Exhibit 99.1

 

 

NEWS RELEASE

 

FOR IMMEDIATE RELEASE: January 25, 2012		FOR MORE INFORMATION, CONTACT:         David D. Brown
		(276) 326-9000

 

First Community Bancshares, Inc. Announces Fourth Quarter and Full Year 2011 Results

and Quarterly Cash Dividend to Common Stockholders

 

Bluefield, Virginia – First Community Bancshares, Inc. (NASDAQ: FCBC) (www.fcbinc.com) (the “Company”) today reported net income for the quarter and twelve months ended December 31, 2011. Net income to common shareholders was $2.95 million, or $0.17 per diluted common share, for the quarter ended December 31, 2011. Net income to common shareholders amounted to $19.33 million, or $1.07 per diluted common share, for the year ended December 31, 2011.

 

The Company also announced today that the board of directors declared a quarterly cash dividend to common stockholders of $1.78 million or ten cents ($0.10) per common share. The quarterly dividend is payable to common stockholders of record February 10, 2012, and is expected to be paid on or about February 24, 2012. The current year marks the 26^th consecutive year of cash dividends to stockholders.

 

Fourth Quarter 2011 Highlights –

 

·

The loan loss provision was lower by $1.25 million, or 33.91%, as compared to the fourth quarter of 2010.

·

Tax-equivalent net interest margin improved to 3.93%, an increase of 15 basis points when compared to the fourth quarter of 2010.

·

Deposit service charges increased 3.54% over the fourth quarter of 2010.

·

Operating costs decreased 14.06%, as compared to the fourth quarter of 2010.

·

The Company’s efficiency ratio of 54.93% for the fourth quarter of 2011 showed improvement over the ratios reported in the third quarter of 2011 of 56.84% and the fourth quarter of 2010 of 64.82%.

·

The Company’s loan portfolio grew $21.41 million, or 1.56%, during the fourth quarter of 2011.

·

The Company significantly exceeds regulatory “well-capitalized” targets with a total risk-based capital ratio of 18.15%, Tier 1 risk-based capital ratio of 16.89%, and a Tier 1 leverage ratio of 11.50% at December 31, 2011.

·

Tangible book value per common share increased to $11.40, an increase of $1.37, or 13.66%, since December 31, 2010.

 

Net Interest Income

 

Tax-equivalent net interest margin for the fourth quarter of 2011 was 3.93%, compared to 3.78% in the comparable quarter of 2010. Net interest income was $18.27 million for the fourth quarter of 2011, an increase of $167 thousand, or 0.01%, from the fourth quarter of 2010. Total interest income was $23.20 million for the fourth quarter of 2011, a decrease of $1.77 million, or 7.10%, from the fourth quarter of 2010. The decrease in interest income reflects a degree of continued loan and investment repricing, effectively reducing the average yields. The yield on loans was 5.69% for the fourth quarter of 2011, a decrease from 5.94% in the same period of the prior year, while average loans decreased slightly between the comparable periods to $1.39 billion as loan demand remains low.

 

Total interest expense for the fourth quarter of 2011 was $4.94 million, a decrease of $1.94 million, or 28.23%, from the fourth quarter of 2010. Fourth quarter 2011 deposit costs decreased $1.77 million compared to the fourth quarter of 2010, which was primarily due to a decrease in the average rate paid on interest-bearing deposits of 43 basis points to 0.79%. Fourth quarter 2011 borrowing costs decreased $171 thousand compared to the fourth quarter of 2010, while the average borrowings balance decreased $49.40 million between the comparable periods due to the redemption of various wholesale borrowings and declining commercial cash management balances. The cost of interest-bearing liabilities decreased 33 basis points to 1.21% during the fourth quarter of 2011 as compared to the same quarter of the prior year. Average interest-bearing liabilities decreased $156.96 million, or 8.86%, for the fourth quarter of 2011 compared with the fourth quarter of 2010, which included a decrease of $25.24 million in Federal Home Loan Bank (“FHLB”) borrowings and other long-term debt.

 

 

Provision

 

The provision for loan losses for the fourth quarter and twelve months ended December 31, 2011, totaled $2.44 million and $9.05 million, respectively, which compares very favorably to the provision for loan losses for the fourth quarter and twelve months ended December 31, 2010, of $3.69 million and $14.76 million, respectively. The fourth quarter of 2011 marks the sixth consecutive quarter of provision decreases when compared to the prior year’s comparable quarter.

 

Noninterest Income

 

Noninterest income for the fourth quarter of 2011 decreased $5.48 million, or 45.35%, compared to the fourth quarter of 2010, largely due to a reduction in realized gains on the investment securities portfolio. During the fourth quarter of 2011, wealth management income totaled $818 thousand, a decrease of $204 thousand, or 19.96%, from the fourth quarter of 2010. The Trust and Wealth Management Divisions reported $873 million in assets under management at December 31, 2011. Service charges on deposit accounts totaled $3.45 million for the fourth quarter of 2011, an increase of $118 thousand, or 3.54%, from the fourth quarter of 2010. Insurance commissions were $1.17 million for the fourth quarter of 2011, a decrease of $304 thousand, or 20.62%, from the comparable quarter of 2010. Net gains on the sales of securities decreased $4.22 million, or 99.39%, in the fourth quarter of 2011 as compared to the same period of the prior year.

 

Noninterest Expenses

 

Noninterest expenses for the fourth quarter of 2011 decreased $2.79 million, or 14.06%, compared to the fourth quarter of 2010. Salaries and employee benefits decreased $1.42 million, or 15.19%, in the fourth quarter of 2011 compared to the same period in the prior year. Occupancy, furniture, and equipment expense for the fourth quarter of 2011 decreased $158 thousand, or 6.19%, compared to the fourth quarter of 2010. Federal Deposit Insurance Corporation (“FDIC”) deposit insurance premiums decreased $383 thousand, or 52.68%, in the fourth quarter of 2011, compared to the fourth quarter of 2010, primarily due to the FDIC’s change in assessment methodology for deposit insurance to one based on tangible assets. As of December 31, 2011, the Company recognized a technical goodwill impairment of $1.24 million at the insurance agency despite strong operating earnings and good realization on recent sales of non-strategic segments of that business. Other operating expenses were $4.93 million for the fourth quarter of 2011, a decrease of $1.02 million, or 17.16%, from the fourth quarter of 2010. Included in other operating expenses are expenses and losses associated with other real estate that amounted to $694 thousand in the fourth quarter of 2011, compared to $675 thousand in the third quarter of 2011, and $1.12 million in the fourth quarter of 2010. The efficiency ratio for the fourth quarter of 2011 declined to 54.93%, a significant improvement over both the third quarter of 2011 and the fourth quarter of 2010.

 

Credit Quality

 

The Company’s loan quality measures at December 31, 2011, continue to compare favorably to the industry. Total loan delinquencies of 30 days or more, including non-accrual loans, as a percent of total loans were 2.62% at both December 31, 2011 and December 31, 2010. This compares favorably to the most recent Federal Reserve report of the Company’s peer group of bank holding companies with total assets between $1 and $3 billion, which reports peer total loan delinquencies of 3.86%. The ratio of the allowance for loan losses as a percent of loans held for investment was 1.88% at December 31, 2011, compared to 1.91% at December 31, 2010.

 

Total non-performing assets, which include unseasoned loan restructurings and other real estate owned, were 1.57% of total assets at December 31, 2011, and non-performing loans as a percentage of loans held for investment were 2.00%. These levels are much better by comparison with those in the Federal Reserve peer group which were last reported at 3.08% for total non-performing assets to total assets and 3.26% for non-performing loans to total loans. Included in non-performing assets are $3.50 million of unseasoned loan restructurings at December 31, 2011.

 

Annualized net charge-offs were 0.75% of average loans held for investment for the fourth quarter of 2011. This represents a decrease of 28 basis points from 1.03% for the fourth quarter of 2010 and continues a general downward trend in net charge-offs.

 

 

Balance Sheet and Capital

 

Consolidated assets were $2.16 billion at December 31, 2011. Total stockholders’ equity was $305.73 million at December 31, 2011, resulting in a book value per common share, on an as-converted basis, of $15.96, compared to total stockholders’ equity of $269.88 million and a book value per common share of $15.11 at December 31, 2010. During the fourth quarter of 2011, the Company repurchased 33,200 treasury shares. The Company also paid a $0.10 per share cash dividend on common shares during the fourth quarter of 2011.

 

The Company will host an investor and media teleconference and webcast on Thursday, January 26, 2012, at 11:00 a.m. To access the teleconference, the toll-free number is (877) 407-8033. Alternatively, individuals may listen to the live or archived webcast of the conference call. To listen to the webcast, visit www.fcbinc.com and follow the link under the Investor Relations section. The Company’s press release and financial summary will be available in this section, as well. Copies of the Company’s fourth quarter 2011 earnings press release and financial summary will also be made available upon request via fax, email or postal service mail. To request a copy, contact David D. Brown, Chief Financial Officer, at (276) 326-9000.

 

Non-GAAP Presentations

 

The Company prepares its financial statements under accounting principles generally accepted in the United States, or “GAAP.” However, this press release also refers to certain non-GAAP financial measures that we believe, when considered together with GAAP financial measures, provide investors with important information regarding our operational performance. An analysis of any non-GAAP financial measure should be used in conjunction with results presented in accordance with GAAP.

 

Core earnings are a non-GAAP financial measure that reflect net income excluding non-recurring income and expense items, taxes, loan loss provisions, losses on other real estate owned, as well as gains, losses, impairment losses on securities, and goodwill impairments from net income. These excluded items are difficult to predict and we believe that core earnings provide the Company and investors with a valuable tool to evaluate the Company’s financial results.

 

The adjusted efficiency ratio is a non-GAAP financial measure that is computed by dividing core noninterest expense by the sum of net interest income on a tax equivalent basis and core noninterest income. We believe that this measure provides investors with important information about our operating efficiency. Comparison of our adjusted efficiency ratio with those of other companies may not be possible because other companies may calculate the adjusted efficiency ratio differently.

 

Tangible book value per share is a non-GAAP financial measure that is defined as stockholders’ equity less goodwill and other intangible assets, divided by as-converted common shares outstanding.

 

About First Community Bancshares, Inc.

 

First Community Bancshares, Inc., headquartered in Bluefield, Virginia, is a $2.16 billion financial holding company and is the parent company of First Community Bank. First Community Bank operates through fifty-one locations in the four states of Virginia, West Virginia, North Carolina, and Tennessee. First Community Bank offers wealth management and investment services through its Trust & Financial Services Division and First Community Wealth Management, a registered investment advisory firm. The Company’s Trust and Wealth Management Divisions managed assets with a market value of $873 million at December 31, 2011. The Company is also the parent company of Greenpoint Insurance Group, Inc., a full-service insurance agency headquartered in High Point, North Carolina, that operates six offices. The Company’s common stock is traded on the NASDAQ Global Select Market under the symbol, “FCBC”. Additional investor information can be found on the Internet at www.fcbinc.com.

 

This news release may include forward-looking statements. These forward-looking statements are based on current expectations that involve risks, uncertainties and assumptions. Should one or more of these risks or uncertainties materialize or should underlying assumptions prove incorrect, actual results may differ materially. These risks include: changes in business or other market conditions; the timely development, production and acceptance of new products and services; the challenge of managing asset/liability levels; the management of credit risk and interest rate risk; the difficulty of keeping expense growth at modest levels while increasing revenues; and other risks detailed from time to time in the Company’s Securities and Exchange Commission reports, including but not limited to the Annual Report on Form 10-K for the most recent year ended. Pursuant to the Private Securities Litigation Reform Act of 1995, the Company does not undertake to update forward-looking statements contained within this news release.

 

  

First Community Bancshares, Inc.

Condensed Consolidated Statements of Income

 

	Three Months Ended						Year Ended
(Unaudited)	December 30,						December 30,
(In Thousands, Except Share and Per Share Data)	2011			2010			2011			2010
Interest Income
Interest and fees on loans held for investment	$	19,947		$	20,950		$	80,580		$	84,741
Interest on securities -- taxable		2,023			2,293			8,117			12,704
Interest on securities -- nontaxable		1,190			1,672			5,194			5,943
Interest on deposits in banks		41			60			285			194
Total interest income		23,201			24,975			94,176			103,582
Interest Expense
Interest on deposits		2,637			4,407			12,788			19,887
Interest on borrowings		2,298			2,469			9,359			9,838
Total interest expense		4,935			6,876			22,147			29,725
Net interest income		18,266			18,099			72,029			73,857
Provision for loan losses		2,436			3,686			9,047			14,757
Net interest income after provision for loan losses		15,830			14,413			62,982			59,100
Noninterest Income
Wealth management income		818			1,022			3,510			3,828
Service charges on deposit accounts		3,450			3,332			13,238			13,128
Other service charges and fees		1,429			1,299			5,722			5,074
Insurance commissions		1,170			1,474			6,197			6,727
Net impairment losses recognized in earnings		(1,548	)		—			(2,285	)		(185	)
Net gains on sale of securities		26			4,248			5,264			8,273
Other operating income		1,261			713			3,888			3,663
Total noninterest income		6,606			12,088			35,534			40,508
Noninterest Expense
Salaries and employee benefits		7,903			9,319			34,126			34,528
Occupancy expense of bank premises		1,589			1,586			6,280			6,438
Furniture and equipment expense		804			965			3,490			3,713
Amortization of intangible assets		250			263			1,020			1,032
FDIC premiums and assessments		344			727			1,984			2,856
Prepayment penalties on FHLB advances		—			—			471			—
Goodwill impairment		1,239			1,039			1,239			1,039
Other operating expense		4,925			5,945			20,305			20,337
Total noninterest expense		17,054			19,844			68,915			69,943
Income before income taxes		5,382			6,657			29,601			29,665
Income tax expense		2,151			1,772			9,573			7,818
Net income		3,231			4,885			20,028			21,847
Dividends on preferred stock		286			—			703			—
Net income available to common shareholders	$	2,945		$	4,885		$	19,325		$	21,847
Per Share
Basic earnings per common share	$	0.16		$	0.27		$	1.08		$	1.23
Diluted earnings per common share	$	0.17		$	0.27		$	1.07		$	1.23
Weighted average shares outstanding:
Basic		17,849,286			17,845,857			17,877,421			17,802,009
Diluted		19,159,090			17,891,807			18,691,081			17,822,944
For the period:
Return on average assets		0.54	%		0.85	%		0.88	%		0.97	%
Return on average common equity		4.06	%		7.00	%		6.81	%		8.11	%
Cash dividends per common share	$	0.10		$	0.10		$	0.40		$	0.40

     

   

 First Community Bancshares, Inc. 

Condensed Quarterly Statements of Income  

 

		As of and for the Quarter Ended
(Unaudited)		December 31,				September 30,				June 30,				March 31,				December 31,
(In Thousands, Except Share and Per Share Data)		2011				2011				2011				2011				2010
Interest Income
Interest and fees on loans held for investment		$	19,947			$	20,084			$	20,094			$	20,455			$	20,950
Interest on securities -- taxable			2,023				1,711				1,850				2,533				2,293
Interest on securities -- nontaxable			1,190				1,180				1,291				1,533				1,672
Interest on deposits in banks			41				75				100				69				60
Total interest income			23,201				23,050				23,335				24,590				24,975
Interest Expense
Interest on deposits			2,637				2,998				3,273				3,880				4,407
Interest on borrowings			2,298				2,318				2,308				2,435				2,469
Total interest expense			4,935				5,316				5,581				6,315				6,876
Net interest income			18,266				17,734				17,754				18,275				18,099
Provision for loan losses			2,436				1,920				3,079				1,612				3,686
Net interest income after provision for loan losses			15,830				15,814				14,675				16,663				14,413
Noninterest Income
Wealth management income			818				868				930				894				1,022
Service charges on deposit accounts			3,450				3,404				3,353				3,031				3,332
Other service charges and fees			1,429				1,426				1,461				1,406				1,299
Insurance commissions			1,170				1,523				1,561				1,943				1,474
Net impairment losses recognized in earnings			(1,548	)			(210	)			—				(527	)			—
Net gains on sale of securities			26				178				3,224				1,836				4,248
Other operating income			1,261				877				834				916				713
Total noninterest income			6,606				8,066				11,363				9,499				12,088
Noninterest Expense
Salaries and employee benefits			7,903				8,409				8,685				9,129				9,319
Occupancy expense of bank premises			1,589				1,476				1,568				1,647				1,586
Furniture and equipment expense			804				862				909				915				965
Amortization of intangible assets			250				250				261				259				263
FDIC premiums and assessments			344				348				414				878				727
Prepayment penalties on FHLB advances			—				—				—				471				—
Goodwill impairment			1,239				—				—				—				1,039
Other operating expense			4,925				4,715				5,901				4,764				5,945
Total noninterest expense			17,054				16,060				17,738				18,063				19,844
Income  before income taxes			5,382				7,820				8,300				8,099				6,657
Income tax expense			2,151				2,502				2,572				2,348				1,772
Net income			3,231				5,318				5,728				5,751				4,885
Dividends on preferred stock			286				286				131				—				—
Net income available to common shareholders		$	2,945			$	5,032			$	5,597			$	5,751			$	4,885
Per Share
Basic earnings per common share		$	0.16			$	0.28			$	0.31			$	0.32			$	0.27
Diluted earnings per common share		$	0.17			$	0.28			$	0.31			$	0.32			$	0.27
Cash dividends per common share		$	0.10			$	0.10			$	0.10			$	0.10			$	0.10
Weighted average shares outstanding:
Basic			17,849,286				17,896,534				17,895,904				17,867,953				17,845,857
Diluted			19,159,090				19,205,634				18,534,489				17,887,118				17,891,807

 

 

 First Community Bancshares, Inc. 

 Reconciliation of GAAP Net Income to Core Earnings

  

	Three Months Ended						Year Ended
(Unaudited)	December 31,						December 31,
(In Thousands, Except Per Share Data)	2011			2010			2011			2010
Net income, GAAP	$	3,231		$	4,885		$	20,028		$	21,847
Non-GAAP adjustments:
Security gains		(26	)		(4,248	)		(5,264	)		(8,273	)
FHLB debt prepayment fees		—			—			471			—
Other-than-temporary security impairments		1,548			—			2,285			185
Goodwill impairment		1,239			1,039			1,239			1,039
Intangibles amortization		250			263			1,020			1,032
Other non-core items		—			—			59			4
Total adjustments to core earnings		3,011			(2,946	)		(190	)		(6,013	)
Tax effect		1,129			(1,105	)		(71	)		(2,255	)
Core earnings, non-GAAP	$	5,113		$	3,044		$	19,909		$	18,089
Core return on average assets		0.94	%		0.53	%		0.91	%		0.80	%
Core return on average common equity		7.05	%		4.36	%		7.02	%		6.71	%
Core diluted earnings per common share	$	0.27		$	0.17		$	1.07		$	1.01

 

 

Efficiency Ratio Calculation 

 

	Three Months Ended						Year Ended
(Unaudited)	December 31,						December 31,
(In Thousands)	2011			2010			2011			2010
Noninterest expense, GAAP	$	17,054		$	19,844		$	68,915		$	69,943
Non-GAAP adjustments:
FHLB debt prepayment fees		—			—			(471	)		—
OREO expenses		(694	)		(1,118	)		(3,441	)		(3,079	)
Goodwill impairment		(1,239	)		(1,039	)		(1,239	)		(1,039	)
Intangibles amortization		(250	)		(263	)		(1,020	)		(1,032	)
Other non-core items		—			—			(77	)		(4	)
Adjusted noninterest expense		14,871			17,424			62,667			64,789
Net interest income, GAAP		18,266			18,099			72,029			73,857
Noninterest income, GAAP		6,606			12,088			35,534			40,508
Non-GAAP adjustments:
Tax-equivalency adjustment		681			941			2,959			3,364
Security gains		(26	)		(4,248	)		(5,264	)		(8,273	)
Other-than-temporary security impairments		1,548			—			2,285			185
Other non-core items		—			—			(18	)		—
Adjusted net interest and noninterest income		27,075			26,880			107,525			109,641
Efficiency Ratio		54.93	%		64.82	%		58.28	%		59.09	%

 

 

 

 First Community Bancshares, Inc. 

 Quarterly Balance Sheets

 

	For the Quarter Ended
(Unaudited)	December 31,			September 30,			June 30,			March 31,			December 31,
(Dollars In Thousands)	2011			2011			2011			2011			2010
Cash and due from banks	$	34,578		$	38,776		$	31,451		$	52,684		$	28,816
Federal funds sold		1,909			103,179			162,629			121,974			81,526
Interest-bearing balances with banks		10,807			6,365			36,539			809			1,847
Total cash and cash equivalents		47,294			148,320			230,619			175,467			112,189
Securities available-for-sale		482,430			449,387			349,976			430,965			480,064
Securities held-to-maturity		3,490			3,342			4,106			4,524			4,637
Loans held for sale		5,820			3,575			920			2,614			4,694
Loans held for investment, net of unearned income		1,396,067			1,374,656			1,373,944			1,375,685			1,386,206
Less allowance for loan losses		26,205			26,407			26,482			26,482			26,482
Net loans		1,375,682			1,351,824			1,348,382			1,351,817			1,364,418
Premises and equipment, net		54,721			54,860			55,808			56,189			56,244
Other real estate owned		5,914			5,942			5,585			5,644			4,910
Interest receivable		6,193			6,264			6,202			7,288			7,675
Goodwill		83,056			83,832			85,132			84,930			84,914
Other intangible assets		4,326			4,576			5,205			5,466			5,725
Other assets		101,683			111,745			115,385			118,690			123,462
Total assets	$	2,164,789		$	2,220,092		$	2,206,400		$	2,240,980		$	2,244,238
Deposits:
Noninterest-bearing demand	$	240,268		$	233,683		$	219,488		$	222,072		$	205,151
Interest-bearing demand		275,156			295,804			271,622			287,006			262,420
Savings		394,707			396,767			405,409			420,481			426,547
Time		633,336			664,237			683,157			707,458			726,837
Total deposits		1,543,467			1,590,491			1,579,676			1,637,017			1,620,955
Interest, taxes and other liabilities		20,452			20,030			20,563			20,459			21,318
Securities sold under agreements to repurchase		129,208			139,510			137,778			139,472			140,894
FHLB borrowings		150,000			150,000			150,000			150,000			175,000
Other indebtedness		15,933			15,941			16,179			16,186			16,193
Total liabilities		1,859,060			1,915,972			1,904,196			1,963,134			1,974,360
Preferred stock, net of discount		18,921			18,921			18,921			—			—
Common stock		18,083			18,083			18,083			18,083			18,083
Additional paid-in capital		188,118			188,243			188,278			188,742			189,239
Retained earnings		93,656			92,498			89,257			85,450			81,486
Treasury stock, at cost		(5,721	)		(5,651	)		(5,137	)		(5,851	)		(6,740	)
Accumulated other comprehensive loss		(7,328	)		(7,974	)		(7,198	)		(8,578	)		(12,190	)
Total stockholders' equity		305,729			304,120			302,204			277,846			269,878
Total liabilities and stockholders' equity	$	2,164,789		$	2,220,092		$	2,206,400		$	2,240,980		$	2,244,238
Actual shares outstanding at period end		17,849,376			17,869,514			17,917,824			17,894,899			17,866,335
Book value per common share at period end (1)	$	15.96		$	15.86		$	15.72		$	15.53		$	15.11
Tangible book value per common share at period end (2)	$	11.40		$	11.25		$	11.02		$	10.48		$	10.03

 

(1)

Book value per common share is defined as stockholders' equity divided by as-converted common shares outstanding

(2)

Tangible book value per common share is defined as stockholders' equity less goodwill and other intangibles divided by as-converted common shares outstanding

   

 

 First Community Bancshares, Inc. 

 Selected Credit Quality Information

  

	As of and for the Quarter Ended
(Unaudited)	December 31,			September 30,			June 30,			March 31,			December 31,
(Dollars in Thousands)	2011			2011			2011			2011			2010
Summary of Loan Loss Experience
Allowance for loan losses:
Beginning balance	$	26,407		$	26,482		$	26,482		$	26,482		$	26,420
Provision for loan losses		2,436			1,920			3,079			1,612			3,686
Charge-offs		(2,915	)		(3,062	)		(3,456	)		(2,027	)		(3,846	)
Recoveries		277			1,067			377			415			222
Net charge-offs		(2,638	)		(1,995	)		(3,079	)		(1,612	)		(3,624	)
Ending balance	$	26,205		$	26,407		$	26,482		$	26,482		$	26,482
Summary of Asset Quality
Non-accrual loans	$	24,487		$	22,877		$	22,037		$	17,703		$	19,414
Restructured loans		3,496			964			878			1,509			5,325
Loans 90 days or more past due and still accruing		—			—			—			—			—
Total non-performing loans		27,983			23,841			22,915			19,212			24,739
Other real estate owned		5,914			5,942			5,585			5,644			4,910
Total non-performing assets	$	33,897		$	29,783		$	28,500		$	24,856		$	29,649
Restructured loans performing in accordance with terms	$	827		$	1,156		$	7,044		$	7,519		$	3,911
Asset Quality Ratios
Non-performing loans as a percentage of  loans held for investment		2.00	%		1.73	%		1.67	%		1.40	%		1.78	%
Non-performing assets as a percentage of total assets		1.57	%		1.34	%		1.29	%		1.11	%		1.32	%
Annualized net charge-offs as a percentage of average loans held for investment		0.75	%		0.57	%		0.90	%		0.47	%		1.03	%
Allowance for loan losses as a percentage of loans held for investment		1.88	%		1.92	%		1.93	%		1.93	%		1.91	%
Ratio of allowance for loan losses to non-performing loans		0.94			1.11			1.16			1.38			1.07

  

 

 First Community Bancshares, Inc. 

 Non-accrual Loan Detail

  

	As of December 31, 2011
							Non-accrual
(Unaudited)	Loans			Non-accrual			Loans to Loans
(Dollars in Thousands)	Outstanding			Loans			Outstanding
Commercial
Construction -- commercial	$	35,482		$	461			1.30	%
Land development		2,902			297			10.23	%
Other land loans		23,384			279			1.19	%
Commercial and industrial		91,939			4,312			4.69	%
Multi-family residential		77,050			341			0.44	%
Single family non-owner occupied		106,743			1,639			1.54	%
Non-farm, non-residential		336,005			8,063			2.40	%
Agricultural		1,374			—			0.00	%
Farmland		37,161			271			0.73	%
Total commercial		712,040			15,663			2.20	%
Consumer real estate
Home equity lines		111,387			516			0.46	%
Single family owner occupied		473,067			8,255			1.74	%
Owner occupied construction		19,577			1			0.01	%
Total consumer real estate		604,031			8,772			1.45	%
Consumer and other
Consumer loans		67,129			52			0.08	%
Other loans		12,867			—			0.00	%
Total consumer and other		79,996			52			0.07	%
Total loans	$	1,396,067		$	24,487			1.75	%

 

 

 First Community Bancshares, Inc. 

 Selected Financial Information

   

	As of and for the Quarter Ended
(Unaudited)	December 31,			September 30,			June 30,			March 31,			December 31,
(Dollars in Thousands)	2011			2011			2011			2011			2010
Ratios
Return on average assets		0.54	%		0.91	%		1.02	%		1.05	%		0.85	%
Return on average common equity		4.06	%		6.94	%		7.91	%		8.47	%		7.00	%
Net interest margin		3.93	%		3.77	%		3.83	%		3.96	%		3.78	%
Efficiency ratio for the quarter		54.93	%		56.84	%		59.03	%		62.27	%		64.82	%
Efficiency ratio year-to-date		58.28	%		59.41	%		60.67	%		62.27	%		59.09	%
Equity as a percent of total assets at end of period		14.12	%		13.70	%		13.70	%		12.40	%		12.03	%
Average earning assets as a percentage of average total assets		88.27	%		88.39	%		88.11	%		88.07	%		87.69	%
Average loans as a percentage of average deposits		89.45	%		87.15	%		85.57	%		84.78	%		85.54	%
Average Balances
Investments	$	479,638		$	417,291		$	386,706		$	470,833		$	498,090
Loans		1,392,650			1,379,144			1,373,988			1,382,526			1,402,178
Earning assets		1,913,768			1,936,720			1,935,470			1,961,538			1,996,106
Total assets		2,168,166			2,191,145			2,196,691			2,227,255			2,276,257
Deposits		1,556,990			1,582,481			1,605,694			1,630,701			1,639,154
Interest-bearing deposits		1,320,186			1,357,938			1,386,292			1,418,807			1,427,746
Borrowings		295,303			300,751			297,857			316,864			344,704
Interest-bearing liabilities		1,615,489			1,658,689			1,684,149			1,735,671			1,772,450
Equity		306,779			306,524			291,474			275,350			276,723
Tax-equivalent net interest income		18,947			18,410			18,490			19,141			19,040

 

 

First Community Bancshares, Inc.

Consolidated Average Balance Sheets, Yields, and Rates 

  

	Three Months Ended December 31,
	2011										2010
(Unaudited)	Average			Interest			Average				Average			Interest			Average
(Dollars in Thousands)	Balance			(1)			Rate (1)				Balance			(1)			Rate (1)
Earning assets
Loans held for investment (2)	$	1,392,650		$	19,987			5.69	%		$	1,402,178		$	20,992			5.94	%
Securities available-for-sale		476,244			3,784			3.15	%			493,018			4,751			3.82	%
Securities held-to-maturity		3,394			70			8.18	%			5,072			113			8.84	%
Interest-bearing deposits with banks		41,480			41			0.39	%			95,838			60			0.25	%
Total earning assets		1,913,768			23,882			4.95	%			1,996,106			25,916			5.15	%
Other assets		254,398										280,151
Total	$	2,168,166									$	2,276,257
Interest-bearing liabilities
Interest-bearing demand deposits	$	277,722		$	27			0.04	%		$	266,938		$	256			0.38	%
Savings deposits		395,530			117			0.12	%			426,030			468			0.44	%
Time deposits		646,934			2,493			1.53	%			734,778			3,683			1.99	%
Fed funds purchased		308			—			0.00	%			—			—			—
Retail repurchase agreements		79,114			103			0.52	%			103,580			219			0.84	%
Wholesale repurchase agreements		50,000			479			3.80	%			50,000			469			3.72	%
FHLB borrowings & other long-term debt		165,881			1,716			4.10	%			191,124			1,781			3.70	%
Total interest-bearing liabilities		1,615,489			4,935			1.21	%			1,772,450			6,876			1.54	%
Noninterest-bearing demand deposits		236,804										211,408
Other liabilities		9,094										15,676
Stockholders' equity		306,779										276,723
Total	$	2,168,166									$	2,276,257
Net interest income, tax-equivalent				$	18,947									$	19,040
Net interest rate spread (3)								3.74	%									3.61	%
Net interest margin (4)								3.93	%									3.78	%

 

(1)

Fully taxable equivalent at the rate of 35%

(2)

Non-accrual loans are included in average balances outstanding but with no related interest income during the period of non-accrual

(3)

Represents the difference between the yield on earning assets and cost of funds

(4)

Represents tax-equivalent net interest income divided by average earning assets

   

 

 First Community Bancshares, Inc.

 Consolidated Average Balance Sheets, Yields, and Rates

 

	Year Ended December 31,
	2011										2010
(Unaudited)	Average			Interest			Average				Average			Interest			XAverage
(Dollars in Thousands)	Balance			(1)			Rate (1)				Balance			(1)			Rate (1)
Earning assets
Loans held for investment (2)	$	1,382,097		$	80,742			5.84	%		$	1,400,061		$	84,906			6.06	%
Securities available-for-sale		434,583			15,775			3.63	%			492,703			21,313			4.33	%
Securities held-to-maturity		3,999			333			8.32	%			6,299			533			8.46	%
Interest-bearing deposits with banks		116,063			285			0.25	%			81,987			194			0.24	%
Total earning assets		1,936,742			97,135			5.01	%			1,981,050			106,946			5.40	%
Other assets		258,897										282,005
Total	$	2,195,639									$	2,263,055
Interest-bearing liabilities
Interest-bearing demand deposits	$	277,263		$	431			0.16	%		$	252,471		$	980			0.39	%
Savings deposits		410,240			886			0.22	%			421,184			2,751			0.65	%
Time deposits		682,997			11,471			1.68	%			760,286			16,156			2.12	%
Fed funds purchased		77			—			0.00	%			—			—			—
Retail repurchase agreements		83,564			544			0.65	%			97,531			992			1.02	%
Wholesale repurchase agreements		50,000			1,887			3.77	%			50,000			1,872			3.74	%
FHLB borrowings & other long-term debt		168,988			6,928			4.10	%			194,461			6,974			3.59	%
Total interest-bearing liabilities		1,673,129			22,147			1.32	%			1,775,933			29,725			1.67	%
Noninterest-bearing demand deposits		223,233										206,396
Other liabilities		4,127										11,280
Stockholders' equity		295,150										269,446
Total	$	2,195,639									$	2,263,055
Net interest income, tax-equivalent				$	74,988									$	77,221
Net interest rate spread (3)								3.69	%									3.73	%
Net interest margin (4)								3.87	%									3.90	%

 

(1)	Fully taxable equivalent at the rate of 35%
(2)	Non-accrual loans are included in average balances outstanding but with no related interest income during the period of non-accrual
(3)	Represents the difference between the yield on earning assets and cost of funds
(4)	Represents tax-equivalent net interest income divided by average earning assets