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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
For the Fiscal Year Ended December 31, 2000
or
[ ] Transition Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
For the transition period from: to
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Commission File Number 0-19297
First Community Bancshares, Inc.
(Exact name of Registrant as specified in its charter)
Nevada 55-0694814
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(State or other jurisdiction (IRS Employer Identification No.)
of incorporation or organization)
One Community Place, Bluefield, Virginia 24605-0989
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (540) 326-9000
Securities registered pursuant to Section 12(b) of the Act:
Title of each class Name of each exchange on which registered
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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
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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.
State the aggregate market value of the voting stock held by non-affiliates of
the Registrant as of March 13, 2001.
$134,000,478 based on the closing 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 13, 2001.
Common Stock, $1 par value- 9,051,335
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the First Community Bancshares, Inc. 2000 Annual Report to Security
Holders are incorporated by reference in Part I and II hereof.
Portions of the Proxy Statement for the annual meeting of shareholders to be
held April 24, 2001 is incorporated by reference in Part III of this Form 10-K.
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Form 10-K Information
Table of Contents
2000 Form 10-K Annual Report
Page
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Part I.
Item 1. Business ...................................................................... 3
Item 2. Properties .................................................................... 19
Item 3. Legal Proceedings ............................................................. 20
Item 4. Submission of Matters to a Vote of Security Holders ........................... 20
Part II.
Item 5. Market for Registrant's Common Equity and Related Stockholder Matters ......... 21
Item 6. Selected Financial Data ....................................................... 21
Item 7. Management's Discussion and Analysis of Financial Condition and Results
of Operations ................................................................. 21
Item 7A. Quantitative and Qualitative Disclosures About Market Risk .................... 22
Item 8. Financial Statements and Supplementary Data ................................... 22
Item 9. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure .......................................................... 22
Part III.
Item 10. Directors and Executive Officers of the Registrant ............................ 22
Item 11. Executive Compensation ........................................................ 22
Item 12. Security Ownership of Certain Beneficial Owners and Management ................ 22
Item 13. Certain Relationships and Related Transactions ................................ 22
Part IV.
Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K ............... 22
Signatures .................................................................... 24
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PART I
Item 1. BUSINESS
GENERAL
First Community Bancshares, Inc. ("FCBI" or the "Company", "Corporation" or
"Registrant") is a one-bank holding company incorporated in the State of Nevada
and serves as the holding company for First Community Bank, N. A. ("FCBNA" or
the "Bank",) a national association that conducts commercial banking operations
within the states of Virginia, West Virginia and North Carolina. United First
Mortgage, Inc. ("UFM"), acquired in the latter part of 1999, is a wholly owned
subsidiary of FCBNA and serves as a wholesale and retail distribution channel
for FCBNA's mortgage banking business segment. First Community Bancshares, Inc.
and its wholly-owned subsidiary have total assets of approximately $1.2 billion
at December 31, 2000 and conduct commercial and mortgage banking business
throughout the three-state area of Virginia, West Virginia and North Carolina
through the 33 branches of FCBNA and 10 mortgage brokerage offices which are
located throughout the state of Virginia.
In October 2000, the Company's wholly owned banking subsidiary, FCBNA, acquired
Citizens Southern Bank, Inc. ("Citizens") located in Beckley, West Virginia.
Citizens, a retail banking business, provided two additional branches to the
existing operating facilities of the Bank. The Citizens operations are currently
located in a geographic region, adjacent to areas presently served by the Bank.
FORWARD-LOOKING STATEMENTS
This report contains forward-looking statements with respect to the financial
condition, results of operations and business of FCBI. These forward-looking
statements involve risks and uncertainties and are based on the beliefs and
assumptions of the management of FCBI, and on the information available to
management at the time that these disclosures were prepared. Many factors could
cause the Company's actual results to differ materially from the results
contemplated by the forward-looking statements. Some factors which could
negatively affect the results include, among others, the following
possibilities: (1) general economic conditions, either nationally or within the
Company's markets, could be less favorable than expected, (2) changes in market
interest rates could affect interest margins and profitability, (3) competitive
pressures could be greater than anticipated, (4) legal or accounting changes
could affect the Company's results, (5) acquisition cost savings may not be
realized or the anticipated income may not be achieved, and (6) adverse changes
could occur in the securities and investments markets; (7) legislative or
regulatory changes, including changes in accounting standards, may adversely
affect the businesses in which FCBI is engaged; (8) competitors may have greater
financial resources and develop products that enable such competitors to compete
more successfully than FCBI.
All statements other than statements of historical fact included in this Annual
Report on form 10-K and the accompanying Annual Report to shareholders which is
incorporated herein by reference, including statements in the Message to
Stockholders and in Management's Discussion and Analysis of Financial Condition
and Results of Operations are, or may be deemed to be, forward-looking
statements within the meaning of Section 27A of the Securities Act of 1933 and
Section 21E of the Exchange Act of 1934. Such information involves risks and
uncertainties that could cause actual results differing from those projected in
the forward-looking information.
Forward-looking statements made herein reflect management's expectations as of
the date such statements are made. Such information is provided to assist
stockholders and potential investors in understanding current and anticipated
financial operations of the Company and is included pursuant to the safe harbor
provisions of the Private Securities Litigation Reform Act of 1995.
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Currently, the Registrant is a 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 subsidiary 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 subsidiary banking
operations.
The Registrant currently derives substantially all of its revenues from
dividends paid by its subsidiary bank. Dividend payments by the bank 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, N. A. (A NATIONAL ASSOCIATION)
At December 31, 2000, the principal assets of FCBI included all of the
outstanding shares of common stock of FCBNA, Bluefield, Virginia. FCBNA is a
nationally chartered bank organized under the banking laws of the United States.
FCBNA engages in general commercial and retail banking business in West
Virginia, Virginia and North Carolina through 33 branch facilities. It provides
safe deposit services and makes all types of loans, including commercial,
mortgage and personal loans. FCBNA also provides trust services and its deposits
are insured by the FDIC. FCBNA is a member of the Federal Reserve System and is
a member of the Federal Home Loan Bank (FHLB) of Atlanta. Regulatory oversight
of the banking subsidiary is conducted by the Office of the Comptroller of the
Currency (OCC). FCBNA, through its wholly owned subsidiary, UFM, provides for
the origination and sale of mortgages to secondary sources. The required
information concerning reportable segments and the required disclosures is
incorporated herein by reference to Note 17 of the financial statements included
in the Annual Report to Shareholders.
COMPETITION
The financial services industry is highly competitive and dramatic change
continues to occur. FCBI's banking subsidiary competes actively with national
and state banks, savings and loan associations, securities dealers, mortgage
bankers, finance companies and insurance companies. Competition for financial
products and services continues to grow as clients select from a variety of
traditional and nontraditional alternatives. The industry continues to rapidly
consolidate which affects competition by eliminating some regional and local
institutions.
MARKET AREA
As described above, the market region served by the Company and its subsidiary
consists of West Virginia, Virginia and North Carolina. The area's economic base
is diverse and primarily consists of manufacturing, mining, general services,
agricultural, wholesale/retail trade, and financial services. Due to the diverse
geographic region and industries served, FCBI believes its current market area
is economically strong and will support consistent growth in assets and deposits
into the future. Management feels that its community bank approach to providing
personalized client service offers a competitive advantage, which strengthens
the Corporation's ability to serves its markets and effectively provide products
and services to the businesses and individuals in these markets.
LENDING ACTIVITIES
The Company's banking subsidiary generates 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 73% of average earning assets and present a higher level
of credit risk to the Company when contrasted with investment securities.
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The principal lending activities of the bank are concentrated primarily within
its market areas in West Virginia, Virginia, North Carolina and the surrounding
mid-Atlantic area. These are areas with which bank personnel are most acquainted
and are within reasonable distances of the bank that allows for timely
communications with customers as well as periodic inspections of collateral.
Loan portfolios total $822.8 million at December 31, 2000 and are comprised of
commercial, real estate and consumer loans including home equity loans.
Commercial and commercial real estate loans comprise 38% of the total loan
portfolio. Commercial loans include loans to small to mid-size industrial,
commercial and service companies that include but are not limited to, coal
mining companies, manufacturers, automobile dealers, and retail and wholesale
merchants. Collateral securing these loans includes 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 Loan 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.
The mortgage offices of UFM provide a distribution outlet for origination and
sale of loans to wholesale and retail purchasers. UFM originates residential
mortgage loans through its production offices located in eastern Virginia. Risks
associated with this lending function include interest rate risk, which is
mitigated through the utilization of financial instruments to offset and
equalize the effect of changing interest rates. In conjunction with the
utilization of these financial instruments (also commonly referred to as
derivatives), the Company has adopted Financial Accounting Standards Board
("FASB") Statement No. 133, as amended, effective January 1, 2001. FASB
Statement No. 133 "Accounting for Derivative Instruments and Hedging Activity"
established accounting and reporting standards for derivative instruments and
for hedging activities. UFM uses financial instruments to manage its pipeline of
loans from the point of the loan commitment to the subsequent sale to an outside
investor who purchases the loan. As a result of the timing from origination to
sale, and the likelihood of changing interest rates, forward commitments are
placed to substantially lock the expected margin on the sale of the loan. Both
the forward commitment to purchase the security and the underlying rate lock
commitment are both considered independent or stand alone derivatives and, as
such, will be independently recorded on the balance sheet at their respective
market value. The forward commitments are not presently used as a hedge within
the meaning of FASB Statement No. 133. Due to the limited use of derivatives,
the adoption did not have a material impact on the Company's financial
statements. However, UFM anticipates that its level of involvement in derivative
contracts will increase, and is utilizing a management tool that measures
effectiveness of the pipeline hedge contracts and minimizes the potential
volatility of losses.
EMPLOYEES
The Registrant and its subsidiary, FCBNA, employed 484 employees at December 31,
2000. Additionally, UFM employed 86 people in the mortgage subsidiary.
Management considers employee relations to be excellent.
SUPERVISION AND REGULATION
GENERAL
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
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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 that 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.
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 bank 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. Additional data
collection and reporting requirements under the Home Mortgage Disclosure Act are
imposed on institutions that accept mortgage loan applications within
metropolitan statistical areas.
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.
The earnings of the Corporation's subsidiary, and therefore the earnings of the
Corporation, are affected by general economic conditions, management policies
and the legislative and governmental actions of various regulatory authorities,
including the Federal Reserve Board, the OCC and the FDIC. In addition, there
are numerous governmental requirements and regulations that affect the
activities of the Corporation and its subsidiary.
PAYMENT OF DIVIDENDS
The Corporation is a legal entity separate and distinct from its banking
subsidiary. A major portion of the revenues of the Corporation result from
amounts paid as dividends to the Corporation by its national bank subsidiary.
The prior approval of the Comptroller is required if the total of all dividends
declared by a national bank in any calendar year will exceed the sum of such
bank's net profits for that year and its retained net profits for the preceding
two calendar years, less any required transfers to surplus. Federal law also
prohibits national banks from paying dividends that would be greater than the
bank's undivided profits after deducting statutory bad debts in excess of the
bank's allowance for loan losses.
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In addition, the Corporation and its banking subsidiary are subject to various
general regulatory policies and requirements relating to the payment of
dividends, including requirements to maintain adequate capital above regulatory
minimums. The appropriate federal regulatory authority is authorized to
determine under certain circumstances relating to the financial condition of a
bank or bank holding company that the payment of dividends would be an unsafe or
unsound practice and to prohibit payment thereof. The appropriate federal
regulatory authorities have indicated that paying dividends that deplete a
bank's capital base to an inadequate level would be an unsound and unsafe
banking practice and that banking organizations should generally pay dividends
only out of current operating earnings.
CAPITAL ADEQUACY
Under the risk-based capital requirements for bank holding companies, the
minimum requirement for the ratio of capital to risk-weighted assets (including
certain off-balance-sheet activities, such as standby letters of credit) is
eight percent. At least half of the total capital is to be composed of common
stockholders' equity, retained earnings, a limited amount of qualifying
perpetual preferred stock and minority interests in the equity accounts of
consolidated subsidiaries, less goodwill and certain intangibles ("tier 1
capital" and together with tier 2 capital "total capital"). The remainder of
total capital may consist of mandatory convertible debt securities and a limited
amount of subordinated debt, qualifying preferred stock and loan loss allowance
("tier 2 capital"). At December 31, 2000, the Corporation's tier 1 capital and
total capital ratios were 11.68 percent and 12.93 percent, respectively.
In addition, the Federal Reserve Board has established minimum leverage ratio
guidelines for bank holding companies. These requirements provide for a minimum
leverage ratio of tier 1 capital to adjusted average quarterly assets less
certain amounts ("leverage ratio") equal to three percent for bank holding
companies that meet certain specified criteria, including having the highest
regulatory rating. All other bank holding companies will generally be required
to maintain a leverage ratio of from at least four to five percent. The
Corporation's leverage ratio at December 31, 2000, was 8.37 percent. The
guidelines also provide that bank holding companies experiencing internal growth
or making acquisitions will be expected to maintain strong capital positions
substantially above the minimum supervisory levels without significant reliance
on intangible assets. Furthermore, the guidelines indicate that the Federal
Reserve Board will continue to consider a "tangible tier 1 leverage ratio"
(deducting all intangibles) in evaluating proposals for expansion or new
activity.
The Corporation's subsidiary bank is subject to similar capital requirements
adopted by the Comptroller of the Currency. The capital ratios of the bank
subsidiary of the Corporation are set forth in Note 13 in the Annual Report and
are incorporated herein by reference.
SUPPORT OF SUBSIDIARY BANK
The Federal Deposit Insurance Corporation Improvement Act, as amended
("FDICIA"), among other things, imposes liability on an institution the deposits
of which are insured by the FDIC, such as the Corporation's subsidiary bank, for
certain potential obligations to the FDIC incurred in connection with other
FDIC-insured institutions under common control with such institution.
Under the National Bank Act, if the capital stock of a national bank is impaired
by losses or otherwise, the Comptroller is authorized to require payment of the
deficiency by assessment upon the bank's stockholders, pro rata, and to the
extent necessary, if any such assessment is not paid by any stockholder after
three months notice, to sell the stock of such stockholder to make good the
deficiency. Under Federal Reserve Board policy, the Corporation is expected to
act as a source of financial strength to its subsidiary bank and to commit
resources to support the subsidiary. This support may be required at times when,
absent such Federal Reserve Board policy, the Corporation may not find itself
able to provide it.
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Any capital loans by a bank holding company to its subsidiary bank are
subordinate in right of payment to deposits and to certain other indebtedness of
such subsidiary bank. In the event of a bank holding company's bankruptcy, any
commitment by the bank holding company to a federal bank regulatory agency to
maintain the capital of a subsidiary bank will be assumed by the bankruptcy
trustee and entitled to a priority of payment.
DEPOSITOR PREFERENCE STATUTE
Under federal law, deposits and certain claims for administrative expenses and
employee compensation against an insured depository institution would be
afforded a priority over other general unsecured claims against such an
institution, including federal funds and letters of credit, in the "liquidation
or other resolution" of such an institution by any receiver.
BORROWINGS BY THE CORPORATION
The banking subsidiary of the Registrant is subject to certain restrictions by
regulatory bodies which limit the amounts and the manner in which it may loan
funds to the Registrant. The bank is 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 bank 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 that might reduce the bank's equity capital to unsafe levels or
which, in the opinion of regulatory agencies, or is not in the best interests of
the public, could be prohibited. (For additional information concerning these
restrictions, see Note 13 of the Notes to the 2000 Consolidated Financial
Statements incorporated herein by reference.)
PROMPT CORRECTIVE ACTION
The FDICIA, among other things, requires the federal banking agencies to take
"prompt corrective action" in respect of depository institutions that do not
meet minimum capital requirements. FDICIA establishes five capital tiers: "well
capitalized", "adequately capitalized", "undercapitalized", "significantly
undercapitalized" and "critically undercapitalized". A depository institution's
capital tier will depend upon where its capital levels compare to various
relevant capital measures and certain other factors, as established by
regulation.
Federal regulatory authorities have adopted regulations establishing relevant
capital measures and relevant capital levels applicable to FDIC-insured banks.
The relevant capital measures are the total capital ratio, the tier 1 capital
ratio and the leverage ratio. Under the regulations, an FDIC-insured bank will
be: (i) "well capitalized" if it has a total capital ratio of ten percent or
greater, a tier 1 capital ratio of six percent or greater and a leverage ratio
of five percent or greater and is not subject to any order or written directive
by any such regulatory authority to meet and maintain a specific capital level
for any capital measure; (ii) "adequately capitalized" if it has a total capital
ratio of eight percent or greater, a tier 1 capital ratio of four percent or
greater and a leverage ratio of four percent or greater (three percent in
certain circumstances) and is not "well capitalized"; (iii) "undercapitalized"
if it has a total capital ratio of less than eight percent, a tier 1 capital
ratio of less than four percent or a leverage ratio of less than four percent
(three percent in certain circumstances); (iv) "significantly undercapitalized"
if it has a total capital ratio of less than six percent, a tier 1 capital ratio
of less than three percent or a leverage ratio of less than three percent; and
(v) "critically undercapitalized" if its tangible equity is equal to or less
than two percent of average quarterly tangible assets. An institution may be
downgraded to, or deemed to be in, a capital category that is lower than is
indicated by its capital ratios if it is determined to be in an unsafe or
unsound condition or if it receives an unsatisfactory examination rating with
respect to certain matters. As of December 31, 2000, the Corporation's
deposit-taking subsidiary bank had capital levels that qualify it as being "well
capitalized" under such regulations.
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The FDICIA generally prohibits an FDIC-insured depository institution from
making any capital distribution (including payment of a dividend) or paying any
management fee to its holding company if the depository institution would
thereafter be "undercapitalized". "Undercapitalized" depository institutions are
subject to growth limitations and are required to submit a capital restoration
plan. The federal banking agencies may not accept a capital plan without
determining, among other things, that the plan is based on realistic assumptions
and is likely to succeed in restoring the depository institution's capital. In
addition, for a capital restoration plan to be acceptable, the depository
institution's parent holding company must guarantee that the institution will
comply with such capital restoration plan. The aggregate liability of the parent
holding company is limited to the lesser of (i) an amount equal to five percent
of the depository institution's total assets at the time it became
"undercapitalized", and (ii) the amount which is necessary (or would have been
necessary) to bring the institution into compliance with all capital standards
applicable with respect to such institution as of the time it fails to comply
with the plan. If a depository institution fails to submit an acceptable plan,
it is treated as if it is "significantly undercapitalized".
"Significantly undercapitalized" depository institutions may be subject to a
number of requirements and restrictions, including orders to sell sufficient
voting stock to become "adequately capitalized", requirements to reduce total
assets and cessation of receipt of deposits from correspondent banks.
"Critically undercapitalized" institutions are subject to the appointment of a
receiver or conservator. A bank that is not "well capitalized" is subject to
certain limitations relating to so-called "brokered" deposits.
RECENT LEGISLATION
GRAMM-LEACH-BLILEY FINANCIAL SERVICES MODERNIZATION ACT
The Gramm-Leach-Bliley Financial Services Modernization Act of 1999 (the "Act")
is the most significant financial services legislation in 60 years, and is the
culmination of decades of effort to restructure the financial services industry
in the United States. The most significant change wrought by the act is to allow
affiliations among banks, securities firms and insurance companies. The act is
complex and far-reaching and deals with a multitude of additional banking,
insurance and financial services issues, and is intended to modernize the
nation's financial services industry. The following discussion is a brief
overview of some of the points of interest that have an impact on the Company
and is not intended to represent the entirety of the "Act."
Among other things, the "Act" is designed to allow greater savings to consumers
by increasing competition and reforming the Federal Home Loan Bank System by
providing a source of funds for community banks to make loans to small
businesses and farmers.
The "Act" repeals two sections of the Glass-Steagall Act, which restrict banks
and their affiliates from being affiliated with companies engaged in the
business of underwriting and dealing in securities. The Act authorizes financial
holding companies ("FHC") and FHC affiliates to engage in activities that are
"financial in nature or incidental to financial in nature," or activities that
are "complementary to financial activities." In addition, the Act blesses as
"financial in nature" the acquisition of interests in and control of any
company," whether financial or not," through securities underwriting, merchant
banking, or insurance company investments." In the case of securities
affiliates, the investment must be part of a bona fide underwriting or merchant
or investment banking activity, including investment activities engaged in for
the purpose of appreciation and ultimate resale or disposition of the
investment. In the case of insurance companies, the portfolio investment must be
made in the ordinary course of business of the insurance company in accordance
with relevant state law governing such investments. The "Act" authorizes the
Federal Reserve Board to determine, for bank holding company affiliates, what
activities are financial in nature or incidental to financial in nature, or
complementary to a financial activity.
The legislation also amends the Community Reinvestment Act to provide that an
election of a bank
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holding company ("BHC") to become an FHC will not be effective if any of the
holding company's subsidiary insured depository institutions has received a less
than "satisfactory" rating in its most recent Community Reinvestment Act
examination. In addition, the Act amends the Bank Holding Company Act to require
the appropriate Federal banking agency to prohibit an FHC or insured depository
institution from commencing any new activities or acquiring companies engaged in
expanded activities "financial in nature" (other than merchant banking or
insurance portfolio investment activities), if any insured depository
institution affiliate has failed to receive in its last examination at least a
"satisfactory" CRA rating. Certain activities of new FHCs have been
grandfathered to allow companies that previously engaged in non-financial
activities to do so.
Title II of the Act amends the federal securities laws to provide for functional
regulation of bank securities activities. Title III of the Act deals with
insurance issues and is divided into four subparts: State Regulation of
Insurance, Redomestication of Mutual Insurers, National Association of
Registered Agents and Brokers, and Rental Car Agency Insurance Activities.
The privacy provisions encompassed under Title IV of the Act govern the
activities of "financial institutions," which include banks, savings
associations, credit unions, broker-dealers, investment companies, investment
advisers and insurance companies.
FAIR DISCLOSURE RULES UNDER REGULATION FD
On October 23, 1999, a new set of rules went into effect that has wide-ranging
impact on how public companies share information with investors. Known as
"Regulation FD" (for "Fair Disclosure"), the rule ends a practice known as
"selective disclosure" that many companies used in the past to provide
information to Wall Street and investment professionals before making it
available to the general public. Regulation FD represents the SEC's first
attempt at direct regulation of informal communications between public companies
and investment professionals.
In an attempt to comply with Regulation FD, companies are reconsidering the
information and the dissemination methods they use to provide such information
to analysts and the investment public. No longer can a company have a
conversation with an analyst and provide any information that is not available
to the general public. The new regulations cover a wide range of information
including topics addressing earnings to business development issues concerning
new products and delivery methods. Additionally, the new rules create the need
for tighter control over material non-public information by placing greater
liability on all Company representatives who have access to this information,
including directors, officers, employees and others with access to material
nonpublic information. Additionally, areas addressed by Regulation FD include
but are not limited to issues addressing the timing of information
dissemination, Securities Act and liability issues and the timing of
information. The requirements of this new regulation are very detailed and
complex and are not presented as a part of this discussion in their entirety.
The long-term effect of fair disclosure is likely to be beneficial to individual
investors, regardless of what happens in the short term as companies and
analysts determine how to best comply with the new rules. However, at the crux
of the disclosure rules is the underlying theme that the investment public
should be on an even and fair playing field when any material and non-public
information is disclosed.
GOVERNMENTAL MONETARY POLICIES AND ECONOMIC CONTROLS
The earnings of the Registrant and its subsidiary 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
10
11
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.
11
12
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 %)
2000 1999 1998
------------------------------- -------------------------------- ------------------------------
AVERAGE INTEREST AVERAGE INTEREST YIELD/RATE AVERAGE INTEREST YIELD/RATE
BALANCE (1) YIELD/RATE BALANCE (1) (1) BALANCE (1) (1)
---------- -------- ---------- ---------- -------- ---------- ---------- -------- ----------
Earning Assets:
Loans (2)
Taxable $ 740,022 $67,849 9.17% $ 626,868 $57,346 9.15% $ 634,342 $61,355 9.67%
---------- ------- ---- ---------- ------- ---- ---------- ------- ----
Tax-Exempt 8,051 869 0.79% 10,043 1,062 10.57% 13,425 1,490 11.10%
Total 748,073 68,718 9.19% 636,911 58,408 9.17% 647,767 62,845 9.70%
Reserve for Loan
Losses (12,195) (11,239) (11,731)
---------- ------- ---- ---------- ------- ---- ---------- ------- ----
Net Total 735,878 68,718 9.34% 625,672 58,408 9.34% 636,036 62,845 9.88%
Securities Available For
Sale:
Taxable 172,079 11,228 6.52% 186,379 11,417 6.13% 121,704 7,750 6.37%
Tax-Exempt 36,171 2,464 6.81% 35,627 2,769 7.77% 26,056 2,015 7.73%
---------- ------- ---- ---------- ------- ---- ---------- ------- ----
Total 208,250 13,692 6.57% 222,006 14,186 6.39% 147,760 9,765 6.61%
Investment Securities:
Taxable 4,467 314 7.03% 6,782 465 6.86% 20,221 1,307 6.46%
Tax-Exempt 70,213 6,113 8.71% 73,938 5,983 8.09% 74,766 6,036 8.07%
---------- ------- ---- ---------- ------- ---- ---------- ------- ----
Total 74,680 6,427 8.61% 80,720 6,448 7.99% 94,987 7,343 7.73%
Interest Bearing
Deposits 6,075 393 6.47% 9,866 482 4.89% 56,136 3,007 5.36%
Fed Funds Sold 330 20 6.06% 8,800 403 4.58% 29,628 1,593 5.38%
---------- ------- ---- ---------- ------- ---- ---------- ------- ----
Total Earning Assets 1,025,213 89,250 8.71% 947,064 79,927 8.44% 964,547 84,553 8.77%
------- ------- -------
Other Assets 102,466 95,119 93,984
---------- ---------- ----------
Total $1,127,679 $1,042,183 $1,058,531
========== =========== ===========
Interest-Bearing
Liabilities:
Demand Deposits $ 131,432 2,936 2.23% $ 137,816 2,974 2.16% $ 134,195 3,732 2.78%
Savings Deposits 135,417 2,905 2.15% 145,526 3,257 2.24% 150,749 4,452 2.95%
Time Deposits 461,813 24,878 5.39% 451,079 22,912 5.08% 474,263 26,196 5.52%
Short-term Borrowings 149,193 8,050 5.40% 58,365 2,326 3.99% 51,457 2,288 4.45%
Long-term Borrowings 10,204 611 5.99% 12,905 781 6.05% 23,468 1,459 6.22%
---------- ------- ---- ---------- ------- ---- ---------- ------- ----
Total Interest-bearing
Liabilities 888,059 39,380 4.43% 805,691 32,250 4.00% 834,132 38,127 4.57%
Demand Deposits 117,165 119,576 111,565
Other Liabilities 13,788 13,070 12,236
Stockholders' Equity 108,667 103,846 100,598
---------- ----------- -----------
Total $1,127,679 $1,042,183 $1,058,531
========== =========== ===========
Net Interest Income 49,870 47,677 46,426
======= ======= ========
Net Interest Rate Spread (3) 4.27% 4.44% 4.20%
===== ====== ======
Net Interest Margin (4) 4.86% 5.03% 4.81%
===== ====== ======
(1) Fully Taxable Equivalent-Using the Federal statutory rate of 35%.
(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.
12
13
C. RATE AND VOLUME ANALYSIS OF INTEREST (1)
(Amounts in Thousands)
2000 Compared to 1999 1999 Compared to 1998
Increase/(Decrease) due to Increase/(Decrease) due to
--------------------------------- ---------------------------------
Volume Rate Total Volume Rate Total
------- ------- ------- ------- ------- -------
Interest Earned On:
Loans $10,160 $ 150 $10,310 $(1,076) $(3,361) $(4,437)
Investment securities available
for sale (865) 371 (494) 4,716 (295) 4,421
Investment securities
held to maturity (473) 452 (21) (984) 89 (895)
Interest-bearing deposits
with other banks (218) 129 (89) (2,282) (243) (2,525)
Federal funds sold (482) 99 (383) (983) (207) (1,190)
------- ------- ------- ------- ------- -------
Total interest-earning assets 8,122 1,201 9,323 (609) (4,017) (4,626)
------- ------- ------- ------- ------- -------
Interest Paid On:
Demand deposits (141) 103 (38) 98 (856) (758)
Savings deposits (220) (132) (352) (150) (1,045) (1,195)
Time deposits 555 1,411 1,966 (1,242) (2,041) (3,283)
Short-term borrowings 4,663 1,061 5,724 289 (251) 38
Long-term debt (162) (8) (170) (640) (38) (678)
------- ------- ------- ------- ------- -------
Total interest-bearing liabilities 4,695 2,435 7,130 (1,645) (4,231) (5,876)
------- ------- ------- ------- ------- -------
Change in net interest income $ 3,427 $(1,234) $ 2,193 $ 1,036 $ 214 $ 1,250
======= ======= ======= ======= ======= =======
(1) Fully taxable Equivalent using the federal statutory rate of 35%.
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.
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14
II. Investment Portfolio
A. Amortized Cost of Investment Securities Held to Maturity:
December 31,
(Amounts in Thousands) 2000 1999 1998
-------- -------- --------
U. S. Treasury Securities $ -- $ 100 $ 100
U. S Government Agencies and Corporations 2,103 3,663 7,546
States and Political Subdivisions 72,264 73,640 75,009
Other Securities 1,369 1,365 1,361
-------- -------- --------
$ 75,736 $ 78,768 $ 84,016
======== ======== ========
Market Value of Securities Available for Sale:
December 31,
(Amounts in Thousands) 2000 1999 1998
-------- -------- --------
U. S Government Agencies and Corporations $134,157 $143,636 $119,508
States and Political Subdivisions 34,648 33,355 37,343
Other Securities 38,757 35,114 36,343
-------- -------- --------
$207,562 $212,105 $193,194
======== ======== ========
B. Maturity and Yields:
The required information is incorporated by reference to pages 32 through 34 of
the 2000 Annual Report.
C. There are no issues included in obligations of states and political
subdivisions or other securities that exceed ten percent of
stockholders' equity.
III. Loan Portfolio
A. Loan Summary:
December 31,
------------------------------------------------------------------------
(Amounts in Thousands) 2000 1999 1998 1997 1996
-------- -------- -------- -------- --------
Commercial, Financial and
Agricultural $ 86,887 $ 92,739 $ 77,233 $ 82,445 $ 79,278
Real Estate-Commercial 222,571 208,228 170,683 202,625 166,787
Real Estate-Construction 73,087 24,684 8,988 9,612 10,589
Real Estate-Residential 305,302 251,332 228,540 227,465 171,455
Consumer 135,692 128,541 127,169 151,429 120,720
Other 649 62 894 1,185 552
-------- -------- -------- -------- --------
Total 824,188 705,586 613,507 674,761 549,381
Less Unearned Income 1,362 1,490 2,014 2,944 1,678
-------- -------- -------- -------- --------
822,826 704,096 611,493 671,817 547,703
Less Reserve for Loan Losses 12,303 11,900 11,404 11,406 8,987
-------- -------- -------- -------- --------
Net Loans $810,523 692,196 $600,089 $660,411 $538,716
======== ======== ======== ======== ========
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15
B. Maturities and Rate Sensitivity of Loan Portfolio at December 31, 2000:
(Amounts in Thousands) Remaining Maturities
------------------------------------------
Over One
One Year to Over Five
and Less Five Years Years Total Percent
-------- ---------- ----- ----- -------
Commercial, Financial and
Agricultural $ 48,593 $ 24,204 $ 14,090 $ 86,887 10.56%
Real Estate-Commercial 94,556 65,306 62,709 222,571 27.05%
Real Estate-Construction 49,899 20,184 3,004 73,087 8.88%
Real Estate-Mortgage 56,048 110,321 138,933 305,302 37.10%
Consumer 18,735 102,651 12,944 134,330 16.33%
Other 225 289 135 649 0.08%
-------- -------- -------- -------- ------
$268,056 $322,955 $231,815 $822,826 100.00%
======== ======== ======== ======== ======
Rate Sensitivity:
Pre-determined Rate $ 86,183 $295,120 $231,815 $613,118 74.51%
Floating or Adjustable Rate 181,873 27,835 -- 209,708 25.49%
-------- -------- -------- -------- ------
$268,056 $322,955 $231,815 $822,826 100.00%
======== ======== ======== ======== ======
32.58% 39.25% 28.17% 100.00%
C. Risk Elements: The required information for risk elements is included below
and incorporated by reference to pages 17 and 36 of the 2000 Annual Report.
Nonperforming Assets:
December 31,
(Amounts in Thousands) 2000 1999 1998 1997 1996
---- ---- ---- ---- ----
Non-accruing Loans $5,397 $7,889 $7,763 $9,988 $5,476
Loans Past Due Over 90 Days 1,208 1,259 377 4,391 780
Restructured Loans Performing
in Accordance with Modified
Terms 502 505 509 534 401
Gross Interest Income Which
Would Have Been Recorded
Under Original Terms of
Non-Accruing and Restructured
Loans 409 436
Actual Interest Income During
the Period 105 78
15
16
Management believes that the extent of problem loans at December 31, 2000 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.
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IV. SUMMARY OF LOAN LOSS EXPERIENCE
A. 1. Summary of Loan Loss Experience:
Years Ended December 31,
-----------------------------------------------------------------------
(Amounts in Thousands, Except Percent Data) 2000 1999 1998 1997 1996
---- ---- ---- ---- ----
Balance of reserve at beginning of period $11,900 $11,404 $11,406 $ 8,987 $ 8,321
Reserve of subsidiaries at date of acquisition 1,051 -- 1,981
Charge-offs:
Commercial, financial and agricultural 2,911 562 3,602 2,052 369
Real estate-residential 629 268 367 385 275
Installment 1,996 2,177 3,019 2,761 1,537
------- ------- ------- ------- -------
Total Charge-offs 5,536 3,007 6,988 5,198 2,181
------- ------- ------- ------- -------
Recoveries:
Commercial, financial and agricultural 267 74 190 130 249
Real estate-residential 82 60 31 31 26
Installment 553 476 515 512 299
------- ------- ------- ------- -------
Total Recoveries 902 610 736 673 574
------- ------- ------- ------- -------
Net charge-offs 4,634 2,397 6,252 4,525 1,607
Provision charged to operations 3,986 2,893 6,250 4,963 2,273
------- ------- ------- ------- -------
Balance of reserve at end of period 12,303 11,900 11,404 11,406 8,987
======= ======= ======= ======= =======
Ratio of net charge-offs to average loans
outstanding 0.62% 0.38% 0.97% 0.73% 0.31%
Ratio of reserve to total loans outstanding 1.50% 1.69% 1.86% 1.70% 1.64%
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A. 2. The required information is incorporated by reference to pages 15
and 16 of the 2000 Annual Report.
B. Allocation of Reserve for Loan Losses:
(Amounts in Thousands, Except Percent Data)
December 31,
--------------------------------------------------------------------------------------------------------
2000 1999 1998 1997 1996
----------------- ------------------ ------------------ ------------------- -------------------
Commercial, Financial
and Agricultural $ 5,946 38.00% $ 4,919 43.00% 4,054 41.00% $ 4,795 42.00% $ 3,167 45.00%
Real Estate-Mortgage 3,279 46.00% 2,578 39.00% 2,297 39.00% 2,819 35.00% 1,956 33.00%
Consumer 1,721 16.00% 1,413 18.00% 1,378 21.00% 1,979 23.00% 1,567 22.00%
Unallocated 1,357 -- 2,990 -- 3,675 -- 1,813 -- 2,297 --
------- ----- ------- ----- ----- ----- ------- ----- ------- -----
Total 12,303 100.00% 11,900 100.00% 11,404 101.00% 11,406 100.00% 8,987 100.00%
======= ====== ======= ====== ====== ====== ======= ====== ======= ======
The percentages in the table above represent the percent of loans in each
category of total loans.
V. Deposits
A. The required information for average deposits and rates paid by type is
included on page 12 of this report.
B. Not applicable.
C. Not applicable.
D. The required information is incorporated by reference to page 37 of the
2000 Annual Report and as follows:
18
19
Maturities of Time Deposits $100,000 or more:
(Amounts in Thousands)
2000
--------
Three Months or Less $ 45,234
Over Three to Six Months 22,699
Over Six to Twelve Months 39,514
Over Twelve Months 29,174
--------
Total $136,621
========
E. Not applicable.
VI. Return on Equity and Assets
A. The required information is incorporated by reference to page 8 of the
2000 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, structured term borrowings from the FHLB, 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)
2000 1999 1998
---------------------- ---------------------- ----------------------
Amount Rate Amount Rate Amount Rate
---------------------- ---------------------- ----------------------
At year-end $174,016 5.52% $127,762 3.99% $ 47,680 3.97%
Average during the year 149,193 5.40% 58,365 3.26% 51,457 4.45%
Maximum month-end balance 182,187 127,762 55,755
B. Long-Term Advances From the FHLB and Long-Term Debt
The Company's banking subsidiary is a member of the FHLB and as such has the
ability to obtain advances from the FHLB. The Company had long-term advances
from the FHLB (original maturities in excess of one year) of $10 million with a
weighted average rate of 6.01% at December 31, 2000 and December 31, 1999. The
advances from the FHLB are secured by certain qualifying first mortgage loans,
stock in the FHLB, mortgage-backed securities and certain other investment
securities.
ITEM 2. PROPERTIES
The principal offices of the Corporation and FCBNA are located at One Community
Place, Bluefield, Virginia, where the Company owns and occupies approximately
36,000 square feet of office space. Additional details regarding the physical
location and number of banking offices is located on pages 52 - 53 in the 2000
Annual Report and incorporated herein by reference. The Corporation's banking
19
20
subsidiary owns in fee 30 offices while others are leased or are located on
leased land. United First Mortgage, Inc., a wholly-owned subsidiary of FCBNA,
maintains ten leased office facilities in eastern Virginia throughout a
geographic area ranging from Virginia Beach, Virginia to Harrisonburg, Virginia.
ITEM 3. LEGAL PROCEEDINGS
The required information is incorporated by reference from Note 12 of Notes to
Consolidated Financial Statements appearing on page 40 of the 2000 Annual
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 2000.
20
21
PART II.
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED MATTERS
Market Price of Common Stock
The Company's common stock has historically traded in the
over-the-counter market; however, on March 1, 2001, the Company began trading on
the Nasdaq SmallCap Market under the symbol FCBC. The following table shows the
approximate high and low bids as known to the Company or reported by local
brokers for each quarter in 1999 and 2000. Also, presented below are the book
value and cash dividends paid per share as of and for each quarter of 1999 and
2000. The number of common stockholders of record on December 31, 2000 was 2,449
and outstanding shares totaled 9,040,370.
Bid Book
------------------- Value Cash Dividends
2000 High Low Per Share Per Share
- ---- ------------------- --------- ---------
First Quarter $21.00 $17.25 $12.02 $0.22
Second Quarter 18.88 15.00 12.25 0.23
Third Quarter 16.13 15.00 12.69 0.23
Fourth Quarter 17.00 14.00 13.35 0.27
-----
$0.95
-----
1999
- ----
First Quarter $23.20 $20.70 $11.75 $0.20
Second Quarter 22.90 18.50 11.60 0.21
Third Quarter 23.50 18.88 11.74 0.22
Fourth Quarter 21.38 18.00 11.86 0.25
-----
$0.88
-----
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, and the general economic
and regulatory climate.
ITEM 6. SELECTED FINANCIAL DATA
The required information is incorporated by reference to page 8 of the 2000
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 5 through 24 of
the 2000 Annual Report.
21
22
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
The required information is incorporated by reference to pages 19 through 22 of
the 2000 Annual Report.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The required information is incorporated by reference to pages 26 through 47 of
the 2000 Annual Report.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
A Form 8-K was previously filed on February 28, 2000 and is incorporated herein
by reference.
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 2001 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 7 and 9 through 11 of the Proxy Statement relating to
the 2001 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 and
9 through 11 of the Proxy Statement relating to the 2001 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 2001
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 has been omitted in accordance with General Instruction G. Such
information appearing on pages 5 and 6 of the Proxy Statement relating to the
2001 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 26, 2001 are incorporated by reference to pages 26
through 48 of the 2000 Annual Report which is included herein as
Exhibit 13.
22
23
(2) Financial Statement Schedules
All applicable financial statement schedules required by Regulation S-X
are included in the Notes to the 2000 Consolidated Financial
Statements.
(b) Reports on Form 8-K filed during the last quarter of the period covered
by this report were as follows:
On October 20, 2000 a report on Form 8-K was filed in conjunction with
announcement of the Company's third quarter operating results.
On October 31, 2000 a report on Form 8-K was filed relative to the
acquisition and merger of Citizens Southern Bank, Inc. into the
registrant's wholly owned subsidiary, FCBNA.
On December 7, 2000, a report on Form 8-K was filed with advance
disclosures of the content of a meeting with analysts in order to meet
fair disclosure requirements.
(c) Exhibits:
(3) Articles of Incorporation and Bylaws
The Registrant's Articles of Incorporation and By-laws were previously
filed as exhibits (3)(i) and (3)(ii), respectively, with the Annual
Report on Form 10-K for the year ending 12/31/97 in connection with the
change of corporate domicile to a Nevada corporation.
(11) Statement Regarding Computation of Per Share Earnings
The statement regarding computation of per share earnings is included
as Note 1 of the Notes to Consolidated Financial Statements in the 2000
Annual Report to Stockholders and is incorporated herein by reference.
(13) Annual Report to Security Holders
(21) Subsidiary of Registrant:
First Community Bank, N.A. (a National Association organized under the
laws of the United States)
(23)(a) Independent Auditors' Consent - Ernst & Young LLP
(23)(b) Independent Auditors' Consent - Deloitte & Touche LLP
(99) Report of Deloitte & Touche LLP, Independent Auditors
23
24
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/ John M. Mendez
-------------------------------------
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/ Kenneth P. Mulkey
-------------------------------------
Principal Accounting Officer
Signature Title Date
/s/ Sam Clark Director 03/28/2001
- -------------------------------
(Sam Clark)
/s/ Allen T. Hamner Director 03/28/2001
- -------------------------------
(Allen T. Hamner)
Director 03/28/2001
- -------------------------------
(James L. Harrison, Sr.)
/s/ B. W. Harvey Director 03/28/2001
- -------------------------------
(B.W. Harvey)
/s/ I. Norris Kantor Director 03/28/2001
- -------------------------------
(I. Norris Kantor)
/s/ John M. Mendez President, Chief Executive 03/28/2001
- ------------------------------- Officer and Director (Principal
(John M. Mendez) Executive Officer)
/s/ A. A. Modena Director 03/28/2001
- -------------------------------
(A. A. Modena)
/s/ Robert E. Perkinson, Jr. Director 03/28/2001
- -------------------------------
(Robert E. Perkinson, Jr.)
/s/ William P. Stafford Chairman of the Board and Director 03/28/2001
- -------------------------------
(William P. Stafford)
/s/ William P. Stafford, II Director 03/28/2001
- -------------------------------
(William P. Stafford, II)
/s/ W. W. Tinder, Jr. Director 03/28/2001
- -------------------------------
(W. W. Tinder, Jr.)
24