BLUEFIELD, Va.--(BUSINESS WIRE)--
First Community Bancshares, Inc. (NASDAQ:FCBC) (www.fcbinc.com)
today reported that second quarter earnings were a record $7.44
million, or $0.66 per diluted share. This represents a 2.02% increase
over second quarter 2006 earnings of $7.29 million, or $0.65 diluted
earnings per share. Return on average assets was 1.40% for the second
quarter of 2007 compared with 1.47% for the second quarter of 2006.
Return on average equity for the second quarter of 2007 was 13.56%,
compared to 14.74% for the same period in 2006. Return on average
tangible equity was 19.12% for the second quarter of 2007 compared to
21.61% for second quarter 2006.
Year-to-date earnings were also a record $14.56 million, or $1.28
diluted earnings per share, a 3.02% increase over the same period of
2006. Return on average assets for the period was 1.41% and return on
average equity was 13.45% for the period.
The Company continues to see improvements in non-interest
expenses. Second quarter and year-to-date non-interest expense
decreased $513 thousand, or 4.08%, and $1.69 million, or 6.51%,
compared with their respective 2006 periods. Salaries and benefits
again led the decreases as second quarter saw a decrease of $617
thousand, or 9.10%, and year-to-date had a $2.11 million, or 14.35%,
decrease compared with 2006. The continuing benefits of the
consolidation of both loan and deposit operations, along with a
reduction in redundant processes has led to further improvements in
overall efficiency and the significant reduction in salaries and
employee benefits.
The American Banker recognized the Company as one of the Nation's
top 100 most efficient banks in 2006, with its ranking based on its
51.05% efficiency ratio. The Company has continued the same improving
trend in 2007 with a year-to-date efficiency ratio of 50.69%.
The Company's efficiency program is ongoing and is moving into a
second phase that will focus on consolidation of other branch
processes, improved branch staffing and review of significant service
contracts. These programs are targeted at further reductions in the
general level of operating costs. The Company is also achieving
further operating efficiencies through an internal reorganization
shifting to a line of business structure.
Steadily improving credit quality metrics and net charge-offs of
only $576 thousand in the second quarter led the Company to make no
provision for loan losses for the second consecutive quarter. At the
close of the second quarter, the Company reports its lowest ever level
of non-accrual loans and non-performing assets. Nonaccrual loans
reached the all-time low of $2.91 million, or 0.23% of total loans.
Other real estate owned was only $593 thousand, and when combined with
non-performing assets, amounted to a scant 0.16% of total assets.
Never before in the history of the Company have non-performing
assets been at such low levels. The Company has strategically avoided
exposure to alternative mortgage structures and high-risk development
lending through disciplined underwriting and strong credit approval
processes. These factors have led to very low delinquencies and
non-performing metrics, as well as reduced loan loss provisions in
stark contrast to many of its peers. The Company initiated these
measures for enhanced credit quality over two years ago in preparation
for the eventual slowdown in real estate markets.
This fall, First Community will open a new branch in the
Chesterfield Towne Center in Richmond, Virginia. Construction is also
underway for a new location in Mechanicsville, which will be the sixth
branch in the Richmond area.
In Princeton, West Virginia, First Community Bank is building a
branch office in the new Princeton Crossing retail center that will
further reinforce First Community's reputation as the most convenient
bank in the region. First Community has deposit footings of over $380
million and dominant market share of 41% in Mercer County.
Construction is well underway for new branches in Daniels and
Summersville, West Virginia. The Daniels branch is slated to open in
September, and will provide a convenient banking opportunity for Glade
Springs, a 4,000 acre resort and upscale housing and golfing
community. In Summersville, First Community's new branch in the
growing commercial area along U.S. Route 19 will be open in first
quarter 2008.
The Company's dividend yield on common shares rose to 3.46% at the
close of the second quarter on its 2007 increase in quarterly dividend
rate to $0.27 per share. Mergent recognized the Company as a Dividend
Achiever for its record of dividend increases. 2007 is expected to be
the sixteenth year of consecutive dividend increases to shareholders.
Financial Highlights
Second Quarter 2007
-- Interest income was $31.98 million, an improvement of $1.95
million, or 6.51%, over second quarter 2006. The increase over
second quarter 2006 was due primarily to increases in average
earning assets. The Company has been adding to its investment
portfolio, and second quarter 2007 average investments
increased $218.18 million, or 51.09%, over second quarter
2006.
-- Net interest income was down from the second quarter of 2006
due to increases in interest expense. Second quarter interest
expense increased $3.11 million, or 26.27%, from 2006. Average
interest bearing liabilities increased $130.17 million, or
8.71%, compared with second quarter 2006. Tax equivalent net
interest margin was 3.78%. Margin has been further compressed
by the large additions of investment securities during the
last half of 2006 and the first half of 2007, despite the
significant positive contribution to net interest income.
-- Wealth management revenues increased $273 thousand, or 37.30%,
compared with the second quarter of 2006, reflective of the
addition of wealth revenues by Investment Planning
Consultants, Inc. beginning with its acquisition in November
2006. Other service charges, commissions, and fees increased
$126 thousand, or 17.72%. Other operating income was $1.01
million for second quarter 2007 compared with $1.52 million
for 2006; however, second quarter 2006 was positively impacted
by a $702 thousand gain on the sale of the Company's Drakes
Branch, Virginia, office location. Total non-interest income
from core banking activities increased $605 thousand, or
12.32%, compared with second quarter 2006.
-- Total non-interest expenses decreased $513 thousand from
second quarter 2006. The decreases are attributed to the
extensive cost savings measures executed by the Company.
Salaries and benefits decreased $617 thousand from the second
quarter of 2006. The second quarter efficiency ratio was
50.25% compared to 50.49% in 2006, and ranks among the
strongest in the industry.
-- Credit quality remains very sound with total delinquencies as
a percent of total loans at 0.55% at June 30, 2007, compared
with 0.45% and 0.91% at June 30 and December 31, 2006,
respectively. The allowance for loan losses as a percent of
loans held for investment was 1.12% compared with 1.12% and
1.13% at June 30 and December 31, 2006, respectively.
Non-performing assets declined to $3.50 million from $3.85
million and $4.07 million at June 30 and December 31, 2006,
respectively.
-- Non-performing assets as a percentage of loans held for
investment and other real estate were 0.28% compared with
0.29% and 0.32% at June 30 and December 31, 2006,
respectively. The Company holds no non-traditional mortgage
products in its loan portfolio.
-- Net charge-offs were $576 thousand compared to $898 thousand
in the second quarter of 2006. As discussed previously, the
Company made no provision for loan losses in the second
quarter of 2007 compared with $811 thousand in the second
quarter of 2006.
-- On a same-branch basis, average deposits have increased $9.70
million compared to the second quarter of 2006. During 2006,
the Company sold two branches with second quarter 2006 average
deposits totaling $26.07 million.
-- During the second quarter, the board of directors declared a
dividend to stockholders of twenty-seven cents($0.27) per
share. The dividend represents an increase of 3.85% over the
$0.26 per share paid in the second quarter of 2006. The year
2007 is projected to be the 16th consecutive year of dividend
increases to stockholders. Dividends have increased at an
average annual rate of over 10% since 1991. The first quarter
dividend yield was 3.46% based on the June 30, 2007, market
value.
Year-to-Date 2007
-- Interest income was $62.67 million, an improvement of $3.72
million, or 6.31%, over the first half of 2006. The increase
was due primarily to increases in average earning assets.
-- Net interest income was down from the first half of 2006 due
to increases in interest expense. Year-to-date interest
expense increased by $5.93 million, or 26.09%, from 2006. Tax
equivalent net interest margin was 3.87%.
-- Wealth management revenues increased $608 thousand, or 42.97%,
compared to the first half of 2006. Other service charges and
commissions increased $256 thousand, or 17.64%, compared to
the first half of 2006. Other operating income was $862
thousand less than 2006; however, 2006 was positively impacted
by a $676 thousand recovery from a 1996 payment systems fraud
and a $702 thousand gain on the sale of the Drakes Branch,
Virginia, office.
-- Non-interest expenses decreased $1.69 million from the first
half of 2006. Salaries and benefits decreased $2.11 million,
or 14.35%, from 2006. The year-to-date efficiency ratio was
50.69% compared with 53.39% in 2006.
-- Since year-end 2006, consolidated assets have increased
$134.90 million, a 13.38% annualized growth rate, to $2.17
billion compared to $2.03 billion.
-- Total stockholders' equity for the Company was $216.26
million, resulting in a book value per common share
outstanding of $19.25 compared to $212.73 million and $18.92
per common share at December 31, 2006, and $197.90 million and
$17.71 per common share a year ago.
The Company will host an investor and media teleconference and
webcast on Wednesday, July 25, 2007, at 11:00 a.m. To access the
teleconference, the toll-free number to call is (877) 407-8031.
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 Current News Releases section. The
Company's press release and financial summary will be available in
this section, as well. Copies of the Company's second quarter 2007
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 Dave Brown, Chief Financial Officer, at (800)
425-0839.
First Community Bancshares, Inc., headquartered in Bluefield,
Virginia, is a $2.17 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 and four wealth management
offices 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 group managed assets with a market
value of $861 million at June 30, 2007. First Community Bancshares,
Inc.'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 www.fcbinc.com.
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.
First Community
Bancshares, Inc. Three Months Ended Six Months Ended
Consolidated June 30, June 30,
Statements of Income
----------------------- -----------------------
(In Thousands, Except 2007 2006 2007 2006
Share and Per Share
Data)(Unaudited)
----------- ----------- ----------- -----------
Interest Interest and
fees on
loans held
for
investment $ 23,404 $ 24,506 $ 46,923 $ 48,431
Income Interest on
securities-
taxable 6,030 3,224 11,011 6,101
Interest on
securities-
nontaxable 2,150 1,816 4,062 3,642
Interest on
federal
funds sold
and deposits 395 479 669 774
---------------------------------- ----------- ----------- -----------
Total
interest
income 31,979 30,025 62,665 58,948
---------------------------------- ----------- ----------- -----------
Interest Interest on
deposits 9,748 8,326 19,048 15,973
Expense Interest on
borrowings 5,217 3,526 9,588 6,737
---------------------------------- ----------- ----------- -----------
Total
interest
expense 14,965 11,852 28,636 22,710
---------------------------------- ----------- ----------- -----------
Net interest
income 17,014 18,173 34,029 36,238
Provision for
loan losses - 811 - 1,219
---------------------------------- ----------- ----------- -----------
Net interest
income after
provision
for loan
losses 17,014 17,362 34,029 35,019
---------------------------------- ----------- ----------- -----------
Non- Wealth
Interest management
income 1,005 732 2,023 1,415
Income Service
charges on
deposit
accounts 2,662 2,655 5,071 5,072
Other service
charges,
commissions
and fees 837 711 1,707 1,451
Gain on sale
of
securities 30 (94) 159 66
Other
operating
income 1,013 1,516 1,802 2,664
---------------------------------- ----------- ----------- -----------
Total non-
interest
income 5,547 5,520 10,762 10,668
---------------------------------- ----------- ----------- -----------
Non- Salaries and
Interest employee
benefits 6,165 6,782 12,576 14,683
Expense Occupancy
expense of
bank
premises 1,020 1,011 2,077 2,051
Furniture and
equipment
expense 780 858 1,603 1,708
Amortization
of
intangible
assets 105 144 208 234
Other
operating
expense 4,005 3,793 7,769 7,245
---------------------------------- ----------- ----------- -----------
Total non-
interest
expense 12,075 12,588 24,233 25,921
---------------------------------- ----------- ----------- -----------
Income before
income taxes 10,486 10,294 20,558 19,766
Income tax
expense 3,047 3,002 5,995 5,630
---------------------------------- ----------- ----------- -----------
Net income $ 7,439 $ 7,292 $ 14,563 $ 14,136
---------------------------------- ----------- ----------- -----------
Basic
earnings per
common share
(EPS) $ 0.66 $ 0.65 $ 1.29 $ 1.26
Diluted
earnings per
common share
(DEPS) $ 0.66 $ 0.65 $ 1.28 $ 1.25
Weighted
Average
Shares
Outstanding:
Basic 11,260,868 11,201,052 11,260,126 11,216,940
Diluted 11,320,227 11,258,581 11,334,486 11,277,032
For the
period:
Return on
average
assets 1.40% 1.47% 1.41% 1.45%
Return on
average
equity 13.56% 14.74% 13.45% 14.42%
Return on
average
tangible
equity 19.12% 21.61% 19.02% 21.14%
Cash
dividends
per share $ 0.27 $ 0.26 $ 0.54 $ 0.52
At period
end:
Book value
per share $ 19.25 $ 17.71 $ 19.25 $ 17.71
Market value $ 31.19 $ 32.99 $ 31.19 $ 32.99
First Community Bancshares, Inc.
Quarterly Performance Summary
Income Statements As of and for the Quarter Ended
--------------------------------------
June 30, March 31, Dec. 31,
(In Thousands, Except Share and 2007 2007 2006
Per Share Data)(Unaudited)
------------ ----------- -----------
Interest Interest and fees on
loans held for
investment $ 23,404 $ 23,519 $ 24,451
Income Interest on securities-
taxable 6,030 4,981 4,353
Interest on securities-
nontaxable 2,150 1,912 1,852
Interest on federal
funds sold and
deposits 395 274 182
------------ ----------- -----------
Total interest
income 31,979 30,686 30,838
------------ ----------- -----------
Interest Interest on deposits 9,748 9,300 9,135
Expense Interest on borrowings 5,217 4,371 4,052
------------ ----------- -----------
Total interest
expense 14,965 13,671 13,187
------------ ----------- -----------
Net interest income 17,014 17,015 17,651
Provision for loan
losses - - 908
------------ ----------- -----------
Net interest income
after provision
for loan losses 17,014 17,015 16,743
------------ ----------- -----------
Non-Int Wealth management
income 1,005 1,018 773
Income Service charges on
deposit accounts 2,662 2,409 2,559
Other service charges,
commissions and fees 837 870 791
(Loss) gain on sale of
securities 30 129 15
Other operating income 1,013 789 1,419
------------ ----------- -----------
Total non-interest
income 5,547 5,215 5,557
------------ ----------- -----------
Non-Int Salaries and employee
benefits 6,165 6,411 6,033
Expense Occupancy expense of
bank premises 1,020 1,057 978
Furniture and equipment
expense 780 823 887
Amortization of
intangible assets 105 103 88
Other operating expense 4,005 3,764 3,717
------------ ----------- -----------
Total non-interest
expense 12,075 12,158 11,703
------------ ----------- -----------
Income before income
taxes 10,486 10,072 10,597
Income tax expense 3,047 2,948 2,970
------------ ----------- -----------
Net income $ 7,439 $ 7,124 $ 7,627
============ =========== ===========
Per Basic EPS $ 0.66 $ 0.63 $ 0.68
Share Diluted EPS $ 0.66 $ 0.63 $ 0.68
Cash dividends per
share $ 0.27 $ 0.27 $ 0.26
Weighted Average Shares
Outstanding:
Basic 11,260,868 11,259,375 11,211,535
Diluted 11,320,227 11,346,828 11,297,931
Actual shares
outstanding at period
end 11,232,466 11,271,302 11,245,742
Book Value per share at
period end $ 19.25 $ 19.33 $ 18.92
Market Value per share
at period end $ 31.19 $ 39.00 $ 39.56
First Community Bancshares, Inc.
Quarterly Performance Summary
Income Statements As of and for the Quarter Ended
--------------------------------------
Sept. 30, June 30,
(In Thousands, Except Share and 2006 2006
Per Share Data)(Unaudited)
--------------------- ----------------
Interest Interest and fees on
loans held for
investment $ 24,578 $ 24,506
Income Interest on securities-
taxable 3,497 3,224
Interest on securities-
nontaxable 1,877 1,816
Interest on federal
funds sold and
deposits 288 479
--------------------- ----------------
Total interest
income 30,240 30,025
--------------------- ----------------
Interest Interest on deposits 8,760 8,326
Expense Interest on borrowings 3,724 3,526
--------------------- ----------------
Total interest
expense 12,484 11,852
--------------------- ----------------
Net interest income 17,756 18,173
Provision for loan
losses 579 811
--------------------- ----------------
Net interest income
after provision
for loan losses 17,177 17,362
--------------------- ----------------
Non-Int Wealth management
income 623 732
Income Service charges on
deposit accounts 2,611 2,655
Other service charges,
commissions and fees 750 711
(Loss) gain on sale of
securities (6) (94)
Other operating income 1,120 1,516
--------------------- ----------------
Total non-interest
income 5,098 5,520
--------------------- ----------------
Non-Int Salaries and employee
benefits 6,151 6,782
Expense Occupancy expense of
bank premises 1,039 1,011
Furniture and equipment
expense 871 858
Amortization of
intangible assets 88 144
Other operating expense 4,064 3,793
--------------------- ----------------
Total non-interest
expense 12,213 12,588
--------------------- ----------------
Income before income
taxes 10,062 10,294
Income tax expense 2,877 3,002
--------------------- ----------------
Net income $ 7,185 $ 7,292
===================== ================
Per Basic EPS $ 0.64 $ 0.65
Share Diluted EPS $ 0.64 $ 0.65
Cash dividends per
share $ 0.26 $ 0.26
Weighted Average Shares
Outstanding:
Basic 11,174,479 11,201,052
Diluted 11,245,073 11,258,581
Actual shares
outstanding at period
end 11,183,668 11,176,455
Book Value per share at
period end $ 18.40 $ 17.71
Market Value per share
at period end $ 33.37 $ 32.99
First Community Bancshares, Inc.
Quarterly Balance Sheets
(Unaudited) June 30, March 31, Dec. 31, Sept. 30, June 30,
2007 2007 2006 2006 2006
---------- ---------- ---------- ---------- ----------
(In Thousands)
Cash and due
from banks $ 40,879 $ 42,394 $ 47,909 $ 38,961 $ 43,620
Interest-bearing
deposits with
banks 33,380 17,082 9,850 13,473 29,714
Securities
available for
sale 658,901 612,977 508,370 475,528 405,761
Securities held
to maturity 13,177 19,266 20,019 20,250 20,641
Loans held for
sale 1,818 1,068 781 1,046 1,293
Loans held for
investment, net
of unearned
income 1,243,076 1,258,847 1,284,863 1,299,220 1,318,943
Less allowance
for loan
losses 13,934 14,510 14,549 14,946 14,710
---------- ---------- ---------- ---------- ----------
Net loans 1,229,142 1,244,337 1,270,314 1,284,274 1,304,233
Premises and
equipment 42,274 38,381 36,889 35,879 35,888
Other real
estate owned 593 600 258 753 910
Interest
receivable 12,892 11,835 12,141 11,435 10,179
Intangible
assets 62,017 62,092 62,196 60,796 60,883
Other assets 73,522 65,763 64,971 65,174 66,510
---------- ---------- ---------- ---------- ----------
Total Assets $2,168,595 $2,115,795 $2,033,698 $2,007,569 $1,979,632
---------- ---------- ---------- ---------- ----------
Deposits:
Demand $ 241,423 $ 242,254 $ 244,771 $ 245,097 $ 253,664
Interest-
bearing demand 143,080 148,735 140,578 145,519 139,861
Savings 333,855 325,454 317,678 327,120 344,436
Time 703,602 703,141 691,744 678,490 672,047
---------- ---------- ---------- ---------- ----------
Total Deposits 1,421,960 1,419,584 1,394,771 1,396,226 1,410,008
Interest, taxes
and other
liabilities 21,000 20,522 19,641 19,223 18,056
Federal funds
purchased - 45,000 7,700 15,500 -
Securities sold
under
agreements to
repurchase 217,987 220,198 201,185 172,711 149,507
FHLB and other
indebtedness 291,387 192,654 197,671 198,127 204,158
---------- ---------- ---------- ---------- ----------
Total
Liabilities 1,952,334 1,897,958 1,820,968 1,801,787 1,781,729
---------- ---------- ---------- ---------- ----------
Common stock, $1
par value 11,499 11,499 11,499 11,499 11,499
Additional paid-
in capital 108,633 108,769 108,806 108,605 108,602
Retained
earnings 108,601 104,198 100,117 95,414 91,136
Treasury stock,
at cost (8,341) (7,124) (7,924) (9,866) (10,097)
Accumulated
other
comprehensive
income (loss) (4,131) 495 232 130 (3,237)
---------- ---------- ---------- ---------- ----------
Total
Stockholders'
Equity 216,261 217,837 212,730 205,782 197,903
---------- ---------- ---------- ---------- ----------
Total
Liabilities
and
Stockholders'
Equity $2,168,595 $2,115,795 $2,033,698 $2,007,569 $1,979,632
---------- ---------- ---------- ---------- ----------
First Community Bancshares, Inc.
Selected Financial Information
(Unaudited) As of and for the Quarter Ended
------------------------------------------------------
June 30, March 31, Dec. 31, Sept. 30, June 30,
2007 2007 2006 2006 2006
---------- ---------- ---------- ---------- ----------
(Dollars in Thousands)
Ratios
Return on
average assets 1.40% 1.42% 1.51% 1.45% 1.47%
Return on
average equity 13.56% 13.33% 14.41% 14.05% 14.74%
Return on
average
tangible equity 19.12% 18.92% 20.57% 20.29% 21.61%
Net interest
margin 3.78% 3.98% 4.09% 4.20% 4.28%
Efficiency ratio
for the quarter
(a) 50.25% 51.13% 48.02% 49.44% 50.49%
Efficiency ratio
year-to-date
(a) 50.69% 51.13% 51.05% 52.07% 53.39%
Equity as a
percent of
total assets at
end of period 9.97% 10.30% 10.46% 10.25% 10.00%
Average earning
assets as a
percentage of
average total
assets 90.47% 90.39% 90.32% 90.06% 90.55%
Average loans as
a percentage of
average
deposits 88.82% 90.90% 92.97% 93.52% 93.06%
Average Balances
Investments $ 645,266 $ 552,383 $ 501,042 $ 443,680 $ 427,085
Loans 1,253,679 1,265,628 1,296,754 1,305,839 1,328,768
Earning assets 1,931,247 1,841,235 1,812,181 1,774,277 1,797,214
Total assets 2,134,612 2,037,006 2,006,377 1,970,003 1,984,741
Deposits 1,411,476 1,392,309 1,394,881 1,396,271 1,427,845
Interest-bearing
deposits 1,176,940 1,162,735 1,156,582 1,155,743 1,187,549
Borrowings 484,410 408,726 381,845 351,909 340,694
Interest-bearing
liabilities 1,661,350 1,571,461 1,541,702 1,510,816 1,531,183
Equity 219,989 216,807 209,985 202,922 198,440
Tax equivalent
net interest
income 18,186 18,057 18,660 18,775 19,161
(a) Excludes securities gains/losses, intangible amortization,
foreclosed property expenses, non-recurring income and expense
items, and includes tax equivalency adjustment.
First Community Bancshares, Inc.
Selected Financial Information
(Unaudited) As of and for the Quarter Ended
----------------------------------------------
June 30, March 31, Dec. 31, Sept. 30, June 30,
2007 2007 2006 2006 2006
------------------ -------- --------- --------
(Dollars in Thousands)
Summary of Loan Loss
Experience
Allowance for Loan
Losses:
Beginning balance $ 14,510 $ 14,549 $ 14,946 $ 14,710 $ 14,797
Provision for Loan
Losses - - 908 579 811
Charge-offs (911) (893) (1,607) (832) (1,389)
Recoveries 335 854 302 489 491
-------- --------- -------- --------- --------
Net charge-offs (576) (39) (1,305) (343) (898)
-------- --------- -------- --------- --------
Ending balance $ 13,934 $ 14,510 $ 14,549 $ 14,946 $ 14,710
======== ========= ======== ========= ========
Summary of Asset Quality
Nonaccrual loans $ 2,910 $ 4,074 $ 3,813 $ 3,657 $ 2,937
Loans 90 days or more
past due and still
accruing - - - - -
-------- --------- -------- --------- --------
Total non-performing
loans 2,910 4,074 3,813 3,657 2,937
Other real estate owned 593 600 258 753 910
-------- --------- -------- --------- --------
Total non-performing
assets $ 3,503 $ 4,674 $ 4,071 $ 4,410 $ 3,847
======== ========= ======== ========= ========
Restructured loans $ 256 $ 265 $ 272 $ 281 $ 289
Asset Quality Ratios
Non-performing loans as
a percentage
of loans held for
investment 0.23% 0.32% 0.30% 0.28% 0.22%
Non-performing assets as
a percentage of:
Total assets 0.16% 0.22% 0.20% 0.22% 0.19%
Loans held for
investment plus other
real estate owned 0.28% 0.37% 0.32% 0.34% 0.29%
Annualized net charge-
offs as a percentage of
average loans held for
investment 0.18% 0.01% 0.40% 0.10% 0.27%
Allowance for loan
losses as a percentage
of loans held for
investment 1.12% 1.15% 1.13% 1.15% 1.12%
Ratio of allowance for
loan losses to
nonaccrual loans 4.79 3.56 3.82 4.09 5.01
First Community Bancshares, Inc.
Consolidated Average Balance Sheets, Yields, and Rates
(Unaudited) Three Months Ended June 30,
-----------------------------------------------------
2007 2006
-------------------------- --------------------------
Yield/ Yield/
Average Interest Rate Average Interest Rate
Balance (1) (1) Balance (1) (1)
---------- -------- ------ ---------- -------- ------
Earning Assets (Dollars in Thousands)
Loans
Held for
Investment (2)
Taxable $1,251,696 $23,379 7.49% $1,327,278 $24,487 7.40%
Tax Exempt 1,983 38 7.69% 1,490 30 8.08%
---------- -------- ------ ---------- -------- ------
Total 1,253,679 23,417 7.49% 1,328,768 24,517 7.40%
Securities
Available for
Sale
Taxable 439,504 6,024 5.50% 257,838 3,218 5.01%
Tax Exempt 189,526 2,993 6.33% 147,869 2,367 6.42%
---------- -------- ------ ---------- -------- ------
Total 629,030 9,017 5.75% 405,707 5,585 5.52%
Held to Maturity
Securities
Taxable 378 6 6.37% 388 5 5.17%
Tax Exempt 15,858 316 7.99% 20,990 427 8.16%
---------- -------- ------ ---------- -------- ------
Total 16,236 322 7.95% 21,378 432 8.11%
Interest-bearing
Deposits with
Banks 32,302 395 4.90% 41,361 479 4.65%
---------- -------- ------ ---------- -------- ------
Total Earning
Assets 1,931,247 $33,151 6.89% 1,797,214 $31,013 6.92%
Other Assets 203,365 187,527
---------- ----------
Total $2,134,612 $1,984,741
========== ==========
Interest-bearing
Liabilities
Interest-bearing
Demand Deposits $147,570 $118 0.32% $148,502 $111 0.30%
Savings Deposits 324,759 1,776 2.19% 355,826 1,761 1.99%
Time Deposits 704,611 7,854 4.47% 683,221 6,454 3.79%
Fed Funds
Purchased &
Repurchase
Agreements 228,856 2,206 3.87% 136,522 1,142 3.36%
FHLB Borrowings &
Other Long-term
Debt 255,554 3,011 4.73% 204,172 2,384 4.68%
---------- -------- ------ ---------- -------- ------
Total
Interest-
bearing
Liabilities 1,661,350 14,965 3.61% 1,528,243 11,852 3.11%
Noninterest-
bearing Demand
Deposits 234,536 240,296
Other Liabilities 18,737 17,762
Stockholders'
Equity 219,989 198,440
---------- ----------
Total $2,134,612 $1,984,741
========== -------- ========== --------
Net Interest
Income $18,186 $19,161
======== ========
Net Interest Rate
Spread (3) 3.28% 3.81%
====== ======
Net Interest
Margin (4) 3.78% 4.28%
====== ======
(1) Fully taxable equivalent at the rate of 35%.
(2) Non-accrual loans are included in average balances outstanding but
with no related interest income during the period of non-accrual.
(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.
Consolidated Average Balance Sheets, Yields, and Rates
(Unaudited) Six Months Ended June 30,
-----------------------------------------------------
2007 2006
-------------------------- --------------------------
Yield/ Yield/
Average Interest Rate Average Interest Rate
Balance (1) (1) Balance (1) (1)
---------- -------- ------ ---------- -------- ------
Earning Assets (Dollars in Thousands)
Loans
Held for
Investment (2)
Taxable $1,257,722 $46,877 7.52% $1,330,375 $48,391 7.34%
Tax Exempt 1,898 71 7.54% 1,531 62 8.17%
---------- -------- ------ ---------- -------- ------
Total 1,259,620 46,948 7.52% 1,331,906 48,453 7.34%
Securities
Available for
Sale
Taxable 405,390 10,999 5.47% 254,702 6,091 4.82%
Tax Exempt 175,701 5,553 6.37% 149,991 4,726 6.35%
---------- -------- ------ ---------- -------- ------
Total 581,091 16,552 5.74% 404,693 10,817 5.39%
Held to Maturity
Securities
Taxable 380 12 6.37% 389 10 5.18%
Tax Exempt 17,611 699 8.00% 21,938 876 8.05%
---------- -------- ------ ---------- -------- ------
Total 17,991 711 7.97% 22,327 886 8.00%
Interest-bearing
Deposits with
Banks 27,788 669 4.85% 35,134 774 4.44%
---------- -------- ------ ---------- -------- ------
Total
Earning
Assets 1,886,490 $64,880 6.94% 1,794,060 $60,930 6.85%
Other Assets 199,588 178,179
---------- ----------
Total $2,086,078 $1,972,239
========== ==========
Interest-bearing
Liabilities
Interest-bearing
Demand Deposits $146,770 $229 0.31% $147,490 $217 0.30%
Savings Deposits 322,223 3,449 2.16% 357,804 3,393 1.91%
Time Deposits 700,884 15,370 4.42% 679,745 12,363 3.67%
Fed Funds
Purchased &
Repurchase
Agreements 221,695 4,241 3.86% 133,566 2,103 3.18%
FHLB Borrowings &
Other Long-term
Debt 225,082 5,347 4.79% 202,118 4,634 4.62%
---------- -------- ------ ---------- -------- ------
Total
Interest-
bearing
Liabilities 1,616,654 28,636 3.57% 1,520,723 22,710 3.01%
Noninterest-
bearing Demand
Deposits 232,069 235,987
Other Liabilities 18,949 17,806
Stockholders'
Equity 218,406 197,723
---------- ----------
Total $2,086,078 $1,972,239
========== -------- ========== --------
Net Interest
Income $36,244 $38,220
======== ========
Net Interest Rate
Spread (3) 3.37% 3.84%
====== ======
Net Interest
Margin (4) 3.87% 4.30%
====== ======
(1) Fully taxable equivalent at the rate of 35%.
(2) Non-accrual loans are included in average balances outstanding
but with no related interest income during the period of non-
accrual.
(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.
Source: First Community Bancshares, Inc.
Contact: First Community Bancshares, Inc.
David D. Brown, 276-326-9000