BLUEFIELD, Va., Jan. 26, 2011 (GLOBE NEWSWIRE) -- First Community Bancshares, Inc. (Nasdaq:FCBC) ( www.fcbinc.com ) (the "Company") today reported net income for the quarter and year ended December 31, 2010. Net income available to common shareholders amounted to $4.89 million, or $0.27 per diluted common share for the quarter ended December 31, 2010. Net income available to common shareholders amounted to $21.85 million, or $1.23 per diluted common share for the twelve months ended December 31, 2010.
Commenting on fourth quarter and full year results for 2010, Chief Executive Officer John M. Mendez stated, "Given the difficult operating environment that persisted throughout 2010, we are pleased to report operating results, capital levels, and credit measures that continue to position our company among the leaders in the industry. Credit management has indeed been a challenge for banks over the past three years as the economy struggled to recover from a very deep recession and significant devaluations in many segments of the real estate market. We have weathered these conditions well and we look forward to a more hospitable environment in the coming quarters as we begin to see the modest economic expansion and recovery that is being forecast by many."
Mendez continued by saying, "Despite high credit costs we achieved a strong performance for the year with a 0.97% return on average assets and a solidly profitable year with earnings of $21.85 million during the most challenging economic environment in decades. With these results we finished the year with a solid and growing capital base, with non-performing assets at a very manageable 1.32% of total assets, and with a generous loan loss reserve of $26.48 million or 1.91% of loans. While these results do not represent the high standard of performance that we expect of ourselves, they do represent a solid rebound performance in light of the economy."
"Loan loss provisions appear to have leveled off and even retreated from 2009 levels. Net charge-offs declined in the second and third quarters, and we would have seen a continuation of that trend in the fourth quarter except for the substantial resolution of a single large commercial credit which required a $1.6 million charge-off during the quarter. With that charge-off we feel that we have quantified that loss and materially reduced the Bank's exposure."
Fourth Quarter 2010 Highlights –
- The ratio of non-performing assets to total assets was 132 basis points and total loan delinquencies of 30 days or more, including non-accrual loans, as a percent of total loans were 2.62%.
- Net interest margin for the fourth quarter remained strong at 3.78%.
- Tangible book value per common share increased to $10.03, up $0.96, or 10.58%, from December 31, 2009.
- The Company remains "well-capitalized" with a total risk-based capital ratio of 15.36%, Tier 1 risk-based capital ratio of 14.07%, and a Tier 1 leverage ratio of 9.44% at December 31, 2010.
Net Interest Income
Tax-equivalent net interest margin for the fourth quarter of 2010 was 3.78% compared to 3.92% from the comparable quarter of 2009. Net interest income was $18.10 million for the fourth quarter of 2010, a decrease of $863 thousand, or 4.55%, from the fourth quarter of 2009. Interest income was $24.98 million for the fourth quarter of 2010, a decrease of $2.78 million, or 10.01%. The yield on loans decreased to 5.94% for the fourth quarter of 2010 from 6.24% in the same period of the prior year, while average loans decreased $4.32 million between the comparable periods to $1.40 billion. The Company continued to maintain a high level of liquidity with cash and cash equivalent balances of $112.19 million in the fourth quarter of 2010.
Fourth quarter 2010 interest expense was $6.88 million, a decrease of $1.91 million, or 21.77%, from the fourth quarter of 2009. Fourth quarter 2010 deposit costs decreased $1.75 million compared to the fourth quarter of 2009, which was primarily due to a decrease in the average rate paid on interest-bearing deposits of 46 basis points to 1.22%. Compared to the fourth quarter of 2009, interest costs on borrowings decreased $166 thousand to $2.47 million for the fourth quarter of 2010, while the average balance decreased $2.29 million from the comparable period due to the redemption of various wholesale borrowings and decreasing rates of interest. The cost of interest-bearing liabilities decreased 40 basis points during the fourth quarter of 2010 compared to the fourth quarter of 2009. Average interest-bearing liabilities decreased $26.91 million, or 1.50% for the fourth quarter of 2010 compared with the fourth quarter of 2009, which included a decrease of $7.73 million in Federal Home Loan Bank ("FHLB") borrowings and other long-term debt.
During the fourth quarter of 2010, wealth management revenues decreased $37 thousand, or 3.49%, to $1.02 million from the fourth quarter of 2009. The Wealth Management Division reported $859 million in assets under management at December 31, 2010. Service charges on deposit accounts were $3.33 million for the fourth quarter of 2010, a decrease of $253 thousand, or 7.06%, from the fourth quarter of 2009. Insurance commissions were $1.47 million for the fourth quarter of 2010, an increase of $9 thousand, or 0.61%, from the previous year.
Noninterest expenses for the fourth quarter of 2010 increased $2.22 million, or 12.57%, compared to the fourth quarter of 2009. The increase was primarily due to salaries and employee benefits which increased $1.07 million, or 12.90%, in the fourth quarter of 2010 compared to the same period in the prior year. The increase is attributed to increasing health care costs, new personnel in the insurance subsidiary, and the building of corporate resources in anticipation of future growth. Federal Deposit Insurance Corporation ("FDIC") deposit insurance premiums decreased $747 thousand, or 50.68% in the fourth quarter of 2010, compared to the fourth quarter of 2009. As of December 31, 2010, the Company recognized a goodwill impairment of $1.04 million at the insurance agency segment. Other operating expenses were $5.95 million, an increase of $1.14 million, or 23.80%, from the fourth quarter of 2009 due to a significant increase in expenses associated with repossessed real estate. The efficiency ratio for the fourth quarter of 2010 was 64.82% compared to 61.29% for the fourth quarter of 2009.
The Company's loan quality measures at December 31, 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 2.62% at December 31, 2010. This compares favorably to the most recent Federal Reserve report of the Company's peer group of bank holding companies with total assets between $1 and $3 billion, which indicates peer total loan delinquencies of 4.65%. The ratio of allowance for loan losses as a percent of loans held for investment was 1.91% at December 31, 2010, compared to 1.89% at September 30, 2010, and 1.79% at June 30, 2010.
Regarding asset quality, Mr. Mendez noted, "Despite the slight increase in non-performing loans and delinquencies, we remain very focused on the prudent management of our loan portfolio and are cautiously optimistic about the future."
Total non-performing assets, which include unseasoned loan restructurings and other real estate owned, were 1.32% of total assets at December 31, 2010, and non-performing loans as a percentage of loans held for investment were 1.78%. These levels are much better by comparison than those in the Federal Reserve peer group, which were last reported as total non-performing assets to total assets of 3.47% and non-performing loans to total loans of 3.71%. Included in non-performing assets are $5.33 million of unseasoned loan restructurings at December 31, 2010.
Consolidated assets were $2.24 billion at December 31, 2010. At December 31, 2010, total stockholders' equity was $269.88 million, resulting in a book value per common share outstanding of $15.11, 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 fourth quarter of 2010, the Company paid a $0.10 per share dividend on common shares. 2010 marked the Company's 25th consecutive year of paying cash dividends to shareholders.
The Company will host an investor and media teleconference and webcast on Thursday, January 27, 2011, at 11:00 a.m. To access the teleconference, the toll-free number is (877) 407-8033. Alternatively, individuals may listen to the live or archived webcast of the conference call. To listen to the webcast, visit www.fcbinc.com and follow the link under the Investor Relations section. The Company's press release and financial summary will be available in this section, as well. Copies of the Company's fourth quarter 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.
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, impairment losses on securities, and goodwill impairments from net income. These excluded items are difficult to predict and we believe that core earnings provide the Company and investors with a valuable tool to evaluate the Company's financial results.
The adjusted efficiency ratio is a non-GAAP financial measure that is computed by dividing core 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 $2.24 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 $859 million at December 31, 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: David D. Brown (276) 326-9000