First Community Bancshares, Inc. Announces Fourth Quarter and Full Year 2016 Results and Quarterly Dividend

BLUEFIELD, Va., Jan. 24, 2017 (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 year ended December 31, 2016. The Company reported net income available to common shareholders of $6.40 million, or $0.38 per diluted common share for the quarter ended December 31, 2016, which represents an 11.76% increase in per share diluted earnings compared to the same quarter of 2015. Net income available to common shareholders was $25.13 million, or $1.45 per diluted common share for the year ended December 31, 2016, which represents a 10.69% increase in per share diluted earnings over 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, which represents an increase of 14.29% over the first quarter of 2016. The quarterly dividend is payable to common shareholders of record on February 3, 2017, and is expected to be paid on or about February 17, 2017. The current year marks the 32^nd consecutive year of cash dividends paid to stockholders.

On October 1, 2016, the Company sold two North Carolina insurance offices operating under the trade name Greenpoint Insurance Group, Inc. and two Virginia offices operating under the trade name Carr & Hyde Insurance to Ascension Insurance Agency, Inc. The transaction does not impact the Company’s in-branch insurance offices operating as First Community Insurance Services, Inc. in West Virginia and Virginia.

On January 9, 2017, the Company redeemed all of its previously issued trust preferred securities totaling $15.46 million. The callable trust preferred securities bore an interest rate of three-month LIBOR plus 2.95% with a maturity date of October 8, 2033.

Fourth Quarter 2016 Highlights

Income Statement
- Net income available to common shareholders increased $256 thousand, or 4.16%, to $6.40 million compared to the same quarter of 2015.
- Diluted earnings per share increased $0.04, or 11.76%, to $0.38 compared to the same quarter of 2015.
- Core, non-GAAP diluted earnings per common share increased $0.02, or 5.88%, to $0.36 compared to the same quarter of 2015.
- Net interest margin increased 1 basis point to 3.99%, and normalized net interest margin increased 15 basis points to 3.83% compared to the same quarter of 2015.
Balance Sheet
- The non-covered loan portfolio increased $172.45 million, or 10.62%, compared to December 31, 2015.
- Book value per common share increased $1.00 to $19.95 compared to December 31, 2015.
- The Company repurchased 29,518 common shares during the quarter resulting in 1,182,294 shares repurchased during the year. The Company has repurchased 2.55 million shares since January 1, 2014.
- The Company and its subsidiary bank both significantly exceed regulatory “well capitalized” targets as of December 31, 2016.
Asset Quality
- Total nonperforming assets decreased $5.51 million compared to December 31, 2015, largely due to a decrease in covered OREO.
- Total non-covered nonperforming assets decreased $1.72 million 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 33 basis points to 1.39% as of December 31, 2016, from 1.72% 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 measures 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 45 branch banking locations in Virginia, West Virginia, North Carolina, and Tennessee as of December 31, 2016. First Community Bank provides insurance services through First Community Insurance Services and offers wealth management and investment advice through its Trust Division and First Community Wealth Management, which collectively managed $846 million in combined assets as of December 31, 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 $2.39 billion as of December 31, 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.

Financial Performance

CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Unaudited)

		Three Months Ended															Year Ended
		December 31,			September 30,			June 30,			March 31,			December 31,			December 31,
(Amounts in thousands, except share and per share data)			2016			2016			2016			2016			2015			2016			2015
Interest income
	Interest and fees on loans	$	21,956		$	21,952		$	22,237		$	21,573		$	21,633		$	87,718		$	87,632
	Interest on securities		1,362			1,643			1,891			1,957			2,023			6,853			8,203
	Interest on deposits in banks		98			26			9			20			21			153			267
Total interest income			23,416			23,621			24,137			23,550			23,677			94,724			96,102
Interest expense
	Interest on deposits		1,145			1,133			1,087			1,114			1,202			4,479			5,878
	Interest on borrowings		1,314			1,367			1,359			1,325			1,300			5,365			5,471
Total interest expense			2,459			2,500			2,446			2,439			2,502			9,844			11,349
Net interest income			20,957			21,121			21,691			21,111			21,175			84,880			84,753
Provision for (recovery of) loan losses			500			(1,154	)		722			1,187			434			1,255			2,191
Net interest income after
	provision (recovery)		20,457			22,275			20,969			19,924			20,741			83,625			82,562
Total noninterest income			6,238			5,895			7,030			7,903			7,483			27,066			29,530
Total noninterest expense			16,653			18,557			18,722			18,814			19,083			72,746			76,171
Income before income taxes			10,042			9,613			9,277			9,013			9,141			37,945			35,921
Income tax expense			3,638			3,230			3,022			2,929			2,993			12,819			11,381
Net income			6,404			6,383			6,255			6,084			6,148			25,126			24,540
Dividends on preferred stock			-			-			-			-			-			-			105
Net income available to common shareholders		$	6,404		$	6,383		$	6,255		$	6,084		$	6,148		$	25,126		$	24,435

Earnings per common share
	Basic	$	0.38		$	0.37		$	0.36		$	0.34		$	0.34		$	1.45		$	1.32
	Diluted		0.38			0.37			0.36			0.34			0.34			1.45			1.31
Cash dividends per common share			0.16			0.16			0.14			0.14			0.14			0.60			0.54
Weighted average shares outstanding
	Basic		16,891,010			17,031,074			17,414,320			17,859,197			18,193,824			17,319,689			18,531,039
	Diluted		17,043,869			17,083,526			17,462,845			17,892,531			18,226,719			17,365,524			18,727,464
Performance ratios
	Return on average assets		1.05	%		1.03	%		1.02	%		0.99	%		0.99	%		1.02	%		0.97	%
	Return on average common equity		7.49	%		7.58	%		7.47	%		7.15	%		7.05	%		7.42	%		7.08	%
	Return on average tangible common equity⁽¹⁾		10.75	%		11.07	%		10.88	%		10.34	%		10.17	%		10.76	%		10.25	%

(1) A non-GAAP financial measure defined as average stockholders’ equity less average goodwill, other intangibles, and preferred stock liquidation preference

RECONCILIATION OF GAAP NET INCOME TO CORE EARNINGS (Unaudited)

		Three Months Ended															Year Ended
		December 31,			September 30,			June 30,			March 31,			December 31,			December 31,
			2016			2016			2016			2016			2015			2016			2015
(Amounts in thousands, except per share data)
Net income, GAAP		$	6,404		$	6,383		$	6,255		$	6,084		$	6,148		$	25,126		$	24,540
Non-GAAP adjustments:
	Net gain on divestitures		(619	)		(3,065	)		-			-			-			(3,684	)		-
	Allowance reversal for sold loans		-			(1,354	)		-			-			-			(1,354	)		-
	Merger, acquisition, and divestiture expense		55			226			410			39			-			730			86
	Net (gain) loss on sale of securities		(388	)		(25	)		79			(1	)		7			(335	)		(144	)
	FHLB debt prepayment fees		-			-			-			-			-			-			1,702
	Net impairment losses		-			4,635			11			-			-			4,646			-
	Other non-core items		(48	)		(264	)		-			(240	)		31			(552	)		(1,004	)
Total adjustments to core earnings			(1,000	)		153			500			(202	)		38			(549	)		640
Tax effect			(708	)		56			184			(74	)		14			(542	)		660
Core earnings, non-GAAP⁽¹⁾		$	6,112		$	6,480		$	6,571		$	5,956		$	6,172		$	25,119		$	24,520

Core diluted earnings per common share		$	0.36		$	0.38		$	0.38		$	0.33		$	0.34		$	1.45		$	1.31
Performance ratios
	Core return on average assets		1.01	%		1.05	%		1.07	%		0.97	%		0.99	%		1.02	%		0.97	%
	Core return on average common equity		7.15	%		7.70	%		7.85	%		7.00	%		7.08	%		7.42	%		7.09	%
	Core return on average tangible common equity⁽²⁾		10.26	%		11.24	%		11.43	%		10.12	%		10.21	%		10.75	%		10.25	%

(1) 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 Interest Income and Margin

AVERAGE BALANCE SHEETS AND NET INTEREST INCOME ANALYSIS (Unaudited)

		Three Months Ended December 31,
		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⁾	$	1,846,848	$	22,012	4.74	%	$	1,694,569	$	21,661	5.07	%
	Securities available for sale		193,342		1,644	3.38	%		377,213		2,349	2.47	%
	Securities held to maturity		67,254		182	1.08	%		72,568		194	1.06	%
	Interest-bearing deposits		35,470		98	1.10	%		19,544		21	0.43	%
Total earning assets			2,142,914		23,936	4.44	%		2,163,894		24,225	4.44	%
Other assets			275,022						298,312
Total assets		$	2,417,936					$	2,462,206

Liabilities and stockholders' equity
Interest-bearing deposits
	Demand deposits	$	348,869	$	73	0.08	%	$	344,214	$	47	0.05	%
	Savings deposits		522,864		57	0.04	%		530,977		78	0.06	%
	Time deposits		519,521		1,015	0.78	%		561,443		1,077	0.76	%
Total interest-bearing deposits			1,391,254		1,145	0.33	%		1,436,634		1,202	0.33	%
Borrowings
	Federal funds purchased		82		-	0.00	%		2,114		2	0.38	%
	Retail repurchase agreements		66,776		12	0.07	%		74,042		14	0.08	%
	Wholesale repurchase agreements		48,913		464	3.77	%		50,000		474	3.76	%
	FHLB advances and other borrowings		92,175		838	3.62	%		83,748		810	3.84	%
Total borrowings			207,946		1,314	2.51	%		209,904		1,300	2.46	%
Total interest-bearing liabilities			1,599,200		2,459	0.61	%		1,646,538		2,502	0.60	%
Noninterest-bearing demand deposits			454,161						466,623
Other liabilities			24,410						23,293
Total liabilities			2,077,771						2,136,454
Stockholders' equity			340,165						345,752
Total liabilities and stockholders' equity		$	2,417,936					$	2,482,206
Net interest income, FTE				$	21,477					$	21,723
Net interest rate spread						3.83	%					3.84	%
Net interest margin						3.99	%					3.98	%

(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)

		Year Ended December 31,
		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⁾	$	1,793,618	$	87,848	4.90	%	$	1,680,021	$	87,768	5.22	%
	Securities available for sale		287,332		8,047	2.80	%		363,359		9,575	2.64	%
	Securities held to maturity		71,069		757	1.07	%		70,987		770	1.08	%
	Interest-bearing deposits		18,864		153	0.81	%		98,639		267	0.27	%
Total earning assets			2,170,883		96,805	4.46	%		2,213,006		98,380	4.44	%
Other assets			284,575						307,928
Total assets		$	2,455,458					$	2,520,934

Liabilities and stockholders' equity
Interest-bearing deposits
	Demand deposits	$	342,169	$	250	0.07	%	$	343,036	$	203	0.06	%
	Savings deposits		531,050		248	0.05	%		532,221		367	0.07	%
	Time deposits		525,162		3,981	0.76	%		631,654		5,308	0.84	%
Total interest-bearing deposits			1,398,381		4,479	0.32	%		1,506,911		5,878	0.39	%
Borrowings
	Federal funds purchased		4,058		26	0.64	%		535		2	0.37	%
	Retail repurchase agreements		68,701		49	0.07	%		71,262		68	0.10	%
	Wholesale repurchase agreements		49,727		1,874	3.77	%		50,000		1,878	3.76	%
	FHLB advances and other borrowings		116,602		3,416	2.93	%		89,400		3,523	3.94	%
Total borrowings			239,088		5,365	2.24	%		211,197		5,471	2.59	%
Total interest-bearing liabilities			1,637,469		9,844	0.60	%		1,718,108		11,349	0.66	%
Noninterest-bearing demand deposits			456,474						433,936
Other liabilities			23,040						20,691
Total liabilities			2,116,983						2,172,735
Stockholders' equity			338,475						348,199
Total liabilities and stockholders' equity		$	2,455,458					$	2,520,934
Net interest income, FTE				$	86,961					$	87,031
Net interest rate spread						3.86	%					3.78	%
Net interest margin						4.01	%					3.93	%

(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 NON-GAAP NORMALIZED NET INTEREST MARGIN (Unaudited)

		Three Months Ended December 31,
		2016				2015
(Amounts in thousands)		Interest⁽¹⁾		Average Yield/ Rate⁽¹⁾		Interest⁽¹⁾		Average Yield/ Rate⁽¹⁾
Earning assets
Loans⁽²⁾		$	22,012	4.74	%	$	21,661	5.07	%
	Accretion income		1,506				2,493
	Less: cash accretion income		633				824
	Non-cash accretion income		873				1,669
Loans, normalized⁽³⁾			21,139	4.55	%		19,992	4.68	%
Other earning assets			1,924	2.59	%		2,564	2.17	%
Total earning assets			23,063	4.28	%		22,556	4.13	%
Total interest-bearing liabilities			2,459	0.61	%		2,502	0.60	%
Net interest income, FTE⁽³⁾		$	20,604			$	20,054
Net interest rate spread, normalized⁽³⁾				3.67	%			3.53	%
Net interest margin, normalized⁽³⁾				3.83	%			3.68	%

(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.

		Year Ended December 31,
		2016				2015
(Amounts in thousands)		Interest⁽¹⁾		Average Yield/ Rate⁽¹⁾		Interest⁽¹⁾		Average Yield/ Rate⁽¹⁾
Earning assets
Loans⁽²⁾		$	87,848	4.90	%	$	87,768	5.22	%
	Accretion income		7,690				11,258
	Less: cash accretion income		2,924				4,149
	Non-cash accretion income		4,766				7,109
Loans, normalized⁽³⁾			83,082	4.63	%		80,659	4.80	%
Other earning assets			8,957	2.37	%		10,612	1.99	%
Total earning assets			92,039	4.24	%		91,271	4.12	%
Total interest-bearing liabilities			9,844	0.60	%		11,349	0.66	%
Net interest income, FTE⁽³⁾		$	82,195			$	79,922
Net interest rate spread, normalized⁽³⁾				3.64	%			3.46	%
Net interest margin, normalized⁽³⁾				3.79	%			3.61	%

(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.

Noninterest Income and Expense

CONDENSED QUARTERLY STATEMENTS OF INCOME (Unaudited)

		Three Months Ended															Year Ended
		December 31,			September 30,			June 30,			March 31,			December 31,			December 31,
(Amounts in thousands)			2016			2016			2016			2016			2015			2016			2015
Noninterest income
	Wealth management	$	681		$	653		$	810		$	684		$	744		$	2,828		$	2,975
	Service charges on deposits		3,442			3,494			3,361			3,291			3,563			13,588			13,717
	Other service charges and fees		2,014			2,024			2,054			2,010			2,058			8,102			8,045
	Insurance commissions		59			1,592			1,600			2,191			1,563			5,442			6,899
	Net impairment losses recognized in earnings		-			(4,635	)		(11	)		-			-			(4,646	)		-
	Net gain (loss) on sale of securities		388			25			(79	)		1			(7	)		335			144
	Net FDIC indemnification asset amortization		(1,618	)		(1,369	)		(1,328	)		(1,159	)		(1,200	)		(5,474	)		(6,379	)
	Net gain on divestitures		619			3,065			-			-			-			3,684			-
	Other operating income		653			1,046			623			885			762			3,207			4,129
Total noninterest income			6,238			5,895			7,030			7,903			7,483			27,066			29,530
Noninterest expense
	Salaries and employee benefits		9,411			9,828			10,198			10,475			10,268			39,912			39,625
	Occupancy expense		1,158			1,249			1,359			1,531			1,413			5,297			5,817
	Furniture and equipment expense		1,070			1,066			1,109			1,096			1,345			4,341			5,199
	Amortization of intangibles		265			316			277			278			281			1,136			1,118
	FDIC premiums and assessments		274			363			372			374			332			1,383			1,513
	FHLB debt prepayment fees		-			-			-			-			-			-			1,702
	Merger, acquisition, and divestiture expense		55			226			410			39			-			730			86
	Other operating expense		4,420			5,509			4,997			5,021			5,444			19,947			21,111
Total noninterest expense			16,653			18,557			18,722			18,814			19,083			72,746			76,171

Efficiency Ratio

EFFICIENCY RATIO CALCULATION (Unaudited)

		Three Months Ended															Year Ended
		December 31,			September 30,			June 30,			March 31,			December 31,			December 31,
			2016			2016			2016			2016			2015			2016			2015
(Amounts in thousands)
Noninterest expense, GAAP		$	16,653		$	18,557		$	18,722		$	18,814		$	19,083		$	72,746		$	76,171
Non-GAAP adjustments
	Merger, acquisition, and divestiture expense		(55	)		(226	)		(410	)		(39	)		-			(730	)		(86	)
	FHLB debt prepayment fees		-			-			-			-			-			-			(1,702	)
	OREO expense and net loss		(184	)		(278	)		(247	)		(711	)		(475	)		(1,420	)		(2,438	)
	Goodwill impairment		-			-			-			-			-			-			-
	Other non-core items		8			(168	)		(30	)		(174	)		(61	)		(364	)		(259	)
Adjusted noninterest expense			16,422			17,885			18,035			17,890			18,547			70,232			71,686

Net interest income, GAAP			20,957			21,121			21,691			21,111			21,175			84,880			84,753
Noninterest income, GAAP			6,238			5,895			7,030			7,903			7,483			27,066			29,530
Non-GAAP adjustments
	Tax equivalency adjustment		520			509			521			531			548			2,081			2,950
	Net impairment losses		-			4,635			11			-			-			4,646			-
	Net (gain) loss on sale of securities		(388	)		(25	)		79			(1	)		7			(335	)		(144	)
	Net gain on divestitures		(619	)		(3,065	)		-			-			-			(3,684	)		-
	Other non-core items		(40	)		(432	)		(30	)		(414	)		(30	)		(916	)		(1,263	)
Adjusted net interest and noninterest income			26,668			28,638			29,302			29,130			29,183			113,738			115,826

Non-GAAP efficiency ratio⁽¹⁾			61.58	%		62.45	%		61.55	%		61.41	%		63.55	%		61.75	%		61.89	%
GAAP efficiency ratio			61.24	%		68.69	%		65.19	%		64.84	%		66.59	%		64.98	%		66.65	%

(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)

		December 31,			September 30,			June 30,			March 31,			December 31,
(Amounts in thousands, except per share data)			2016			2016			2016			2016			2015
Assets
Total cash and cash equivalents		$	76,307		$	65,929		$	44,301		$	39,587		$	51,787
Securities available for sale			165,579			220,856			322,699			338,469			366,173
Securities held to maturity			47,133			72,182			72,239			72,485			72,541
Loans held for investment, net of unearned income
	Non-covered		1,795,954			1,774,547			1,733,398			1,685,891			1,623,506
	Covered		56,994			61,837			68,585			76,538			83,035
	Less allowance for loan losses		(17,948	)		(19,633	)		(21,099	)		(20,467	)		(20,233	)
Loans held for investment, net			1,835,000			1,816,751			1,780,884			1,741,962			1,686,308
FDIC indemnification asset			12,173			14,332			16,431			18,787			20,844
Premises and equipment, net			50,085			50,564			50,199			50,799			52,756
Other real estate owned, non-covered			5,109			4,052			4,187			5,313			4,873
Other real estate owned, covered			276			2,437			2,017			2,279			4,034
Interest receivable			5,553			5,498			6,115			5,968			6,007
Goodwill			95,779			101,776			100,486			100,486			100,486
Other intangible assets			7,207			7,964			4,688			4,965			5,243
Other assets			86,197			87,932			91,082			89,187			91,224
Total assets		$	2,386,398		$	2,450,273		$	2,495,328		$	2,470,287		$	2,462,276

Liabilities
Deposits
	Noninterest-bearing	$	427,705		$	473,509		$	451,003		$	453,336		$	451,511
	Interest-bearing		1,413,633			1,388,390			1,373,412			1,421,329			1,421,748
Total deposits			1,841,338			1,861,899			1,824,415			1,874,665			1,873,259
Interest, taxes, and other liabilities			27,290			26,599			25,553			24,576			26,630
Federal funds purchased			-			-			42,000			18,000			-
Securities sold under agreements to repurchase			98,005			118,532			113,392			134,661			138,614
FHLB borrowings			65,000			90,000			140,000			65,000			65,000
Other borrowings			15,708			15,707			15,756			15,756			15,756
Total liabilities			2,047,341			2,112,737			2,161,116			2,132,658			2,119,259

Stockholders' equity
Common stock			21,382			21,382			21,382			21,382			21,382
Additional paid-in capital			228,142			227,884			227,791			227,725			227,692
Retained earnings			170,377			166,689			163,030			159,223			155,647
Treasury stock, at cost			(78,833	)		(78,789	)		(74,974	)		(64,968	)		(56,457	)
Accumulated other comprehensive (loss) income			(2,011	)		370			(3,017	)		(5,733	)		(5,247	)
Total stockholders' equity			339,057			337,536			334,212			337,629			343,017
Total liabilities and stockholders' equity		$	2,386,398		$	2,450,273		$	2,495,328		$	2,470,287		$	2,462,276

Shares outstanding at period-end			16,994,208			16,988,972			17,155,322			17,631,011			18,098,141
Book value per common share⁽¹⁾		$	19.95		$	19.87		$	19.48		$	19.15		$	18.95
Tangible book value per common share⁽²⁾			13.89			13.41			13.35			13.17			13.11

(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

Asset Quality

SELECTED CREDIT QUALITY INFORMATION (Unaudited)

		December 31,			September 30,			June 30,			March 31,			December 31,
(Amounts in thousands)			2016			2016			2016			2016			2015
Allowance for Loan Losses
Beginning balance		$	19,633		$	21,099		$	20,467		$	20,233		$	20,127
(Recovery of) provision for loan losses charged
	to operations		500			(1,154	)		722			1,187			434
(Recovery of) provision for loan losses recorded
	through the FDIC indemnification asset		-			-			(10	)		9			-
Charge-offs			(2,485	)		(772	)		(691	)		(1,228	)		(805	)
Recoveries			300			460			611			266			477
Net charge-offs			(2,185	)		(312	)		(80	)		(962	)		(328	)
Ending balance		$	17,948		$	19,633		$	21,099		$	20,467		$	20,233

Nonperforming Assets
Non-covered nonperforming assets
Nonaccrual loans		$	15,854		$	17,487		$	16,626		$	16,196		$	17,847
Accruing loans past due 90 days or more			-			62			64			243			-
Troubled debt restructurings ("TDRs")⁽¹⁾			114			115			115			158			73
Total non-covered nonperforming loans			15,968			17,664			16,805			16,597			17,920
OREO			5,109			4,052			4,187			5,313			4,873
Total non-covered nonperforming assets		$	21,077		$	21,716		$	20,992		$	21,910		$	22,793

Covered nonperforming assets
Nonaccrual loans		$	608		$	688		$	680		$	1,955		$	647
Total covered nonperforming loans			608			688			680			1,955			647
OREO			276			2,437			2,017			2,279			4,034
Total covered nonperforming assets		$	884		$	3,125		$	2,697		$	4,234		$	4,681

Additional Information
Performing TDRs⁽²⁾		$	12,838		$	13,336		$	13,562		$	13,474		$	13,889
Total TDRs⁽³⁾			12,952			13,451			13,677			13,632			13,962

Non-covered ratios
Nonperforming loans to total loans			0.89	%		1.00	%		0.97	%		0.98	%		1.10	%
Nonperforming assets to total assets			0.90	%		0.91	%		0.87	%		0.92	%		0.96	%
Non-PCI allowance to nonperforming loans			112.32	%		111.08	%		125.48	%		123.17	%		112.61	%
Non-PCI allowance to total loans			1.00	%		1.11	%		1.22	%		1.21	%		1.24	%
Annualized net charge-offs to average loans			0.49	%		0.07	%		0.02	%		0.23	%		0.08	%

Total ratios
Nonperforming loans to total loans			0.89	%		1.00	%		0.97	%		1.05	%		1.09	%
Nonperforming assets to total assets			0.92	%		1.01	%		0.95	%		1.06	%		1.12	%
Allowance for loan losses to nonperforming loans			108.28	%		106.98	%		120.67	%		110.32	%		108.97	%
Allowance for loan losses to total loans			0.97	%		1.07	%		1.17	%		1.16	%		1.19	%
Annualized net charge-offs to average loans			0.47	%		0.07	%		0.02	%		0.22	%		0.08	%

(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

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

Distribution channels: Banking, Finance & Investment Industry

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