A Service For Professionals Monday, August 21, 2017
Contact (202) 540-8337

Company News Today

A Service For Professionals Monday, August 21, 2017 11435 Sources 399,325,772 Articles 3,328,029 Readers
Contact (202) 540-8337

First Community Bancshares, Inc. Announces Second Quarter 2016 Results and Increased Quarterly Dividend

BLUEFIELD, Va., July 26, 2016 (GLOBE NEWSWIRE) -- First Community Bancshares, Inc. (NASDAQ:FCBC) (www.fcbinc.com) (the “Company”) today reported its unaudited results of operations and other financial information for the quarter and six months ended June 30, 2016. The Company reported net income available to common shareholders of $6.26 million, or $0.36 per diluted common share for the quarter ended June 30, 2016, which represents a 9.09% increase in per share earnings compared to the same quarter of 2015. Net income available to common shareholders was $12.34 million, or $0.70 per diluted common share for the six months ended June 30, 2016, which represents a 9.38% increase in per share earnings compared to the same period of 2015.

The Company also announced today that the Board of Directors declared a quarterly cash dividend to common shareholders of sixteen cents ($0.16) per common share, an increase of 14.29% over the most recent cash dividend. The quarterly dividend is payable to common shareholders of record on August 5, 2016, and is expected to be paid on or about August 19, 2016. The current year marks the 31st consecutive year of cash dividends paid to stockholders.

On July 15, 2016, the Company completed the previously announced branch exchange with First Bank, North Carolina, pursuant to which First Community Bank (the “Bank”) sold six branches in the Winston-Salem and Mooresville areas of North Carolina and acquired seven branches in Southwestern Virginia.

Second Quarter 2016 Highlights

  • Income Statement
    • Net income available to common shareholders increased $80 thousand to $6.26 million, or 1.30%, compared to the same quarter of 2015.
    • Diluted earnings per share increased $0.03, or 9.09%, to $0.36 compared to the same quarter of 2015.
    • Core diluted earnings per common share increased $0.06 to $0.38 compared to the same quarter of 2015.
    • Net interest margin increased 18 basis points to 4.08% while normalized net interest margin increased 14 basis points to 3.81% compared to the same quarter of 2015.
    • Second quarter 2016 efficiency ratio was 65.19%, a significant decrease from the same quarter of 2015. The non-GAAP efficiency ratio improved 16 basis points to 61.55% compared to the same quarter of 2015. 
  • Balance Sheet
    • The non-covered loan portfolio increased $109.89 million, or 6.77%, compared to December 31, 2015.
    • Book value per common share increased $0.53 to $19.48 compared to December 31, 2015.
    • The Company repurchased 493,812 common shares during the quarter resulting in 981,551 shares repurchased year-to-date. Since June 30, 2013, the Company has repurchased 4.12 million shares.
    • The Company and its subsidiary bank both significantly exceed regulatory “well capitalized” targets as of June 30, 2016. 
  • Asset Quality
    • Annualized net charge-offs were only 0.02% of average loans compared to 0.06% for the same period of the prior year.
    • Delinquent loans as a percentage of total loans decreased 15 basis points to 1.26% compared to the same period of 2015.
    • Non-covered delinquent loans as a percentage of total non-covered loans decreased 13 basis points to 1.26% compared to the same period of 2015.
    • Total nonperforming assets decreased $3.79 million compared to December 31, 2015, and decreased $6.13 million compared to the same period of 2015.
    • Total non-covered nonperforming assets decreased $1.80 million compared to December 31, 2015, and decreased $2.38 million compared to June 30, 2015.
    • A net loan loss provision of $722 thousand was recognized to cover net charge-offs and the continued loan growth experienced during the quarter.

Financial Performance

CONDENSED STATEMENTS OF INCOME (Unaudited)  
                                 
      Three Months Ended   Six Months Ended  
      June 30,   March 31,   December 31,   September 30,   June 30,   June 30,   June 30,  
(Amounts in thousands, except share and per share data)   2016       2016       2015       2015       2015       2016       2015    
Interest income                            
  Interest and fees on loans $   22,237     $   21,573     $   21,633     $   22,259     $   21,826     $   43,810     $   43,740    
  Interest on securities     1,891         1,957         2,023         2,056         2,073         3,848         4,124    
  Interest on deposits in banks     9         20         21         33         80         29         213    
Total interest income     24,137         23,550         23,677         24,348         23,979         47,687         48,077    
Interest expense                            
  Interest on deposits     1,087         1,114         1,202         1,384         1,562         2,201         3,292    
  Interest on borrowings     1,359         1,325         1,300         1,295         1,347         2,684         2,876    
Total interest expense     2,446         2,439         2,502         2,679         2,909         4,885         6,168    
Net interest income     21,691         21,111         21,175         21,669         21,070         42,802         41,909    
Provision for loan losses     722         1,187         434         381         276         1,909         1,376    
Net interest income after provision     20,969         19,924         20,741         21,288         20,794         40,893         40,533    
Noninterest income                            
    Wealth management     810         684         744         790         775         1,494         1,441    
    Service charges on deposits     3,361         3,291         3,563         3,744         3,507         6,652         6,410    
    Other service charges and fees     2,054         2,010         2,058         1,974         2,005         4,064         4,013    
    Insurance commissions     1,600         2,191         1,563         1,650         1,559         3,791         3,686    
    Net impairment losses recognized in earnings     (11 )       -         -         -         -         (11 )       -    
    Net (loss) gain on sale of securities     (79 )       1         (7 )       (39 )       213         (78 )       190    
    Net FDIC indemnification asset amortization     (1,328 )       (1,159 )       (1,200 )       (1,768 )       (1,846 )       (2,487 )       (3,411 )  
    Other operating income     623         885         762         723         1,924         1,508         2,644    
Total noninterest income      7,030         7,903         7,483         7,074         8,137         14,933         14,973    
Noninterest expense                            
Total noninterest expense     18,722         18,814         19,083         19,019         20,289         37,536         38,069    
Income before income taxes     9,277         9,013         9,141         9,343         8,642         18,290         17,437    
Income tax expense     3,022         2,929         2,993         3,084         2,467         5,951         5,304    
Net income      6,255         6,084         6,148         6,259         6,175         12,339         12,133    
Dividends on preferred stock     -         -         -         -         -         -         105    
Net income available to common shareholders $   6,255     $   6,084     $   6,148     $   6,259     $   6,175     $   12,339     $   12,028    
                                 
Earnings per common share                            
  Basic $   0.36     $   0.34     $   0.34     $   0.34     $   0.33     $   0.70     $   0.64    
  Diluted     0.36         0.34         0.34         0.34         0.33         0.70         0.64    
Cash dividends per common share     0.14         0.14         0.14         0.14         0.13         0.28         0.26    
Weighted average shares outstanding                            
  Basic     17,414,320         17,859,197         18,193,824         18,470,348         18,831,907         17,636,783         18,733,288    
  Diluted     17,462,845         17,892,531         18,226,719         18,500,975         18,860,284         17,675,128         19,095,408    
Performance ratios                            
  Return on average assets   1.02 %     0.99 %     0.99 %     1.00 %     0.97 %     1.00 %     0.94 %  
  Return on average common equity   7.47 %     7.15 %     7.05 %     7.18 %     7.08 %     7.31 %     7.01 %  
  Return on average tangible common equity(1)   10.88 %     10.34 %     10.17 %     10.38 %     10.19 %     10.60 %     10.16 %  
                                 
  (1 ) A non-GAAP financial measure defined as average stockholders’ equity less average goodwill, other intangibles, and preferred stock liquidation preference.  
                                 

/EIN News/ --  

RECONCILIATION OF GAAP NET INCOME TO CORE EARNINGS (Unaudited)
                               
      Three Months Ended   Six Months Ended
      June 30,   March 31,   December 31,   September 30,   June 30,   June 30,   June 30,
        2016       2016       2015       2015       2015       2016       2015  
(Amounts in thousands, except per share data)                          
Net income, GAAP $   6,255     $   6,084     $   6,148     $   6,259     $   6,175     $   12,339     $   12,133  
Non-GAAP adjustments:                          
  Merger, acquisition, and divestiture expense     410         39         -         -         -         449         86  
  Net loss (gain) on sale of securities     79         (1 )       7         39         (213 )       78         (190 )
  FHLB debt prepayment fees     -         -         -         -         1,702         -         1,702  
  Net impairment losses recognized in earnings     11         -         -         -         -         11         -  
  Other non-core, non-recurring items     -         (240 )       31         (75 )       (930 )       (240 )       (960 )
Total adjustments to core earnings     500         (202 )       38         (36 )       559         298         638  
Tax effect      184         (74 )       14         (13 )       631         110         660  
Core earnings, non-GAAP(1) $   6,571     $   5,956     $   6,172     $   6,236     $   6,103     $   12,527     $   12,111  
                               
Core diluted earnings per common share $   0.38     $   0.33     $   0.34     $   0.34     $   0.32     $   0.71     $   0.63  
Performance ratios                          
  Core return on average assets   1.07 %     0.97 %     0.99 %     1.00 %     0.96 %     1.02 %     0.95 %
  Core return on average common equity   7.85 %     7.00 %     7.08 %     7.16 %     7.00 %     7.42 %     7.06 %
  Core return on average tangible common equity(2)   11.43 %     10.12 %     10.21 %     10.34 %     10.07 %     10.77 %     10.23 %
                               
    (1 ) A non-GAAP financial measure that excludes gains, losses, and impairment losses on securities; goodwill and intangible impairment; taxes; and other non-recurring income and expense items from net income. 
    (2 ) A non-GAAP financial measure defined as average stockholders’ equity less average goodwill, other intangibles, and preferred stock liquidation preference.
                               

Net income available to common shareholders increased $80 thousand, or 1.30%, to $6.26 million for the second quarter of 2016 from $6.18 million for the same quarter of 2015. Diluted earnings per common share increased $0.03 to $0.36 for the second quarter of 2016 from $0.33 for the same quarter of 2015. The increase in net interest income was a result of  $621 thousand increase in net interest income and a $1.57 million decrease in noninterest expense offset by a $1.11 million decrease in noninterest income, a $446 thousand increase in the provision for loan losses, and a $555 thousand increase in income tax expense. The increase in net interest income was primarily due to decreases in deposit and borrowing costs. Noninterest income during the second quarter of 2015 included a net death benefit of approximately $1.14 million from the maturity of a life insurance policy.

Net Interest Income and Margin

AVERAGE BALANCE SHEETS AND NET INTEREST INCOME ANALYSIS (Unaudited)
                             
      Three Months Ended June 30,  
        2016       2015    
      Average        Average Yield/   Average        Average Yield/  
(Amounts in thousands) Balance   Interest(1)   Rate(1)   Balance   Interest(1)   Rate(1)  
Assets                        
Earning assets                        
  Loans(2) $   1,775,435     $   22,263       5.04 %   $   1,671,476     $   21,862       5.25 %  
  Securities available for sale     336,510         2,195       2.62 %       362,366         2,418       2.68 %  
  Securities held to maturity     72,331         191       1.06 %       72,742         196       1.08 %  
  Interest-bearing deposits     5,184         9       0.70 %       120,025         80       0.27 %  
Total earning assets     2,189,460         24,658       4.53 %       2,226,609         24,556       4.42 %  
Other assets      283,945                 311,437            
Total assets $   2,473,405             $   2,538,046            
                             
Liabilities and stockholders' equity                        
Interest-bearing deposits                        
  Demand deposits  $   339,365     $   60       0.07 %   $   340,517     $   51       0.06 %  
  Savings deposits      542,238         63       0.05 %       538,717         101       0.08 %  
  Time deposits     518,163         964       0.75 %       655,243         1,410       0.86 %  
Total interest-bearing deposits     1,399,766         1,087       0.31 %       1,534,477         1,562       0.41 %  
Borrowings                        
  Federal funds purchased     9,078         14       0.62 %       -         -       -    
  Retail repurchase agreements     65,718         12       0.07 %       70,328         17       0.10 %  
  Wholesale repurchase agreements     50,000         469       3.77 %       50,000         468       3.75 %  
  FHLB advances and other borrowings     132,459         864       2.62 %       86,592         862       3.99 %  
Total borrowings     257,255         1,359       2.12 %       206,920         1,347       2.61 %  
Total interest-bearing liabilities     1,657,021         2,446       0.59 %       1,741,397         2,909       0.67 %  
Noninterest-bearing demand deposits     460,255                 428,442            
Other liabilities     19,520                 20,072            
Total liabilities     2,136,796                 2,189,911            
Stockholders' equity     336,609                 348,135            
Total liabilities and stockholders' equity $   2,473,405             $   2,538,046            
Net interest income, FTE     $   22,212             $   21,647        
Net interest rate spread           3.94 %             3.75 %  
Net interest margin           4.08 %             3.90 %  
                             
    (1 ) Fully taxable equivalent ("FTE") basis based on the federal statutory rate of 35%
 
    (2 ) Nonaccrual loans are included in average balances; however, no related interest income is recorded during the period of nonaccrual.
 
                             


AVERAGE BALANCE SHEETS AND NET INTEREST INCOME ANALYSIS (Unaudited)
                             
      Six Months Ended June 30,  
       2016    2015  
      Average        Average Yield/   Average        Average Yield/  
(Amounts in thousands) Balance   Interest(1)   Rate(1)   Balance   Interest(1)   Rate(1)  
Assets                        
Earning assets                        
  Loans(2) $   1,752,918     $   43,862       5.03 %   $   1,674,778     $   43,816       5.28 %  
  Securities available for sale     345,546         4,463       2.60 %       346,792         4,831       2.81 %  
  Securities held to maturity     72,421         385       1.07 %       69,351         382       1.11 %  
  Interest-bearing deposits     10,388         29       0.56 %       164,201         213       0.26 %  
Total earning assets     2,181,273         48,739       4.49 %       2,255,122         49,242       4.40 %  
Other assets      290,551                 315,126            
Total assets $   2,471,824             $   2,570,248            
                             
Liabilities and stockholders' equity                        
Interest-bearing deposits                        
  Demand deposits  $   340,945     $   117       0.07 %   $   346,099     $   104       0.06 %  
  Savings deposits      539,004         129       0.05 %       532,740         206       0.08 %  
  Time deposits     525,899         1,955       0.75 %       676,519         2,982       0.89 %  
Total interest-bearing deposits     1,405,848         2,201       0.31 %       1,555,358         3,292       0.43 %  
Borrowings                        
  Federal funds purchased     6,251         20       0.64 %       -         -       -    
  Retail repurchase agreements     71,855         25       0.07 %       69,097         38       0.11 %  
  Wholesale repurchase agreements     50,000         937       3.77 %       50,000         931       3.75 %  
  FHLB advances and other borrowings     120,236         1,702       2.85 %       96,551         1,907       3.98 %  
Total borrowings     248,342         2,684       2.17 %       215,648         2,876       2.69 %  
Total interest-bearing liabilities     1,654,190         4,885       0.59 %       1,771,006         6,168       0.70 %  
Noninterest-bearing demand deposits     454,552                 427,881            
Other liabilities     23,652                 20,696            
Total liabilities     2,132,394                 2,219,583            
Stockholders' equity     339,430                 350,665            
Total liabilities and stockholders' equity $   2,471,824             $   2,570,248            
Net interest income, FTE     $   43,854             $   43,074        
Net interest rate spread           3.90 %             3.70 %  
Net interest margin           4.04 %             3.85 %  
                             
    (1 ) Fully taxable equivalent ("FTE") basis based on the federal statutory rate of 35%
 
    (2 ) Nonaccrual loans are included in average balances; however, no related interest income is recorded during the period of nonaccrual.
 
                             


RECONCILIATION OF GAAP NET INTEREST MARGIN TO NORMALIZED NET INTEREST MARGIN (Unaudited)
                     
      Three Months Ended June 30,  
        2016       2015    
(Amounts in thousands) Interest(1)   Average Yield/ Rate(1)    Interest(1)   Average Yield/ Rate(1)   
Earning assets                
Loans(2) $   22,263       5.04 %   $   21,862       5.25 %  
  Accretion income     2,248             2,416        
  Less: cash accretion income     786             1,134        
  Non-cash accretion income     1,462             1,282        
Loans, normalized(3)     20,801       4.71 %       20,580       4.94 %  
Other earning assets     2,395       2.33 %       2,694       1.95 %  
Total earning assets     23,196       4.26 %       23,274       4.19 %  
Total interest-bearing liabilities     2,446       0.59 %       2,909       0.67 %  
Net interest income, FTE(3) $   20,750         $   20,365        
Net interest rate spread, normalized(3)       3.67 %         3.52 %  
Net interest margin, normalized(3)       3.81 %         3.67 %  
                     
    (1 ) FTE basis based on the federal statutory rate of 35%.  
    (2 ) Nonaccrual loans are included in average balances; however, no related interest income is recorded during the period of nonaccrual.
 
    (3 ) Normalized totals are non-GAAP financial measures that exclude non-cash loan interest accretion related to PCI loans.  
                     
      Six Months Ended June 30,  
       2016    2015  
(Amounts in thousands) Interest(1)   Average Yield/ Rate(1)    Interest(1)   Average Yield/ Rate(1)   
Earning assets                
Loans(2) $   43,862       5.03 %   $   43,816       5.28 %  
  Accretion income     4,500             5,255        
  Less: cash accretion income     1,591             2,230        
  Non-cash accretion income     2,909             3,025        
Loans, normalized(3)     40,953       4.70 %       40,791       4.91 %  
Other earning assets     4,877       2.29 %       5,425       1.89 %  
Total earning assets     45,830       4.23 %       46,216       4.13 %  
Total interest-bearing liabilities     4,885       0.59 %       6,168       0.70 %  
Net interest income, FTE(3) $   40,945         $   40,048        
Net interest rate spread, normalized(3)       3.63 %         3.43 %  
Net interest margin, normalized(3)       3.77 %         3.58 %  
                     
    (1 ) FTE basis based on the federal statutory rate of 35%  
    (2 ) Nonaccrual loans are included in average balances; however, no related interest income is recorded during the period of nonaccrual.
    (3 ) Normalized totals are non-GAAP financial measures that exclude non-cash loan interest accretion related to PCI loans.
 
                     

The tax equivalent net interest margin increased 18 basis points, or 4.62%, to 4.08% and the normalized net interest margin, which excludes non-cash loan interest accretion, increased 14 basis points, or 3.81%, to 3.81% for the second quarter of 2016 compared to the same quarter of 2015. The tax equivalent yield on loans decreased 21 basis points to 5.04% while the average balance increased $103.96 million, or 6.22%, to $1.78 billion. The increase in average loans was primarily due to continued growth in the non-covered loan portfolio. Non-cash purchased credit impaired (“PCI”) loan interest accretion increased $180 thousand, or 14.04%, to $1.46 million for the second quarter of 2016 from $1.28 million for the same quarter of 2015 due to several large loan payoffs. The normalized yield on loans decreased 23 basis points to 4.71%. The average rate paid on interest-bearing liabilities decreased 8 basis points to 0.59% and the average balance decreased $84.38 million, or 4.85%, to $1.66 billion. The decrease in average interest-bearing liabilities included a $134.71 million decrease in average interest-bearing deposits, primarily time deposit accounts, offset by a $50.34 million increase in average borrowings. 

Noninterest Income and Expense

CONDENSED QUARTERLY STATEMENTS OF INCOME (Unaudited)  
                               
    Three Months Ended   Six Months Ended  
    June 30,   March 31,   December 31,   September 30,   June 30,   June 30,   June 30,  
(Amounts in thousands)   2016       2016       2015       2015       2015       2016       2015    
Noninterest income                            
  Wealth management     810         684         744         790         775         1,494         1,441    
  Service charges on deposits     3,361         3,291         3,563         3,744         3,507         6,652         6,410    
  Other service charges and fees     2,054         2,010         2,058         1,974         2,005         4,064         4,013    
  Insurance commissions     1,600         2,191         1,563         1,650         1,559         3,791         3,686    
  Net impairment losses recognized in earnings     (11 )       -         -         -         -         (11 )       -    
  Net (loss) gain on sale of securities     (79 )       1         (7 )       (39 )       213         (78 )       190    
  Net FDIC indemnification asset amortization     (1,328 )       (1,159 )       (1,200 )       (1,768 )       (1,846 )       (2,487 )       (3,411 )  
  Other operating income     623         885         762         723         1,924         1,508         2,644    
Total noninterest income      7,030         7,903         7,483         7,074         8,137         14,933         14,973    
Noninterest expense                            
  Salaries and employee benefits     10,198         10,475         10,268         9,971         9,693         20,673         19,386    
  Occupancy expense     1,359         1,531         1,413         1,443         1,427         2,890         2,961    
  Furniture and equipment expense     1,109         1,096         1,345         1,259         1,358         2,205         2,595    
  Amortization of intangibles     277         278         281         281         279         555         556    
  FDIC premiums and assessments     372         374         332         377         389         746         804    
  FHLB debt prepayment fees     -         -         -         -         1,702         -         1,702    
  Merger, acquisition, and divestiture expense     410         39         -         -         -         449         86    
  Other operating expense     4,997         5,021         5,444         5,688         5,441         10,018         9,979    
Total noninterest expense     18,722         18,814         19,083         19,019         20,289         37,536         38,069    
                               

Noninterest income decreased $1.11 million, or 13.60%, for the second quarter of 2016 compared to the same quarter of 2015. The decrease was largely due to a $1.30 million, or 67.62%, decrease in other operating income offset by a $518 thousand decrease in net negative amortization related to the FDIC indemnification asset as a result of continuing better than expected performance in the covered loan portfolio. The Company recognized OTTI charges of $11 thousand associated with certain equity securities. Other operating income included a net death benefit of approximately $1.14 million from the maturity of a life insurance policy during the second quarter of 2015.

Noninterest expense decreased $1.57 million, or 7.72%, for the second quarter of 2016 compared to the same quarter of 2015. The decrease was largely due to FHLB debt prepayment fees of $1.70 million incurred during the second quarter of 2015 coupled with a $444 thousand decrease in other operating expense offset by a $505 thousand increase in salaries and employee benefits and expenses related to the branch swap with First Bank of $410 thousand. The decrease in other operating expense included a $415 thousand decrease in the net loss on sales and expenses associated with other real estate owned (“OREO”).

Efficiency Ratio

EFFICIENCY RATIO CALCULATION (Unaudited)  
                                 
      Three Months Ended   Six Months Ended  
      June 30,   March 31,   December 31,   September 30,   June 30,   June 30,   June 30,  
        2016       2016       2015       2015       2015       2016       2015    
(Amounts in thousands)                            
Noninterest expense, GAAP $   18,722     $   18,814     $   19,083     $   19,019     $   20,289     $   37,536     $   38,069    
Non-GAAP adjustments                            
  Merger, acquisition, and divestiture expense     (410 )       (39 )       -         -         -         (449 )       (86 )  
  FHLB debt prepayment fees     -         -         -         -         (1,702 )       -         (1,702 )  
  OREO expense and net loss     (247 )       (711 )       (475 )       (1,220 )       (416 )       (958 )       (743 )  
  Other non-core, non-recurring items     (30 )       (174 )       (61 )       15         (213 )       (204 )       (213 )  
Adjusted noninterest expense     18,035         17,890         18,547         17,814         17,958         35,925         35,325    
                                 
Net interest income, GAAP     21,691         21,111         21,175         21,669         21,070         42,802         41,909    
Noninterest income, GAAP     7,030         7,903         7,483         7,074         8,137         14,933         14,973    
Non-GAAP adjustments                            
  Tax equivalency adjustment     521         531         548         565         1,249         1,052         1,837    
  Net impairment losses recognized in earnings     11         -         -         -         -         11         -    
  Net loss (gain) on sale of securities     79         (1 )       7         39         (213 )       78         (190 )  
  Other non-core, non-recurring items     (30 )       (414 )       (30 )       (60 )       (1,143 )       (444 )       (1,173 )  
Adjusted net interest and noninterest income     29,302         29,130         29,183         29,287         29,100         58,432         57,356    
                                 
Non-GAAP efficiency ratio(1)   61.55 %     61.41 %     63.55 %     60.83 %     61.71 %     61.48 %     61.59 %  
GAAP efficiency ratio   65.19 %     64.84 %     66.59 %     66.17 %     69.47 %     65.01 %     66.93 %  
                                 
    (1 ) A non-GAAP financial measure computed by dividing adjusted noninterest expense by the sum of tax equivalent net interest income and adjusted noninterest income. 
 
                                 

Balance Sheet and Capital

CONDENSED CONSOLIDATED QUARTERLY BALANCE SHEETS (Unaudited)
                       
      June 30,   March 31,   December 31,   September 30,   June 30,
(Amounts in thousands, except per share data)   2016       2016       2015       2015       2015  
Assets                  
Total cash and cash equivalents     44,301         39,587         51,787         62,024         92,602  
Securities available for sale      322,699         338,469         366,173         382,212         376,191  
Securities held to maturity      72,239         72,485         72,541         72,596         72,652  
Loans held for sale     -         -         -         523         913  
Loans held for investment, net of unearned income                  
  Non-covered     1,733,398         1,685,891         1,623,506         1,600,271         1,564,655  
  Covered     68,585         76,538         83,035         90,203         102,634  
  Less allowance for loan losses     (21,099 )       (20,467 )       (20,233 )       (20,127 )       (20,258 )
Loans held for investment, net     1,780,884         1,741,962         1,686,308         1,670,347         1,647,031  
FDIC indemnification asset     16,431         18,787         20,844         22,049         23,653  
Premises and equipment, net     50,199         50,799         52,756         53,442         54,112  
Other real estate owned, non-covered     4,187         5,313         4,873         5,088         7,434  
Other real estate owned, covered     2,017         2,279         4,034         4,079         5,382  
Interest receivable     6,115         5,968         6,007         5,910         6,119  
Goodwill     100,486         100,486         100,486         100,810         100,810  
Other intangible assets     4,688         4,965         5,243         5,583         5,865  
Other assets     91,082         89,187         91,224         93,453         99,034  
Total assets $   2,495,328     $   2,470,287     $   2,462,276     $   2,478,116     $   2,491,798  
                       
Liabilities                  
Deposits                  
  Noninterest-bearing $   451,003     $   453,336     $   451,511     $   442,021     $   424,438  
  Interest-bearing     1,373,412         1,421,329         1,421,748         1,460,881         1,495,783  
Total deposits     1,824,415         1,874,665         1,873,259         1,902,902         1,920,221  
Interest, taxes, and other liabilities     25,553         24,576         26,630         25,356         23,852  
Federal funds purchased     42,000         18,000         -         -         -  
Securities sold under agreements to repurchase     113,392         134,661         138,614         124,076         122,158  
FHLB borrowings     140,000         65,000         65,000         65,000         65,000  
Other borrowings     15,756         15,756         15,756         15,955         15,999  
Total liabilities     2,161,116         2,132,658         2,119,259         2,133,289         2,147,230  
                       
Stockholders' equity                  
Common stock     21,382         21,382         21,382         21,382         21,382  
Additional paid-in capital     227,791         227,725         227,692         227,621         227,616  
Retained earnings     163,030         159,223         155,647         152,046         148,378  
Treasury stock, at cost     (74,974 )       (64,968 )       (56,457 )       (52,484 )       (46,610 )
Accumulated other comprehensive loss     (3,017 )       (5,733 )       (5,247 )       (3,738 )       (6,198 )
Total stockholders' equity     334,212         337,629         343,017         344,827         344,568  
Total liabilities and stockholders' equity $   2,495,328     $   2,470,287     $   2,462,276     $   2,478,116     $   2,491,798  
                       
Shares outstanding at period-end     17,155,322         17,631,011         18,098,141         18,313,425         18,641,966  
Book value per common share(1) $   19.48     $   19.15     $   18.95     $   18.83     $   18.48  
Tangible book value per common share(2)     13.35         13.17         13.11         13.02         12.76  
                       
    (1 ) Stockholders' equity divided by as-converted common shares outstanding
    (2 ) A non-GAAP financial measure defined as stockholders’ equity less goodwill and other intangibles, divided by as-converted common shares outstanding.
                       

Consolidated assets increased $33.05 million, or 1.34%, as of June 30, 2016, compared to December 31, 2015. The change in consolidated assets was primarily driven by a $94.58 million increase in net loans offset by a $43.47 million decrease in securities available for sale and a $7.49 million decrease in cash and cash equivalents. Consolidated liabilities increased $41.86 million, or 1.98%, as of June 30, 2016, compared to December 31, 2015. The change in consolidated liabilities was driven by a $75.00 million increase in FHLB borrowings and $42.00 million increase in federal funds purchased offset by a $48.84 million decrease in total deposits, primarily due to time deposits, and $25.22 million decrease in securities sold under agreements to repurchase.

Stockholders’ equity decreased $8.81 million, or 2.57%, as of June 30, 2016, compared to December 31, 2015. The Company repurchased 981,551 common shares at a weighted average cost of $19.52 per share and paid a cash dividend of $0.28 per common share during the first six months of 2016. Book value per common share increased $0.53 to $19.48 and tangible book value per common share increased $0.24 to $13.35 as of June 30, 2016, compared to December 31, 2015. The Company significantly exceeds regulatory “well capitalized” targets as of June 30, 2016.

Asset Quality

SELECTED CREDIT QUALITY INFORMATION (Unaudited)
                       
      June 30,   March 31,   December 31,   September 30,   June 30,
(Amounts in thousands)   2016       2016       2015       2015       2015  
Allowance for Loan Losses                   
Beginning balance $   20,467     $   20,233     $   20,127     $   20,258     $   20,252  
Provision for loan losses charged                  
  to operations     722         1,187         434         381         276  
(Recovery of) provision for loan losses recorded                  
  through the FDIC indemnification asset     (10 )       9         -         (75 )       -  
Charge-offs     (691 )       (1,228 )       (805 )       (689 )       (673 )
Recoveries     611         266         477         252         403  
Net charge-offs     (80 )       (962 )       (328 )       (437 )       (270 )
Ending balance $   21,099     $   20,467     $   20,233     $   20,127     $   20,258  
                       
Nonperforming Assets                  
Non-covered nonperforming assets                  
Nonaccrual loans  $   16,626     $   16,196     $   17,847     $   17,100     $   15,936  
Accruing loans past due 90 days or more     64         243         -         3         -  
Troubled debt restructurings ("TDRs")(1)     115         158         73         74         -  
Total non-covered nonperforming loans     16,805         16,597         17,920         17,177         15,936  
OREO     4,187         5,313         4,873         5,088         7,434  
Total non-covered nonperforming assets $   20,992     $   21,910     $   22,793     $   22,265     $   23,370  
                       
Covered nonperforming assets                  
Nonaccrual loans  $   680     $   1,955     $   647     $   815     $   1,062  
Accruing loans past due 90 days or more     -         -         -         -         -  
Total covered nonperforming loans     680         1,955         647         815         1,062  
OREO     2,017         2,279         4,034         4,079         5,382  
Total covered nonperforming assets $   2,697     $   4,234     $   4,681     $   4,894     $   6,444  
                       
Additional Information                  
Performing TDRs(2) $   13,562     $   13,474     $   13,889     $   13,965     $   13,841  
Total TDRs(3)     13,677         13,632         13,962         14,039         13,841  
                       
Non-covered ratios                  
Nonperforming loans to total loans   0.97 %     0.98 %     1.10 %     1.07 %     1.02 %
Nonperforming assets to total assets   0.87 %     0.92 %     0.96 %     0.93 %     0.98 %
Non-PCI allowance to nonperforming loans   125.48 %     123.17 %     112.61 %     117.06 %     126.41 %
Non-PCI allowance to total loans   1.22 %     1.21 %     1.24 %     1.26 %     1.29 %
Annualized net charge-offs to average loans   0.02 %     0.23 %     0.08 %     0.11 %     0.07 %
                       
Total ratios                  
Nonperforming loans to total loans   0.97 %     1.05 %     1.09 %     1.06 %     1.02 %
Nonperforming assets to total assets   0.95 %     1.06 %     1.12 %     1.10 %     1.20 %
Allowance for loan losses to nonperforming loans   120.67 %     110.32 %     108.97 %     111.87 %     119.18 %
Allowance for loan losses to total loans   1.17 %     1.16 %     1.19 %     1.19 %     1.22 %
Annualized net charge-off to average loans   0.02 %     0.22 %     0.08 %     0.10 %     0.06 %
                       
    (1 ) Accruing TDRs restructured within the past six months or nonperforming
    (2 ) Accruing TDRs with six months or more of satisfactory payment performance
    (3 ) Accruing total TDRs 
                       

The allowance for loan losses increased $866 thousand, or 4.28%, to $21.10 million as of June 30, 2016, compared to December 31, 2015. As of June 30, 2016, $21.09 million of the allowance was attributed to the non-PCI loan portfolio and $12 thousand was attributed to the PCI loan portfolio.

The provision for loan losses charged to operations increased $446 thousand to $722 thousand, for the second quarter of 2016 compared to the same quarter of 2015. The recovery of loan losses recorded through the FDIC indemnification asset totaled $10 thousand during the second quarter of 2016 compared to no activity for the same quarter of 2015. Net charge-offs decreased $190 thousand, or 70.37%, for the second quarter of 2016, compared to the same quarter of 2015. Annualized net charge-offs to average non-covered loans improved 5 basis points to 0.02% for the second quarter of 2016 compared to the same quarter of 2015. Non-covered loans and OREO are those assets not covered by FDIC loss share agreements.

Non-covered nonaccrual loans decreased $1.22 million, or 6.84%, as of June 30, 2016, compared to December 31, 2015. Non-covered nonaccrual loans as a percentage of total non-covered loans improved 14 basis points to 0.96% as of June 30, 2016, compared to December 31, 2015. Non-covered delinquent loans, which are comprised of loans 30 days or more past due and nonaccrual loans, as a percentage of total non-covered loans improved 46 basis points to 1.26% as of June 30, 2016, from 1.72% as of December 31, 2015.

Non-covered nonperforming assets decreased $1.80 million, or 7.90%, as of June 30, 2016, compared to December 31, 2015, and non-covered assets as a percent of total non-covered assets improved 9 basis points to 0.87%. As of June 30, 2016, total nonperforming assets consisted of $17.31 million in nonaccrual loans, $64 thousand in accruing loans 90 days or more past due, $115 thousand in unseasoned, accruing troubled debt restructurings, and $6.20 million in OREO. In comparison, total nonperforming assets consisted of $18.49 million in nonaccrual loans, $73 thousand in unseasoned, accruing troubled debt restructurings, and $8.91 million in OREO as of December 31, 2015.

Non-GAAP Financial Measures

The Company prepares its financial statements in accordance with generally accepted accounting principles in the United States (“GAAP”). This press release also refers to certain non-GAAP financial measures that the Company believes provide investors with important information, when used in conjunction with results presented in accordance with GAAP, regarding its operational performance. The Company’s non-GAAP financial measure presented in this release include core earnings, the efficiency ratio, tangible book value per common share, average tangible common equity, and normalized net interest margin. Management believes that core earnings provide the Company and investors a valuable tool to evaluate the Company’s financial results. Management believes that the efficiency ratio provides important information about the Company’s operating expense control and efficiency of operations. Management also believes this ratio focuses attention on the core operating performance of the Company over time and is highly useful in comparing period-to-period operating performance of core business operations. The efficiency ratio used by the Company may not be comparable to efficiency ratios reported by other financial institutions. The reconciliations of these measures to GAAP measures are provided within this news release.

About First Community Bancshares, Inc.

First Community Bancshares, Inc., a financial holding company headquartered in Bluefield, Virginia, provides banking products and services through its wholly-owned subsidiary First Community Bank. First Community Bank operated 48 branch banking locations throughout Virginia, West Virginia, North Carolina, and Tennessee as of June 30, 2016. First Community Bank offers wealth management and investment services through its wholly-owned subsidiary First Community Wealth Management and the Bank’s Trust Division, which collectively managed $770 million in combined assets as of June 30, 2016. The Company provides insurance services through its wholly-owned subsidiary Greenpoint Insurance Group, Inc., a full-service insurance agency headquartered in High Point, North Carolina, that operated 9 insurance locations throughout Virginia, West Virginia, and North Carolina as of June 30, 2016. The Company’s common stock is listed on the NASDAQ Global Select Market under the trading symbol, “FCBC”. The Company reported consolidated assets of $2.50 billion as of June 30, 2016. Additional investor information is available on the Company’s website 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 fiscal year end. Pursuant to the Private Securities Litigation Reform Act of 1995, the Company does not undertake to update forward-looking statements to reflect circumstances or events that occur after the date the forward-looking statements are made.

FOR MORE INFORMATION, CONTACT:
                    David D. Brown
                    (276) 326-9000

Primary Logo

Powered by EIN News