government agencies and corporations 26,377
43,494 59,792
States and political subdivisions 77,641 47,532
47,975
Other securities 1,058 1,055 1,055
_______ _______ _______
$109,174 $100,328 $
125,385
======= ====== ======
8
Market Value of Investment Securities Available
for Sale:
December 31
(Amounts in Thousands) 1997 1996 1995
U.S. Treasury securities $ - $ 1,005 $
1,217
U.S. Government agencies and corporations 132,746
110,967 100,184
States and political subdivisions 22,576 16,037
16,345
Other securities 6,473 8,104 3,447
_______ _______
_______
$161,795 $ 136,113
$121,193
======= ====== ======
B. Maturity and Yields
The required information is incorporated by reference to
pages 34 through 36
of the 1997 Annual Report.
C. There are no issues included in obligations of states
and political
subdivisions or other securities which
exceed ten percent of stockholders' equity.
9
III. Loan Portfolio
A. Loan Summary
December 31
(Amounts in Thousands) 1997 1996 1995 1994
1993
Commercial, Financial and
Agricultural $ 82,445$ 79,278$ 71,441$ 61,691
$ 58,060
Real Estate- Commercial 202,625 166,787 152,579
129,672 121,599
Real Estate- Construction 9,612 10,589
5,608 2,406 2,783
Real Estate- Residential227,465 171,455 155,282
143,350 133,477
Consumer 151,429 120,720 100,843 84,453
81,035
Other 1,185 552 519
501 738
________________________ ________
________
Total 674,761 549,381 486,272 422,073
397,692
Less : Unearned Income 2,944 1,678 1,121
883 888
671,817547,703 485,151 421,190
396,804
Less: Reserve for Possible
Loan Losses 11,406 8,987 8,321
8,479 9,568
Net Loans $660,411$ 538,716$ 476,830$ 412,711 $
387,236
====== ======= ======= ======= =======
B. Maturities and Rate Sensitivity of Loan Portfolio at
December 31, 1997:
Remaining
Maturities
(Amounts in Thousands)
Over One Over
One Year Year to Five
and Less Five Years Years
Total Percent
Commercial, Financial and
Agricultural $ 41,436 $ 32,301 $ 8,708 $ 82,445
12.27%
Real Estate- Commercial 51,261 85,976
65,388 202,625 30.16%
Real Estate- Construction 5,912
3,038 662 9,612 1.43%
Real Estate- Mortgage 31,553 114,948
80,964 227,465 33.86%
Consumer 38,277 103,101 7,107
148,485 22.10%
Other 896 268
21 1,185 .18%
$169,335 $339,632 $162,850
$671,817 100.00%
======= ======== ========
======== =======
Rate Sensitivity:
Pre-determined Rate $ 82,711 $288,076 $ 102,703
$473,490 70.48%
Floating or Adjustable Rate 86,624
51,556 60,147 198,327 29.52%
$169,335 $339,632 $162,850
$671,817 100.00%
=======
======== ======= ======= =======
25.21% 50.55% 24.24%
100.00%
======= ======== ======= =======
10
C. Risk Elements. The required information for risk
elements in included
below and incorporated by reference to
pages 20 through 22 of the 1997 Annual Report.
Nonperforming Assets:
December 31
(Amounts in Thousands) 1997 1996 1995 1994
1993
Non-accruing Loans $9,988 $5,476 $4,371
$6,909 $11,269
Loans Past Due Over 90
Days 4,391 780 673
968 1,393
Restructured Loans Per-
forming in Accordance
With Modified Terms 534 401 440
640 1,400
Gross Interest Income Which
Would Have Been Recorded
Under Original Terms of
Non-Accruing and Re-
Structured Loans 667
Actual Interest Income During
the Period 191
Commitments to Lend
Additional Funds on Non-
Performing Assets - - - - -
Management believes that the extent of problem loans at
December 31, 1997
is disclosed as non-performing assets or delinquent loans in
the preceding
charts. However, there can be no assurance that future
circumstances, such
as further erosion of economic conditions and the related
potential effect
that such erosion may have on certain borrowers' ability to
continue to
meet payment obligations, will not lead to an increase in
problem loan
totals. Management believes that the non-performing asset
carrying values
will be substantially recoverable, taking into consideration
the adequacy of
the applicable collateral and, in certain cases, partial
write-downs which
have been taken and allowances that have been established.
It is the Registrant's policy to discontinue the accrual of
interest on loans
based on their payment status and evaluation of the related
collateral and
the financial strength of the borrower. The accrual of
interest is normally
discontinued when a loan becomes 90 days past due as to
principal or interest.
At December 31, 1997, and at the present time, the Company
does not have any
concentrations of loans to borrowers engaged in similar
activities exceeding
10% of total loans, net of unearned income.
Presently, the Company has no significant concentrations of
credit risk
other than geographic concentrations. Most loans in the
current portfolio are
made and collateralized in West Virginia. Although portions
of the West
Virginia economy are closely related to coal and timber,
they are supplemented
by service industries. The current economy of the Company's
market is
relatively stable and is not seen as highly subject to
volatile economic
change.
The following table presents the Company's investment in
loans considered to
be impaired (in thousands):
December 31
1997 1996
Commercial, financial and agricultural $6,800
$3,377
Real estate-mortgage 708 149
______ ______
Total investment in loans considered to be impaired
$7,508 $3,526
===== =====
11
The Company has not presented impaired loan information for
periods prior to
the effective date of FAS 114, "Accounting by Creditors for
the Impairment of
a Loan", as amended, which was effective in 1995. Under
SFAS No. 114,
the allowance for possible loan losses related to loans that
are identified for
evaluation in accordance with SFAS No. 114 is based on
discounted cash
flows using the loan's initial effective interest rate or
the fair value of
the collateral for certain collateral dependent loans.
IV. Summary of Loan Loss Experience
A. 1. Summary of Loan Loss Experience:
Years Ended December 31
(Amounts in Thousands, Except Percent Data) 1997 1996
1995 1994 1993
Balance of reserve at beginning of period $8,987 $8,321
$8,479 $9,568$7,803
Reserve of subsidiaries at date of acquisition 1,981
- - - - - 1,387
Charge-offs:
Commercial, financial and agricultural 2,052 369
1,875 2,237 815
Real estate- residential 385 275 109 163
289
Installment 2,761 1,537 899 963 1,137
Total Charge-offs 5,198 2,181 2,883 3,363 2,241
Recoveries:
Commercial, financial and agricultural 130 249
126 83 311
Real estate-residential 31 26 35
7 83
Installment 512 299 329 420
338
Total Recoveries 673 574 490 510
732
Net charge-offs 4,525 1,607 2,393 2,853 1,509
Provision charged to operations 4,963 2,273 2,235 1,764
1,887
Balance of reserve at end of period$11,406$8,987 $8,321
$8,479 $9,568
===== ========== ===== =====
Ratio of net charge-offs to average loans
outstanding .73% .31% .54% .70% .38%
====== ========== ===== =====
Ratio of reserve to total loans outstanding 1.70% 1.64%
1.72% 2.01% 2.41%
====== ========== ===== =====
A. 2. The required information is incorporated by
reference to page 21
of the 1997 Annual Report.
B. Allocation of Reserve for Possible Loan Losses:
(Amounts in Thousands, Except Percent Data)
December 31
1997
1996 1995 1994
1993
Commercial, Financial
and Agricultural $4,795 42% $3,167 45% $3,465
46% $3,327 45% $4,671 45%
Real Estate- Mortgage 2,819 35% 1,956 33%
1,751 33% 747 35% 828 34%
Consumer 1,979 23% 1,567 22% 1,280 21%
1,099 20% 1,587 21%
Unallocated 1,813 N/A 2,297 N/A 1,825 N/A
3,306 N/A 2,482 N/A
Total $11,406 100% $8,987 100% $8,321 100%
$8,479 100% $9,568 100%
===== ==== ===== ==== ===== ====
===== ==== ===== ====
The percentages in the table above represent the percent of
loans in each
category of total loans.
12
V. Deposits
A. The required information for average deposits and
rates paid by type
is on page 9 of this report.
B. Not applicable.
C. Not applicable.
D. The required information is incorporated by
reference to page 39 of
the 1997 Annual Report and as follows:
Maturities of Time Deposits of $100,000 or more
(Amounts in Thousands)
1997
Three months or less $ 49,168
Over Three to Six Months 20,082
Over Six to Twelve Months 23,423
Over Twelve Months 24,678
___________
Total $117,351
==========
E. Not applicable.
VI. Return on Equity and Assets
A. The required information is incorporated by
reference to page 15 of
the 1997 Annual Report.
VII. Short-Term Borrowings
A. Securities Sold Under Agreements to Repurchase and
Other Short-Term
Borrowings:
The Company uses various short-term funding sources
including term repurchase
agreements, customer repurchase agreements and Federal funds
purchased. The
Company's short-term borrowings and rates paid are
summarized as follows
(Amounts in Thousands, Except Percent Data):
1997
1996 1995
Amount
Rate Amount Rate
Amount Rate
At year-end $55,056 4.28% $53,031 4.02% $50,205
4.16%
Average during year 59,462 4.41% 64,933 4.44% 45,868
4.24%
Maximum month-end
balance 63,782 54,833 61,068
B. Long-Term Advances From the Federal Home Loan Bank
(FHLB) and
Long-Term Debt
Two subsidiaries of the Company are members of the FHLB and
as such have the
ability to obtain advances from the FHLB. At December 31,
1997 and 1996,
the Company had long-term advances from the FHLB ( original
maturities in
excess of one year) of $15 million with a weighted average
rate of 5.83%.
The advances from the FHLB are secured by certain qualifying
first mortgage
loans, stock in the FHLB, mortgage-backed securities and
certain investment
securities.
13
Item 2. Properties
FIRST COMMUNITY BANK OF MERCER COUNTY, INC.
The offices of the Registrant are located within First
Community Bank of
Mercer County, Inc. at 1001 Mercer Street, Princeton, West
Virginia. Principal
properties owned by the subsidiary banks consist of modern
single purpose
facilities described as follows:
Princeton- Two-story, 30,000 square foot banking offices
with detached
drive-up/walk-in facility in Princeton, West Virginia,
completed in 1976;
Pine Plaza branch office with drive-up located in Princeton,
West Virginia,
constructed in 1986 on leased land with initial lease term
plus renewal
options totaling twenty years; moveable, modular branch
office with
drive-up/walk-in located in Matoaka, West Virginia,
constructed in 1983 on
leased land; two-story, 6,000 square foot banking office
with drive-up
located in Green Valley, West Virginia, constructed in 1978,
10 automated
teller machines located throughout Mercer County.
Bluefield- Three-story, 37,000 square foot banking offices
located on Federal
Street with detached drive-up facility, completed in 1972
and walk-up
automated teller machine located on premises; one off-site
automated teller
machine on leased land in Bluefield Plaza.
Bluewell- Two-story, 8,200 square foot banking offices with
drive-up facility
located in Bluewell, West Virginia completed in 1965; one
drive-up automated
teller machine located on premises.
Green Valley- Branch office leased in Mercer Mall; one walk-
up automated
teller machine located on premises.
FIRST COMMUNITY BANK, INC.
Wyoming County- Two-story banking offices located in
Pineville, West Virginia,
acquired in 1961; two-story banking offices with drive-up
located in Oceana,
West Virginia, constructed in 1984; branch office with drive-
up located
in Mullens, West Virginia, constructed in 1984; moveable,
modular branch
office with drive-up/walk-in located in Pineville, West
Virginia, constructed
in 1984; three automated teller machines.
Upshur County- Three-story banking offices with an off-
premise drive-up/walk-in
facility located in Buckhannon, West Virginia, acquired in
1937; branch
office with drive-up located in Tennerton, West Virginia,
constructed in 1980;
two automated teller machines.
Taylor County- Two-story banking offices with an attached
drive-up/walk-in
facility located in Grafton, West Virginia, constructed in
1966; one automated
teller machine; one-story, 1,200 square foot banking offices
with an attached
drive-up facility, located in the Blueville area of Grafton,
West Virginia,
constructed in 1968.
Nicholas County- Two story banking offices and office
addition with drive-up
located in Richwood, West Virginia; off-premises facility
with drive-up
located in Richwood, West Virginia, constructed in 1977 on
leased land; one and
one-half story branch office with drive-up located in
Summersville, West
Virginia, constructed in 1984; one and one-half story branch
office with
drive-up located in Craigsville, West Virginia, constructed
in 1984;
three automated teller machines.
Webster County- Branch office with drive-up located in
Cowen, West
Virginia, constructed in 1988.
Preston County- One-story, 4,000 square foot banking offices
with an attached
drive-up facility located in Rowlesburg, West Virginia,
constructed in the
early 1920's and remodeled in 1981.
Logan County- Two and one-half story banking facility with
attached two-lane
drive-up located in Man, West Virginia, constructed in 1976
with additional
levels added in 1981; separate mini-bank facility with four
drive-thru
lanes; banking sales center located inside Wal-Mart
Supercenter in Logan,
West Virginia; one automated teller machine.
14
FIRST COMMUNITY BANK OF SOUTHWEST VIRGINIA, INC.
Tazewell County- Bi-level , 6,500 square foot banking
offices with attached
drive-up facility located in Tazewell, Virginia, constructed
in 1978, remodeled
in 1981 and 1995; one-story, 2,500 square foot banking
offices with an
attached drive-up facility, located in Richlands, Virginia,
constructed in
1989 and remodeled in 1995.
Dickenson County- Two story bank building with attached
drive-up
constructed in 1973 located in Clintwood, Virginia.
Wythe County- One story bank building with attached two-lane
drive-up located
in Fort Chiswell, Virginia, constructed in 1962, additions
in 1984 and
completely remodeled in 1994; a leased one story banking
facility with walk-up
automated teller machine, two-lane drive-up remodeled in
1997, located in
Wytheville, Virginia.
Wise County- One story bank building with attached two-lane
drive-up
located in Pound, Virginia.
BLUE RIDGE BANK
Alleghany County- One story 17,980 square foot bank building
constructed
in 1987 located in Sparta, North Carolina.
Alexander County- 4,000 square foot one story banking
facility situated
on approximately three acres in Taylorsville, North
Carolina; with a walk-up
automated teller machine.
Wilkes County- One story, 1,500 square foot banking facility
purchased by the
bank in 1995, located in Hays, North Carolina.
Surry County- One story, 4,000 square foot banking facility
purchased by
the bank in 1995, located in Elkin, North Carolina; with a
walk-up automated
teller machine.
Item 3. Legal Proceedings
The Registrant and its subsidiaries (the Company) are
plaintiffs and
defendants in lawsuits arising out of the normal course of
business, in which
claims for monetary damages are asserted. Management, after
consulting with
legal counsel handling the respective matters, is of the
opinion that the
ultimate outcome of such pending actions will not have a
material effect upon
the consolidated results of operations or financial
condition of the
Registrant. Following is a summary of significant
proceedings along with
recent developments, where applicable.
The Company's most significant matter of litigation styled
Civil Action No.
92-CV-1696-K Four Winds Development, Inc., W. Stephen
Melcher, and E. T.
Boggess, Plaintiffs vs. First Community Bank - Princeton and
Dave Shields
Company, Inc., Defendants was settled in the first quarter
of 1997 through
a compromise which resulted in payments by the Company to
various plaintiffs
aggregating $733,000 and with a net cost to the Company of
$468,000 after
contribution by insurance providers and co-defendants. This
settlement
concluded three separate but related Civil Actions involving
the above
referenced commercial loan customers, a related bankruptcy
and a mechanics'
lien action. The first quarter settlement in 1997 resulted
in a recovery of
litigation reserves of approximately $700,000. Reserves had
been established
in previous years in anticipation of execution of a verdict
judgment under
the above referenced Civil Action. Settlement of the
verdict was accomplished
in 1997 at a lesser sum and with co-defendants and insurance
carriers assuming
a portion of the settlement amount as described above.
Included in the settlement described in the preceding
paragraph was the
settlement of a second Civil Action No. 89-C-1156-F styled
Commercial Bank
of Bluefield (Commercial), Plaintiff vs. Allied
Refrigeration, Inc., Defendant
and Third Party Plaintiff vs. Dan Shortridge, Four Winds
Development, Inc.,
W. Stephen Melcher, E. T. Boggess, Robert W. Culler and
First Community
Bank, Third Party Defendants. This action was settled in
connection with
the above referenced joint settlement agreement in
consideration of the
forgiveness of a $200,000 loan by First Party Plaintiff,
Commercial Bank of
Bluefield, and the payment of $228,000 to Defendant Allied
Refrigeration, Inc.
The cash payment to Allied is included in the settlement
total referenced
in the preceding paragraph.
The third related action styled Allied Refrigeration vs.
Westwood Associates,
et al, Adversary Proceeding No. 7-93-00037, which was
settled as part of
the above referenced joint settlement agreement, was the
assertion of a
mechanics' lien in relation to the development of a long-
term care facility
in Bluefield, Virginia. The mechanics' lien action, brought
by Allied
Refrigeration, Inc., was also dismissed as part of the joint
settlement
agreement.
15
In August 1997, the Company was named as a defendant in a
suit styled Ann
Tierney Smith, as Executrix of the Estate of Katharine B.
Tierney, Ann
Barclay Smith and Laurence E. Tierney Smith, Plaintiffs vs.
FCFT, Inc.,
First Community Bank, Inc., Gentry, Locke, Rakes & Moore,
and W. William
Gust, Defendants, Civil Action No. 97-CV-408-K, seeking to
overturn the
establishment of a private foundation for which the
Company's Trust and
Financial Services Division serves as Trustee. The suit
filed by heirs of the
Foundation donor, seeks a total of $6 million in
compensatory and punitive
damages as well as the termination of the Foundation. The
Company and
Trustee believe the creation and the operation of the
Foundation represent the
intent and will of the donor and intend to defend the suit
and the continuation
of the Foundation's purpose. Both management and the
Company's legal
counsel are of the opinion that this suit is without merit
and will be
successfully defended with no material adverse impact on the
Company's
financial condition or results of operations.
Civil Action No. 82-C-610, styled Rhondal L. Toler, et al,
vs. Castle Rock Bank
of Pineville, filed on December 2, 1982 in the Circuit Court
of Wyoming
County, West Virginia, was reported in the 1996 Annual
Report on Form 10-K.
In this action, which Rhondal L. and Annette Toler and Vern
and Henrietta
Ellison, Plaintiffs, claimed that former representatives of
a subsidiary
of the Registrant misrepresented the condition of a company
at the time the
Plaintiffs borrowed money to purchase the company. The
Company filed an
answer denying all pertinent allegations made by the
Plaintiffs and
additionally filed a counterclaim seeking $322,000 plus
costs. This case was
dismissed in 1996 due to its prolonged existence on the
Court docket and
the Plaintiff's failure to prosecute. The Plaintiff has
filed a motion to
reinstate this matter and the Company has filed a counter
motion objecting to
the reinstatement. Ruling on these issues has not been made
as of the
date of this report.
Additionally, the Company is also subject to certain
asserted and unasserted
potential claims encountered in the normal course of
business. In the
opinion of management, the resolution to these claims and
unasserted potential
claims will not have a material adverse affect on the
Company's financial
position or results of operations and, due to the relative
amount of claims
where damage is sought and based upon the Company's
evaluation, these
matters have not been included in this report.
Item 4. Submission of Matters to a Vote of Security Holders
No matters were submitted to a vote of security holders
during the fourth
quarter of 1997
16
Part II.
Item 5. Market for Registrant's Common Equity and Related
Matters
Market Price of Common Stock
The common stock of First Community Bancshares, Inc. is
traded over-the-counter
and is quoted on the NASDAQ (Level III) Electronic
Billboard. The following
table shows the approximate high and low bids as known to
the Company or
reported by local brokers for each quarter in 1996 and 1997.
Management
has been advised that such quotations primarily represent
actual transactions.
Also, presented below is the book value and cash dividends
paid per share as
of and for each quarter of 1996 and 1997. The number of
common stockholders
of record on December 31, 1997 was 2,142 and outstanding
shares totaled
5,650,932.
Bid Book Value Cash Dividends
1996 High Low Per Share Per Share
First Quarter $27.20 $23.60 $14.70 $.22
Second Quarter 26.40 25.60 15.02 .24
Third Quarter 25.80 24.80 15.50 .28
Fourth Quarter 28.80 25.80 15.81 .40
$1.14
====
1997
First Quarter $29.60 $27.20 $16.04 $.28
Second Quarter 33.00 28.25 16.62 .31
Third Quarter 36.13 31.75 16.98 .31
Fourth Quarter 40.00 32.75 17.32 .40
$1.30
====
The holders of shares of common stock of the Company are
entitled to such
dividends as the Board of Directors, in its discretion, may
declare out
of funds legally available thereof.
The Company has historically paid dividends on a quarterly
basis and
currently intends to continue to pay such dividends in the
foreseeable future.
However, there can be no assurance that dividends will be
paid in the future.
The declaration and payment of future dividends will depend
upon, among
other things, the Company's earnings and financial
condition, the general
economic and regulatory climate.
The Company's ability to pay dividends to its shareholders
depends to a
large extent upon the dividends the Company receives from
its subsidiaries.
Dividends paid by its banking subsidiaries are subject to
restrictions under
various Federal banking laws. In addition, the banking
subsidiaries must
maintain certain capital levels which may restrict their
ability to pay
dividends to the Company. As of December 31, 1997, the net
profits available
for distribution to the shareholders as dividends without
regulatory approval
were approximately $1.8 million; however the regulators of
the banking
subsidiaries could administratively impose stricter limits
on the ability of
the banking subsidiaries to distribute net profits to the
Company.
Item 6. Selected Financial Data
The required information is incorporated by reference to
page 15 of the 1997
Annual Report.
Item 7. Management's Discussion and Analysis of Financial
Condition and
Results of Operations
The required information is incorporated by reference to
pages 13 through
24 of the 1997 Annual Report.
17
Item 7A. Quantitative and Qualitative Disclosures About
Market Risk
Interest Rate Risk (IRR) and Asset/Liability Management
The Bank's profitability is dependent to a large extent upon
its net interest
income (NII), which is the difference between its interest
income on
interest-earning assets, such as loans and securities, and
its interest
expense on interest-bearing liabilities, such as deposits
and borrowings.
The Bank, like other financial institutions, is subject to
interest rate risk
to the degree that its interest-earning assets reprice
differently than its
interest-bearing liabilities. The Bank manages its mix of
assets and
liabilities with the goals of limiting its exposure to
interest rate risk,
ensuring adequate liquidity, and coordinating its sources
and uses of funds.
Specific strategies for management of IRR have included
shortening the
amortized maturity of fixed-rate loans and increasing the
volume of
adjustable rate loans to reduce the average maturity of the
Bank's
interest-earning assets.
The bank seeks to control its IRR exposure to insulate net
interest income and
net earnings from fluctuations in the general level of
interest rates. To
measure its exposure to IRR, the bank performs quarterly
simulations of
NII using financial models which project NII through a range
of possible
interest rate environments including rising, declining, most
likely and
flat rate scenarios. The results of these simulations
indicate the existence
and severity of IRR in each of those rate environments based
upon the
current balance sheet position and assumptions as to changes
in the volume
and mix of interest-earning assets and interest-paying
liabilities and
management's estimate of yields attained in those future
rate environments
and rates which will be paid on various deposit instruments
and borrowings.
The following table summarizes the impact on tax equivalent
NII and the
Market Value of Equity (MVE) of immediate and sustained rate
shocks in
the interest rate environment of plus and minus 100, 200,
300 and 400 basis
points from the flat rate simulation.
Change in Tax Equivalent Market
Interest Rates Net Interest Value of
(Basis Points) Income %
Equity %
400 32,290.6 -25.5 90,873.7 -7.6
300 35,086.1 -19.1 92,359.7 -6.1
200 37,862.7 -12.7 94,062.0 -4.4
100 40,620.2 -6.3 96,045.5 -2.4
- - -0- 43,358.8 0 98,390.1 0
- - -100 46,079.4 6.3 101,192.9 2.8
- - -200 48,781.8 12.5 104,572.5 6.3
- - -300 51,466.0 18.7 108,701.2 10.5
- - -400 54,132.2 24.8 113,982.1 15.8
The preceding table which illustrates the prospective
effects of hypothetical
interest rate changes is based upon numerous assumptions,
including relative
and estimated levels of key interest rate factors.
Management feels that
this type of modeling technique, although useful, does not
take into
account strategies which management would undertake in
response to a sudden
and sustained rate shock as depicted. Additionally,
management does not
believe that a rate shock of the magnitude described is
likely in the
forecast period presented.
Item 8. Financial Statements and Supplementary Data
The required information is incorporated by reference to
pages 26 through 51
of the 1997 Annual Report and as follows:
First Community Bancshares, Inc.
Quarterly Earnings Summary (Unaudited)
Quarterly earnings for the years ended December 31, 1997 and
1996 are as
follows (in thousands):
1997
March 31 June 30 Sept30 Dec 31
Interest Income $16,546 $18,934 $19,512 $20,842
Interest Expense 6,942 7,946 8,609 9,393
Net interest income 9,604 10,988 10,903 11,449
Provision for possible loan losses 630
1,087 736 2,510
Net interest income after provision
for possible loan losses 8,974 9,901 10,167
8,939
Other income 1,824 2,163 2,123 2,551
Other expenses 5,441 5,975 7,305 5,951
Income before income taxes 5,357 6,089 4,985
5,539
Income taxes 1,660 1,950 1,598 1,668
Net income $3,697 $4,139 $3,387 $3,871
Per share:
Basic earnings $ 0.65 $ 0.73 $ 0.60 $ 0.69
Dividends $ 0.28 $ 0.31 $ 0.31 $ 0.40
Weighted average shares outstanding 5,650 5,650
5,650 5,651
1996
March 31 June 30 Sept 30 Dec 31
Interest Income $15,475 $16,115 $16,593 $16,758
Interest Expense 6,403 6,660 6,918 6,952
Net interest income 9,072 9,455 9,675 9,806
Provision for possible loan losses 455
581 621 616
Net interest income after provision
for possible loan losses 8,617 8,874 9,054
9,190
Other income 1,576 2,110 1,835 3,549
Other expenses 5,385 5,375 5,518 8,080
Income before income taxes 4,808 5,609 5,371
4,659
Income taxes 1,398 1,718 1,720 1,694
Net income $ 3,410 $ 3,891 $ 3,651 $ 2,965
Per share:
Basic earnings $ 0.61 $ 0.69 $ 0.65 $ 0.53
Dividends $ 0.23 $ 0.23 $ 0.28 $ 0.40
Weighted average shares outstanding 5,590 5,639
5,617 5,594
Item 9. Changes in and Disagreements with Accountants on
Accounting and
Financial Disclosure
None.
18
Part III
Item 10. Directors and Executive Officers of the Registrant
The required information concerning directors has been
omitted in accordance
with General Instruction G. Such information regarding
directors appears
on pages 3, 4, 5, and 6 of the Proxy Statement relating to
the 1998 Annual
Meeting of Stockholders and is incorporated herein by
reference.
A portion of the information relating to executive officers
has been omitted
in accordance with General Instruction G. Such information
regarding
executive officers appears on pages 6, 7, and 8 of the Proxy
Statement
relating to the 1998 Annual Meeting of Stockholders and is
incorporated
herein by reference.
Item 11. Executive Compensation
The required information concerning management remuneration
has been
omitted in accordance with General Instruction G. Such
information appearing
on pages 7, 8, 9, and 10 of the Proxy Statement relating to
the 1998 Annual
Meeting of Stockholders is incorporated herein by reference.
Item 12. Security Ownership of Certain Beneficial Owners
and Management
The required information concerning security ownership of
certain beneficial
owners and management has been omitted in accordance with
General Instruction
G. Such information appearing on page 6 of the Proxy
Statement relating to
the 1998 Annual Meeting of Stockholders is incorporated
herein by reference.
Item 13. Certain Relationships and Related Transactions
The required information concerning certain relationships
and related
transactions have been omitted in accordance with General
Instruction G.
Such information appearing on pages 5 and 6 of the Proxy
Statement relating
to the 1998 Annual Meeting of Stockholders is incorporated
herein by reference.
Part IV
Item 14. Exhibits, Financial Statement Schedules and
Reports on Form 8-K
(a) (1) Financial Statements
The Consolidated Financial Statements of First
Community
Bancshares, Inc. and subsidiaries together with
the independent Auditors' Report dated January
30, 1998 are
incorporated by reference to pages 26 through 50
of the 1997 Annual Report which is included
herein as Exhibit 13.
(2) Financial Statement Schedules
All applicable financial statement schedules
required by
Regulation S-X are included in the Notes to
Consolidated Financial Statements.
(b) A report on Form 8-K regarding the Company's
merger with the
new Nevada corporation to change its state
of domicile and its corporate name was filed
on November 3,
1997 and incorporated by reference to Form
10-Q for the period ending September 30,
1997.
19
(c) Exhibits:
(3) Articles of Incorporation and Bylaws
The Registrant's Articles of Incorporation and
By-laws are included
as exhibits (3)(i) and (3)(ii), respectively.
(11) Statement Regarding Computation of Per Share
Earnings
The statement regarding computation of per share
earnings is
included as Note 10 of the Notes to Consolidated
Financial Statements in the 1997 Annual Report
to Stockholders
and is incorporated herein by reference.
(13) Annual Report to Security Holders
(21) Subsidiaries of Registrant:
First Community Bank, Inc. ( a West Virginia
Corporation)
First Community Bank of Mercer County, Inc. ( a West
Virginia Corporation)
First Community Bank of Southwest Virginia, Inc. ( a
Virginia Corporation)
Blue Ridge Bank, Inc. (a North Carolina
Corporation)
(23) Independent Auditors' Consent
20
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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.
BY: /s/
President and Chief
Executive Officer
Pursuant to the requirements of the Securities Exchange Act
of 1934, this
report has been signed below by the following persons on
behalf of the
Registrant and in the capacities and on the dates indicated.
BY: /s/
Principal Accounting Officer
Signature
Title
Date
/s/________________________________ Director
3/31/98
(Sam Clark)
/s/________________________________ Director
3/31/98
(Allen T. Hamner)
/s/ _______________________________
President, Chief Executive Officer
3/31/98
(James L. Harrison, Sr.) and Director (Principal Executive
Officer)
/s/________________________________ Director
3/31/98
(B.W. Harvey)
/s/________________________________ Director
3/31/98
(I. Norris Kantor)
/s/________________________________ Vice
President, Chief Financial
3/31/98
(John M. Mendez) Officer and Director
(Principal
Financial Officer)
/s/________________________________ Director
3/31/98
(A. A. Modena)
/s/________________________________ Director
3/31/98
(Robert E. Perkinson, Jr.)
/s/________________________________ Chairman
of the Board and Director
3/31/98
(William P. Stafford)
/s/________________________________ Director
3/31/98
(William P. Stafford, II)
/s/________________________________ Director
3/31/98
(W. W. Tinder, Jr.)
/s/________________________________ Director
3/31/98
(Harold M. Wood)
21
Exhibit 3i.
ARTICLES
OF
INCORPORATION
OF
FIRST COMMUNITY BANCSHARES, INC.
FIRST: The name of this corporation is First Community
Bancshares, Inc.
SECOND: The registered agent for the corporation is CSC
Services of Nevada,
Inc. , whose street address and mailing address are 502 East
John Street,
Carson City, NV 89706.
THIRD: The purpose or purposes for which this corporation
is organized are
as follows:
To own, buy, acquire, sell, exchange, assign, lease and deal
in and with real
and personal property and any interest or right therein;
To own, buy, acquire, sell, exchange, assign,
pledge and deal with voting
stock, non-voting stock, notes, bonds, evidences
of indebtedness and rights
and options in and to other corporate and non-
corporate entities, and to pay
therefor in whole or in part in cash or by
exchanging therefor stocks, bonds,
or other evidences of indebtedness or securities
of this or any other
corporation, and while the owner or holder of any
such stocks, bonds,
debentures, notes, evidences of indebtedness or
other securities, contracts,
or obligations, to receive, collect, and dispose
of the interest, dividends
and income arising from such property, and to
possess and exercise in respect
thereof, all the rights, powers and privileges of
ownership, including all
voting powers on any stocks so owned.
To borrower money without limit as to amount; and
To engage in any lawful act or activity for which
corporations may be
organized under the laws of the State of Nevada.
FOURTH: The total number of shares of stock which the
corporation shall have
authority to issue is Ten Million (10,000,000) shares of
Common Stock, all of
a par value of One Dollar ($1.00) each, and One Million
(1,000,000) shares of
preferred stock, whose par or face value, voting powers, designations,
preferences, interest rate, limitations, restrictions and relative
rights shall
be determined from time to time by resolution of the Board of
Directors of
the corporation.
FIFTH: The name and post office address of the incorporator is as
follows:
NAME POST OFFICE ADDRESS
Eugene E. Derryberry P.O. Box 40013
Roanoke, VA 24038
SIXTH: The members of the corporation's governing board shall be
styled as directors. The initial directors of the
corporation shall consist
of 12 persons, divided into the aforesaid classes as follows:
Class A
Allen T. Hamner 3 Lincoln Way
Buckhannon, WV 26201
B.W. Harvey c/o Acme Markets
P.O. Box 1457
Bluefield, WV 24701
John M. Mendez #6 Sandrine Pointe
Princeton, WV 24740
Harold Wood Box 97
Flat Top, WV 25841
Class B
Sam Clark State Farm Insurance
Box 700
Oceana, WV 24870
Robert E. Perkinson, Jr. MAPCO Coal, Inc.
P.O. Box 1349
Bluefield, VA 24605
William P. Stafford Princeton Machinery Service
HC 71, Box 6
Princeton, WV 24740
W.W. Tinder, Jr. Tinder Enterprises
P.O. Box 980
Bluefield, WV 24701
Class C
James L. Harrison, Sr. P.O. Box 5462
Princeton, WV 24740
I. Norris Kantor Katz, Kantor &
Perkins
P.O. Box 727
Bluefield, WV 24701
A.A. Modena 4 Windsor Circle
Drive
Bluefield, VA 24605
William P. Stafford, II Brewster, Morhous &
Cameron
P.O. Box 529
Bluefield, WV 24701
The number of directors of the corporation, not
less than 12, shall be fixed
in accordance with the Bylaws. Directors shall be
divided into three classes
(A, B and C). The initial term of office for
directors in Classes A, B and
C shall expire at the Annual Meeting of
Stockholders in 1998, 1999 and 2000,
respectively. At each Annual Meeting of
Stockholders, directors for the class
whose term then expires shall be elected for a
term of office to expire at
the third succeeding Annual Meeting of
Stockholders after election, and
shall
continue to hold office until their respective
successors are elected and
qualify. In the event of any increase or decrease
in the number of directors
fixed by the Bylaws, all classes of directors
shall be increased or decreased
as equally as possible. No person who has
attained the age of 70 years shall
be elected or appointed as a director of this
corporation; provided, however,
that every person, otherwise eligible, who was
serving as a director of the
corporation on December 31, 1990, shall continue
to be eligible for
re-election as a director of the corporation
regardless of age.
All vacancies on the Board of Directors, including
those resulting from an
increase in the authorized number of directors,
shall be filled by the
affirmative vote of a majority of the directors
then in office, whether or not
a quorum. Each director so chosen shall hold
office until the expiration
of the term of the class to which his position has
been assigned. No decrease
in the number of directors constituting the Board
of Directors shall shorten
the term of any incumbent director. No director
may be removed from office
except for cause relating to the proper
performance of this duties as a
director and then only by the affirmative vote of
the holders of more than
two-thirds of the stock of the
corporation then outstanding and entitled to vote thereon
(without voting by
class) at a meeting duly called for that purpose.
The affirmative vote of the holders of more than
twothirds of the stock of
the corporation then outstanding and entitled to
vote thereon (without
voting
by class) shall be required to amend or repeal
this Article or adopt any
provision inconsistent herewith.
SEVENTH:
Section 1. The corporation shall not be governed
by the provisions of
Nevada
Revised Statutes 78.411 to 78.444, inclusive. The
provisions of this
Article
shall govern in lieu thereof. For the purposes of
this Article:
(A) The Term "Business Combination" means any of
the following
transactions:
(I) Any merger or consolidation of the
corporation or any
Subsidiary with
or into any Interested Stockholder, or
(ii) Any sale, lease, exchange, transfer, or
other disposition (in one
transaction or a series of related
transactions) to or with any
Interested Stockholder of any assets of
the corporation or
any
Subsidiary when such assets have an
aggregate fair market
value
of $5,000,000 or more; or
(iii) The issuance or transfer to any
Interested Stockholder by the
corporation or any Subsidiary (in one
transaction or a series of
transactions) of any equity securities of the
corporation or any
Subsidiary
where any such equity securities have -an
aggregate fair market
value of
$5,000,000 or more; or
(iv) The adoption of any plan or proposal
for the liquidation or
dissolution
of the corporation; or
(v) Any agreement, contract, or other
arrangement providing for
any of
the transactions described in this
definition of a Business
Combination".
(B) A "Person" means any individual, firm,
corporation, or other entity.
(C) "Interested Stockholder" means (i) any person (other
than the
corporation, a Subsidiary of the corporation, or any profit-
sharing, employee
stock ownership or employee benefit plan of the corporation
or a Subsidiary of
the corporation, or any trustee of a fiduciary with respect
to any such plan
acting in such capacity) that is the direct or indirect
beneficial owner (as
defined in Rule 13d-3 and Rule 13d-5 under the Securities
Exchange Act of
1934 (111934 Act") as in effect on January 1, 1990) of 15
percent (15%)
or more of the outstanding capital stock of the corporation
entitled to vote
for the Election of Directors, and (ii) any Affiliate or
Associate of any
such person, includingany corporation which after the
transaction in question would be an Interested Stockholder.
(D) "Affiliate,, and "Associate" shall have the respective
meanings given
those terms in Rule 12b-2 of the General Rules and
Regulations under the
1934 Act, as in effect on January 1, 1990.
(E) "Subsidiary" means any business entity, fifty percent
(50%) or more of
which is directly or indirectly owned by the corporation.
(F)"Continuing Director" means any member of the Board of
Directors of the
corporation who is neither an Interested Stockholder nor
affiliated with,
proposed or nominated by, or controlled by an Interested
Stockholder.
Section 2. If the provisions of Section 3 of this Article
have not been
satisfied, any Business Combination shall require the
affirmative vote, in
person or by proxy, of the holders of more than eight-five
percent (85%) of
the stock, or the maximum allowed by law, if less, of the
corporation then
outstanding and entitled to vote (without voting by class).
Such affirmative
vote shall be required notwithstanding the fact that no
vote may be required,
or that some lesser percentage may be specified, by law or
in any agreement
of the corporation with any national securities exchange or
otherwise.
Section 3. Any Business Combination shall require only such
affirmative vote
by the holders of all classes of the capital stock of the
corporation
("Holders") as is required by applicable law and any other
provision of the
Certificate of Incorporation of the corporation,
exclusive of Section 2 of this Article, if the conditions
of either
Subparagraph (A) or (B) are met;
(A) The Business Combination has been approved by a vote
of a majority of all
the directors, and by a vote of a majority of all the
Continuing Directors; or
(B) All of the following conditions have been satisfied:
(1) The Holders shall receive an aggregate amount of (i)
cash and (ii) fair
market value (as of the date of the consummation of the
Business Combination)
of consideration other than cash, at least equal to the
greater of (i) the
highest per share price (including any brokerage
commissions, transfer taxes,
and fees) paid by the Interested Stockholder for any shares
of such class or
series of stock acquired by the Interested Stockholder, or
(ii) in the case
of preferred stock, the highest preferential amount per
share applicable to
such stock; and
(2) The consideration to be received by Holders of any
class or series of
outstanding common or preferred stock shall be in cash or
in the same form
as the Interested Stockholder has previously paid for
shares of such class
or series of stock. If the Interested Stockholder has paid
for shares of any
class or series of stock with varying forms of
consideration, the form of
consideration given for such class or series of stock in
the Business
Combination shall be either cash or the form used to
acquire the largest
number of shares of such class or series of stock
previously acquired by the
Interested Stockholder; and
(3) A proxy statement complying with the requirements of
the 1934 Act and
the rules and regulations thereunder (or any subsequent
provisions replacing
the 1934 Act and such rules and regulations) shall be
mailed to the
stockholders of the corporation at least 30 days prior to
the holding of any
meeting of stockholders of the corporation to vote upon the
Business
Combination (whether or not such proxy or information
statement is required
pursuant to the 1934 Act or any subsequent provisions)
which shall contain
in the forepart thereof in a prominent place any
recommendations as to the
advisability (or inadvisability) of the Business
Combination which the
Continuing Directors may choose to state and, if deemed
advisable by a majority
of the Continuing Directors, an opinion of a reputable
investment banking firm
as to the fairness (or lack of fairness) of the terms of
such Business
Combination from the point of view of the Holders of any
class of voting
stock of the corporation other than the Interested
Stockholder (such
investment banking firm to be selected by a majority of the
Continuing
Directors, to be furnished with all information it
reasonably requests, and to
be paid by the corporation a reasonable fee for its
services upon receipt by
the corporation of such opinion).
Section 4. A majority of the Continuing Directors shall
have the power to
make all determinations with respect to this Article
including without
limitation determining the transactions that are Business
Combinations, the
persons who are Interested Stockholders, the time at which
an Interested
Stockholder became an Interested Stockholder, the fair
market value of any
assets, securities, or other property, and whether a person
is an Affiliate or
Associate of another; and any such determinations of such
Continuing Directors
shall be conclusive and binding.
Section 5. Nothing contained in this Article shall be
construed to relieve
any Interested Stockholder from any fiduciary obligation
imposed by law.
Section 6. Notwithstanding any other provisions of the
Certificate of
Incorporation or of the Bylaws of the corporation (and in
addition to any
other vote that may be required by law or of the Bylaws of
the corporation),
the affirmative vote of the Holders or more than 85% of the
stock of the
corporation then outstanding and entitled to vote (without
voting by class)
shall be required in order to amend or repeal this Article
or adopt any
provision inconsistent herewith.
EIGHTH: (a) The corporation shall indemnify any person who
was or is a
party or is threatened to be made a party to any
threatened, pending or
completed action, suit or proceeding, whether civil,
criminal, administrative
or investigative (other than an action by or in the right
of
the corporation) by reason of the fact that he is or was a
director, officer,
employee or agent of the corporation, or is or was serving
at the request
of the corporation as a director, officer, employee or
agent of another
corporation, partnership, joint venture, trust or other
enterprise, against
expenses (including attorneys, fees), judgments, fines and
amounts paid in
settlement actually and reasonably incurred by him in
connection with such
action, suit or proceeding if he acted in good faith and in
a manner he
reasonably believed to be in or not opposed to be the best
interests of the
corporation, and, with respect to any criminal action or
proceeding, had no
reasonable cause to believe his conduct was unlawful.
(b) The corporation shall indemnify any person who was or
is a party or is
threatened to be made a party to any threatened, pending or
completed action
or suit by or in the right of the corporation to procure a
judgment in its
favor by reason of the fact that he is or was a director,
officer, employee
or agent of the corporation, or is or was serving at the
request of the
corporation as a director, officer, employee or agent of
another corporation,
partnership, joint venture, trust or other enterprise
against expenses
(including amounts paid in settlement and attorneys' fees)
actually and
reasonably incurred by him in connection with the defense
or settlement of
such action or suit if he acted in good faith and in a
manner he reasonably
believed to be in or not opposed to the best interests of
the corporation,
except that no indemnification shall be made in respect of
any claim, issue
or matter as to which such person shall have been finally
adjudged to be
liable to the corporation unless and only to the extent
that an appropriate
court shall determine upon application that, despite the
adjudication of
liability but in view of all the circumstances of the case,
such person is
fairly and reasonably entitled to indemnify for such
expenses as the court
shall deem proper.
(c) Any indemnification under subsections (a) and (b) of
this Article (unless
ordered by the court) shall be made by the corporation only
as authorized in
the specific case upon a determination that indemnification
of the director,
officer, employee or agent is proper in the circumstances
because he has
met the applicable standard of conduct set forth in
subsections (a) and
(b) of this Article. Such determination shall be made (1)
by the Board of
Directors by a majority vote of a quorum constituting of
directors who were
not parties to such action, suit or proceeding, or (2) if
such a quorum is
not obtainable, or, even if obtainable a quorum of
disinterested Directors
so directs, by independent legal counsel in a written
opinion, or (3) by the
stockholders.
(d) Expenses incurred by an officer or director in
defending a civil or
criminal action, suit or proceeding shall be paid by the
corporation as
incurred and in advance of the final disposition of such
action, suit or
proceeding upon receipt of an undertaking by or on behalf
of such director
or officer to repay such amount if it shall ultimately be
determined by a
court of competent jurisdiction that he is not entitled to
be indemnified by
the corporation as authorized in this section. Such
expense incurred by
other employees and agents may be so paid upon such terms
and conditions,
if any, as the Board of Directors deems appropriate.
(e) The corporation may (but need not) purchase and
maintain insurance on
behalf of any personal who is or was a director, officer,
employee or agent of
the corporation, or is or was serving at the request of the
corporation as a
director, officer, employee or agent of another
corporation, partnership,
joint venture, trust or other enterprise against any
liability asserted against
him or expenses incurred by him in any such capacity, or
arising out of
this status as such, whether or not the corporation would
have the power
to indemnify him against such liability under this section.
(f) No director of the corporation shall be liable to the
corporation or
its stockholders for monetary damages for breach of
fiduciary duty as a
director, provided that such provision shall not eliminate
or limit the
liability of a director; (i) for any breach of the
director's duty of loyalty
to the corporation or its stockholders; (ii) for acts or
omissions which
involve intentional misconduct, fraud or a knowing
violation of law; (iii) for
the payment of any distribution in violation of Nevada
Revised Statute 78.300;
or (iv) for any transaction from which the director derived
an improper
personal benefit.
Date: July 24, 1997
Eugene E. Derryberry
Incorporator
Commonwealth of Virginia )
City of Roanoke)
Subscribed and sworn to before me in my jurisdiction
aforesaid this 25th day
of July, 1997.
/s/ Leigh S. Holland
Notary Public
my commission expires: 9-30-98
Exhibit 3ii.
BYLAWS OF
FIRST COMMUNITY BANCSHARES, INC.
1. Annual Meeting of Stockholders.
The regular Annual Meeting of the Stockholders of the
Corporation for the
election of directors and the conducting of such other
business as may be
appropriate shall be held during April of each year, on such
date and at such
time and place as may be fixed by the Board of Directors.
Notice of such
meeting, stating the purpose thereof, shall be mailed to all
stockholders not
less than ten (10) days nor more than sixty (60) days prior
to the date
thereof.
The stockholders shall meet annually on the day
appointed and shall elect a
Chairman and Secretary of the meeting. The Chairman,
Chief Executive Officer
or other Executive Officers of the Holding Corporation
shall then submit to the
stockholders a clear and concise statement of the
financial condition of the
Corporation for the preceding year and a review of the
business of the
Corporation.
A record of the Stockholders, Meeting, giving the number of
shares represented
by proxy and in person, shall be made and entered in the
records of the
meeting in the minute book of the Corporation. The
stockholders shall proceed
to the election of directors and to the transaction of any
other business that
may properly come before the meeting as prescribed by Nevada
law. The
record of the meeting shall show the number of shares voting
for, voting
against or abstaining on each resolution, or voting for,
voting against, or
withholding authority on each candidate for director.
Proxies shall be dated,
and shall be filed with the records of the meeting.
Any nominations to the Board of Directors other than
those made by or on
behalf of the existing management of the Corporation
shall be made in
writing and shall be delivered or mailed to the
Secretary of the Corporation
not less than thirty (30) days prior to any meeting of
the stockholders
calling for the election of directors, provided,
however, that if less than
thirty (30) days notice of the meeting is given to
stockholders, such notice
of nomination shall be mailed or delivered to the
Secretary of the
Corporation no later than the close of business on the
seventh day following
the day on which the notice of the meeting was mailed.
The Chairman of
the meeting may disregard nominations not made in
accordance herewith, and
direct the vote tellers to disregard all votes cast for
such nominee.
The Chairman of the meeting shall notify the directors of
their election, and
the directors shall immediately following the regular Annual
Meeting of the
Stockholders organize and elect the officers for the current
year.
A majority of the shares entitled to vote, represented
in person or by proxy,
shall constitute a quorum at meetings of the
stockholders.
At each election for directors every stockholder
entitled to vote at such
election shall have one vote for each share of stock
held.
The directors so elected shall serve pursuant to the
provisions of Article
Sixth of the Articles of Incorporation or until their
successors are elected
and qualify, subject to the further provisions of these
Bylaws.
Special meetings of the stockholders may be held at any
time on call of the
Board of Directors. Notice of such meeting, stating the
purpose or purposes,
shall be given to all stockholder by mail to their last
known address, mailed
not less than ten (10) days nor more than sixty (60)
days prior to such
meeting unless otherwise required by law.
If for any cause the annual election of directors is not
held pursuant to
these Bylaws, the directors in office shall order an
election to be held on
some other day, of which special notice shall be given
in accordance with
the requirements of law, and the meeting conducted
according to the provisions
of Section 1 of these Bylaws.
The proceedings of all regular and special meetings of
the Board of Directors
and of the stockholders and reports of the committees or
directors, shall be
recorded in the minute book; and the minutes of each
meeting shall be signed
by the Chairman or the President and attested by the
Secretary of the
Corporation.
2. Directors.
The members of the Board of Directors shall be stockholders,
and every such
director shall own in his own right shares of stock of the
Corporation of the
aggregate par value of not less than One Hundred Dollars
($100.00). The
initial Board of Directors shall consist of twelve (12)
directors, classified
in accordance with the Articles of Incorporation; and
thereafter the number
of directors of the Corporation shall be not less than 12
and not more than
20, as shall be fixed from time-to-time by resolution of the
Board of
Directors. Directors shall serve until their successors
shall have been
elected and qualified in conformity with the provisions of
Article Sixth of the Articles of Incorporation and the
provisions of these
Bylaws.
All vacancies on the Board of Directors, including those
resulting from an
increase in the authorized number of directors, shall be
filled by the
affirmative vote of a majority of the directors then in
office, whether or not
a quorum. Each director so chosen shall hold office until
the expiration of
the term of the director, if any, whom he or she has been
chosen to succeed,
or if none, until the expiration of the term assigned. No
decrease in the
number of directors constituting the Board of Directors
shall shorten the term
of any incumbent director.
Directors shall hold regular meetings and shall meet at
least once each
quarter. The Board of Directors shall have the power to
do, or cause to be
done, all things that are proper to be done by the
Corporation. The directors
shall be authorized to appoint a director in lieu of the
President to serve
as Chairman of the Board, shall define the duties of the
Chief Executive
Officer of the Corporation, fix the compensation of such
officer and may
employ and dismiss any officer of the Corporation.
A majority of the Board of Directors shall be necessary
to constitute a quorum
for the transaction of business, except that those
present may adjourn until
a quorum is obtained and except as otherwise provided by
these Bylaws and by
law.
Special meetings of the directors may be called by the
Chairman of the Board,
by the President or by any four directors.
3. Officers.
The officers of the Corporation shall be a Chairman of the
Board, President
and Chief Executive Officer, one or more Executive Vice
Presidents, Senior
Vice Presidents, Vice Presidents, Secretary, and such other
officers,
including Assistant Vice Presidents, as may be from time to
time required for
the prompt and orderly transaction of its business, to be
elected or appointed
by the Board of Directors, by whom their several duties
shall be prescribed.
At the option of the Board of Directors, any combination of
the foregoing
offices may be held by the same person.
The Chairman of the Board and the President shall be
directors. They shall
hold office for the current year for which the Board of
Directors was elected,
unless either shall resign, become disqualified, or be
removed. Any vacancy
occurring in the office of the Chairman or the President
shall be filled by
the Board of Directors. All other officers shall be
appointed by the Board
of Directors to hold their respective offices at the
will and pleasure of the
Board of Directors.
The appropriate executive and subordinate officers of the
Corporation shall be
responsible for any such sums of money, property and
valuables of every
description which may be entrusted to their care or which
may from time to
time come into their care by virtue of their respective
offices and shall give
such bond as shall be required by law and by the Board of
Directors, in
principal amount and with security to be approved by the
Board of Directors,
conditioned on the faithful discharge of their respective
duties and their
faithful and honest application and accounting for all sums
of money and
other property that may come into their care.
In the absence of the President and Chief Executive
Officer, the Executive
Vice President, or in his or her absence, a Senior Vice
President shall
perform all acts and duties pertinent to the offices of
the President and
Chief Executive Officer, except such acts and duties as
the President and
Chief Executive Officer only are authorized by law to
perform.
There shall be appointed a Secretary of the Corporation,
who shall be
responsible for the minute book of the Corporation, in
which shall be
maintained and preserved the Articles of Incorporation,
the Bylaws, the
returns of elections, the proceedings of regular and
special meetings of the
Board of Directors, of the stockholders and of all
committees established by
the Board of Directors.
4. Seal.
The following is an impression of the seal adopted by the
Board of Directors
of the Corporation:
5. Conveyance of Real Estate.
All transfers and conveyances of real estate shall be made
by the Corporation
pursuant to resolution of the Board of Directors and shall
be signed by the
President, Chief Executive Officer, Vice President or such
other officer as
may be hereafter authorized.
6. Executive Committee.
The Board may appoint an Executive Committee consisting of
the Chairman of
the Board, the President, the Chief Executive Officer and
such other members
of the Board of Directors as shall be appointed, which
committee shall have
full power and authority to
do or cause to be done all things which may be done by the
Board of Directors,
except as otherwise prohibited by law. The proceedings of
such committee
shall be signed by the Chairman or the President, and
recorded in the minute
book of the Corporation.
7. Other Committees.
The Board of Directors may establish from time to time such
other committees
from its members, or otherwise, as are deemed appropriate
for the operation
and performance of its duties and responsibilities.
Committees shall be
formed by proper resolutions of the Board of Directors
setting forth the
duties, responsibilities and operations of such committees.
The resolutions
of the Board of Directors shall set forth the manner in
which the committees
are to be formed, the number of persons constituting the
committee and such
other matters as are deemed proper by the Board of
Directors.
The Audit Committee shall consist of three members of
the Board of Directors
who are not employees of the Corporation, who shall be
appointed by and serve
at the pleasure of the Board of Directors. The Audit
Committee shall meet
with the Corporation's independent auditors at least
annually and shall be
responsible for reviewing the financial records and
reports of the Corporation
and its subsidiaries, and reporting to the Board of
Directors thereon.
All committees established by the Board of Directors may
by proper authority
of the Board of Directors be permitted to employ
personnel to assist in the
performance of its duties, and the members of the
committee may have
compensation fixed for them by the Board of Directors.
8. Transfer of Stock.
The stock of this Corporation shall be assignable and
transferable only on the
books of the Corporation, subject to the provisions of the
laws of the State
of Nevada. A transfer book shall be maintained in which all
assignments and
transfers of stock shall be recorded.
Transfers of stock need not be suspended for the
declaration of dividends
in cash or stock, nor in case of a new stock issue. In
all cases stock of the
stockholder of record as of the date fixed by the Board
of Directors shall be
entitled to such dividends, and the right, if any, to
subscribe to a new issue.
Certificates of stock shall be signed by such officers
as designated by the
Board of Directors by resolution. The certificates
shall state upon the face
thereof, that the stock is transferable only upon the
books of the Corporation
and when stock is transferred, the certificates thereof
shall be returned to
the
Corporation, cancelled, preserved and new certificates
issued. No
certificates for fractional shares shall be issued.
9. Checks and Drafts.
All checks and drafts of the Corporation shall be signed by
an officer or
officers of the Corporation designated by the Board of
Directors.
10. Amendment of Bylaws.
These Bylaws may be amended at any time by vote of a
majority of the Board
of Directors at a meeting called for that purpose upon
notice thereof given
in the call for the meeting.
The attached Bylaws were approved at a regular
meeting of the Board of
Directors of First Community Bancshares, Inc. held
on the day
of , 1997.
ATTEST:
Secretary
Exhibit 23
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in Registration Statement Nos.
33-72616 on Form S-8 and 333-2996 on Form S-4 of First Community Bancshares,
Inc. of our report dated January 30, 1998, incorporated by reference in this
Annual Report on Form 10-K of First Community Bancshares, Inc. for the year
ended December 31, 1997.
Deloitte & Touche
Pittsburgh, PA
March 31, 1998