BLUEFIELD, Va., July 27, 2010 (GLOBE NEWSWIRE) -- First Community Bancshares, Inc. (Nasdaq:FCBC) ( www.fcbinc.com) (the "Company") today reported net income for the quarter ended June 30, 2010, of $5.13 million, or $0.29 per diluted common share.

Commenting on second quarter results, Chief Executive Officer John M. Mendez stated, "We are pleased to see the continuation of solid earnings and credit measures through the second quarter of 2010. Compared to the same quarter in 2009, earnings available to common stockholders improved by 181% in the second quarter of 2010 and earnings per share increased by 107% in the second quarter of 2010 from $0.14 to $0.29 per common share. Core earnings also improved by 4% in the second quarter of 2010 compared to the same period on the prior year. Second quarter earnings closely parallel the first quarter of this year and appear to reflect stabilization of operations in the current economy and credit cycle."

Mendez continued, "We are also encouraged by the continued strong performance of our loan portfolio in the face of a difficult credit environment, high unemployment and a sluggish economic recovery. For the second quarter of 2010, total delinquencies within our loan portfolio were 1.70% which is a substantial decrease from total delinquencies of 2.35% in the first quarter of this year and non-accrual loans were essentially unchanged compared to the first quarter of 2010. Although higher than historic levels through March 31, 2010, the most recent date for which data is available, our asset quality metrics compare favorably to our peers during this credit cycle."

Additionally, the board of directors of the Company declared a quarterly cash dividend to common stockholders of ten cents ($0.10) per common share. The quarterly dividend is payable to common stockholders of record on August 13, 2010, and is expected to be paid on or about August 27, 2010. The current dividend reflects the Company's practice of paying dividends based on a review of the results of the previous quarter.

As a result of a routine internal audit, the Company determined there was a computational error in the model that the Company uses to calculate the quantitative basis for its allowance for loan losses. In connection with its determination of the appropriate loan loss reserve at December 31, 2008, the Company made certain modifications to its loan loss reserve model with respect to a $130.76 million pool of loans. However, in calculating the loan loss reserves for this pool of loans, the historical quarterly net charge-off rates were not annualized as was the case with all other quarterly loss rates in the model. Based on the Company's modeling using the corrected computations, the Company, in consultation with the audit committee of the Board of Directors, determined that the amount of the allowance for loan losses should be increased by an aggregate of $2.55 million for the period beginning December 31, 2008 and ending March 31, 2010. 

The Company will be filing amendments to its Annual Reports on Form 10-K for the years ended December 31, 2009 and 2008, and its Quarterly Reports on Form 10-Q for the quarters ended March 31, 2009, June 30, 2009, September 30, 2009, and March 31, 2010, to correct for these computational errors and make other required disclosures. The financial tables included in this press release present the "As Reported" and "As Revised" amounts for the periods indicated to reflect the correction of these computational errors.

Second Quarter 2010 Highlights –
  • The ratio of non-performing assets to total assets was 110 basis points, an increase from 97 basis points in the first quarter of 2010.
  • Total loan delinquencies of 30 days or more, including non-accrual loans, as a percent of total loans were 1.70%, a decrease from 2.35% in the first quarter of 2010.
  • Net interest margin for the second quarter was 3.92%, up 30 basis points from the comparable quarter of 2009.
  • Net interest income increased $2.22 million, or 13.61%, from the second quarter of 2009.
  • Tangible book value per common share increased to $9.95, up $0.88 from the quarter ended December 31, 2009.
  • The Company remains "well-capitalized" with a total risk-based capital ratio of 13.6%, Tier 1 risk-based capital ratio of 12.3%, and a Tier 1 leverage ratio of 8.7% at June 30, 2010.

Net Interest Income

Tax-equivalent net interest margin for the second quarter of 2010 was 3.92%. Net interest income was $18.54 million for the second quarter of 2010, an increase of $2.22 million, or 13.61%, from the second quarter of 2009. Interest income was $26.16 million for the second quarter of 2010, a slight decrease of $34 thousand, or 0.13%, from the second quarter of 2009. The yield on loans decreased to 6.04% for the second quarter of 2010 from 6.19% in the same period in the prior year, while average loans increased $127.94 million to $1.40 billion for the second quarter 2010. The increase in the average loans is primarily due to the acquisition of TriStone Community Bank in July 2009. The Company continued to maintain a high level of liquidity with average cash balances of $72.78 million in the second quarter of 2010. 

Second quarter 2010 interest expense was $7.61 million, a decrease of $2.26 million, or 22.85%, from the second quarter of 2009. Second quarter 2010 deposit costs decreased $1.97 million compared to the second quarter of 2009, which was primarily due to a decrease in the average rate paid on interest-bearing deposits of 65 basis points to 1.43% for the second quarter of 2010 compared to the same period in the prior year. Compared to the second quarter of 2009, interest costs on borrowings decreased $285 thousand to $2.51 million for the second quarter of 2010, while the average balance decreased $19.63 million for the comparable periods due to the redemption and restructuring of various wholesale borrowings. The cost of interest-bearing liabilities decreased 58 basis points during the second quarter of 2010 compared to the second quarter of 2009. Average interest-bearing liabilities increased $51.44 million, or 2.99% for the second quarter of 2010 compared with the second quarter of 2009, which included a decrease of $12.30 million in Federal Home Loan Bank ("FHLB") borrowings.

Noninterest Income

During the second quarter of 2010, wealth management revenues decreased $121 thousand, or 10.68%, to $1.01 million from the second quarter of 2009, which was primarily due to the settlement of several large estates in the prior year. The Wealth Management Division reported $806 million in assets under management at June 30, 2010. Service charges on deposit accounts were $3.35 million for the second quarter of 2010, a decrease of $144 thousand, or 4.12%, from the second quarter of 2009. Insurance commissions were $1.39 million for the second quarter of 2010, a decrease of $250 thousand, or 15.25%.

Noninterest Expenses

Noninterest expenses for the second quarter of 2010 increased $557 thousand, or 3.47%, compared to the second quarter of 2009. The increase was primarily due to salaries and employee benefits which increased $1.08 million, or 14.61%, in the second quarter of 2010 compared to the same period in the prior year.  The branches of TriStone Community Bank, which the company acquired in July 2009, accounted for an increase in salaries and employee benefits of $359 thousand during the comparable periods. Excluding these branches, the remainder of the Company presented an overall increase in salaries and benefits of $723 thousand in the second quarter of 2010 compared to the same period of the prior year.  Federal Deposit Insurance Corporation ("FDIC") deposit insurance premiums decreased $577 thousand, or 44.83% in the second quarter of 2010, compared to the second quarter of 2009 when the FDIC levied a special assessment. The efficiency ratio in the second quarter of 2010 was 58.26% compared to 58.15% in the second quarter of 2009.  

Credit Quality

The Company's loan quality measures at June 30, 2010, continue to compare favorably to the Company's peer group of bank holding companies with total assets between $1 and $3 billion, as reported by the Federal Reserve. Total loan delinquencies of 30 days or more, including non-accrual loans, as a percent of total loans were 1.70% at June 30, 2010, a decrease from 2.35% at March 31, 2010, and 2.32% at December 31, 2009. The ratio of allowance for loan losses as a percent of loans held for investment was 1.79% at June 30, 2010, compared to 1.76% at March 31, 2010, and 1.74% at December 31, 2009.

Total non-performing assets, which include other real estate owned, were 1.10% of total assets at June 30, 2010, 0.97% at both March 31, 2010, and December 31, 2009. Non-performing loans as a percentage of loans held for investment remained stable at 1.26% for the periods ended June 30, 2010, March 31, 2010, and December 31, 2009.

Balance Sheet

Consolidated assets were $2.25 billion at June 30, 2010. At June 30, 2010, total stockholders' equity was $267.93 million, resulting in a book value per common share outstanding of $15.05, compared to total stockholders' equity of $252.27 million and a book value per common share of $14.20 at December 31, 2009. During the second quarter of 2010, the Company paid a $0.10 per share dividend on common shares. 2010 marks the Company's 25 th consecutive year of dividends to shareholders.

Non-GAAP Presentations

The Company prepares its financial statements under accounting principles generally accepted in the United States, or "GAAP". However, this press release also refers to certain non-GAAP financial measures that we believe, when considered together with GAAP financial measures, provide investors with important information regarding our operational performance. An analysis of any non-GAAP financial measure should be used in conjunction with results presented in accordance with GAAP.

Core earnings is a non-GAAP financial measure that reflects net income excluding non-recurring income and expense items, taxes, loan loss provisions, losses on other real estate owned, as well as gains, losses, and impairment losses on securities from net income. These excluded items are difficult to predict and we believe that core earnings provides the Company and investors with a valuable tool to evaluate the company's financial results.

The adjusted efficiency ratio is a non-GAAP financial measure that is computed by dividing core non-interest expense by the sum of net interest income on a tax equivalent basis and core non-interest income. We believe that this measure provides investors with important information about our operating efficiency. Comparison of out adjusted efficiency ratio with those of other companies may not be possible because other companies may calculate the adjusted efficiency ratio differently.

About First Community Bancshares, Inc.

First Community Bancshares, Inc., headquartered in Bluefield, Virginia, is a $2.25 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 in the five states of Virginia, West Virginia, North Carolina, South 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 Division managed assets with a market value of $806 million at June 30, 2010. The Company is also the parent company of GreenPoint Insurance Group, Inc., a full-service insurance agency headquartered in High Point, North Carolina, that operates eleven offices. The Company'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 .

The First Community Bancshares, Inc. logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=6960

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.
Condensed Consolidated Statements of Income
           
(Unaudited)   Six Months Ended June 30,
(In Thousands, Except Share and Per Share Data) Three Months Ended June 30,   2009
  2010 2009 2010 As Reported As Revised
Interest Income          
Interest and fees on loans held for investment  $ 20,997  $ 19,571  $ 42,351  $ 39,555  $ 39,555
Interest on securities -- taxable  3,730  5,177  7,516  10,341  10,341
Interest on securities -- nontaxable  1,394  1,402  2,820  3,078  3,078
Interest on federal funds sold and deposits  34  39  80  78  78
Total interest income  26,155  26,189  52,767  53,052  53,052
Interest Expense          
Interest on deposits  5,106  7,076  10,608  14,643  14,643
Interest on borrowings  2,507  2,792  4,998  5,655  5,655
Total interest expense  7,613  9,868  15,606  20,298  20,298
Net interest income  18,542  16,321  37,161  32,754  32,754
Provision for loan losses  3,596  2,552  7,261  4,639  4,700
Net interest income after provision for loan losses  14,946  13,769  29,900  28,115  28,054
Noninterest Income          
Wealth management income  1,012  1,133  1,897  2,117  2,117
Service charges on deposit accounts  3,347  3,491  6,339  6,648  6,648
Other service charges and fees  1,250  1,133  2,531  2,311  2,311
Insurance commissions  1,389  1,639  3,590  3,956  3,956
Total other-than-temporary impairment loss  --   --   --   --   -- 
Portion of loss recognized in OCI  (185)  (29,872)  (185)  (209)  (209)
Net impairment losses recognized in earnings  (185)  (3,776)  (185)  (3,985)  (3,985)
Security gains  1,201  1,653  1,451  2,064  2,064
Acquisition gain  --   --   --   --   -- 
Other operating income  890  247  1,859  826  826
Total noninterest income  8,904  5,520  17,482  13,937  13,937
Noninterest Expense          
Salaries and employee benefits  8,487  7,405  16,456  15,271  15,271
Occupancy expense of bank premises  1,570  1,333  3,279  2,936  2,936
Furniture and equipment expense  918  892  1,822  1,830  1,830
Amortization of intangible assets  253  244  509  489  489
FHLB debt prepayment fees  --   88  --   88  88
FDIC premiums and assessments  710  1,287  1,411  1,475  1,475
Merger-related expenses  --   74  --   75  75
Other operating expense   4,660  4,718  9,193  9,064  9,064
Total noninterest expense  16,598  16,041  32,670  31,228  31,228
Income before income taxes  7,252  3,248  14,712  10,824  10,763
Income tax expense   2,121  843  4,303  3,189  3,166
Net income  5,131  2,405  10,409  7,635  7,597
Dividends on preferred stock  --   578  --   1,149  1,149
Net income available to common shareholders  $ 5,131  $ 1,827  $ 10,409  $ 6,486  $ 6,448
Per Share          
Basic earnings per common share   $ 0.29  $ 0.14  $ 0.59  $ 0.53  $ 0.53
Diluted earnings per common share   $ 0.29  $ 0.14  $ 0.59  $ 0.53  $ 0.53
Weighted average shares outstanding:          
Basic  17,787,325  12,696,202  17,776,500  12,135,103  12,135,103
Diluted  17,805,393  12,741,080  17,792,535  12,181,843  12,181,843
For the period:          
Return on average assets 0.91% 0.34% 0.93% 0.60% 0.60%
Return on average common equity 7.68% 3.82% 7.97% 7.07% 7.03%
Cash dividends per common share  $ 0.10  $ 0.20  $ 0.20  $ 0.20  $ 0.20
           

The "As Reported" columns reflect the amounts previously reported by the Company and the "As Revised" columns reflect the revised amounts based on the corrections made for the computational errors described in the text of this press release.
First Community Bancshares, Inc. 
Condensed Quarterly Statements of Income (Loss) 
         
   As of and for the Quarter Ended
(Unaudited)     December 31, 2009
(In Thousands, Except Share and Per Share Data) June 30, 2010 March 31, 2010 As Reported As Revised
Interest Income        
Interest and fees on loans held for investment  $ 20,997  $ 21,354  $ 22,085  $ 22,085
Interest on securities --- taxable  3,730  3,786  4,190  4,190
Interest on securities --- nontaxable  1,394  1,426  1,445  1,445
Interest on federal funds sold and deposits  34  46  32  32
Total interest income  26,155  26,612  27,752  27,752
Interest Expense        
Interest on deposits  5,106  5,502  6,155  6,155
Interest on borrowings  2,507  2,491  2,635  2,635
Total interest expense  7,613  7,993  8,790  8,790
Net interest income  18,542  18,619  18,962  18,962
Provision for loan losses  3,596  3,665  6,996  7,282
Net interest income after provision for loan losses  14,946  14,954  11,966  11,680
Noninterest Income        
Wealth management income  1,012  885  1,059  1,059
Service charges on deposit accounts  3,347  2,992  3,585  3,585
Other service charges and fees  1,250  1,281  1,248  1,248
Insurance commissions  1,389  2,201  1,465  1,465
Net impairment losses recognized in earnings  (185)  --   (44,067)  (44,067)
Securities gains (losses)  1,201  250  (14,603)  (14,603)
Acquisition gain  --   --   --   -- 
Other operating income  890  969  983  983
Total noninterest income  8,904  8,578  (50,330)  (50,330)
Noninterest Expense        
Salaries and employee benefits  8,487  7,969  8,254  8,254
Occupancy expense of bank premises  1,570  1,709  1,687  1,687
Furniture and equipment expense  918  904  988  988
Amortization of intangible assets  253  256  277  277
FHLB debt prepayment fees  --   --   --   -- 
FDIC premiums and assessments   710  701  1,474  1,474
Merger-related expenses  --   --   146  146
Other operating expense  4,660  4,533  4,802  4,802
Total noninterest expense  16,598  16,072  17,628  17,628
Income (loss) before income taxes  7,252  7,460  (55,992)  (56,278)
Income tax expense (benefit)  2,121  2,182  (21,430)  (21,537)
Net income (loss)  5,131  5,278  (34,562)  (34,741)
Preferred dividends  --   --   --   -- 
Net income (loss) available to common shareholders  $ 5,131  $ 5,278  $ (34,562)  $ (34,741)
Per Share        
Basic EPS  $ 0.29  $ 0.30  $ (1.95)  $ (1.96)
Diluted EPS   $ 0.29  $ 0.30  $ (1.95)  $ (1.96)
Cash dividends per common share  $ 0.10  $ 0.10  $ --   $ -- 
Weighted average shares outstanding:        
Basic  17,787,325  17,765,556  17,687,413  17,687,413
Diluted  17,805,393  17,784,449  17,687,413  17,687,413
First Community Bancshares, Inc. 
Reconciliation of GAAP Net Income to Core Earnings
 
      Six Months Ended June 30,
(Unaudited) Three Months Ended June 30,   2009
(In Thousands, Except Per Share Data) 2010 2009 2010 As Reported As Revised
           
Net income, GAAP  $ 5,131  $ 2,405  $ 10,409  $ 7,635  $ 7,597
Non-GAAP adjustments:          
Security gains  (1,201)  (1,653)  (1,451)  (2,064)  (2,064)
Merger-related expenses  --   74  --   75  75
FHLB debt prepayment fees  --   88  --   88  88
Other-than-temporary security impairments  185  3,776  185  3,985  3,985
FDIC special assessments  --   988  --   988  988
Other non-core, non-recurring items  738  508  1,673  808  808
Total adjustments to core earnings  (278)  3,781  407  3,880  3,880
Tax effect   (104)  1,408  153  1,513  1,513
Core earnings, non-GAAP  $ 4,957  $ 4,778  $ 10,663  $ 10,002  $ 9,964
           
Core return on average assets 0.88% 0.88% 0.95% 0.93% 0.92%
Core return on average equity 7.42% 8.22% 8.16% 8.91% 8.87%
Core diluted earnings per share $0.28 $0.37 $0.60 $0.82 $0.82
 
Efficiency Ratio Calculation
         
(Unaudited)  Three Months Ended June 30, Six Months Ended June 30,
(In Thousands) 2010 2009 2010 2009
         
Noninterest expenses, GAAP  $ 16,598  $ 16,041  $ 32,670  $ 31,228
Non-GAAP adjustments:        
Merger-related expenses  --  (74)  --  (75)
FHLB debt prepayment fees  --  (88)  --  (88)
Other non-core, non-recurring items  (738)  (1,496)  (1,673)  (1,796)
Adjusted noninterest expenses  15,860  14,383  30,997  29,269
         
Net interest income, GAAP  18,542  16,321  37,161  32,754
Noninterest income, GAAP  8,904  5,520  17,482  13,937
Non-GAAP adjustments:        
Tax-equivalency adjustment  791  772  1,603  1,688
Security gains  (1,201)  (1,653)  (1,451)  (2,064)
Other-than-temporary security impairments  185  3,776  185  3,985
Adjusted net interest and noninterest income  27,221  24,736  54,980  50,300
         
Efficiency Ratio 58.26% 58.15% 56.38% 58.19%
First Community Bancshares, Inc. 
Quarterly Balance Sheets
           
   For the Quarter Ended
(Unaudited)   March 31, 2010 December 31, 2009
(Dollars In Thousands) June 30, 2010 As Reported As Revised As Reported As Revised
           
Cash and due from banks  $ 50,922  $ 74,962  $ 74,962  $ 97,641  $ 97,641
Interest-bearing deposits with banks  25,609  12,744  12,744  3,700  3,700
Securities available-for-sale   502,866  524,297  524,297  486,057  486,057
Securities held-to-maturity   6,468  7,155  7,155  7,454  7,454
Loans held for sale  2,141  1,494  1,494  11,576  11,576
Loans held for investment, net of unearned income  1,399,885  1,390,874  1,390,874  1,393,931  1,393,931
Less allowance for loan losses  25,011  21,956  24,508  21,725  24,277
Net loans  1,377,015  1,370,412  1,367,860  1,383,782  1,381,230
Premises and equipment  56,407  56,772  56,772  56,946  56,946
Other real estate owned  7,108  4,740  4,740  4,578  4,578
Interest receivable  7,859  8,630  8,630  8,610  8,610
Intangible assets  90,757  90,805  90,805  91,061  91,061
Other assets  121,835  130,017  130,974  135,049  136,006
Total Assets  $ 2,246,846  $ 2,280,534  $ 2,278,939  $ 2,274,878  $ 2,273,283
Deposits:          
Demand  $ 205,731  $ 205,810  $ 205,810  $ 208,244  $ 208,244
Interest-bearing demand  244,889  246,513  246,513  231,907  231,907
Savings  404,820  427,883  427,883  381,381  381,381
Time  757,979  775,405  775,405  824,428  824,428
Total Deposits  1,613,419  1,655,611  1,655,611  1,645,960  1,645,960
Interest, taxes and other liabilities  21,865  21,912  21,912  22,498  22,498
Federal funds purchased  --   --   --   --   -- 
Securities sold under agreements to repurchase  147,772  144,381  144,381  153,634  153,634
FHLB and other indebtedness  195,865  195,873  195,873  198,924  198,924
Total Liabilities  1,978,921  2,017,777  2,017,777  2,021,016  2,021,016
           
Preferred stock, net of discount  --   --   --   --   -- 
Common stock  18,083  18,083  18,083  18,083  18,083
Additional paid-in capital  190,259  190,650  190,650  190,967  190,967
Retained earnings  73,613  71,857  70,262  68,355  66,760
Treasury stock, at cost  (8,583)  (9,342)  (9,342)  (9,891)  (9,891)
Accumulated other comprehensive loss  (5,447)  (8,491)  (8,491)  (13,652)  (13,652)
Total Stockholders' Equity  267,925  262,757  261,162  253,862  252,267
Total Liabilities and          
Stockholders' Equity  $ 2,246,846  $ 2,280,534  $ 2,278,939  $ 2,274,878  $ 2,273,283
           
Actual shares outstanding at period end  17,807,155  17,782,791  17,782,791  17,765,164  17,765,164
Book value per common share at period end  $ 15.05  $ 14.78  $ 14.69  $ 14.29  $ 14.20
Tangible book value per common share at period end (1)  $ 9.95  $ 9.67  $ 9.58  $ 9.16  $ 9.07
           
(1) Tangible book value per common share is defined as stockholders' equity less goodwill and other intangibles divided by common shares outstanding.  
First Community Bancshares, Inc. 
Selected Financial Information
           
  As of and for the Quarter Ended
(Unaudited)   March 31, 2010 December 31, 2009
(Dollars in Thousands) June 30, 2010 As Reported As Revised As Reported As Revised
Summary of Loan Loss Experience          
Allowance for loan losses:          
Beginning balance  $ 24,508  $ 21,725  $ 24,277  $ 17,444  $ 19,710
Balance acquired  --  --  --  --  --
Provision for loan losses  3,596  3,665  3,665  6,996  7,282
Charge-offs  (3,373)  (3,732)  (3,732)  (2,954)  (2,954)
Recoveries  280  298  298  239  239
Net charge-offs  (3,093)  (3,434)  (3,434)  (2,715)  (2,715)
Ending balance  $ 25,011  $ 21,956  $ 24,508  $ 21,725  $ 24,277
           
Summary of Asset Quality          
Non-accrual loans   $ 17,668  $ 17,477  $ 17,477  $ 17,527  $ 17,527
Loans 90 days or more past due and still accruing  --  --  --  --  --
Total non-performing loans  17,668  17,477  17,477  17,527  17,527
           
Other real estate owned  7,108  4,740  4,740  4,578  4,578
Total non-performing assets  $ 24,776  $ 22,217  $ 22,217  $ 22,105  $ 22,105
           
 Restructured loans performing in accordance with terms  $ 2,763  $ 3,091  $ 3,091  $ 3,565  $ 3,565
           
Asset Quality Ratios          
           
Non-performing loans as a percentage of loans held for investment 1.26% 1.26% 1.26% 1.26% 1.26%
           
Non-performing assets as a percentage of total assets 1.10% 0.97% 0.97% 0.97% 0.97%
           
Annualized net charge-offs as a percentage of average loans held for investment 0.89% 1.00% 1.00% 0.77% 0.77%
           
Allowance for loan losses as a percentage of loans held for investment 1.79% 1.58% 1.76% 1.56% 1.74%
           
Ratio of allowance for loan losses to non-performing loans  1.42  1.26  1.40  1.24  1.39
 
    
First Community Bancshares, Inc. 
Non-accrual Loan Detail
       
  As of June 30, 2010
      Non-accrual 
(Unaudited) Loans Non-accrual  Loans to Loans
(Dollars in Thousands) Outstanding Loans Outstanding
Commercial      
Commercial & industrial  $ 109,344  $ 654 0.60%
Agriculture  1,354  -- 0.00%
Total commercial  110,698  654 0.59%
       
Commercial real estate      
Construction, land development & vacant land  114,207  1,876 1.64%
Non-owner occupied  196,896  3,111 1.58%
Owner occupied  155,946  2,571 1.65%
Farmland  39,053  7 0.02%
Total commercial real estate  506,102  7,565 1.49%
       
Consumer  62,659  96 0.15%
       
Residential real estate      
Residential  536,540  6,788 1.27%
Multi-family  70,850  1,317 1.86%
Home equity lines  113,036  1,248 1.10%
Total residential  720,426  9,353 1.30%
       
 Total loans   $ 1,399,885  $ 17,668 1.26%
 
 
First Community Bancshares, Inc.
Consolidated Average Balance Sheets, Yields, and Rates
             
  Three Months Ended June 30,
  2010 2009
      Yield/     Yield/
(Unaudited) Average  Interest Rate Average  Interest Rate
(Dollars in Thousands) Balance  (1)   (1)  Balance  (1)   (1) 
Earning assets            
Loans held for investment (2)  $ 1,397,528  $ 21,039 6.04%  $ 1,269,584  $ 19,589 6.19%
Securities available-for-sale  498,880  5,728 4.61%  557,110  7,169 5.16%
Securities held-to-maturity   6,928  145 8.39%  7,824  164 8.41%
Interest-bearing deposits with banks  72,782  34 0.19%  57,885  39 0.27%
Total earning assets  1,976,118  26,946 5.47%  1,892,403  26,961 5.71%
Other assets  283,068      288,376    
Total  $ 2,259,186      $ 2,180,779    
Interest-bearing liabilities            
Interest-bearing demand deposits  $ 248,512  $ 250 0.40%  $ 197,710  $ 81 0.16%
Savings deposits  421,669  781 0.74%  317,700  540 0.68%
Time deposits  762,858  4,075 2.14%  846,560  6,455 3.06%
Retail repurchase agreements  94,197  252 1.07%  101,525  333 1.32%
Wholesale repurchase agreements  50,000  468 3.75%  50,000  465 3.73%
FHLB borrowings & other long-term debt  195,804  1,787 3.66%  208,102  1,994 3.84%
Total interest-bearing liabilities  1,773,040  7,613 1.72%  1,721,597  9,868 2.30%
Noninterest-bearing demand deposits  207,393      201,670    
Other liabilities  10,940      24,419    
Stockholders' equity  267,813      233,093    
Total  $ 2,259,186      $ 2,180,779    
Net interest income, tax-equivalent    $ 19,333      $ 17,093  
Net interest rate spread (3)     3.75%     3.41%
Net interest margin (4)     3.92%     3.62%
             
(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
             
  Six Months Ended June 30,
  2010 2009
      Yield/     Yield/
(Unaudited) Average  Interest Rate Average  Interest Rate
(Dollars in Thousands) Balance  (1)   (1)  Balance  (1)   (1) 
Earning assets            
Loans held for investment (2)  $ 1,396,603  $ 42,436 6.13%  $ 1,280,394  $ 39,585 6.23%
Securities available-for-sale  490,062  11,561 4.76%  535,326  14,741 5.55%
Securities held-to-maturity   7,033  293 8.40%  8,147  336 8.32%
Interest-bearing deposits with banks  74,675  80 0.22%  65,713  78 0.24%
Total earning assets  1,968,373  54,370 5.57%  1,889,580  54,740 5.84%
Other assets  283,958      289,273    
Total  $ 2,252,331      $ 2,178,853    
Interest-bearing liabilities            
Interest-bearing demand deposits  $ 242,531  $ 450 0.37%  $ 193,983  $ 160 0.17%
Savings deposits  417,377  1,612 0.78%  315,146  1,196 0.77%
Time deposits  777,268  8,546 2.22%  852,258  13,287 3.14%
Retail repurchase agreements  93,093  528 1.14%  103,984  723 1.40%
Wholesale repurchase agreements  50,000  931 3.75%  50,000  975 3.93%
FHLB borrowings & other long-term debt  197,266  3,539 3.62%  211,511  3,957 3.77%
Total interest-bearing liabilities  1,777,535  15,606 1.77%  1,726,882  20,298 2.37%
Noninterest-bearing demand deposits  203,252      200,497    
Other liabilities  8,097      25,064    
Stockholders' equity  263,447      226,410    
Total  $ 2,252,331      $ 2,178,853    
Net interest income, tax-equivalent    $ 38,764      $ 34,442  
Net interest rate spread (3)     3.80%     3.47%
Net interest margin (4)     3.97%     3.68%
             
(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.
CONTACT:  First Community Bancshares, Inc.          David D. Brown          (276) 326-9000

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