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First Community Bancshares, Inc. Announces Third Quarter 2016 Results and Quarterly Dividend

BLUEFIELD, Va., Oct. 25, 2016 (GLOBE NEWSWIRE) -- First Community Bancshares, Inc. (NASDAQ:FCBC) (www.fcbinc.com) (the “Company”) today reported its unaudited results of operations and other financial information for the quarter and nine months ended September 30, 2016. The Company reported net income available to common shareholders of $6.38 million, or $0.37 per diluted common share for the quarter ended September 30, 2016, which represents an 8.82% increase in per share earnings compared to the same quarter of 2015. Net income available to common shareholders was $18.72 million, or $1.07 per diluted common share for the nine months ended September 30, 2016, which represents a 10.31% increase in per share earnings compared to the same period of 2015.

The Company also announced today that the Board of Directors declared a quarterly cash dividend to common shareholders of sixteen cents ($0.16) per common share. The quarterly dividend is payable to common shareholders of record on November 4, 2016, and is expected to be paid on or about November 18, 2016. The current year marks the 31st consecutive year of cash dividends paid to stockholders.

On July 15, 2016, the Company completed the previously announced branch exchange with First Bank, North Carolina, pursuant to which First Community Bank (the “Bank”) sold six branches in the Winston-Salem and Mooresville areas of North Carolina and acquired seven branches in Southwestern Virginia. At closing, First Bank assumed total assets of $158.25 million, including total loans of $154.03 million, and total liabilities of $111.20 million, including total deposits of $110.99 million. The Company received a deposit premium from First Bank of $4.07 million and recorded a net gain of $3.07 million in connection with the divestiture transaction. At closing, the acquired branches added total assets of $156.88 million, including total loans of $151.04 million, and total liabilities of $134.41 million, including total deposits of $134.26 million. The Company paid a deposit premium to First Bank of $3.84 million and recorded goodwill of $2.45 million in connection with the branch acquisitions.

On October 1, 2016, the Company sold two North Carolina offices operating under the Greenpoint Insurance Group, Inc. trade name and two Virginia offices operating under the trade name Carr & Hyde Insurance to Ascension Insurance Agency, Inc. The transaction does not impact the Company’s in-branch insurance offices operating as First Community Insurance Services, Inc. in West Virginia and Virginia.

Third Quarter 2016 Highlights

  • Income Statement
    • Net income available to common shareholders increased $124 thousand, or 1.98%, to $6.38 million compared to the same quarter of 2015.
    • Diluted earnings per share increased $0.03, or 8.82%, to $0.37 compared to the same quarter of 2015.
    • Core, non-GAAP diluted earnings per common share increased $0.04 to $0.38 compared to the same quarter of 2015.
    • The net interest margin decreased 10 basis points to 3.95%, while the normalized net interest margin increased 9 basis points to 3.77% compared to the same quarter of 2015.
  • Balance Sheet
    • The non-covered loan portfolio increased $151.04 million, or 9.30%, compared to December 31, 2015.
    • Book value per common share increased $0.92 to $19.87 compared to December 31, 2015.
    • The Company repurchased 171,225 common shares during the quarter resulting in 1,152,776 shares repurchased year-to-date. The Company has repurchased 3.93 million shares since September 30, 2013.
    • The Company and its subsidiary bank both significantly exceed regulatory “well capitalized” targets as of September 30, 2016.
  • Asset Quality
    • Annualized net charge-offs were only 0.07% of average loans compared to 0.10% for the same period of the prior year.
    • Total nonperforming assets decreased $2.63 million compared to December 31, 2015, and decreased $2.32 million compared to September 30, 2015.
    • Total non-covered nonperforming assets decreased $1.08 million compared to December 31, 2015, and decreased $549 thousand compared to September 30, 2015.
    • Non-covered delinquent loans, which are comprised of loans 30 days or more past due and nonaccrual loans, as a percentage of total non-covered loans improved 21 basis points to 1.51% as of September 30, 2016, from 1.72% as of December 31, 2015.
    • The Company recognized a net loan loss recovery of $1.15 million as a result of the reversal of $1.35 million in loan loss provisions related to loans sold to First Bank.

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 48 branch banking locations throughout Virginia, West Virginia, North Carolina, and Tennessee as of September 30, 2016. First Community Bank offers wealth management and investment services through its wholly-owned subsidiary First Community Wealth Management and the Bank’s Trust Division, which collectively managed $767 million in combined assets as of September 30, 2016. The Company’s common stock is listed on the NASDAQ Global Select Market under the trading symbol, “FCBC”. The Company reported consolidated assets of $2.45 billion as of September 30, 2016. 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 Nine Months Ended
September 30, June 30, March 31, December 31, September 30, September 30,
(Amounts in thousands, except share and per share data) 2016 2016 2016 2015 2015 2016 2015
Interest income
Interest and fees on loans$21,952 $22,237 $21,573 $21,633 $22,259 $65,762 $65,999
Interest on securities 1,643 1,891 1,957 2,023 2,056 5,491 6,180
Interest on deposits in banks 26 9 20 21 33 55 246
Total interest income 23,621 24,137 23,550 23,677 24,348 71,308 72,425
Interest expense
Interest on deposits 1,133 1,087 1,114 1,202 1,384 3,334 4,676
Interest on borrowings 1,367 1,359 1,325 1,300 1,295 4,051 4,171
Total interest expense 2,500 2,446 2,439 2,502 2,679 7,385 8,847
Net interest income 21,121 21,691 21,111 21,175 21,669 63,923 63,578
(Recovery of) provision for loan losses (1,154) 722 1,187 434 381 755 1,757
Net interest income after
(recovery) provision 22,275 20,969 19,924 20,741 21,288 63,168 61,821
Total noninterest income 5,895 7,030 7,903 7,483 7,074 20,828 22,047
Total noninterest expense 18,557 18,722 18,814 19,083 19,019 56,093 57,088
Income before income taxes 9,613 9,277 9,013 9,141 9,343 27,903 26,780
Income tax expense 3,230 3,022 2,929 2,993 3,084 9,181 8,388
Net income 6,383 6,255 6,084 6,148 6,259 $ 18,722 18,392
Dividends on preferred stock - - - - - - 105
Net income available to common shareholders$6,383 $$6,255 $$6,084 $ $6,148 $$6,259 $$18,722 $18,287
Earnings per common share
Basic$0.37 $0.36 $0.34 $0.34 $0.34 $1.07 $0.98
Diluted 0.37 0.36 0.34 0.34 0.34 1.07 0.97
Cash dividends per common share 0.16 0.14 0.14 0.14 0.14 0.44 0.40
Weighted average shares outstanding
Basic 17,031,074 17,414,320 17,859,197 18,193,824 18,470,348 17,433,406 18,644,679
Diluted 17,083,526 17,462,845 17,892,531 18,226,719 18,500,975 17,475,211 18,895,909
Performance ratios
Return on average assets 1.03% 1.02% 0.99% 0.99% 1.00% 1.01% 0.96%
Return on average common equity 7.58% 7.47% 7.15% 7.05% 7.18% 7.40% 7.07%
Return on average tangible common equity(1) 11.07% 10.88% 10.34% 10.17% 10.38% 10.76% 10.23%
(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 Nine Months Ended
September 30, June 30, March 31, December 31, September 30, September 30,
2016 2016 2016 2015 2015 2016 2015
(Amounts in thousands, except per share data)
Net income, GAAP $ 6,383 $ 6,255 $ 6,084 $ 6,148 $ 6,259 $ 18,722 $ 18,392
Non-GAAP adjustments:
Net gain on divestiture (3,065) - - - - (3,065) -
Allowance reversal for sold loans (1,354) - - - - (1,354) -
Merger, acquisition, and divestiture expense 226 410 39 - - 675 86
Net (gain) loss on sale of securities (25) 79 (1) 7 39 53 (151)
FHLB debt prepayment fees - - - - - - 1,702
Net impairment losses 4,635 11 - - - 4,646 -
Other non-core items (264) - (240) 31 (75) (504) (1,035)
Total adjustments to core earnings 153 500 (202) 38 (36) 451 602
Tax effect 56 184 (74) 14 (13) 166 646
Core earnings, non-GAAP(1) $ 6,480 $ 6,571 $ 5,956 $ 6,172 $ 6,236 $19,007 $ 18,348
Core diluted earnings per common share $ 0.38 $ 0.38 $ 0.33 $ 0.34 $ 0.34 $ 1.09 $ 0.97
Performance ratios
Core return on average assets 1.05% 1.07% 0.97% 0.99% 1.00% 1.03% 0.97%
Core return on average common equity 7.70% 7.85% 7.00% 7.08% 7.16% 7.51% 7.09%
Core return on average tangible common equity(2) 11.24% 11.43% 10.12% 10.21% 10.34% 10.92% 10.26%
(1) A non-GAAP financial measure that 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 September 30,
2016 2015
Average Average Yield/ Average Average Yield/
(Amounts in thousands)Balance Interest(1) Rate(1) Balance Interest(1) Rate(1)
Assets
Earning assets
Loans(2)$ 1,820,899 $ 21,974 4.80% $ 1,675,787 $ 22,291 5.28%
Securities available for sale 266,162 1,941 2.90% 382,099 2,394 2.49%
Securities held to maturity 72,210 189 1.04% 72,624 195 1.07%
Interest-bearing deposits 19,025 26 0.54% 48,750 33 0.27%
Total earning assets 2,178,296 24,130 4.41% 2,179,260 24,913 4.53%
Other assets 282,310 305,331
Total assets$ 2,460,606 $ 2,484,591
Liabilities and stockholders' equity
Interest-bearing deposits
Demand deposits $ 337,893 $ 60 0.07% $ 335,831 $ 52 0.06%
Savings deposits 523,503 62 0.05% 532,445 83 0.06%
Time deposits 529,344 1,011 0.76% 613,598 1,249 0.81%
Total interest-bearing deposits 1,390,740 1,133 0.32% 1,481,874 1,384 0.37%
Borrowings
Federal funds purchased 3,696 6 0.65% 7 - -
Retail repurchase agreements 64,385 12 0.07% 72,740 16 0.09%
Wholesale repurchase agreements 50,000 473 3.76% 50,000 473 3.75%
FHLB advances and other borrowings 133,838 876 2.60% 80,985 806 3.95%
Total borrowings 251,919 1,367 2.16% 203,732 1,295 2.52%
Total interest-bearing liabilities 1,642,659 2,500 0.61% 1,685,606 2,679 0.63%
Noninterest-bearing demand deposits 462,588 433,164
Other liabilities 20,462 20,028
Total liabilities 2,125,709 2,138,798
Stockholders' equity 334,897 345,793
Total liabilities and stockholders' equity$ 2,460,606 $ 2,484,591
Net interest income, FTE $ 21,630 $ 22,234
Net interest rate spread 3.80% 3.90%
Net interest margin 3.95% 4.05%
(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)
Nine Months Ended September 30,
2016 2015
Average Average Yield/ Average Average Yield/
(Amounts in thousands)Balance Interest(1) Rate(1) Balance Interest(1) Rate(1)
Assets
Earning assets
Loans(2)$ 1,775,744 $ 65,836 4.95% $ 1,675,118 $ 66,107 5.28%
Securities available for sale 318,891 6,403 2.68% 358,690 7,225 2.69%
Securities held to maturity 72,350 575 1.06% 70,454 577 1.09%
Interest-bearing deposits 13,288 55 0.55% 125,295 246 0.26%
Total earning assets 2,180,273 72,869 4.47% 2,229,557 74,155 4.45%
Other assets 287,784 311,825
Total assets$ 2,468,057 $ 2,541,382
Liabilities and stockholders' equity
Interest-bearing deposits
Demand deposits $ 339,920 $ 177 0.07% $ 342,639 $ 156 0.06%
Savings deposits 533,799 191 0.05% 532,641 289 0.07%
Time deposits 527,056 2,966 0.75% 655,314 4,231 0.86%
Total interest-bearing deposits 1,400,775 3,334 0.32% 1,530,594 4,676 0.41%
Borrowings
Federal funds purchased 5,393 26 0.64% 2 - 0.00%
Retail repurchase agreements 69,347 37 0.07% 70,325 53 0.10%
Wholesale repurchase agreements 50,000 1,410 3.77% 50,000 1,405 3.76%
FHLB advances and other borrowings 124,803 2,578 2.76% 91,305 2,713 3.97%
Total borrowings 249,543 4,051 2.17% 211,632 4,171 2.64%
Total interest-bearing liabilities 1,650,318 7,385 0.60% 1,742,226 8,847 0.68%
Noninterest-bearing demand deposits 457,250 429,661
Other liabilities 22,581 20,472
Total liabilities 2,130,149 2,192,359
Stockholders' equity 337,908 349,023
Total liabilities and stockholders' equity$ 2,468,057 $ 2,541,382
Net interest income, FTE $ 65,484 $ 65,308
Net interest rate spread 3.88% 3.77%
Net interest margin 4.01% 3.92%
(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 September 30,
2016 2015
(Amounts in thousands)Interest(1) Average Yield/
Rate
(1)
Interest(1) Average Yield/
Rate
(1)
Earning assets
Loans(2)$ 21,974 4.80% $ 22,291 5.28%
Accretion income 1,683 2,930
Less: cash accretion income 699 903
Non-cash accretion income 984 2,027
Loans, normalized(3) 20,990 4.59% 20,264 4.80%
Other earning assets 2,156 2.40% 2,622 2.07%
Total earning assets 23,146 4.23% 22,886 4.17%
Total interest-bearing liabilities 2,500 0.61% 2,679 0.63%
Net interest income, FTE(3)$ 20,646 $ 20,207
Net interest rate spread, normalized(3) 3.62% 3.54%
Net interest margin, normalized(3) 3.77% 3.68%
(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.
Nine Months Ended September 30,
2016 2015
(Amounts in thousands)Interest(1) Average Yield/
Rate
(1)
Interest(1) Average Yield/
Rate
(1)
Earning assets
Loans(2)$ 65,836 4.95% $ 66,107 5.28%
Accretion income 6,183 8,765
Less: cash accretion income 2,290 3,326
Non-cash accretion income 3,893 5,439
Loans, normalized(3) 61,943 4.66% 60,668 4.84%
Other earning assets 7,033 2.32% 8,048 1.94%
Total earning assets 68,976 4.23% 68,716 4.12%
Total interest-bearing liabilities 7,385 0.60% 8,847 0.68%
Net interest income, FTE(3)$ 61,591 $ 59,869
Net interest rate spread, normalized(3) 3.63% 3.44%
Net interest margin, normalized(3) 3.77% 3.59%
(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 Nine Months Ended
September 30, June 30, March 31, December 31, September 30, September 30,
(Amounts in thousands) 2016 2016 2016 2015 2015 2016 2015
Noninterest income
Wealth management 653 810 684 744 790 2,147 2,231
Service charges on deposits 3,494 3,361 3,291 3,563 3,744 10,146 10,154
Other service charges and fees 2,024 2,054 2,010 2,058 1,974 6,088 5,987
Insurance commissions 1,592 1,600 2,191 1,563 1,650 5,383 5,336
Net impairment losses recognized in earnings (4,635) (11) - - - (4,646) -
Net (loss) gain on sale of securities 25 (79) 1 (7) (39) (53) 151
Net FDIC indemnification asset amortization (1,369) (1,328) (1,159) (1,200) (1,768) (3,856) (5,179)
Net gain on divestiture 3,065 - - - - 3,065 -
Other operating income 1,046 623 885 762 723 2,554 3,367
Total noninterest income 5,895 7,030 7,903 7,483 7,074 20,828 22,047
Noninterest expense
Salaries and employee benefits 9,828 10,198 10,475 10,268 9,971 30,501 29,357
Occupancy expense 1,249 1,359 1,531 1,413 1,443 4,139 4,404
Furniture and equipment expense 1,066 1,109 1,096 1,345 1,259 3,271 3,854
Amortization of intangibles 316 277 278 281 281 871 837
FDIC premiums and assessments 363 372 374 332 377 1,109 1,181
FHLB debt prepayment fees - - - - - - 1,702
Merger, acquisition, and divestiture expense 226 410 39 - - 675 86
Other operating expense 5,509 4,997 5,021 5,444 5,688 15,527 15,667
Total noninterest expense 18,557 18,722 18,814 19,083 19,019 56,093 57,088


Efficiency Ratio


EFFICIENCY RATIO CALCULATION (Unaudited)
Three Months Ended Nine Months Ended
September 30, June 30, March 31, December 31, September 30, September 30,
2016 2016 2016 2015 2015 2016 2015
(Amounts in thousands)
Noninterest expense, GAAP$ 18,557 $ 18,722 $ 18,814 $ 19,083 $ 19,019 $ 56,093 $ 57,088
Non-GAAP adjustments
Merger, acquisition, and divestiture expense (226) (410) (39) - - (675) (86)
FHLB debt prepayment fees - - - - - - (1,702)
OREO expense and net loss (278) (247) (711) (475) (1,220) (1,236) (1,963)
Goodwill impairment - - - - - - -
Other non-core, non-recurring items (168) (30) (174) (61) 15 (372) (198)
Adjusted noninterest expense 17,885 18,035 17,890 18,547 17,814 53,810 53,139
Net interest income, GAAP 21,121 21,691 21,111 21,175 21,669 63,923 63,578
Noninterest income, GAAP 5,895 7,030 7,903 7,483 7,074 20,828 22,047
Non-GAAP adjustments
Tax equivalency adjustment 509 521 531 548 565 1,561 2,402
Net impairment losses 4,635 11 - - - 4,646 -
Net (gain) loss on sale of securities (25) 79 (1) 7 39 53 (151)
Net gain on divestiture (3,065) - - - - (3,065) -
Other non-core items (432) (30) (414) (30) (60) (876) (1,233)
Adjusted net interest and noninterest income 28,638 29,302 29,130 29,183 29,287 87,070 86,643
Non-GAAP efficiency ratio(1) 62.45% 61.55% 61.41% 63.55% 60.83% 61.80% 61.33%
GAAP efficiency ratio 68.69% 65.19% 64.84% 66.59% 66.17% 66.19% 66.67%
(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)
September 30, June 30, March 31, December 31, September 30,
(Amounts in thousands, except per share data) 2016 2016 2016 2015 2015
Assets
Total cash and cash equivalents 65,929 44,301 39,587 51,787 62,024
Securities available for sale 220,856 322,699 338,469 366,173 382,212
Securities held to maturity 72,182 72,239 72,485 72,541 72,596
Loans held for sale - - - - 523
Loans held for investment, net of unearned income
Non-covered 1,774,547 1,733,398 1,685,891 1,623,506 1,600,271
Covered 61,837 68,585 76,538 83,035 90,203
Less allowance for loan losses (19,633) (21,099) (20,467) (20,233) (20,127)
Loans held for investment, net 1,816,751 1,780,884 1,741,962 1,686,308 1,670,347
FDIC indemnification asset 14,332 16,431 18,787 20,844 22,049
Premises and equipment, net 50,564 50,199 50,799 52,756 53,442
Other real estate owned, non-covered 4,052 4,187 5,313 4,873 5,088
Other real estate owned, covered 2,437 2,017 2,279 4,034 4,079
Interest receivable 5,498 6,115 5,968 6,007 5,910
Goodwill 101,776 100,486 100,486 100,486 100,810
Other intangible assets 7,964 4,688 4,965 5,243 5,583
Other assets 87,932 91,082 89,187 91,224 93,453
Total assets$ 2,450,273 $ 2,495,328 $ 2,470,287 $ 2,462,276 $ 2,478,116
Liabilities
Deposits
Noninterest-bearing$ 473,509 $ 451,003 $ 453,336 $ 451,511 $ 442,021
Interest-bearing 1,388,390 1,373,412 1,421,329 1,421,748 1,460,881
Total deposits 1,861,899 1,824,415 1,874,665 1,873,259 1,902,902
Interest, taxes, and other liabilities 26,599 25,553 24,576 26,630 25,356
Federal funds purchased - 42,000 18,000 - -
Securities sold under agreements to repurchase 118,532 113,392 134,661 138,614 124,076
FHLB borrowings 90,000 140,000 65,000 65,000 65,000
Other borrowings 15,707 15,756 15,756 15,756 15,955
Total liabilities 2,112,737 2,161,116 2,132,658 2,119,259 2,133,289
Stockholders' equity
Common stock 21,382 21,382 21,382 21,382 21,382
Additional paid-in capital 227,884 227,791 227,725 227,692 227,621
Retained earnings 166,689 163,030 159,223 155,647 152,046
Treasury stock, at cost (78,789) (74,974) (64,968) (56,457) (52,484)
Accumulated other comprehensive income (loss) 370 (3,017) (5,733) (5,247) (3,738)
Total stockholders' equity 337,536 334,212 337,629 343,017 344,827
Total liabilities and stockholders' equity$ 2,450,273 $ 2,495,328 $ 2,470,287 $ 2,462,276 $ 2,478,116
Shares outstanding at period-end 16,988,972 17,155,322 17,631,011 18,098,141 18,313,425
Book value per common share(1)$ 19.87 $ 19.48 $ 19.15 $ 18.95 $ 18.83
Tangible book value per common share(2) 13.41 13.35 13.17 13.11 13.02
(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)
September 30, June 30, March 31, December 31, September 30,
(Amounts in thousands) 2016 2016 2016 2015 2015
Allowance for Loan Losses
Beginning balance$ 21,099 $ 20,467 $ 20,233 $ 20,127 $ 20,258
(Recovery of) provision for loan losses charged
to operations (1,154) 722 1,187 434 381
(Recovery of) provision for loan losses recorded
through the FDIC indemnification asset - (10) 9 - (75)
Charge-offs (772) (691) (1,228) (805) (689)
Recoveries 460 611 266 477 252
Net charge-offs (312) (80) (962) (328) (437)
Ending balance$ 19,633 $ 21,099 $ 20,467 $ 20,233 $ 20,127
Nonperforming Assets
Non-covered nonperforming assets
Nonaccrual loans $ 17,487 $ 16,626 $ 16,196 $ 17,847 $ 17,100
Accruing loans past due 90 days or more 62 64 243 - 3
Troubled debt restructurings ("TDRs")(1) 115 115 158 73 74
Total non-covered nonperforming loans 17,664 16,805 16,597 17,920 17,177
OREO 4,052 4,187 5,313 4,873 5,088
Total non-covered nonperforming assets$ 21,716 $ 20,992 $ 21,910 $ 22,793 $ 22,265
Covered nonperforming assets
Nonaccrual loans $ 688 $ 680 $ 1,955 $ 647 $ 815
Total covered nonperforming loans 688 680 1,955 647 815
OREO 2,437 2,017 2,279 4,034 4,079
Total covered nonperforming assets$ 3,125 $ 2,697 $ 4,234 $ 4,681 $ 4,894
Additional Information
Performing TDRs(2)$ 13,336 $ 13,562 $ 13,474 $ 13,889 $ 13,965
Total TDRs(3) 13,451 13,677 13,632 13,962 14,039
Non-covered ratios
Nonperforming loans to total loans 1.00% 0.97% 0.98% 1.10% 1.07%
Nonperforming assets to total assets 0.91% 0.87% 0.92% 0.96% 0.93%
Non-PCI allowance to nonperforming loans 111.08% 125.48% 123.17% 112.61% 117.06%
Non-PCI allowance to total loans 1.11% 1.22% 1.21% 1.24% 1.26%
Annualized net charge-offs to average loans 0.07% 0.02% 0.23% 0.08% 0.11%
Total ratios
Nonperforming loans to total loans 1.00% 0.97% 1.05% 1.09% 1.06%
Nonperforming assets to total assets 1.01% 0.95% 1.06% 1.12% 1.10%
Allowance for loan losses to nonperforming loans 106.98% 120.67% 110.32% 108.97% 111.87%
Allowance for loan losses to total loans 1.07% 1.17% 1.16% 1.19% 1.19%
Annualized net charge-offs to average loans 0.07% 0.02% 0.22% 0.08% 0.10%
(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

FOR MORE INFORMATION, CONTACT: David D. Brown (276) 326-9000

Source:First Community Bancshares, Inc.