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First Community Bancshares, Inc. Announces Fourth Quarter and Full Year 2012 Results and Quarterly Cash Dividend to Common Stockholders

First Community Bancshares, Inc. Logo

BLUEFIELD, Va., Feb. 1, 2013 (GLOBE NEWSWIRE) -- First Community Bancshares, Inc. (Nasdaq:FCBC) (www.fcbinc.com) (the "Company") today reported net income for the quarter and twelve months ended December 31, 2012, of $8.44 million and $28.58 million, respectively. Net income available to common shareholders totaled $8.17 million, or $0.39 per diluted common share, for the quarter ended December 31, 2012. Net income available to common shareholders totaled $27.52 million, or $1.40 per diluted common share, for the twelve months ended December 31, 2012. Net income for the quarter and twelve months ended December 31, 2012, was impacted by $857 thousand and $5.08 million, respectively, in merger related expenses. Excluding nonrecurring income and expense items, core earnings for the quarter and twelve months ended December 31, 2012, totaled $8.78 million and $30.47 million, respectively.

On January 22, 2013, the Company announced that the board of directors declared a quarterly cash dividend to common shareholders of twelve cents ($0.12) per common share. The quarterly dividend is payable to common shareholders of record on February 8, 2013, and is expected to be paid on or about February 22, 2013. The current dividend represents an increase of 20% over the dividend paid during the same quarter of 2012. The current year marks the 28th consecutive year of cash dividends to shareholders.

Fourth Quarter 2012 Highlights –

  • Core earnings were $8.78 million for the fourth quarter of 2012, an increase of $3.82 million, or 77.04%, compared with the fourth quarter of 2011.
  • Core return on average assets was 1.28% and core return on average tangible common equity was 15.10% for the fourth quarter of 2012.
  • Core return on average assets was 1.21% and core return on average tangible common equity was 13.95% for the year ended December 31, 2012.
  • Loans held for investment increased $328.38 million, or 23.52%, compared with the fourth quarter of 2012.
  • The tax equivalent net interest margin increased 56 basis points to 4.49% for the fourth quarter of 2012 compared with the fourth quarter of 2011.
  • Net interest income was $26.14 million, an increase of $7.87 million, or 43.09%, compared with fourth quarter 2011.
  • Cash dividends paid per common share increased 7.5% for the year ended December 31, 2012, compared with the year ended December 31, 2011.

Net Interest Income

Net interest income increased $7.87 million, or 43.09%, to $26.14 million for the fourth quarter of 2012 compared with the fourth quarter of 2011. The tax equivalent net interest margin increased 56 basis points to 4.49% for the fourth quarter of 2012 compared with 3.93% for the fourth quarter of 2011. Total interest income increased $8.06 million, or 34.72%, to $31.26 million for the fourth quarter of 2012 compared with the fourth quarter of 2011. The increase reflects the increases in loan portfolio balances from the acquisitions of Peoples Bank of Virginia ("Peoples") and Waccamaw Bank ("Waccamaw") during the second quarter of 2012. The tax equivalent yield on loans increased to 6.43% while the average loan balance increased $352.93 million, or 25.34%, to $1.75 billion for the fourth quarter of 2012 compared with the fourth quarter of 2011.

Total interest expense increased $185 thousand, or 3.75%, to $5.12 million for the fourth quarter of 2012 compared with the fourth quarter of 2011. Deposit costs decreased $33 thousand, or 1.25%, to $2.60 million for the fourth quarter of 2012 compared with the fourth quarter of 2011, which was primarily due to an 18 basis point decrease in the average rate paid on interest-bearing deposits. Borrowing costs increased $218 thousand, or 9.49%, to $2.52 million for the fourth quarter of 2012 compared with the fourth quarter of 2011. The average rate paid on interest-bearing liabilities decreased 20 basis points to 1.01% for the fourth quarter of 2012 compared with the fourth quarter of 2011. The average balance of interest-bearing liabilities increased $399.15 million, or 24.71%, to $2.01 billion for the fourth quarter of 2012 compared with the fourth quarter of 2011, which included a $379.81 million increase in average interest-bearing deposits and a $19.34 million increase in average total borrowings. The increases were primarily the result of the Peoples and Waccamaw acquisitions that occurred during the second quarter of 2012.

Provision for Loan Losses

The provision for loan losses for the fourth quarter of 2012 decreased $1.22 million, or 49.92%, to $1.22 million, compared with the same period of the prior year. Provision for the twelve months of 2012 decreased $3.37 million, or 37.24%, to $5.68 million, compared with the same period of the prior year. The fourth quarter of 2012 marks the ninth consecutive quarter of provision decreases when compared to the prior year's comparable quarter.

Noninterest Income

Noninterest income increased $1.64 million, or 24.84%, to $8.25 million for the fourth quarter of 2012 compared with the fourth quarter of 2011. The Company realized a $316 thousand net gain on sale of securities for the fourth quarter of 2012, which was an increase of $290 thousand, or 11.15%, compared to the fourth quarter of 2011. Wealth management revenues increased $44 thousand, or 5.38%, for the fourth quarter of 2012 compared with the fourth quarter of 2011. The Trust and Wealth Management Divisions reported $876 million in assets under management as of December 31, 2012. Service charges on deposit accounts increased $376 thousand, or 10.90%, for the fourth quarter of 2012 compared with the fourth quarter of 2011, which are attributable to the addition of Waccamaw. Insurance commissions increased $45 thousand, or 3.85%, to $1.22 million for the fourth quarter of 2012 compared with the same quarter of 2011. The Company incurred no other-than-temporary impairment charges for the fourth quarter of 2012 compared to $1.55 million recorded for the fourth quarter of 2011.

Noninterest Expense

Noninterest expense increased $3.71 million, or 21.77%, to $20.77 million for the fourth quarter of 2012 compared with the fourth quarter of 2011, due largely to the Peoples and Waccamaw acquisitions. Salaries and employee benefits increased $2.79 million, or 35.30%, to $10.69 million for the fourth quarter of 2012 compared with the fourth quarter of 2011. The Peoples and Waccamaw acquisitions accounted for an increase in salaries and employee benefits of $665 thousand and $1.22 million, respectively, during the fourth quarter of 2012. Occupancy, furniture, and equipment expense increased $949 thousand, or 39.66%, to $3.34 million for the fourth quarter of 2012 compared with the fourth quarter of 2011. During the fourth quarter of 2012, the Company incurred merger related expenses of $857 thousand in connection with the acquisition of Peoples and Waccamaw. Other operating expense increased $446 thousand, or 9.06%, to $5.37 million for the fourth quarter of 2012 compared with the fourth quarter of 2011. Other operating expense included a net loss on sales and expenses associated with other real estate owned of $312 thousand for the fourth quarter of 2012 compared to $455 thousand for the fourth quarter of 2011. The efficiency ratio for the fourth quarter of 2012 was 56.38% compared to 56.73% for the fourth quarter of 2011.

Allowance for Loan Losses and Credit Quality on Non-covered Loans

Non-covered loans and other real estate owned are those assets not covered by the loss share agreement between the FDIC and the Bank in relation to the acquisition of Waccamaw. The allowance for loan losses on non-covered loans decreased to $25.77 million at December 31, 2012, compared with $26.21 million at December 31, 2011. The allowance for loan losses for non-covered loans as a percentage of non-covered loans decreased to 1.70% at December 31, 2012, compared with 1.88% at December 31, 2011. The decrease in the ratio of allowance for loan losses for non-covered loans as a percentage of non-covered loans for the fourth quarter of 2012 was impacted by loans marked to fair value as part of the Peoples' acquisition. For the fourth quarter of 2012, net charge-offs decreased $1.35 million, or 51.29%, compared with the fourth quarter of 2011. Annualized net charge-offs as a percentage of average non-covered loans were 0.33% for the fourth quarter of 2012, which represents a decrease compared with 0.76% for the fourth quarter of 2011.

Non-covered delinquent loans, comprised of loans 30 days or more past due and nonaccrual loans, as a percentage of total non-covered loans measured 2.57% at December 31, 2012, compared to 2.63% for the same period of the prior year. Non-covered nonaccrual loans decreased to $23.93 million at December 31, 2012, compared with $24.49 million at December 31, 2011. At quarter end, the Company's non-covered nonperforming loans as a percentage of total non-covered loans were 1.89% and non-covered nonperforming assets as a percentage of total non-covered assets were 1.37%, down from 1.43% for the same period of the prior year. Nonperforming assets included $4.73 million in unseasoned, accruing troubled debt restructurings and $9.00 million in other real estate owned, of which $3.26 million was covered under the loss share agreement, at December 31, 2012.

Balance Sheet and Capital

Consolidated assets totaled $2.73 billion as of December 31, 2012, an increase of $566.31 million, or 26.16%, compared with $2.16 billion at December 31, 2011. Consolidated liabilities totaled $2.37 billion as of December 31, 2012, an increase of $515.56 million, or 27.73%, compared with $1.86 billion at December 31, 2011. Total stockholders' equity increased to $356.47 million as of December 31, 2012, compared with $305.73 million at December 31, 2011. Book value per as-converted common share increased to $16.80 for the quarter ended December 31, 2012, compared with $15.96 for the quarter ended December 31, 2011. Tangible book value per common share increased $0.19 to $11.59 compared with the fourth quarter of 2011. During the fourth quarter of 2012, the Company paid a cash dividend of $0.11 per common share.

The Company significantly exceeds regulatory "well capitalized" targets as of December 31, 2012, with a total risk-based capital ratio of 16.6%, Tier 1 risk-based capital ratio of 15.4%, and a Tier 1 leverage ratio of 9.9%.

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 our operational performance.

Core earnings are a non-GAAP financial measure that excludes certain items from net income. Excluded items include gains, losses, and impairment losses on securities; goodwill and intangible impairment; amortization of intangibles; taxes; and other nonrecurring income and expense items. Management believes that core earnings provide the Company and investors a valuable tool to evaluate the Company's financial results.

The efficiency ratio is a non-GAAP financial measure that is computed by dividing adjusted noninterest expense by the sum of tax equivalent net interest income and adjusted noninterest income. Management believes this measure provides investors with 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.

Tangible book value per common share is a non-GAAP financial measure that is defined as stockholders' equity less goodwill and other intangibles, divided by as-converted common shares outstanding. Average tangible common equity is a non-GAAP financial measure that is defined as average stockholders' equity less average goodwill, other intangibles, and the preferred liquidation preference.

Investor Relations

The Company will host an investor and media teleconference and webcast on Friday, February 1, 2013, at 11:00 a.m. To access the teleconference, the toll-free number is (877) 407-8033. 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 2012 earnings press release and financial summary will 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.

About First Community Bancshares, Inc.

First Community Bancshares, Inc., headquartered in Bluefield, Virginia, is a $2.73 billion financial holding company and the parent company of First Community Bank. First Community Bank operates seventy-two banking locations throughout Virginia, West Virginia, North Carolina, South Carolina, and Tennessee. First Community Bank offers wealth management and investment services through its Trust Division and First Community Wealth Management, a registered investment advisory firm. The Trust Division and First Community Wealth Management managed assets with a market value of $876 million as of December 31, 2012. 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 insurance offices throughout Virginia, West Virginia, and North Carolina. 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 Company's website at www.fcbinc.com.

The First Community Bancshares, Inc. logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=6960

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 to reflect circumstances or events that occur after the date the forward-looking statements are made.

FIRST COMMUNITY BANCSHARES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Unaudited)
Three Months Ended
December 31,
Year Ended
December 31,
(Amounts in thousands, except share and per share data) 2012 2011 2012 2011
Interest income
Interest and fees on loans held for investment $ 28,188 $ 19,947 $ 96,684 $ 80,580
Interest on securities --- taxable 1,770 2,023 7,830 8,117
Interest on securities --- nontaxable 1,216 1,190 4,883 5,194
Interest on deposits in banks 82 41 259 285
Total interest income 31,256 23,201 109,656 94,176
Interest expense
Interest on deposits 2,604 2,637 9,972 12,788
Interest on short-term borrowings 656 603 2,515 2,475
Interest on long-term borrowings 1,860 1,695 7,113 6,884
Total interest expense 5,120 4,935 19,600 22,147
Net interest income 26,136 18,266 90,056 72,029
Provision for loan losses 1,220 2,436 5,678 9,047
Net interest income after provision for loan losses 24,916 15,830 84,378 62,982
Noninterest income
Wealth management income 862 818 3,701 3,510
Service charges on deposit accounts 3,826 3,450 14,063 13,238
Other service charges and fees 1,682 1,429 6,462 5,722
Insurance commissions 1,215 1,170 5,743 6,197
Net impairment losses recognized in earnings -- (1,548) (942) (2,285)
Net gain on sale of securities 316 26 586 5,264
Other operating income 346 1,261 6,131 3,888
Total noninterest income 8,247 6,606 35,744 35,534
Noninterest expense
Salaries and employee benefits 10,693 7,903 38,667 34,126
Occupancy expense of bank premises 1,938 1,589 6,872 6,280
Furniture and equipment 1,404 804 4,145 3,490
Amortization of intangible assets 191 250 804 1,020
FDIC premiums and assessments 313 344 1,536 1,984
FHLB debt prepayment fees -- -- -- 471
Merger related expense 857 -- 5,084 --
Goodwill impairment -- 1,239 -- 1,239
Other operating expense 5,371 4,925 20,309 20,305
Total noninterest expense 20,767 17,054 77,417 68,915
Income before income taxes 12,396 5,382 42,705 29,601
Income tax expense 3,957 2,151 14,128 9,573
Net income 8,439 3,231 28,577 20,028
Dividends on preferred stock 272 286 1,058 703
Net income available to common shareholders $ 8,167 $ 2,945 $ 27,519 $ 19,325
Basic earnings per common share $ 0.41 $ 0.16 $ 1.44 $ 1.08
Diluted earnings per common share $ 0.39 $ 0.17 $ 1.40 $ 1.07
Cash dividends per common share $ 0.11 $ 0.10 $ 0.43 $ 0.40
Weighted average basic shares outstanding 20,058,998 17,849,286 19,125,839 17,877,421
Weighted average diluted shares outstanding 21,373,669 19,159,090 20,480,172 18,691,081
Return on average assets 1.19% 0.54% 1.10% 0.88%
Return on average common equity 9.59% 4.06% 8.70% 6.81%
FIRST COMMUNITY BANCSHARES, INC.
CONDENSED QUARTERLY STATEMENTS OF INCOME (Unaudited)
As of and for the Quarter Ended
(Amounts in thousands, except share and per share data) December 31,
2012
September 30,
2012
June 30,
2012
March 31,
2012
December 31,
2011
Interest Income
Interest and fees on loans held for investment $ 28,188 $ 28,275 $ 20,853 $ 19,368 $ 19,947
Interest on securities --- taxable 1,770 1,980 2,001 2,079 2,023
Interest on securities --- nontaxable 1,216 1,215 1,256 1,196 1,190
Interest on deposits in banks 82 66 72 39 41
Total interest income 31,256 31,536 24,182 22,682 23,201
Interest Expense
Interest on deposits 2,604 2,603 2,360 2,405 2,637
Interest on short-term borrowings 656 675 589 595 592
Interest on long-term borrowings 1,860 1,799 1,749 1,705 1,706
Total interest expense 5,120 5,077 4,698 4,705 4,935
Net interest income 26,136 26,459 19,484 17,977 18,266
Provision for loan losses 1,220 1,916 1,620 922 2,436
Net interest income after provision for loan losses 24,916 24,543 17,864 17,055 15,830
Noninterest Income
Wealth management income 862 1,005 940 894 818
Service charges on deposit accounts 3,826 3,895 3,329 3,013 3,450
Other service charges and fees 1,682 1,631 1,564 1,585 1,429
Insurance commissions 1,215 1,616 1,336 1,576 1,170
Net impairment losses recognized in earnings -- (942) -- -- (1,548)
Net gain (loss) on sale of securities 316 228 (9) 51 26
Other operating income 346 3,730 1,183 872 1,261
Total noninterest income 8,247 11,163 8,343 7,991 6,606
Noninterest Expense
Salaries and employee benefits 10,693 10,860 8,892 8,222 7,903
Occupancy expense of bank premises 1,938 1,754 1,654 1,526 1,589
Furniture and equipment 1,404 955 975 811 804
Amortization of intangible assets 191 191 189 233 250
FDIC premiums and assessments 313 611 290 322 344
Merger related expense 857 645 3,419 163 --
Goodwill impairment -- -- -- -- 1,239
Other operating expense 5,371 5,309 4,713 4,916 4,925
Total noninterest expense 20,767 20,325 20,132 16,193 17,054
Income before income taxes 12,396 15,381 6,075 8,853 5,382
Income tax expense 3,958 5,322 1,997 2,852 2,151
Net income 8,438 10,059 4,078 6,001 3,231
Dividends on preferred stock 272 220 283 283 286
Net income available to common shareholders $ 8,166 $ 9,839 $ 3,795 $ 5,718 $ 2,945
Basic earnings per common share $ 0.41 $ 0.49 $ 0.20 $ 0.32 $ 0.16
Diluted earnings per common share $ 0.39 $ 0.47 $ 0.20 $ 0.31 $ 0.17
Cash dividends per common share $ 0.11 $ 0.11 $ 0.11 $ 0.10 $ 0.10
Weighted average basic shares outstanding 20,058,998 20,013,264 18,561,714 17,849,376 17,849,286
Weighted average diluted shares outstanding 21,373,669 21,476,497 19,909,242 19,189,923 19,159,090
FIRST COMMUNITY BANCSHARES, INC.
RECONCILIATION OF GAAP NET INCOME TO CORE EARNINGS (Unaudited)
Three Months Ended
December 31,
Year Ended
December 31,
2012 2011 2012 2011
(Amounts in thousands, except per share data)
Net income, GAAP $ 8,439 $ 3,231 $ 28,577 $ 20,028
Non-GAAP adjustments:
Net impairment losses recognized in earnings -- 1,548 942 2,285
Net gain on sale of securities (316) (26) (586) (5,264)
FHLB debt prepayment fees -- -- -- 471
Merger related expense 857 -- 5,084 --
Goodwill impairment -- 1,239 -- 1,239
Prospective correction of prior period understatement -- -- (2,395) --
Other noncore, nonrecurring items -- -- -- 59
Total adjustments to core earnings 541 2,761 3,045 (1,210)
Tax effect 204 1,035 1,151 (454)
Core earnings, non-GAAP $ 8,776 $ 4,957 $ 30,471 $ 19,272
Core return on average assets 1.28% 0.91% 1.21% 0.88%
Core return on average common equity 10.30% 6.83% 9.63% 6.79%
Core return on average tangible common equity 15.10% 9.85% 13.95% 9.92%
Core diluted earnings per common share $0.41 $0.26 $1.49 $1.03
FIRST COMMUNITY BANCSHARES, INC.
EFFICIENCY RATIO CALCULATION (Unaudited)
Three Months Ended
December 31,
Year Ended
December 31,
2012 2011 2012 2011
(Amounts in thousands)
Noninterest expense, GAAP $ 20,767 $ 17,054 $ 77,417 $ 68,915
Non-GAAP adjustments:
FHLB debt prepayment fees -- -- -- (471)
Merger related expenses (857) -- (5,084) --
Goodwill impairment -- (1,239) -- (1,239)
OREO expense and net loss (312) (455) (1,893) (3,081)
Other noncore, nonreccuring items -- -- -- (77)
Adjusted noninterest expense 19,598 15,360 70,440 64,047
Net interest income, GAAP 26,136 18,266 90,056 72,029
Noninterest income, GAAP 8,247 6,606 35,744 35,534
Non-GAAP adjustments:
Tax equivalency adjustment 696 681 2,747 2,959
Net impairment losses recognized in earnings -- 1,548 942 2,285
Net gain on sale of securities (316) (26) (586) (5,264)
Prospective correction of prior period understatement -- -- (2,395) --
Other noncore, nonreccuring items -- -- -- (18)
Adjusted net interest and noninterest income 34,763 27,075 126,508 107,525
Efficiency Ratio 56.38% 56.73% 55.68% 59.56%
FIRST COMMUNITY BANCSHARES, INC.
CONDENSED QUARTERLY BALANCE SHEETS (Unaudited)
For the Quarter Ended
December 31,
2012
September 30,
2012
June 30,
2012
March 31,
2012
December 31,
2011
(Amounts in thousands)
Cash and due from banks $ 50,405 $ 44,865 $ 54,494 $ 36,555 $ 34,578
Federal funds sold 66,509 93,005 64,815 61,328 1,909
Interest-bearing deposits in banks 27,933 27,359 36,856 11,729 10,807
Total cash and cash equivalents 144,847 165,229 156,165 109,612 47,294
Securities available-for-sale 534,358 517,161 526,607 478,352 482,430
Securities held-to-maturity 816 816 1,295 2,874 3,490
Loans held for sale 6,672 4,446 1,179 3,522 5,820
Loans held for investment, net of unearned income:
Covered under loss share agreements 207,869 221,977 238,777 -- --
Not covered under loss share agreements 1,516,574 1,541,633 1,568,312 1,386,525 1,396,067
Less allowance for loan losses 25,770 25,835 26,171 25,800 26,205
Loans, net 1,705,345 1,742,221 1,782,097 1,364,247 1,375,682
FDIC receivable under loss share agreements 48,073 49,477 52,067 -- --
Property, plant, and equipment, net 64,868 62,191 60,829 54,616 54,721
Other real estate owned:
Covered under loss share agreements 3,255 3,553 5,325 -- --
Not covered under loss share agreements 5,749 5,957 4,938 3,829 5,914
Interest receivable 5,864 6,038 8,396 5,886 6,193
Goodwill 107,054 104,022 99,402 83,056 83,056
Intangible assets 3,522 3,713 3,903 4,093 4,326
Other assets 107,346 109,272 109,297 96,704 101,683
Total assets $ 2,731,097 $2,769,650 $2,810,321 $2,203,269 $2,164,789
Deposits:
Noninterest-bearing $ 343,352 $ 335,100 $ 340,895 $ 253,352 $ 240,268
Interest-bearing 353,321 360,061 335,686 307,136 275,156
Savings 500,276 496,740 494,516 397,850 394,707
Time 833,226 872,059 934,110 621,412 633,336
Total deposits 2,030,175 2,063,960 2,105,207 1,579,750 1,543,467
Interest, taxes, and other liabilities 30,896 29,538 22,465 23,203 20,452
Securities sold under agreements to repurchase 136,118 146,904 148,367 124,266 129,208
FHLB advances 161,558 161,558 176,653 150,000 150,000
Other borrowings 15,877 15,877 15,918 15,925 15,933
Total liabilities 2,374,624 2,417,837 2,468,610 1,893,144 1,859,060
Preferred stock 17,421 17,921 18,921 18,921 18,921
Common stock 20,343 20,309 20,240 18,083 18,083
Additional paid-in capital 213,829 213,320 212,510 188,149 188,118
Retained earnings 113,013 107,055 99,418 97,588 93,656
Treasury stock, at cost (6,458) (5,446) (5,672) (5,721) (5,721)
Accumulated other comprehensive loss (1,675) (1,346) (3,706) (6,895) (7,328)
Total stockholders' equity 356,473 351,813 341,711 310,125 305,729
Total liabilities and stockholders' equity $ 2,731,097 $ 2,769,650 $ 2,810,321 $ 2,203,269 $ 2,164,789
Shares outstanding at period end 20,018,966 20,086,404 20,008,181 17,849,376 17,849,376
Book value per common share at period end (1) $ 16.80 $ 16.50 $ 16.03 $ 16.19 $ 15.96
Tangible book value per common share at period end (2) $ 11.59 $ 11.45 $ 11.19 $ 11.64 $ 11.40
(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 (Unaudited)
As of and for the Quarter Ended
(Amounts in thousands) December 31,
2012
September 30,
2012
June 30,
2012
March 31,
2012
December 31,
2011
Allowance for Loan Losses on Non-covered Loans
Beginning balance $ 25,835 $ 26,171 $ 25,800 $ 26,205 $ 26,407
Provision for loan losses 1,220 1,916 1,620 922 2,436
Charge-offs (1,717) (2,613) (1,613) (1,562) (2,915)
Recoveries 432 361 364 235 277
Net charge-offs (1,285) (2,252) (1,249) (1,327) (2,638)
Ending balance $ 25,770 $ 25,835 $ 26,171 $ 25,800 $ 26,205
Summary of Asset Quality
Non-covered loans
Nonaccrual loans $ 23,931 $ 26,514 $ 27,947 $ 24,617 $ 24,487
Accruing loans past due 90 days or more -- -- -- -- --
Troubled debt restructurings ("TDRs") (1) 4,734 121 469 2,668 600
Total non-covered nonperforming loans 28,665 26,635 28,416 27,285 25,087
Other real estate owned ("OREO") not covered under FDIC loss share agreements 5,749 5,957 4,938 3,829 5,914
Total non-covered nonperforming assets $ 34,414 $ 32,592 $ 33,354 $ 31,114 $ 31,001
Covered Loans
Nonaccrual loans $ 4,323 $ 2,849 $ -- $ -- $ --
Accruing loans past due 90 days or more -- -- -- -- --
Total covered nonperforming loans 4,323 2,849 -- -- --
OREO covered under FDIC loss share agreements 3,255 3,553 5,325 -- --
Total covered nonperforming assets 7,578 6,402 5,325 -- --
Total nonperforming assets $ 41,992 $ 38,994 $ 38,679 $ 31,114 $ 31,001
Performing TDRs (2) $ 6,038 $ 6,742 $ 6,995 $ 7,052 $ 8,854
Total TDRs (3) $ 10,772 $ 6,863 $ 7,464 $ 9,720 $ 9,454
Asset Quality Ratios
Excluding covered assets
Nonperforming loans to total loans 1.89% 1.73% 1.81% 1.97% 1.80%
Nonperforming assets to total assets 1.37% 1.28% 1.30% 1.41% 1.43%
Allowance for loan losses to nonperforming loans 89.90% 97.00% 92.10% 94.56% 104.46%
Allowance for loan losses to non-covered total loans 1.70% 1.68% 1.67% 1.86% 1.88%
Annualized net charge-offs to average loans 0.33% 0.57% 0.38% 0.38% 0.76%
Including covered assets
Nonperforming loans to total loans 1.91% 1.67% 1.57% 1.97% 1.80%
Nonperforming assets to total assets 1.54% 1.41% 1.38% 1.41% 1.43%
Allowance for loan losses to nonperforming loans 78.12% 87.62% 92.10% 94.56% 104.46%
Allowance for loan losses to total loans 1.49% 1.46% 1.45% 1.86% 1.88%
(1) Accruing TDRs restructured within the past six months
(2) Accruing TDRs with six months or more of satisfactory payment performance
(3) Accruing nonperforming and performing TDRs
FIRST COMMUNITY BANCSHARES, INC.
SELECTED FINANCIAL INFORMATION (Unaudited)
As of and for the Quarter Ended
December 31,
2012
September 30,
2012
June 30,
2012
March 31,
2012
December 31,
2011
Selected Ratios
Return on average assets 1.19% 1.41% 0.65% 1.06% 0.54%
Return on average common equity 9.59% 11.91% 5.00% 7.88% 4.06%
Net interest margin 4.49% 4.48% 3.93% 3.91% 3.93%
Efficiency ratio for the quarter 56.38% 55.49% 57.58% 57.18% 56.73%
Efficiency ratio year-to-date 55.68% 52.40% 57.38% 57.18% 59.56%
Total equity to total assets 13.05% 12.70% 12.16% 14.08% 14.12%
Average earning assets to average assets 86.87% 87.02% 87.68% 88.24% 88.27%
Average loans to average deposits 85.71% 87.88% 88.57% 89.85% 89.45%
(Amounts in thousands)
Average Balances
Loans $ 1,745,584 $ 1,790,489 $ 1,512,451 $ 1,394,246 $ 1,392,650
Investment securities 519,798 528,126 490,219 481,595 479,638
Earning assets 2,376,805 2,408,442 2,069,799 1,918,366 1,913,768
Total assets 2,736,037 2,767,790 2,360,567 2,174,004 2,168,166
Total deposits 2,036,697 2,037,467 1,707,613 1,551,728 1,556,990
Interest-bearing deposits 1,699,991 1,733,987 1,437,548 1,312,865 1,320,186
Borrowings 314,645 329,958 303,474 290,015 295,303
Interest-bearing liabilities 2,014,636 2,063,945 1,741,022 1,602,880 1,615,489
Stockholders' equity 356,812 347,637 323,994 310,795 306,779
Tax equivalent net interest income 26,832 27,139 20,206 18,660 18,947
FIRST COMMUNITY BANCSHARES, INC.
AVERAGE BALANCE SHEETS AND NET INTEREST INCOME ANALYSIS (Unaudited)
Three Months Ended December 31,
2012 2011
(Amounts in thousands) Average
Balance
Interest (1) Average Yield/
Rate (1)
Average
Balance
Interest (1) Average Yield/
Rate (1)
Assets
Earning assets
Loans (2) $ 1,745,584 $ 28,231 6.43% $ 1,392,650 $ 19,987 5.69%
Securities available-for-sale 518,982 3,623 2.78% 476,244 3,784 3.15%
Securities held-to-maturity 816 16 7.80% 3,394 70 8.18%
Interest-bearing deposits 111,423 82 0.29% 41,480 41 0.39%
Total earning assets 2,376,805 31,952 5.35% 1,913,768 23,882 4.95%
Other assets 359,232 254,398
Total assets $ 2,736,037 $ 2,168,166
Liabilities
Interest-bearing deposits
Demand deposits $ 351,329 $ 62 0.07% $ 277,722 $ 27 0.04%
Savings deposits 495,116 156 0.13% 395,530 117 0.12%
Time deposits 853,546 2,386 1.11% 646,934 2,493 1.53%
Total interest-bearing deposits 1,699,991 2,604 0.61% 1,320,186 2,637 0.79%
Borrowings
Federal funds purchased -- -- 0.00% 308 -- 0.00%
Retail repurchase agreements 79,014 105 0.53% 79,114 103 0.52%
Wholesale repurchase agreements 58,196 540 3.69% 50,000 479 3.80%
FHLB advances and other borrowings 177,435 1,871 4.19% 165,881 1,716 4.10%
Total borrowings 314,645 2,516 3.18% 295,303 2,298 3.09%
Total interest-bearing liabilities 2,014,636 5,120 1.01% 1,615,489 4,935 1.21%
Noninterest-bearing demand deposits 336,706 236,804
Other liabilities 27,883 9,094
Total liabilities 2,379,225 1,861,387
Stockholders' equity 356,812 306,779
Total liabilities and stockholders' equity $ 2,736,037 $ 2,168,166
Net interest income, tax equivalent $ 26,832 $ 18,947
Net interest rate spread (3) 4.34% 3.74%
Net interest margin(4) 4.49% 3.93%
(1) Fully taxable equivalent at the rate of 35% ("FTE"). The FTE basis adjusts for the tax benefits of income on certain tax exempt loans and investments using the federal statutory rate of 35% for each period presented. The Company believes this measure to be the preferred industry measurement of net interest income and provides relevant comparison between taxable and nontaxable amounts.
(2) Nonaccrual loans are included in average balances outstanding, but with no related interest income during the period of nonaccrual.
(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.
AVERAGE BALANCE SHEETS AND NET INTEREST INCOME ANALYSIS (Unaudited)
Year Ended December 31,
2012 2011
(Amounts in thousands) Average
Balance
Interest (1) Average Yield/
Rate (1)
Average
Balance
Interest (1) Average Yield/
Rate (1)
Assets
Earning assets
Loans (2) $ 1,611,557 $ 96,803 6.01% $ 1,382,097 $ 80,742 5.84%
Securities available-for-sale 502,416 15,170 3.02% 434,583 15,775 3.63%
Securities held-to-maturity 2,622 171 6.52% 3,999 333 8.33%
Interest-bearing deposits 77,851 259 0.33% 116,063 285 0.25%
Total earning assets 2,194,446 112,403 5.12% 1,936,742 97,135 5.02%
Other assets 316,485 258,897
Total assets $ 2,510,931 $ 2,195,639
Liabilities
Interest-bearing deposits
Demand deposits $ 306,019 $ 185 0.06% $ 277,263 $ 431 0.16%
Savings deposits 471,406 556 0.12% 410,240 886 0.22%
Time deposits 776,901 9,231 1.19% 682,997 11,471 1.68%
Total interest-bearing deposits 1,554,326 9,972 0.64% 1,370,500 12,788 0.93%
Borrowings
Federal funds purchased 490 2 0.41% 77 -- 0.00%
Retail repurchase agreements 78,608 449 0.57% 83,564 544 0.65%
Wholesale repurchase agreements 55,163 2,023 3.67% 50,000 1,887 3.77%
FHLB advances and other borrowings 175,333 7,154 4.08% 168,988 6,928 4.10%
Total borrowings 309,594 9,628 3.11% 302,629 9,359 3.09%
Total interest-bearing liabilities 1,863,920 19,600 1.05% 1,673,129 22,147 1.32%
Noninterest-bearing demand deposits 286,950 223,233
Other liabilities 25,160 4,127
Total liabilities 2,176,030 1,900,489
Stockholders' equity 334,901 295,150
Total liabilities and stockholders' equity $ 2,510,931 $ 2,195,639
Net interest income, tax equivalent $ 92,803 $ 74,988
Net interest rate spread (3) 4.07% 3.69%
Net interest margin(4) 4.23% 3.87%
(1) Fully taxable equivalent at the rate of 35% ("FTE"). The FTE basis adjusts for the tax benefits of income on certain tax exempt loans and investments using the federal statutory rate of 35% for each period presented. The Company believes this measure to be the preferred industry measurement of net interest income and provides relevant comparison between taxable and nontaxable amounts.
(2) Nonaccrual loans are included in average balances outstanding, but with no related interest income during the period of nonaccrual.
(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.

CONTACT: David D. Brown (276) 326-9000

Source:First Community Bancshares, Inc.