BLUEFIELD, Va., Oct. 21, 2010 (GLOBE NEWSWIRE) -- First Community Bancshares, Inc. (Nasdaq:FCBC) ( www.fcbinc.com ) (the "Company") today reported net income for the quarter ended September 30, 2010, of $6.55 million, or $0.37 per diluted common share.
Commenting on third quarter results, Chief Executive Officer John M. Mendez stated, "Our recent results further confirm our earnings capacity and strength. Third quarter GAAP earnings of $6.55 million reflect increases of $1.42 million and $19.12 million over the second quarter of this year and the comparable quarter in 2009, respectively. Annualized return on average assets for the recently completed quarter reached 1.14%, the highest level in over two years. These results were achieved despite the lingering effects of the recession and the continued pressures of the real estate and construction market sectors."
Mendez summarized, saying, "We continue to operate with very high levels of liquidity, which tend to constrain net interest margin; however, we are committed to preserving the strength of our balance sheet through the remainder of the business cycle. First Community's combination of strength in earnings and capital, coupled with its excellent asset quality measures, set the stage for what we believe to be excellent prospects for the future and continued ability to capitalize on a range of opportunities."
Third Quarter 2010 Highlights –
- The ratio of non-performing assets to total assets was 131 basis points.
- Tax-equivalent net interest margin for the third quarter was 3.87%, up 19 basis points from the comparable quarter of 2009.
- Net interest income increased $1.06 million, or 6.05%, from the third quarter of 2009.
- Tangible book value per common share increased to $10.26, up $1.19 from December 31, 2009.
- The Company remains "well-capitalized" with a total risk-based capital ratio of 14.2%, Tier 1 risk-based capital ratio of 12.9%, and a Tier 1 leverage ratio of 8.8% at September 30, 2010.
Net Interest Income
Tax-equivalent net interest margin for the third quarter of 2010 was 3.87% compared to 3.68% from the comparable quarter of 2009. Net interest income was $18.60 million for the third quarter of 2010, an increase of $1.06 million, or 6.05%, from the third quarter of 2009. Interest income was $25.84 million for the third quarter of 2010, a decrease of $1.29 million, or 4.75%, from the third quarter of 2009. The yield on loans decreased to 6.07% for the third quarter of 2010 from 6.14% in the same period of the prior year, while average loans increased $42.14 million between the comparable periods to $1.40 billion. The Company continued to maintain a high level of liquidity with average cash and cash equivalent balances of $82.52 million in the third quarter of 2010.
Third quarter 2010 interest expense was $7.24 million, a decrease of $2.35 million, or 24.50%, from the third quarter of 2009. Third quarter 2010 deposit costs decreased $2.13 million compared to the third quarter of 2009, which was primarily due to a decrease in the average rate paid on interest-bearing deposits of 58 basis points to 1.35% for the third quarter of 2010 compared to the same period in the prior year. Compared to the third quarter of 2009, interest costs on borrowings decreased $225 thousand to $2.37 million for the third quarter of 2010, while the average balance decreased $4.80 million for the comparable periods due to the redemption of various wholesale borrowings and decreasing rates of interest paid. The cost of interest-bearing liabilities decreased 51 basis points during the third quarter of 2010 compared to the third quarter of 2009. Average interest-bearing liabilities decreased $8.79 million, or 0.49% for the third quarter of 2010 compared with the third quarter of 2009, which included a decrease of $3.95 million in Federal Home Loan Bank ("FHLB") borrowings and other long-term debt.
Noninterest Income
During the third quarter of 2010, wealth management revenues decreased $62 thousand, or 6.39%, to $909 thousand from the third quarter of 2009. The Wealth Management Division reported $836 million in assets under management at September 30, 2010. Service charges on deposit accounts were $3.46 million for the third quarter of 2010, a decrease of $202 thousand, or 5.52%, from the third quarter of 2009. Insurance commissions were $1.66 million for the third quarter of 2010, an increase of $96 thousand, or 6.13%, from the comparable quarter of 2009. During the third quarter of 2010, GreenPoint Insurance Group, Inc., the Company's wholly-owned insurance subsidiary, acquired Murphy Insurance Agency, based in Princeton, West Virginia.
Noninterest Expenses
Noninterest expenses for the third quarter of 2010 decreased $339 thousand, or 1.91%, compared to the third quarter of 2009. The decrease was primarily due to merger-related expenses incurred in the third quarter of 2009 resulting from the TriStone merger. These reductions were offset by salary and employee benefit increases of $893 thousand, or 11.36%, reflecting the increase in the number of branches, general increases in other operational areas, and increasing health care costs. Federal Deposit Insurance Corporation ("FDIC") deposit insurance premiums decreased $595 thousand, or 45.32% in the third quarter of 2010, compared to the third quarter of 2009, due to a prior year's change in the way FDIC assessments are calculated and collected. The efficiency ratio for the third quarter of 2010 was 58.92% compared to 59.40% for the third quarter of 2009.
Credit Quality
The Company's loan quality measures at September 30, 2010 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 1.76% at September 30, 2010, 1.70% at June 30, 2010, and 2.35% at March 31, 2010. That compares favorably to the most recent reporting by the Company's Federal Reserve peer group of bank holding companies with total assets between $1 and $3 billion, which reported total loan delinquencies of 4.65%. The ratio of allowance for loan losses as a percent of loans held for investment was 1.89% at September 30, 2010, compared to 1.79% at June 30, 2010, and 1.76% at March 31, 2010.
Total non-performing assets, which include other real estate owned, were 1.31% of total assets at September 30, 2010, and non-performing loans as a percentage of loans held for investment were 1.76%. The Federal Reserve peer group last reported total non-performing assets to total assets of 3.42% and non-performing loans to total loans of 3.67%. Included in non-performing assets are $7.90 million of unseasoned troubled debt restructurings at September 30, 2010. The Company was more active this quarter in restructuring loan terms for creditworthy customers. Approximately $578 thousand of the third quarter provision for loan losses was related to lowering the interest rate for borrowers under restructured terms.
Balance Sheet
Consolidated assets totaled $2.30 billion at September 30, 2010. Total stockholders' equity was $274.20 million, resulting in a book value per common share outstanding of $15.37 at September 30, 2010, compared to total stockholders' equity of $252.27 million and a book value per common share of $14.20 at December 31, 2009. During the third quarter of 2010, the Company paid a $0.10 per share dividend on common shares. 2010 marks the Company's 25th consecutive year of dividends to shareholders.
The Company will host an investor and media teleconference and webcast on Friday, October 22, 2010, 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 third quarter 2010 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 is a non-GAAP financial measure that reflects net income excluding non-recurring income and expense items, taxes, loan loss provisions, losses on other real estate owned, as well as gains, losses, and impairment losses on securities 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 non-interest expense by the sum of net interest income on a tax equivalent basis and core non-interest 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.
About First Community Bancshares, Inc.
First Community Bancshares, Inc., headquartered in Bluefield, Virginia, is a $2.30 billion financial holding company and is the parent company of First Community Bank, N. A. First Community Bank, N. A. operates through fifty-six locations in the five states of Virginia, West Virginia, North Carolina, South Carolina, and Tennessee. First Community Bank, N. A. offers wealth management services through its Trust & Financial Services Division and Investment Planning Consultants, Inc., a registered investment advisory firm which offers wealth management and investment advice. The Company's Wealth Management Division managed assets with a market value of $836 million at September 30, 2010. 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 ten 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 .
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 contained within this news release.
CONTACT: First Community Bancshares, Inc. David D. Brown (276) 326-9000