BLUEFIELD, Va.--(BUSINESS WIRE)--July 24, 2003--First Community
Bancshares, Inc. (Nasdaq: FCBC) (www.fcbinc.com) today reported record
earnings of $7.0 million for the second quarter of 2003, or $0.63
basic and diluted earnings per share (adjusted for a 10% stock
dividend to be distributed on or about August 15, 2003 to stockholders
of record August 1, 2003). This represents a per share improvement of
14.6% compared to $0.55 per basic and diluted share for the second
quarter of 2002. Return on average equity in the second quarter of
2003 was 17.29% compared to 17.25% for the second quarter of last
year. In addition, return on average assets increased to 1.78% in 2003
compared to 1.65% for the second quarter of last year. President and
Chief Executive Officer John M. Mendez commented on the earnings
report noting that, "Record earnings for both the quarter and the
first half were very gratifying and provide a strong foundation for
the Company's recent and continued expansion efforts."
Net income for the second quarter of 2003 increased by $929,000
compared to the second quarter of 2002. The larger contributing
factors to this increase were a $415,000 improvement in net interest
income and an increase in noninterest income of $2.0 million, $1.3
million of which was an increase in mortgage banking income. Partially
offsetting these improvements were a $286,000 increase in the
provision for loan losses and an increase of $968,000 in total
noninterest expenses, principally salaries and benefits which were up
$693,000 as a result of increased loan production by the Company's
mortgage division, the addition of Bank of Greenville in late 2002,
the addition of The CommonWealth Bank in June 2003 and a general
increase in salaries and benefits, as staffing needs at several
locations were satisfied in order to support added corporate services
and continued branch growth including newly established branches in
Winston-Salem, North Carolina.
Net income for the six months ended June 30, 2003 was $13.7
million, versus $12.4 million for the six months ended June 30, 2002,
an increase of $1.3 million or 11%. Contributing to this increase in
net income was a $1.1 million or 3.8% increase in net interest income
and a $2.1 million increase in noninterest income. The increase in
noninterest income is largely the result of a 20% or $1.1 million
increase in mortgage banking income and a $538,000, or 16.5%, increase
in service charges on deposit accounts. Total noninterest expenses
also increased 7%, or $1.5 million for the six months ended June 30,
2003, again, largely due to salaries and benefits. The improved
financial performance of the Company translates into an increase of
$0.11 in basic and diluted earnings per share to $1.25 for the first
six months of 2003 compared to the same period last year. Return on
average equity for the first six months of 2003 was 17.46% compared to
17.95% for the first six months of last year. Return on average assets
also improved to 1.79% compared to 1.71% for the first six months of
2002.
The provision for loan losses for the six months ended June 30,
2003 decreased by $62,000 over the comparable period in the prior
year, but increased by $1.3 million when compared to the quarter ended
March 31, 2003. The increase during the quarter is largely
attributable to management's initial determination that an aggregate
of $2.8 million in loans, part of a $12.2 million portfolio originated
by one loan officer, is substandard. During the second quarter of
2003, following the discovery of the loan officer's deficiencies in
the application of policies and procedures associated with these
loans, management implemented a comprehensive risk assessment of all
of such identified loans and incorporated these credits in its
analysis for loan losses at June 30, 2003. Based upon this analysis,
management believes that the resulting increase in the provision and
allowance under the circumstances is appropriate. At June 30, 2003,
the portfolio in question had loans with an average loan balance of
$28,000, which had been originated by such loan officer during the
last three years. As of June 30, 2003, $11.6 million, or 95% of the
portfolio, was performing in accordance with original terms.
Management has terminated the loan officer in question, and has made
associated changes in regional management.
Chief Executive Officer John M. Mendez noted that, "Despite the
continued slow economy and the individual loan portfolio noted above,
First Community's overall asset quality ratios remain quite good and
reflects continuing improvement over previous periods." The ratio of
non-performing assets to total assets was .33% on June 30, 2003,
slightly lower than the March 31, 2003 level of .44%. The Company
reported non-accrual loans of $2.6 million at June 30, 2003 compared
to $4 million at March 31, 2003 and $3 million at December 31, 2002.
Total delinquencies as a percent of total loans were 1.19%, slightly
higher than the first quarter 2003 level of 1.09%. The coverage ratio
at June 30, 2003 was 596.5% compared to 343% at March 31, 2003.
Period-end assets at June 30, 2003 increased to $1.7 billion
versus $1.52 billion at year-end 2002. Asset growth for the six-month
period includes $128.7 million resulting from the acquisition of The
CommonWealth Bank in Richmond, Virginia. Total equity for the Company
increased to $175.3 million resulting in book value per common share
outstanding of $15.57 at June 30, 2003, up from $14.28 at March 31,
2003 and $13.18 at the end of the first quarter 2002.
First Community Bancshares, Inc., headquartered in Bluefield,
Virginia, has assets of approximately $1.7 billion and is the parent
company of First Community Bank, N. A., also headquartered in
Bluefield. First Community Bank operates through 47 full-service
offices and two trust and investment management offices in the
three-state region of Virginia, West Virginia and North Carolina.
First Community Bank is also the parent company of Stone Capital
Management, Inc., an SEC registered investment advisory firm and
United First Mortgage, Inc., which operates 11 retail mortgage offices
throughout Virginia. First Community Bancshares, Inc.'s common stock
is traded on the Nasdaq National Market under the symbol "FCBC."
DISCLAIMER
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 and their feature sets; 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.
First Community Bancshares, Inc.
Consolidated Statements of Income
----------------------------------------------------------------------
(Dollars in Thousands, Except Per Share Data)
(Unaudited)
Six Months Three Months
Ended Ended
June 30June 30
------------------------------------------
2003 2002 2003 2002
------------------------------------------
Interest Income
Interest and fees on
loans held for investment $33,874 $36,049 $16,982 $18,013
Interest and fees on
loans held for sale 1,284 1,670 655 826
Interest on securities-
taxable 6,532 6,999 3,387 3,621
Interest on securities-
nontaxable 3,299 3,422 1,642 1,680
Interest on federal
funds sold and deposits 362 82 147 39
----------------------------------------------------------------------
Total interest income 45,351 48,222 22,813 24,179
----------------------------------------------------------------------
Interest Expense
Interest on deposits 10,459 13,397 5,142 6,404
Interest on borrowings 4,125 5,180 2,084 2,603
----------------------------------------------------------------------
Total interest expense 14,584 18,577 7,226 9,007
----------------------------------------------------------------------
Net interest income 30,767 29,645 15,587 15,172
Provision for loan losses 1,897 1,959 1,308 1,022
----------------------------------------------------------------------
Net interest income
after provision for
loan losses 28,870 27,686 14,279 14,150
----------------------------------------------------------------------
Non-Interest Income
Fiduciary income 981 844 565 501
Service charges on
deposit accounts 3,807 3,269 1,986 1,806
Other service charges,
commissions and fees 1,069 681 556 355
Mortgage banking income 6,414 5,356 3,450 2,107
Other operating income 541 482 244 186
Gain on sale of securities 153 186 133 9
----------------------------------------------------------------------
Total non-interest
income 12,965 10,818 6,934 4,964
----------------------------------------------------------------------
Non-Interest Expense
Salaries and employee
benefits 12,772 11,549 6,439 5,746
Occupancy expense of
bank premises 1,672 1,422 823 679
Furniture and equipment
expense 1,050 1,065 520 562
Amortization of intangible
assets 114 119 51 60
Other operating expense 6,937 6,900 3,581 3,399
----------------------------------------------------------------------
Total non-interest
expense 22,545 21,055 11,414 10,446
----------------------------------------------------------------------
Income before income taxes 19,290 17,449 9,799 8,668
Income tax expense 5,575 5,094 2,832 2,630
----------------------------------------------------------------------
Net Income $13,715 $12,355 $6,967 $6,038
----------------------------------------------------------------------
Basic earnings per common
share (EPS) $1.25 $1.14 $0.63 $0.55
----------------------------------------------------------------------
Diluted earnings per
common share (DEPS) $1.25 $1.14 $0.63 $0.55
Weighted Average Shares
Outstanding:
Basic 10,937,927 10,933,145 10,969,748 10,939,674
Diluted 11,021,010 10,984,274 11,084,847 10,993,193
For the period:
Return on average equity 17.46% 17.95% 17.29% 17.25%
Return on average assets 1.79% 1.71% 1.78% 1.65%
Cash dividends per share $0.47 $0.45 $0.24 $0.23
At period end:
Book value per share $15.57 $13.18 $15.57 $13.18
Market value
(average bid and ask) $35.58 $30.00 $35.58 $30.00
----------------------------------------------------------------------
First Community Bancshares, Inc.
Consolidated Balance Sheets
----------------------------------------------------------------------
(Dollars in Thousands, Except Per Share Data)
(Unaudited)
June 30, Dec. 31,
2003 2002
----------- -----------
Assets
Cash and due from banks $43,551 $33,364
Interest-bearing deposits with banks 25,795 88,064
Fed Funds Sold 7,353 3,157
Securities available for sale (amortized cost
of $405,630 June 30, 2003; $289,616,
December 31, 2002) 419,815 300,885
Securities held to maturity (market value of
$42,604 June 30, 2003; $43,342,
December 31, 2002) 39,745 41,014
Loans held for sale 45,458 66,364
Loans held for investment, net of unearned
income 1,027,928 927,621
Less allowance for loan losses 15,707 14,410
----------------------------------------------------------------------
Net loans 1,012,221 913,211
Premises and equipment 29,449 25,078
Other real estate owned 2,787 2,855
Interest receivable 8,381 7,897
Other assets 22,966 15,391
Intangible assets 42,791 27,083
----------------------------------------------------------------------
Total Assets $1,700,312 $1,524,363
----------------------------------------------------------------------
Liabilities
Deposits:
Demand $210,347 $165,557
Interest-bearing demand 234,551 200,297
Savings 185,284 180,786
Time 626,539 593,087
----------------------------------------------------------------------
Total Deposits 1,256,721 1,139,727
Interest, taxes and other liabilities 21,686 15,940
Securities sold under agreements to repurchase 93,742 91,877
FHLB and other indebtedness 152,855 124,357
----------------------------------------------------------------------
Total Liabilities 1,525,004 1,371,901
----------------------------------------------------------------------
Stockholders' Equity
Preferred stock, par value undesignated;
1,000,000 shares authorized;
no shares issued and outstanding in 2003
and 2002 - -
Common stock, $1 par value; 15,000,000 shares
authorized in 2003 and 2002, respectively;
11,390,205 issued in 2003 and 10,952,385
issued in 2002; and 11,256,674 and 10,877,330
outstanding in 2003 and 2002, respectively 11,390 9,957
Additional paid-in capital 108,286 58,642
Retained earnings 51,149 79,084
Treasury stock, at cost (4,028) (1,982)
Accumulated other comprehensive income 8,511 6,761
----------------------------------------------------------------------
Total Stockholders' Equity 175,308 152,462
----------------------------------------------------------------------
Total Liabilities and
Stockholders' Equity $1,700,312 $1,524,363
----------------------------------------------------------------------
First Community Bancshares, Inc.
Quarterly Performance Summary
Income Statements
(Dollars in Thousands Except Per Share Data)
As of and for the Quarter Ended
June 30, March 31,
2003 2003
------------------------------
Interest Income
Interest and fees on loans held for
investment $16,982 $16,892
Interest and fees on loans held for sale 655 629
Interest on securities-taxable 3,387 3,145
Interest on securities-nontaxable 1,642 1,657
Interest on federal funds sold and
deposits 147 215
------------------------------
Total interest income 22,813 22,538
------------------------------
Interest Expense
Interest on deposits 5,142 5,317
Interest on borrowings 2,084 2,041
------------------------------
Total interest expense 7,226 7,358
------------------------------
Net interest income 15,587 15,180
Provision for loan losses 1,308 589
------------------------------
Net interest income after
provision for loan losses 14,279 14,591
------------------------------
Non-Int Income
Fiduciary income 565 416
Service charges on deposit accounts 1,986 1,821
Other service charges, commissions and
fees 556 513
Mortgage banking income 3,450 2,964
Other operating income 244 297
Gain (loss) on Securities 133 20
------------------------------
Total non-interest income 6,934 6,031
------------------------------
Non-Int Expense
Salaries and employee benefits 6,439 6,333
Occupancy expense of bank premises 823 849
Furniture and equipment expense 520 530
Amortization of intangible assets 51 63
Other operating expense 3,581 3,356
------------------------------
Total non-interest expense 11,414 11,131
------------------------------
Income before income taxes 9,799 9,491
Income tax expense 2,832 2,743
------------------------------
Net Income(a) 6,967 6,748
==============================
Per Share Data
Basic EPS(a) $0.63 $0.62
Diluted EPS(a) $0.63 $0.62
Cash dividends per share $0.24 $0.24
Weighted Average Shares Outstanding:
Basic 10,969,748 10,857,307
Diluted 11,084,847 10,913,481
Actual shares oustanding at period end 11,256,674 10,830,701
Book Value per share at period end $15.57 $14.28
Average Bid and Ask per share at
period end $35.58 $30.15
Ratios
Return on average assets(a) 1.78% 1.81%
Return on average equity(a) 17.29% 17.63%
Net yield on earning assets 4.55% 4.64%
Efficiency Ratio at end of period 48.68% 49.67%
Equity as a percent of total assets at
end of period 10.12% 10.12%
Average earning assets as a percentage
of average total assets 92.67% 92.99%
Average loans (not including loans held
for sale) as a percentage of average
deposits 79.23% 79.50%
QTD Averages
Average Loans (Not including Loans Held
for Sale) $931,488 $906,856
Average Earning Assets $1,454,319 $1,408,749
Average Total Assets $1,569,302 $1,514,900
Average deposits $1,175,618 $1,140,746
Average Equity $161,622 $155,222
Taxable Equivalent Net Interest Income $16,504 $16,115
Average Interest-bearing deposits $1,008,130 $983,242
(a) In accordance with FAS 147, goodwill amortization on certain
branch acquisitions ceased on October 1, 2002 and, as required,
First Community restated quarterly amounts in its 2002 annual
report.
First Community Bancshares, Inc.
Quarterly Performance Summary
Income Statements
(Dollars in Thousands Except Per Share Data)
As of and for the Quarter Ended
Dec. 31, Sept. 30, June 30,
2002 2002 2002
---------------------------------------
Interest Income
Interest and fees on loans
held for investment $17,769 $18,597 $18,013
Interest and fees on loans held
for sale 1,063 851 826
Interest on securities-taxable 2,766 3,236 3,621
Interest on securities-nontaxable 1,718 1,679 1,680
Interest on federal funds sold
and deposits 215 88 39
---------------------------------------
Total interest income 23,531 24,451 24,179
---------------------------------------
Interest Expense
Interest on deposits 5,763 6,206 6,404
Interest on borrowings 2,228 2,234 2,603
---------------------------------------
Total interest expense 7,991 8,440 9,007
---------------------------------------
Net interest income 15,540 16,011 15,172
Provision for loan losses 947 1,302 1,022
---------------------------------------
Net interest income
after provision for
loan losses 14,593 14,709 14,150
---------------------------------------
Non-Int Income
Fiduciary income 486 443 501
Service charges on deposit accounts 1,921 1,866 1,806
Other service charges, commissions
and fees 371 328 355
Mortgage banking income 1,841 2,238 2,107
Other operating income 214 100 186
Gain (loss) on Securities (599) 22 9
---------------------------------------
Total non-interest income 4,234 4,997 4,964
---------------------------------------
Non-Int Expense
Salaries and employee benefits 5,972 5,746 5,746
Occupancy expense of bank premises 714 738 679
Furniture and equipment
expense 488 529 562
Amortization of intangible assets 65 61 60
Other operating expense 3,724 3,177 3,399
---------------------------------------
Total non-interest expense 10,963 10,251 10,446
---------------------------------------
Income before income taxes 7,864 9,455 8,668
Income tax expense 2,086 2,869 2,630
---------------------------------------
Net Income(a) 5,778 6,586 6,038
=======================================
Per Share Data
Basic EPS(a) $0.53 $0.60 $0.55
Diluted EPS(a) $0.52 $0.60 $0.55
Cash dividends per share $0.23 $0.23 $0.23
Weighted Average Shares
Outstanding:
Basic 10,881,754 10,920,876 10,939,674
Diluted 10,939,535 10,975,950 10,993,193
Actual shares oustanding at period
end 10,877,330 10,910,330 10,918,580
Book Value per share at period end $14.02 $13.73 $13.18
Average Bid and Ask per share at
period end $27.95 $26.66 $30.00
Ratios
Return on average assets(a) 1.64% 1.78% 1.65%
Return on average equity(a) 16.36% 17.64% 17.25%
Net yield on earning assets 4.70% 4.93% 4.77%
Efficiency Ratio at end of period 49.01% 48.09% 48.99%
Equity as a percent of
total assets at end of period 10.00% 10.09% 9.89%
Average earning assets as
a percentage of average total
assets 93.05% 92.82% 92.64%
Average loans (not including
loans held for sale) as a percentage
of average deposits 81.20% 84.86% 84.83%
QTD Averages
Average Loans (Not including Loans
Held for Sale) $908,342 $929,494 $917,319
Average Earning Assets $1,394,399 $1,364,045 $1,355,841
Average Total Assets $1,498,567 $1,469,609 $1,463,573
Average deposits $1,118,597 $1,095,377 $1,081,316
Average Equity $150,449 $148,124 $140,408
Taxable Equivalent Net Interest
Income $16,513 $16,963 $16,123
Average Interest-bearing deposits $959,708 $936,578 $926,649
(a) In accordance with FAS 147, goodwill amortization on certain
branch acquisitions ceased on October 1, 2002 and, as required,
First Community restated quarterly amounts in its 2002 annual
report.
First Community Bancshares, Inc.
Quarterly Performance Summary
Balance Sheets
(Dollars in Thousands Except Per Share Data)
June, March, Dec. 31, Sept. 30, June 30,
2003 2003 2002 2002 2002
------------------------------------------------------
Cash and due
from banks $43,551 $36,979 $33,364 $30,331 $31,448
Interest-bearing
deposits with
banks 25,795 63,146 88,064 20,246 255
Federal funds
sold 7,353 4 3,157 75
Securities
available for
sale 419,815 372,926 300,885 334,408 338,572
Securities held
to maturity 39,745 40,084 41,014 40,211 41,327
Loans held for
sale 45,458 50,753 66,364 68,821 52,095
Loans held for
investment, net
of unearned
income 1,027,928 897,194 927,621 926,400 928,541
Less allowance
for loan
losses 15,707 13,782 14,410 14,080 14,194
------------------------------------------------------
Net loans 1,012,221 883,412 913,211 912,320 914,347
Premises and
equipment 29,449 25,417 25,078 23,632 22,314
Other real
estate owned 2,787 2,545 2,855 2,668 2,452
Interest
receivable 8,381 8,210 7,897 8,340 8,330
Other assets 22,966 18,524 15,391 16,843 18,348
Intangible
assets 42,791 27,110 27,083 26,012 25,846
------------------------------------------------------
Total Assets $1,700,312 $1,529,110 $1,524,363 $1,483,907 $1,455,334
------------------------------------------------------
Deposits:
Demand $210,347 $162,998 $165,557 $161,249 $156,820
Interest-
bearing
demand 234,551 207,098 200,297 185,866 180,585
Savings 185,284 183,738 180,786 179,888 175,431
Time 626,539 599,868 593,087 578,223 568,679
------------------------------------------------------
Total
Deposits 1,256,721 1,153,702 1,139,727 1,105,226 1,081,515
Interest, taxes
and other
liabilities 21,686 14,663 15,940 13,928 13,704
Federal funds
purchased - - - - 8,950
Securities sold under
agreements to
repurchase 93,742 95,621 91,877 94,964 83,015
FHLB and other
indebtedness 152,855 110,429 124,357 120,053 124,266
------------------------------------------------------
Total
Liabilities 1,525,004 1,374,415 1,371,901 1,334,171 1,311,450
------------------------------------------------------
Preferred Stock - - - - -
Common stock, $1
par value 11,390 9,965 9,957 9,957 9,957
Additional paid-
in capital 108,286 58,970 58,642 58,642 58,600
Retained
earnings 51,149 83,267 79,084 75,353 71,394
Treasury stock,
at cost (4,028) (3,543) (1,982) (1,098) (870)
Accumulated
other comprehensive
income (loss) 8,511 6,036 6,761 6,882 4,803
------------------------------------------------------
Total
Stockholders'
Equity 175,308 154,695 152,462 149,736 143,884
------------------------------------------------------
Total
Liabilities and
Stockholders'
Equity $1,700,312 $1,529,110 $1,524,363 $1,483,907 $1,455,334
------------------------------------------------------
First Community Bancshares, Inc.
Selected Financial Information
(Dollars in Thousands)
As of and for the Quarter Ended
June 30, March 31, Dec. 31Sept. 30June 30,
2003 2003 2002 2002 2002
-------------------------------------------------------
Asset Quality Analysis:
Allowance for Loan Losses:
Beginning balance $13,782 $14,410 $14,080 $14,194 $14,271
Provision 1,308 589 947 1,302 1,022
Acquisiton
balance 1,609 - 395 - -
Charge-offs (1,418) (1,668) (1,212) (1,593) (1,243)
Recoveries 426 451 200 177 144
-------------------------------------------------------
Net charge-offs (992) (1,217) (1,012) (1,416) (1,099)
Ending balance $15,707 $13,782 $14,410 $14,080 $14,194
=======================================================
Nonperforming Assets:
Nonaccrual loans $2,547 $3,997 $3,075 $4,987 $4,131
Foreclosed
real estate 2,787 2,544 2,855 2,668 2,452
Repossessions 140 188 172 341 436
Loans 90 days or
more past due
& still accruing 86 21 91 367 254
-------------------------------------------------------
Nonperforming
assets $5,560 $6,750 $6,193 $8,363 $7,273
=======================================================
Loans 90 days or more
past due & still
accruing as a
percentage of
loans held
for investment 0.01% 0.00% 0.01% 0.04% 0.03%
Asset Quality Ratios:
Nonaccrual loans and
leases as a percentage
of loans held for
investment 0.25% 0.45% 0.33% 0.54% 0.44%
Nonperforming assets
as a percentage of:
Total assets 0.33% 0.44% 0.41% 0.56% 0.50%
Loans held for
investment plus
foreclosed
property 0.54% 0.75% 0.67% 0.90% 0.78%
Net charge-
offs as a % of
average loans
held for
investment 0.11% 0.13% 0.11% 0.15% 0.12%
Allowance for loan &
lease losses as
a percentage of
loans held for
investment 1.53% 1.54% 1.55% 1.52% 1.53%
Ratio of allowance
for loans losses
to:
Nonaccrual loans 6.17 3.45 4.69 2.82 3.44
Restructured loans
performing
according to
modified terms $368 $341 $345 $347 $440
CONTACT: First Community Bancshares, Inc.
Robert L. Schumacher, 276-326-9000
SOURCE: First Community Bancshares, Inc.