FIRST COMMUNITY BANKSHARES INC /VA/ - FORM 8-K - EX-99.1 - EXHIBIT 99.1

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8-K - FORM 8-K - FIRST COMMUNITY BANKSHARES INC /VA/	fcbc20170725_8k.htm

Exhibit 99.1


NEWS RELEASE
FOR IMMEDIATE RELEASE:		FOR MORE INFORMATION, CONTACT:
July 25, 2017		David D. Brown
		(276) 326-9000

First Community Bancshares, Inc. Announces Second Quarter 2017 Results and Increased Quarterly Dividend

Bluefield, Virginia – First Community Bancshares, Inc. (NASDAQ: FCBC) (www.firstcommunitybank.com) (the “Company”) today reported its unaudited results of operations and other financial information for the quarter and six months ended June 30, 2017. The Company reported net income available to common shareholders of $6.42 million, or $0.38 per diluted common share for the quarter ended June 30, 2017, which represents a 5.56% increase in per share diluted earnings compared to the same quarter of 2016. Net income available to common shareholders was $12.62 million, or $0.74 per diluted common share for the six months ended June 30, 2017, which represents a 5.71% increase in per share diluted earnings compared to the same period of 2016.

The Company also announced today that the Board of Directors declared a quarterly cash dividend to common shareholders of eighteen cents ($0.18) per common share, which represents an increase of 12.50% over the most recent cash dividend. The quarterly dividend is payable to common shareholders of record on August 4, 2017, and is expected to be paid on or about August 18, 2017. The current year marks the 32^nd consecutive year of cash dividends paid to stockholders.

Second Quarter 2017 Highlights

●	Income Statement

Net income available to common shareholders increased $163 thousand, or 2.61%, to $6.42 million compared to the same quarter of 2016.

Diluted earnings per share increased $0.02, or 5.56%, to $0.38 compared to the same quarter of 2016.

Net interest margin increased 24 basis points to 4.32%, and normalized net interest margin increased 18 basis points to 3.99% compared to the same quarter of 2016.

●	Balance Sheet

Book value per common share increased $0.55 to $20.50 compared to December 31, 2016.

Tangible book value per common share increased $0.58 to $14.47 compared to December 31, 2016.

The Company and its subsidiary bank both significantly exceed regulatory “well capitalized” targets as of June 30, 2017.

Non-GAAP Financial Measures

The Company prepares its financial statements in accordance with generally accepted accounting principles in the United States (“GAAP”). This press release also refers to certain non-GAAP financial measures that the Company believes provide investors with important information, when used in conjunction with results presented in accordance with GAAP, regarding its operational performance. The Company’s non-GAAP financial measures presented in this release include core earnings, the efficiency ratio, tangible book value per common share, average tangible common equity, and normalized net interest margin. Management believes that core earnings provide the Company and investors a valuable tool to evaluate the Company’s financial results. Management believes that the efficiency ratio provides important information about the Company’s operating expense control and efficiency of operations. Management also believes this ratio focuses attention on the core operating performance of the Company over time and is highly useful in comparing period-to-period operating performance of core business operations. The efficiency ratio used by the Company may not be comparable to efficiency ratios reported by other financial institutions. The reconciliations of these measures to GAAP measures are provided within this news release.

About First Community Bancshares, Inc.

First Community Bancshares, Inc., a financial holding company headquartered in Bluefield, Virginia, provides banking products and services through its wholly owned subsidiary First Community Bank. First Community Bank operated 44 branch banking locations in Virginia, West Virginia, North Carolina, and Tennessee as of June 30, 2017. First Community Bank provides insurance services through First Community Insurance Services, which operate 6 in-branch locations in Virginia and West Virginia and offers wealth management and investment advice through its Trust Division and First Community Wealth Management, which collectively managed $926 million in combined assets as of June 30, 2017. The Company reported consolidated assets of $2.37 billion as of June 30, 2017. The Company’s common stock is listed on the NASDAQ Global Select Market under the trading symbol, “FCBC”. Additional investor information is available on the Company’s website 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 fiscal year end. Pursuant to the Private Securities Litigation Reform Act of 1995, the Company does not undertake to update forward-looking statements to reflect circumstances or events that occur after the date the forward-looking statements are made.

Financial Performance

CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Unaudited)

	Three Months Ended															Six Months Ended
(Amounts in thousands, except share and	June 30,			March 31,			December 31,			September 30,			June 30,			June 30,
per share data)	2017			2017			2016			2016			2016			2017			2016
Interest income
Interest and fees on loans	$	22,914		$	21,827		$	21,956		$	21,952		$	22,237		$	44,741		$	43,810
Interest on securities		1,170			1,206			1,362			1,643			1,891			2,376			3,848
Interest on deposits in banks		221			159			98			26			9			380			29
Total interest income		24,305			23,192			23,416			23,621			24,137			47,497			47,687
Interest expense
Interest on deposits		1,233			1,166			1,145			1,133			1,087			2,399			2,201
Interest on borrowings		778			885			1,314			1,367			1,359			1,663			2,684
Total interest expense		2,011			2,051			2,459			2,500			2,446			4,062			4,885
Net interest income		22,294			21,141			20,957			21,121			21,691			43,435			42,802
Provision for (recovery of) loan losses		934			492			500			(1,154	)		722			1,426			1,909
Net interest income after provision (recovery)		21,360			20,649			20,457			22,275			20,969			42,009			40,893
Total noninterest income		5,475			5,691			6,238			5,895			7,030			11,166			14,933
Total noninterest expense		17,458			17,083			16,653			18,557			18,722			34,541			37,536
Income before income taxes		9,377			9,257			10,042			9,613			9,277			18,634			18,290
Income tax expense		2,959			3,055			3,638			3,230			3,022			6,014			5,951
Net income		6,418			6,202			6,404			6,383			6,255			12,620			12,339
Dividends on preferred stock		-			-			-			-			-			-			-
Net income available to common shareholders	$	6,418		$	6,202		$	6,404		$	6,383		$	6,255		$	12,620		$	12,339

Earnings per common share
Basic	$	0.38		$	0.36		$	0.38		$	0.37		$	0.36		$	0.74		$	0.70
Diluted		0.38			0.36			0.38			0.37			0.36			0.74			0.70
Cash dividends per common share		0.16			0.16			0.16			0.16			0.14			0.32			0.28
Weighted average shares outstanding
Basic		17,012,189			16,998,125			16,891,010			17,031,074			17,414,320			17,005,196			17,636,783
Diluted		17,082,832			17,072,174			17,043,869			17,083,526			17,462,845			17,075,961			17,675,128
Performance ratios
Return on average assets		1.08	%		1.06	%		1.05	%		1.03	%		1.02	%		1.07	%		1.00	%
Return on average common equity		7.41	%		7.35	%		7.49	%		7.58	%		7.47	%		7.38	%		7.31	%
Return on average tangible common equity⁽¹⁾		10.51	%		10.50	%		10.75	%		11.07	%		10.88	%		10.51	%		10.60	%

(1)

A non-GAAP financial measure defined as average stockholders’ equity less average goodwill, other intangibles, and preferred stock liquidation preference

RECONCILIATION OF GAAP NET INCOME TO CORE EARNINGS (Unaudited)

	Three Months Ended															Six Months Ended
	June 30,			March 31,			December 31,			September 30,			June 30,			June 30,
	2017			2017			2016			2016			2016			2017			2016
(Amounts in thousands, except per share data)
Net income, GAAP	$	6,418		$	6,202		$	6,404		$	6,383		$	6,255		$	12,620		$	12,339
Non-GAAP adjustments:
Net gain on divestitures		-			-			(619	)		(3,065	)		-			-			-
Allowance reversal for sold loans		-			-			-			(1,354	)		-			-			-
Merger, acquisition, and divestiture expense		-			-			55			226			410			-			449
Net loss (gain) on sale of securities		657			-			(388	)		(25	)		79			657			78
Net impairment losses		-			-			-			4,635			11			-			11
Other non-core items		(174	)		(18	)		(48	)		(264	)		-			(192	)		(240	)
Total adjustments to core earnings		483			(18	)		(1,000	)		153			500			465			298
Tax effect		345			(7	)		(708	)		56			184			338			110
Core earnings, non-GAAP⁽¹⁾	$	6,556		$	6,191		$	6,112		$	6,480		$	6,571		$	12,747		$	12,527

Core diluted earnings per common share	$	0.38		$	0.36		$	0.36		$	0.38		$	0.38		$	0.74		$	0.71
Performance ratios
Core return on average assets		1.11	%		1.06	%		1.01	%		1.05	%		1.07	%		1.08	%		1.02	%
Core return on average common equity		7.57	%		7.33	%		7.15	%		7.70	%		7.85	%		7.45	%		7.42	%
Core return on average tangible common equity⁽²⁾		10.74	%		10.48	%		10.26	%		11.24	%		11.43	%		10.61	%		10.77	%

_____________________________________________

(1)

Excludes gains, losses, and impairment losses on securities; goodwill and intangible impairment; taxes; and other non-recurring income and expense items from net income

(2)

A non-GAAP financial measure defined as average stockholders’ equity less average goodwill, other intangibles, and preferred stock liquidation preference

Net Interest Income and Margin

AVERAGE BALANCE SHEETS AND NET INTEREST INCOME ANALYSIS (Unaudited)

	Three Months Ended June 30,
	2017							2016
	Average				Average Yield/			Average				Average Yield/
(Amounts in thousands)	Balance		Interest⁽¹⁾		Rate⁽¹⁾			Balance		Interest⁽¹⁾		Rate⁽¹⁾
Assets
Earning assets
Loans⁽²⁾	$	1,843,441	$	22,986		5.00	%	$	1,775,435	$	22,263		5.04	%
Securities available for sale		167,869		1,455		3.48	%		336,510		2,195		2.62	%
Securities held to maturity		34,664		125		1.45	%		72,331		191		1.06	%
Interest-bearing deposits		68,455		221		1.29	%		5,184		9		0.70	%
Total earning assets		2,114,429		24,787		4.70	%		2,189,460		24,658		4.53	%
Other assets		263,767							283,945
Total assets	$	2,378,196						$	2,473,405

Liabilities and stockholders' equity
Interest-bearing deposits
Demand deposits	$	387,113	$	110		0.11	%	$	339,365	$	60		0.07	%
Savings deposits		525,808		35		0.03	%		542,238		63		0.05	%
Time deposits		514,527		1,088		0.85	%		518,163		964		0.75	%
Total interest-bearing deposits		1,427,448		1,233		0.35	%		1,399,766		1,087		0.31	%
Borrowings
Federal funds purchased		5		-		1.07	%		9,078		14		0.62	%
Retail repurchase agreements		60,809		10		0.07	%		65,718		12		0.07	%
Wholesale repurchase agreements		25,000		201		3.22	%		50,000		469		3.77	%
FHLB advances and other borrowings		55,635		567		4.09	%		132,459		864		2.62	%
Total borrowings		141,449		778		2.21	%		257,255		1,359		2.12	%
Total interest-bearing liabilities		1,568,897		2,011		0.51	%		1,657,021		2,446		0.59	%
Noninterest-bearing demand deposits		441,547							460,255
Other liabilities		20,197							19,520
Total liabilities		2,030,641							2,136,796
Stockholders' equity		347,555							336,609
Total liabilities and stockholders' equity	$	2,378,196						$	2,473,405
Net interest income, FTE			$	22,776						$	22,212
Net interest rate spread						4.19	%						3.94	%
Net interest margin						4.32	%						4.08	%

____________________________________

(1)

Fully taxable equivalent ("FTE") basis based on the federal statutory rate of 35%

(2)

Nonaccrual loans are included in average balances; however, no related interest income is recorded during the period of nonaccrual.

AVERAGE BALANCE SHEETS AND NET INTEREST INCOME ANALYSIS (Unaudited)

	Six Months Ended June 30,
	2017							2016
	Average				Average Yield/			Average				Average Yield/
(Amounts in thousands)	Balance		Interest⁽¹⁾		Rate⁽¹⁾			Balance		Interest⁽¹⁾		Rate⁽¹⁾
Assets
Earning assets
Loans⁽²⁾	$	1,841,152	$	44,880		4.92	%	$	1,752,918	$	43,862		5.03	%
Securities available for sale		164,820		2,939		3.60	%		345,546		4,463		2.60	%
Securities held to maturity		40,854		276		1.36	%		72,421		385		1.07	%
Interest-bearing deposits		62,140		380		1.23	%		10,388		29		0.56	%
Total earning assets		2,108,966		48,475		4.64	%		2,181,273		48,739		4.49	%
Other assets		267,163							290,551
Total assets	$	2,376,129						$	2,471,824

Liabilities and stockholders' equity
Interest-bearing deposits
Demand deposits	$	384,098	$	212		0.11	%	$	340,945	$	117		0.07	%
Savings deposits		525,691		71		0.03	%		539,004		129		0.05	%
Time deposits		515,014		2,116		0.83	%		525,899		1,955		0.75	%
Total interest-bearing deposits		1,424,803		2,399		0.34	%		1,405,848		2,201		0.31	%
Borrowings
Federal funds purchased		3		-		1.07	%		6,251		20		0.64	%
Retail repurchase agreements		63,861		21		0.07	%		71,855		25		0.07	%
Wholesale repurchase agreements		25,000		399		3.22	%		50,000		937		3.77	%
FHLB advances and other borrowings		61,096		1,243		4.10	%		120,236		1,702		2.85	%
Total borrowings		149,960		1,663		2.24	%		248,342		2,684		2.17	%
Total interest-bearing liabilities		1,574,763		4,062		0.53	%		1,654,190		4,885		0.59	%
Noninterest-bearing demand deposits		433,588							454,552
Other liabilities		22,822							23,652
Total liabilities		2,031,173							2,132,394
Stockholders' equity		344,956							339,430
Total liabilities and stockholders' equity	$	2,376,129						$	2,471,824
Net interest income, FTE			$	44,413						$	43,854
Net interest rate spread						4.11	%						3.90	%
Net interest margin						4.25	%						4.04	%

____________________________________

(1)

Fully taxable equivalent ("FTE") basis based on the federal statutory rate of 35%

(2)

Nonaccrual loans are included in average balances; however, no related interest income is recorded during the period of nonaccrual.

RECONCILIATION OF GAAP NET INTEREST MARGIN TO NON-GAAP NORMALIZED NET INTEREST MARGIN (Unaudited)

	Three Months Ended June 30,
	2017					2016
(Amounts in thousands)	Interest⁽¹⁾		Average Yield/ Rate⁽¹⁾			Interest⁽¹⁾		Average Yield/ Rate⁽¹⁾
Earning assets
Loans⁽²⁾	$	22,986		5.00	%	$	22,263		5.04	%
Accretion income		2,534					2,248
Less: cash accretion income		788					786
Non-cash accretion income		1,746					1,462
Loans, normalized⁽³⁾		21,240		4.62	%		20,801		4.71	%
Other earning assets		1,801		2.67	%		2,395		2.33	%
Total earning assets		23,041		4.37	%		23,196		4.26	%
Total interest-bearing liabilities		2,011		0.51	%		2,446		0.59	%
Net interest income, FTE⁽³⁾	$	21,030				$	20,750
Net interest rate spread, normalized⁽³⁾				3.86	%				3.67	%
Net interest margin, normalized⁽³⁾				3.99	%				3.81	%

___________________________________________________

(1)		FTE basis based on the federal statutory rate of 35%
(2)		Nonaccrual loans are included in average balances; however, no related interest income is recorded during the period of nonaccrual.
(3)		Normalized totals are non-GAAP financial measures that exclude non-cash loan interest accretion related to PCI loans.

	Six Months Ended June 30,
	2017					2016
(Amounts in thousands)	Interest⁽¹⁾		Average Yield/ Rate⁽¹⁾			Interest⁽¹⁾		Average Yield/ Rate⁽¹⁾
Earning assets
Loans⁽²⁾	$	44,880		4.92	%	$	43,862		5.03	%
Accretion income		4,318					4,500
Less: cash accretion income		1,438					1,591
Non-cash accretion income		2,880					2,909
Loans, normalized⁽³⁾		42,000		4.60	%		40,953		4.70	%
Other earning assets		3,595		2.71	%		4,877		2.29	%
Total earning assets		45,595		4.36	%		45,830		4.23	%
Total interest-bearing liabilities		4,062		0.53	%		4,885		0.59	%
Net interest income, FTE⁽³⁾	$	41,533				$	40,945
Net interest rate spread, normalized⁽³⁾				3.83	%				3.63	%
Net interest margin, normalized⁽³⁾				3.97	%				3.77	%

___________________________________________________

(1)		FTE basis based on the federal statutory rate of 35%
(2)		Nonaccrual loans are included in average balances; however, no related interest income is recorded during the period of nonaccrual.
(3)		Normalized totals are non-GAAP financial measures that exclude non-cash loan interest accretion related to PCI loans.

Noninterest Income and Expense

CONDENSED QUARTERLY STATEMENTS OF INCOME (Unaudited)

	Three Months Ended															Six Months Ended
	June 30,			March 31,			December 31,			September 30,			June 30,			June 30,
(Amounts in thousands)	2017			2017			2016			2016			2016			2017			2016
Noninterest income
Wealth management	$	791		$	790		$	681		$	653		$	810		$	1,581		$	1,494
Service charges on deposits		3,360			3,113			3,442			3,494			3,361			6,473			6,652
Other service charges and fees		2,168			2,078			2,014			2,024			2,054			4,246			4,064
Insurance commissions		325			373			59			1,592			1,600			698			3,791
Net impairment losses recognized in earnings		-			-			-			(4,635	)		(11	)		-			(11	)
Net gain (loss) on sale of securities		(657	)		-			388			25			(79	)		(657	)		(78	)
Net FDIC indemnification asset amortization		(1,586	)		(1,332	)		(1,618	)		(1,369	)		(1,328	)		(2,918	)		(2,487	)
Net gain on divestitures		-			-			619			3,065			-			-			-
Other operating income		1,074			669			653			1,046			623			1,743			1,508
Total noninterest income		5,475			5,691			6,238			5,895			7,030			11,166			14,933
Noninterest expense
Salaries and employee benefits		9,157			8,884			9,411			9,828			10,198			18,041			20,673
Occupancy expense		1,341			1,248			1,158			1,249			1,359			2,589			2,890
Furniture and equipment expense		1,087			1,091			1,070			1,066			1,109			2,178			2,205
Amortization of intangibles		263			261			265			316			277			524			555
FDIC premiums and assessments		227			244			274			363			372			471			746
Merger, acquisition, and divestiture expense		-			-			55			226			410			-			449
Other operating expense		5,383			5,355			4,420			5,509			4,997			10,738			10,018
Total noninterest expense		17,458			17,083			16,653			18,557			18,722			34,541			37,536

Efficiency Ratio

EFFICIENCY RATIO CALCULATION (Unaudited)

	Three Months Ended															Six Months Ended
	June 30,			March 31,			December 31,			September 30,			June 30,			June 30,
	2017			2017			2016			2016			2016			2017			2016
(Amounts in thousands)
Noninterest expense, GAAP	$	17,458		$	17,083		$	16,653		$	18,557		$	18,722		$	34,541		$	37,536
Non-GAAP adjustments
Merger, acquisition, and divestiture expense		-			-			(55	)		(226	)		(410	)		-			(449	)
OREO expense and net loss		(213	)		(328	)		(184	)		(278	)		(247	)		(541	)		(958	)
Other non-core items		(327	)		-			8			(168	)		(30	)		(327	)		(204	)
Adjusted noninterest expense		16,918			16,755			16,422			17,885			18,035			33,673			35,925

Net interest income, GAAP		22,294			21,141			20,957			21,121			21,691			43,435			42,802
Noninterest income, GAAP		5,475			5,691			6,238			5,895			7,030			11,166			14,933
Non-GAAP adjustments
Tax equivalency adjustment		481			497			520			509			521			978			1,052
Net impairment losses		-			-			-			4,635			11			-			11
Net loss (gain) on sale of securities		657			-			(388	)		(25	)		79			657			78
Net gain on divestitures		-			-			(619	)		(3,065	)		-			-			-
Other non-core items		(501	)		(18	)		(40	)		(432	)		(30	)		(519	)		(444	)
Adjusted net interest and noninterest income		28,406			27,311			26,668			28,638			29,302			55,717			58,432

Non-GAAP efficiency ratio⁽¹⁾		59.56	%		61.35	%		61.58	%		62.45	%		61.55	%		60.44	%		61.48	%
GAAP efficiency ratio		62.87	%		63.67	%		61.24	%		68.69	%		65.19	%		63.26	%		65.01	%

________________________________________

(1)

A non-GAAP financial measure computed by dividing adjusted noninterest expense by the sum of tax equivalent net interest income and adjusted noninterest income

Balance Sheet and Capital

CONDENSED CONSOLIDATED QUARTERLY BALANCE SHEETS (Unaudited)

	June 30,			March 31,			December 31,			September 30,			June 30,
(Amounts in thousands, except per share data)	2017			2017			2016			2016			2016
Assets
Total cash and cash equivalents	$	106,799		$	152,851		$	76,307		$	65,929		$	44,301
Securities available for sale		157,854			158,685			165,579			220,856			322,699
Securities held to maturity		25,216			47,092			47,133			72,182			72,239
Loans held for investment, net of unearned income
Non-covered		1,796,263			1,784,371			1,795,954			1,774,547			1,733,398
Covered		45,845			51,412			56,994			61,837			68,585
Less allowance for loan losses		(18,886	)		(18,458	)		(17,948	)		(19,633	)		(21,099	)
Loans held for investment, net		1,823,222			1,817,325			1,835,000			1,816,751			1,780,884
FDIC indemnification asset		8,159			9,931			12,173			14,332			16,431
Premises and equipment, net		49,598			50,057			50,085			50,564			50,199
Other real estate owned, non-covered		3,914			4,477			5,109			4,052			4,187
Other real estate owned, covered		124			241			276			2,437			2,017
Interest receivable		5,072			5,059			5,553			5,498			6,115
Goodwill		95,779			95,779			95,779			101,776			100,486
Other intangible assets		6,683			6,947			7,207			7,964			4,688
Other assets		84,183			82,069			86,197			87,932			91,082
Total assets	$	2,366,603		$	2,430,513		$	2,386,398		$	2,450,273		$	2,495,328

Liabilities
Deposits
Noninterest-bearing	$	443,800		$	467,677		$	427,705		$	473,509		$	451,003
Interest-bearing		1,413,574			1,438,917			1,413,633			1,388,390			1,373,412
Total deposits		1,857,374			1,906,594			1,841,338			1,861,899			1,824,415
Federal funds purchased		-			-			-			-			42,000
Securities sold under agreements to repurchase		86,011			90,653			98,005			118,532			113,392
FHLB borrowings		50,000			65,000			65,000			90,000			140,000
Other borrowings		-			244			15,708			15,707			15,756
Interest, taxes, and other liabilities		24,443			24,618			27,290			26,599			25,553
Total liabilities		2,017,828			2,087,109			2,047,341			2,112,737			2,161,116

Stockholders' equity
Common stock		21,382			21,382			21,382			21,382			21,382
Additional paid-in capital		228,326			228,176			228,142			227,884			227,791
Retained earnings		177,556			173,860			170,377			166,689			163,030
Treasury stock, at cost		(78,488	)		(78,533	)		(78,833	)		(78,789	)		(74,974	)
Accumulated other comprehensive (loss) income		(1	)		(1,481	)		(2,011	)		370			(3,017	)
Total stockholders' equity		348,775			343,404			339,057			337,536			334,212
Total liabilities and stockholders' equity	$	2,366,603		$	2,430,513		$	2,386,398		$	2,450,273		$	2,495,328

Shares outstanding at period-end		17,017,071			17,013,185			16,994,208			16,988,972			17,155,322
Book value per common share⁽¹⁾	$	20.50		$	20.18		$	19.95		$	19.87		$	19.48
Tangible book value per common share⁽²⁾		14.47			14.15			13.89			13.41			13.35

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(1)		Stockholders' equity divided by as-converted common shares outstanding
(2)		A non-GAAP financial measure defined as stockholders’ equity less goodwill and other intangibles, divided by as-converted common shares outstanding

Asset Quality

SELECTED CREDIT QUALITY INFORMATION (Unaudited)

	June 30,			March 31,			December 31,			September 30,			June 30,
(Amounts in thousands)	2017			2017			2016			2016			2016
Allowance for Loan Losses
Beginning balance	$	18,458		$	17,948		$	19,633		$	21,099		$	20,467
Provision for (recovery of) loan losses charged to operations		934			492			500			(1,154	)		722
Recovery of loan losses recorded through the FDIC indemnification asset		-			-			-			-			(10	)
Charge-offs		(902	)		(357	)		(2,485	)		(772	)		(691	)
Recoveries		396			375			300			460			611
Net (charge-offs) recoveries		(506	)		18			(2,185	)		(312	)		(80	)
Ending balance	$	18,886		$	18,458		$	17,948		$	19,633		$	21,099

Nonperforming Assets
Non-covered nonperforming assets
Nonaccrual loans	$	20,146		$	18,537		$	15,854		$	17,487		$	16,626
Accruing loans past due 90 days or more		-			20			-			62			64
Troubled debt restructurings ("TDRs")⁽¹⁾		100			-			114			115			115
Total non-covered nonperforming loans		20,246			18,557			15,968			17,664			16,805
OREO		3,914			4,477			5,109			4,052			4,187
Total non-covered nonperforming assets	$	24,160		$	23,034		$	21,077		$	21,716		$	20,992

Covered nonperforming assets
Nonaccrual loans	$	446		$	918		$	608		$	688		$	680
Total covered nonperforming loans		446			918			608			688			680
OREO		124			241			276			2,437			2,017
Total covered nonperforming assets	$	570		$	1,159		$	884		$	3,125		$	2,697

Additional Information
Performing TDRs⁽²⁾	$	8,485		$	8,593		$	12,838		$	13,336		$	13,562
Total TDRs⁽³⁾		8,585			8,593			12,952			13,451			13,677

Non-covered ratios
Nonperforming loans to total loans		1.13	%		1.04	%		0.89	%		1.00	%		0.97	%
Nonperforming assets to total assets		1.04	%		0.97	%		0.90	%		0.91	%		0.87	%
Non-PCI allowance to nonperforming loans		93.24	%		99.40	%		112.32	%		111.08	%		125.48	%
Non-PCI allowance to total loans		1.05	%		1.03	%		1.00	%		1.11	%		1.22	%
Annualized net charge-offs to average loans		0.11	%		0.00	%		0.49	%		0.07	%		0.02	%

Total ratios
Nonperforming loans to total loans		1.12	%		1.06	%		0.89	%		1.00	%		0.97	%
Nonperforming assets to total assets		1.04	%		1.00	%		0.92	%		1.01	%		0.95	%
Allowance for loan losses to nonperforming loans		91.27	%		94.78	%		108.28	%		106.98	%		120.67	%
Allowance for loan losses to total loans		1.03	%		1.01	%		0.97	%		1.07	%		1.17	%
Annualized net charge-offs to average loans		0.11	%		0.00	%		0.47	%		0.07	%		0.02	%

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(1)		Accruing TDRs restructured within the past six months or nonperforming
(2)		Accruing TDRs with six months or more of satisfactory payment performance
(3)		Accruing total TDRs

FIRST COMMUNITY BANKSHARES INC /VA/ - FORM 8-K - EX-99.1 - EXHIBIT 99.1 - July 25, 2017

Attached files

FIRST COMMUNITY BANKSHARES INC /VA/ Reports