First Community Bancshares, Inc. Announces First Quarter 2011 Results

/ Source: GlobeNewswire

BLUEFIELD, Va., April 25, 2011 (GLOBE NEWSWIRE) -- First Community Bancshares, Inc. (Nasdaq:FCBC) () (the "Company") today reported net income for the quarter ended March 31, 2011, of $5.75 million, or $0.32 per diluted common share.

Commenting on first quarter results, Chief Executive Officer John M. Mendez stated, "We are very proud to report another quarter of solid profitability. Our asset quality metrics continue to improve and still compare very favorably to peer results."

First Quarter 2011 Highlights –

  • Return on average assets for the first quarter of 2011 improved to 1.05%, as compared to 0.85% for the fourth quarter of 2010.
  • Loan loss provisions were reduced by $2.07 million, or 56.27% from the fourth quarter of 2010.
  • Net charge-offs for the first quarter of 2011 were $1.61 million, a decrease of $2.01 million from the fourth quarter of 2010.
  • Net interest margin for the first quarter of 2011 improved to 3.96%, an increase of 18 basis points from the fourth quarter of 2010.
  • Net interest income for the first quarter of 2011 increased $176 thousand, or 0.97%, over the fourth quarter of 2010.
  • Tangible book value per common share increased to $10.48, up $0.45, or 4.49%, from December 31, 2010.
  • The ratio of non-performing assets to total assets was 111 basis points, an improvement of 21 basis points from year-end 2010.
  • The Company significantly exceeds regulatory "well-capitalized" targets with a total risk-based capital ratio of 15.81%, Tier 1 risk-based capital ratio of 14.55%, and a Tier 1 leverage ratio of 9.66% at March 31, 2011.

Net Interest Income

Tax-equivalent net interest margin for the first quarter of 2011 was 3.96% compared to 4.02% from the comparable quarter of 2010. Net interest income was $18.28 million for the first quarter of 2011. Total interest income was $24.59 million for the first quarter of 2011, a decrease of $2.02 million, or 7.60% from the first quarter of 2010. The yield on loans decreased to 6.01% for the first quarter of 2011 from 6.22% in the same period of the prior year, while average loans decreased $13.14 million between the comparable periods to $1.38 billion. The Company continued to maintain a high level of liquidity with average overnight liquidity of $108.18 million during the first quarter of 2011.

First quarter 2011 interest expense was $6.32 million, a decrease of $1.68 million, or 20.99%, from the first quarter of 2010. First quarter 2011 deposit costs decreased $1.62 million compared to the first quarter of 2010, which was primarily due to a decrease in the average rate paid on interest-bearing deposits of 44 basis points to 1.11%. Compared to the first quarter of 2010, interest costs on borrowings decreased $56 thousand to $2.44 million for the first quarter of 2011, while the average balance decreased $23.86 million from the comparable period due to the redemption of various wholesale borrowings. The cost of interest-bearing liabilities decreased 34 basis points during the first quarter of 2011 compared to the first quarter of 2010. Average interest-bearing liabilities decreased $46.41 million, or 2.60% for the first quarter of 2011 compared with the first quarter of 2010, which included a decrease of $20.56 million in Federal Home Loan Bank ("FHLB") borrowings and other long-term debt.

Noninterest Income

During the first quarter of 2011, wealth management revenues increased $9 thousand, or 1.02%, to $894 thousand from the first quarter of 2010. The Wealth Management Division reported $893 million in assets under management at March 31, 2011. Service charges on deposit accounts were $3.03 million for the first quarter of 2011, an increase of $39 thousand, or 1.30%, from the first quarter of 2010. Insurance commissions were $1.94 million for the first quarter of 2011, a decrease of $258 thousand, or 11.72%, from the previous year. The decrease in insurance commissions reflects the effects of the recent recession, as well as the soft insurance market.

Noninterest Expenses

Noninterest expenses for the first quarter of 2011 increased $1.99 million, or 12.39%, compared to the first quarter of 2010. The increase was primarily due to salaries and employee benefits which increased $1.16 million, or 14.56%, in the first quarter of 2011 compared to the same period in the prior year. The Company has increased staffing levels in credit administration, marketing, and compliance due to increasing regulatory burdens. The Company has also experienced a significant increase in health insurance costs in recent quarters. Federal Deposit Insurance Corporation ("FDIC") deposit insurance premiums increased $177 thousand, or 25.25% in the first quarter of 2011, compared to the first quarter of 2010. During the first quarter of 2011, the Company prepaid a $25.00 million FHLB advance, and the expense associated with that prepayment was $471 thousand. Other operating expenses were $4.76 million, an increase of $231 thousand, or 5.10%, from the first quarter of 2010. Increases in consulting and service fees and debit card costs of $401 thousand and $181 thousand, respectively, were offset by a decrease in other real estate expenses of $355 thousand.

Credit Quality

The Company's loan quality measures at March 31, 2011, 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 2.23% at March 31, 2011. 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 4.55%. The ratio of allowance for loan losses as a percent of loans held for investment was 1.93% at March 31, 2011, compared to 1.91% at December 31, 2010, and 1.89% at September 30, 2010.

Total non-performing assets, which include unseasoned loan restructurings and other real estate owned, were 1.11% of total assets at March 31, 2011, and non-performing loans as a percentage of loans held for investment were 1.40%. These levels are much better by comparison with those in the Federal Reserve peer group, which were last reported as total non-performing assets to total assets of 3.30% and non-performing loans to total loans of 3.57%. Included in non-performing assets are $1.51 million of unseasoned loan restructurings at March 31, 2011.

Balance Sheet

Consolidated assets were $2.24 billion at March 31, 2011. Total stockholders' equity was $277.85 million at March 31, 2011, resulting in a book value per common share outstanding of $15.53, compared to total stockholders' equity of $261.16 million and a book value per common share of $14.69 at March 31, 2010.  During the first quarter of 2011, the Company paid a $0.10 per share dividend on common shares. 2011 marks the Company's 26th consecutive year of paying cash dividends to shareholders.

The Company will host an investor and media teleconference and webcast on Monday, April 25, 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 first quarter 2011 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 are 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.

Tangible book value is a non-GAAP financial measure that is defined as stockholders' equity less goodwill and other intangible assets.

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 four states of Virginia, West Virginia, North 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 $893 million at March 31, 2011. 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

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