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10 Bank Stocks Ready for a 2012 Dividend Boost

7. First Community Bancshares

First Community Bancshares (FCBC) of Bluefield, Va., has seen its stock decline 14% year-to-date, closing Friday at $12.45. Based on a quarterly payout of 10 cents, the shares have a dividend yield of 3.21%.

The company had $2.2 billion in total assets as of Sept 30, with 56 branches in Virginia, West Virginia, North Carolina, and Tennessee

Third-quarter net income available to common shareholders was $5.0 million, or 28 cents a share, declining from $5.6 million, or 31 cents in the second quarter, and $6.6 million, or 37 cents a share, in the third quarter of 2010.

The earnings decline in part reflected gains on the sales of securities of $3.2 million in the second quarter and $2.6 million in the third quarter of 2010.

The third-quarter net interest margin was 3.77%, narrowing from 3.83% the previous quarter and 3.87% a year earlier

The provision for loan losses declined to $1.9 million in the third quarter, from $3.1 million the previous quarter and $3.8 million in the third quarter of 2010.

The third-quarter ROA was 0.97%, according to SNL Financial.

The company was strongly capitalized, with a tangible common equity ratio of 9.23% as of Sept. 30, according to SNL Financial, and repurchased 48,310 shares during the third quarter.

KBW analyst Catherine Mealor on Oct 27 reiterated her neutral rating on First Community, saying that with "slow balance sheet growth," the company "has been particularly focused on expense controls recently. The analyst said that "the lack of any top-line growth with FCBC's recent quarters keeps us on the sidelines in regards to the stock in the near term," and that her firm would "like to see an improvement in revenue & balance sheet growth, or a true catalyst (M&A) before we get more positive on the shares."

The shares trade for 11.2 times the consensus 2012 EPS estimate of $1.07, among analysts polled by FactSet, and 1.1 times tangible book value, according to SNL.

Out of five analysts covering First Community Bancshares, one rates the stock a buy, while the other four analysts have neutral ratings.

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