First Community Bankshares (FCBC) 8-K First Community Bancshares, Inc. Announces Third Quarter Results

Exhibit 99.1

NEWS RELEASE

FOR IMMEDIATE RELEASE:	FOR MORE INFORMATION,
October 29, 2004	CONTACT: Robert L. Schumacher
	at (276) 326-9000

First Community Bancshares, Inc. Announces
Third Quarter Results

      Bluefield, Virginia – First Community Bancshares, Inc. (NASDAQ): FCBC;(www.fcbinc.com) today reported earnings of $6.4 million for the third quarter of 2004, or $0.57 basic and diluted earnings per share. This compares to $6.2 million or $0.55 basic and diluted earnings per share for the third quarter of 2003. Net income for the nine months ended September 30, 2004 was $16.3 million or $1.45 per basic and $1.44 per diluted share compared with $19.9 million or $1.81 per basic and $1.79 per diluted share for the nine months ended September 30, 2003. Net income for the three and nine month periods in 2004 was impacted by the discontinued operations of the mortgage subsidiary and realization of tax benefits from its divestiture, as discussed below. Return on average equity and return on average assets were 14.46% and 1.39% for the third quarter of 2004 and 12.30% and 1.21% for the nine months ended September 30, 2004. This compares with 14.10% and 1.46% for the third quarter of 2003 and 16.23% and 1.67% for the nine months ended September 30, 2003.

     As previously announced during the third quarter of 2004, First Community sold its mortgage banking subsidiary completing its exit of the mortgage banking segment. The loss from discontinued operations of $ $212,000 or $0.02 per basic and $.01 per diluted share for the third quarter of 2004 included a net of tax gain on sale of approximately $387,000. The loss from discontinued operations was $3.5 million or $0.31 per basic and diluted share for the nine months ended September 30, 2004. The strategic decision to exit the wholesale mortgage business will reduce the Company’s exposure to risk associated with the large fluctuations previously experienced in the volume-driven, wholesale business and the related interest rate

volatility associated with the mortgage banking business. This change in direction will permit the Company to focus its resources on its core community banking business, which continues to grow and perform.

     Income from continuing operations for the third quarter of 2004 was $6.6 million or $0.59 per basic and $0.58 per diluted per share, down from the $0.64 per basic and diluted share in the third quarter of 2003. Return on average equity for the third quarter of 2004 from continuing operations amounted to 14.94%, compared to 16.34% for the third quarter of last year. Return on average assets from continuing operations was 1.44% compared to 1.75% for the third quarter of last year. Income from continuing operations for the first nine months of 2004 totaled $19.8 million or $1.76 basic and $1.75 diluted earnings per share, compared to $20.0 million or $1.81 basic and $1.79 diluted earnings per share for the nine months ended September 30, 2003. Return on average equity from continuing operations for the first nine months of 2004 was 14.97% compared to 16.26% for the first nine months of last year. Return on average assets from continuing operations was 1.49% compared to 1.74% for the first nine months of 2003.

     When comparing the third quarter 2004 earnings from continuing operations with that of the third quarter of 2003, net interest income improved by 5.56% or $933,000, due primarily to an increase in the average balance of loans held for investment. A large portion of the increase in loans held for investment is due to the April 1 acquisition of People’s Community Bank in East Tennessee, with loans totaling $134 million at the time of acquisition. The Bank’s branch expansion into Winston-Salem, Charlotte, and Mt. Airy, North Carolina and Blacksburg and Norfolk, Virginia contributed another $30 million in 2004 loan growth. Non-interest income from continuing operations for the third quarter of 2004 declined by $300,000 compared to the third quarter of 2003. Non-interest income in the third quarter of 2003 included a $1.0 million gain on the sale of equity securities compared to a $60,000 gain in the third quarter of 2004. Absent security gains, non interest income improved due in large part to continuing improvements in the areas of service charges, which increased $363,000 or 17.3% and other service charges,

commissions and fees which improved by $175,000 or 31.7%, offset by a slight decline in fiduciary income during the third quarter of 2004 when compared to the third quarter of 2003. The Company maintained its level of performance from continuing operations for the third quarter of 2004 despite a $1.2 million increase in salaries and related employee benefits, as well as increases in other overhead and operating expenses, which are associated primarily with the acquisition of People’s Community Bank in East Tennessee in April 2004 and costs associated with continued development and growth of branches and loan production offices in North Carolina and Virginia.

     The Company’s effective income tax rate for the quarter and the nine months ended September 30, 2004 declined as result of realization of tax benefits from the divestiture of its discontinued operating segment, United First Mortgage in the third quarter. Realization of the tax benefits from the divestiture reduced the loss from discontinued operations and increased net income by $957,000 or $0.08 per diluted share.

     Income from continuing operations for the nine months ended September 30, 2004 was $19.8 million, versus $20.0 million for the nine months ended September 30, 2003. Contributing to change income from continuing operations was a $4.0 million or 8.4% increase in net interest income and a $2.0 million or 17.7% increase in non-interest income. The improvement in non-interest income is the result of a 13.8% or $817,000 increase in collection of service charges and a 23.3% or $378,000 enhancement in other service charges, commissions and fees. A 62.9% or $554,000 improvement in other operating income for the nine months ended September 30, 2004, versus the same nine-month period in 2003 is due to several factors including the settlement of a legal proceeding, which resulted in a $150,000 recovery and a $182,000 gain on the sale of a previously closed bank branch. The $318,000 increase in gain on sale of securities is in large part the difference between a $1.4 million gain on the sale of corporate bonds held as part of available for sale securities in the second quarter of 2004 compared to a $1.0 million gain from the sale of equities during the third quarter of 2003. Total non-interest expenses from continuing

operations increased by 27.8% or $7.7 million for the nine months ended September 30, 2004. A 29.7% or $4.5 million increase in salaries and benefits and a $2.0 million increase in other operating expenses account for 84% of this increase, which is associated with the Company’s expansion into Blacksburg, Virginia, Eastern Virginia, East Tennessee, and Charlotte, Winston-Salem and Mount Airy, North Carolina which brings with it the associated cost for additional corporate services, support, added technology and infrastructure.

     The provision for loan losses for the third quarter of 2004 increased by $429,000 from the second quarter of 2004. Net charge-offs increased $194,000 from the second quarter of 2004. The provision for loan losses for the nine months ended September 30, 2004 decreased by $272,000 from the comparable period in the prior year. Changes in the provision are consistent with changes in asset quality and the results of First Community’s quarterly analysis of the adequacy of the allowance for loan losses. The ratio of non-performing assets to total assets was 0.29% on September 30, 2004, compared to 0.26% at June 30, 2004 and 0.31% at December 31, 2003. Non-accrual loans were $3.7 million at September 30, 2004, $2.6 million at June 30, 2004 and $3.0 million at December 31, 2003. Total delinquencies as a percent of total loans were 0.80%, at September 30, 2004, 0.67% at June 30, 2004 and 1.04% at December 31, 2003. The ratio of allowance for loan losses to non-accrual loans was 441.23% at September 30, 2004 compared to 614.5% at June 30, 2004 and 488.61% at December 31, 2003.

     Assets at September 30, 2004 increased to $1.83 billion versus $1.67 billion at year-end 2003. Asset growth for the nine-month period includes $155 million from the acquisition of People’s Community Bank in Johnson City, Tennessee. Total equity for the Company was $180.8 million at September 30, 2004, resulting in book value per common share outstanding of $16.08 compared to $175.0 million and $15.57 per common share at December 31, 2003.

     The third quarter 2004 tax equivalent net interest margin from continuing operations was 4.38% compared to 4.66% for the third quarter of 2003. The

Company’s year-to-date tax equivalent net interest margin from continuing operations decreased 25 basis points to 4.45% vs. 4.70% for the same period last year. These decreases in tax equivalent net interest margin are largely attributable to reduced loan yields on new and renewed business throughout the prevailing low interest rate environment. The impact on net interest income was partially offset by the balance sheet growth of approximately $132.2 million and $124.8 million of interest-bearing assets and liabilities, respectively, from the second quarter 2004 acquisition of People’s Community Bank (PCB Bancorp, Inc.)

     First Community Bancshares, Inc., headquartered in Bluefield, Virginia, is a $1.83 billion bank holding company and is the parent company of First Community Bank, N. A. First Community Bank, N. A. operates through 52 full-service banking locations, four loan production offices, and two trust and investment management offices in the four states of Virginia, West Virginia, North Carolina and Tennessee. First Community Bank is also the parent of Stone Capital Management, Inc., a SEC registered investment advisory firm, which offers wealth management and investment advice. First Community Bancshares, Inc.'s common stock is traded on the NASDAQ National market under the symbol “FCBC”.

DISCLAIMER

     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.
Consolidated Statements of Income
(Dollars in Thousands, Except Per Share Data)(Unaudited)

		Nine Months Ended						Three Months Ended
		September 30,						September 30,
		2004			2003			2004			2003
Interest	Interest and fees on loans held for investment	$	56,195		$	52,465		$	19,953		$	18,591
	Interest on securities-taxable		9,659			9,589			2,960			3,070
	Interest on securities-nontaxable		4,985			4,851			1,642			1,552
	Interest on federal funds sold and deposits		395			482			94			124
	Total interest income		71,234			67,387			24,649			23,337
Interest	Interest on deposits		13,830			15,393			4,702			4,934
Expense	Interest on borrowings		6,092			4,650			2,246			1,635
	Total interest expense		19,922			20,043			6,948			6,569
	Net interest income		51,312			47,344			17,701			16,768
	Provision for loan losses		2,407			2,679			1,152			782
	Net interest income after provision for loan losses		48,905			44,665			16,549			15,986
Non-Interest	Fiduciary income		1,429			1,530			499			549
Income	Service charges on deposit accounts		6,722			5,905			2,461			2,098
	Other service charges, commissions and fees		2,000			1,622			728			553
	Other operating income		1,435			881			530			340
	Gain on sale of securities		1,509			1,191			60			1,038
	Total non-interest income		13,095			11,129			4,278			4,578
Non-Interest	Salaries and employee benefits		19,582			15,097			6,807			5,631
Expense	Occupancy expense of bank premises		2,659			2,208			913			752
	Furniture and equipment expense		2,108			1,427			735			532
	Amortization of intangible assets		287			178			112			64
	Other operating expense		10,737			8,769			3,670			3,203
	Total non-interest expense		35,373			27,679			12,237			10,182
	Income from continuing operations before income taxes		26,627			28,115			8,590			10,382
	Income tax expense continuing operations		6,817			8,133			1,968			3,164
	Income from continuing operations	$	19,810		$	19,982		$	6,622		$	7,218
	Loss from discontinued operations before tax	$	(5,531	)	$	(64	)	$	(1,266	)	$	(1,621	)
	Income tax benefit from discontinued operations	$	(2,006	)	$	(26	)	$	(1,054	)	$	(632	)
	Loss from discontinued operations	$	(3,525	)	$	(38	)	$	(212	)	$	(989	)
	Net income	$	16,285		$	19,944		$	6,410		$	6,229
	Basic earnings per common share (EPS)	$	1.45		$	1.81		$	0.57		$	0.55
	Diluted earnings per common share (DEPS)	$	1.44		$	1.79		$	0.57		$	0.55
	Basic earnings per common share-continuing operations	$	1.76		$	1.81		$	0.59		$	0.64
	Diluted earnings per common share-continuing operations	$	1.75		$	1.79		$	0.58		$	0.64
	Weighted Average Shares Outstanding:
	Basic		11,235,462			11,047,199			11,231,973			11,262,180
	Diluted		11,331,718			11,143,175			11,326,999			11,383,941
	For the period:
	Return on average equity		12.30	%		16.23	%		14.46	%		14.10	%
	Return on average equity-continuing operations		14.97	%		16.26	%		14.94	%		16.34	%
	Return on average assets		1.21	%		1.67	%		1.39	%		1.46	%
	Return on average assets-continuing operations		1.49	%		1.74	%		1.44	%		1.75	%
	Cash dividends per share	$	0.75		$	0.73		$	0.25		$	0.25
	At period end:
	Book value per share	$	16.08		$	15.33		$	16.08		$	15.33
	Market value	$	32.85		$	35.29		$	32.85		$	35.29

First Community Bancshares, Inc.
Consolidated Balance Sheets
(Dollars in Thousands, Except Per Share Data)(Unaudited)

		September 30,			December 31,
		2004			2003
Assets	Cash and due from banks	$	37,400		$	37,173
	Interest-bearing deposits with banks		17,678			22,136
	Securities available for sale (amortized cost of $386,024 September 30, 2004; $435,912, December 31, 2003)		391,623			444,194
	Securities held to maturity (fair value of $36,334 September 30, 2004; $40,060, December 31, 2003)		34,719			38,020
	Loans held for sale		1,163			424
	Loans held for investment, net of unearned income		1,229,270			1,026,191
	Less allowance for loan losses		16,233			14,624
	Net loans		1,213,037			1,011,567
	Premises and equipment		36,499			29,816
	Other real estate owned		1,636			2,091
	Interest receivable		8,770			8,327
	Other assets		22,302			17,266
	Intangible assets		61,715			39,341
	Assets related to discontinued operations		—			22,372
	Total Assets	$	1,826,542		$	1,672,727
Liabilities	Deposits:
	Demand	$	218,818		$	194,046
	Interest-bearing demand		312,594			234,458
	Savings		222,065			190,366
	Time		609,076			606,666
	Total Deposits		1,362,553			1,225,536
	Interest, taxes and other liabilities		14,616			11,897
	Securities sold under agreements to repurchase		111,481			97,651
	FHLB and other indebtedness		157,060			144,616
	Liabilities related to discontinued operations		—			17,992
	Total Liabilities		1,645,710			1,497,692
Stockholders’ Equity	Preferred stock, par value undesignated; 1,000,000 shares authorized; no shares issued and outstanding in 2004 and 2003		—			—
	Common stock, $1 par value; 15,000,000 shares authorized in 2004 and 2003, respectively; 11,470,142 issued in 2004 and 11,442,348 issued in 2003; and 11,243,991 and 11,242,443 outstanding in 2004 and 2003, respectively		11,470			11,442
	Additional paid-in capital		108,280			108,128
	Retained earnings		64,752			56,894
	Treasury stock, at cost		(7,029	)		(6,407	)
	Accumulated other comprehensive income		3,359			4,978
	Total Stockholders’ Equity		180,832			175,035
	Total Liabilities and Stockholders’ Equity	$	1,826,542		$	1,672,727

First Community Bancshares, Inc.
Quarterly Performance Summary
Income Statements
(Dollars in Thousands Except Per Share Data)

		As of and for the Quarter Ended
		September 30,			June 30,			March 31,			December 31,			September 30,
		2004			2004			2004			2003			2003
Interest	Interest and fees on loans held for investment	$	19,953		$	19,112		$	17,130		$	17,967		$	18,591
	Interest on securities-taxable		2,960			3,433			3,266			3,528			3,070
	Interest on securities-nontaxable		1,642			1,707			1,636			1,637			1,552
	Interest on federal funds sold and deposits		94			104			197			122			124
	Total interest income		24,649			24,356			22,229			23,254			23,337
Interest	Interest on deposits		4,702			4,813			4,315			4,557			4,934
Expense	Interest on borrowings		2,246			1,916			1,930			1,797			1,635
	Total interest expense		6,948			6,729			6,245			6,354			6,569
	Net interest income		17,701			17,627			15,984			16,900			16,768
	Provision for loan losses		1,152			723			532			740			782
	Net interest income after provision for loan losses		16,549			16,904			15,452			16,160			15,986
Non-Int	Fiduciary income		499			512			418			258			549
Income	Service charges on deposit accounts		2,461			2,301			1,960			2,166			2,098
	Other service charges, commissions and fees		728			713			559			762			553
	Other operating income		530			610			295			317			340
	Gain (loss) on Securities		60			1,438			11			(90	)		1,038
	Total non-interest income		4,278			5,574			3,243			3,413			4,578
Non-Int	Salaries and employee benefits		6,807			6,662			6,113			5,547			5,631
Expense	Occupancy expense of bank premises		913			894			852			704			752
	Furniture and equipment expense		735			747			626			567			532
	Amortization of intangible assets		112			111			64			65			64
	Other operating expense		3,670			3,812			3,255			3,028			3,203
	Total non-interest expense		12,237			12,226			10,910			9,911			10,182
	Income before income taxes-continuing operations		8,590			10,252			7,785			9,662			10,382
	Income tax expense-continuing operations		1,968			2,666			2,183			2,925			3,164
	Income from continuing operations		6,622			7,586			5,602			6,737			7,218
	Loss before tax-discontinued operations		(1,266	)		(2,374	)		(1,891	)		(2,110	)		(1,621	)
	Income tax benefit -discontinued operations		(1,054	)		(502	)		(450	)		(667	)		(632	)
	Loss from discontinued operations		(212	)		(1,872	)		(1,441	)		(1,443	)		(989	)
	Net income		6,410			5,714			4,161			5,294			6,229
Per	Basic EPS	$	0.57		$	0.51		$	0.37		$	0.47		$	0.55
Share	Diluted EPS	$	0.57		$	0.50		$	0.37		$	0.47		$	0.55
	Basic EPS from continuing operations	$	0.59		$	0.67		$	0.50		$	0.60		$	0.64
	Diluted EPS from continuing operations	$	0.58		$	0.67		$	0.49		$	0.59		$	0.64
Data	Cash dividends per share	$	0.25		$	0.25		$	0.25		$	0.25		$	0.25
	Weighted Average Shares Outstanding:
	Basic		11,231,973			11,228,956			11,245,465			11,244,382			11,262,180
	Diluted		11,326,999			11,320,415			11,347,748			11,362,269			11,383,941
	Actual shares outstanding at period end		11,243,991			11,215,473			11,244,894			11,242,443			11,250,931
	Book Value per share at period end	$	16.08		$	15.28		$	15.83		$	15.57		$	15.33
	Market Value per share at period end	$	32.85		$	33.50		$	30.54		$	33.16		$	35.29

First Community Bancshares, Inc.
Quarterly Performance Summary
Income Statements
(Dollars in Thousands Except Per Share Data)

	As of and for the Quarter Ended
	September 30,			June 30,			March 31,			December 31,			September 30,
	2004			2004			2004			2003			2003
Ratios:
Return on average assets		1.39	%		1.22	%		1.00	%		1.25	%		1.46	%
Return on average assets-continuing operations		1.44	%		1.65	%		1.36	%		1.61	%		1.75	%
Return on average equity		14.46	%		13.06	%		9.40	%		12.01	%		14.10	%
Return on average equity-continuing operations		14.94	%		17.33	%		12.66	%		15.28	%		16.34	%
Net yield on earning assets		4.37	%		4.46	%		4.41	%		4.56	%		4.55	%
Net yield on earning assets-continuing operations		4.38	%		4.51	%		4.45	%		4.63	%		4.66	%
Efficiency Ratio at end of period		59.73	%		59.97	%		61.71	%		51.92	%		51.16	%
Efficiency Ratio at end of period-continuing operations		50.56	%		49.18	%		51.26	%		44.76	%		45.05	%
Equity as a percent of total assets at end of period		9.90	%		9.27	%		10.51	%		10.46	%		10.27	%
Equity as a percent of continuing assets at end of period		9.90	%		9.38	%		10.71	%		10.61	%		10.41	%
Average earning assets as a percentage of average total assets		90.88	%		90.96	%		92.21	%		91.92	%		91.91	%
Average earning assets-continuing as a percentage of average total assets continuing operations		90.87	%		91.12	%		92.37	%		92.18	%		91.99	%
Average loans (not including loans held for sale) as a percentage of average deposits		88.63	%		83.38	%		83.10	%		84.17	%		83.04	%
QTD Averages:
Average Loans (Not including Loans Held for Sale)	$	1,222,204		$	1,171,562		$	1,016,309		$	1,034,786		$	1,030,875
Average Earning Assets	$	1,673,030		$	1,708,139		$	1,543,157		$	1,545,585		$	1,559,472
Average Earning Assets-continuing operations	$	1,664,447		$	1,682,841		$	1,527,932		$	1,527,098		$	1,501,239
Average Total Assets	$	1,840,911		$	1,878,000		$	1,673,585		$	1,681,510		$	1,696,647
Average Total Assets-continuing operations	$	1,831,596		$	1,846,772		$	1,654,119		$	1,656,714		$	1,632,044
Average Deposits	$	1,379,000		$	1,405,121		$	1,223,032		$	1,229,439		$	1,241,420
Average Deposits-continuing operations	$	1,378,953		$	1,405,070		$	1,222,971		$	1,229,351		$	1,241,313
Average Equity	$	176,369		$	176,034		$	178,037		$	174,923		$	175,228
Taxable Equivalent Net Interest Income	$	18,374		$	18,948		$	16,937		$	17,773		$	17,899
Taxable Equivalent Net Interest Income-continuing operations	$	18,314		$	18,873		$	16,889		$	17,806		$	17,634
Average Interest-bearing deposits	$	1,160,880		$	1,182,311		$	1,036,976		$	1,038,341		$	1,046,364
Average Interest-bearing deposits-continuing operations	$	1,160,880		$	1,182,311		$	1,036,976		$	1,038,341		$	1,046,364

First Community Bancshares, Inc.
Quarterly Performance Summary
Balance Sheets

	(Dollars in Thousands Except Per Share Data)
	September 30,			June 30,			March 31,			December 31,			September 30,
	2004			2004			2004			2003			2003
Cash and due from banks	$	37,400		$	41,533		$	36,389		$	37,173		$	30,915
Interest-bearing deposits with banks		17,678			14,799			40,157			22,136			76,309
Securities available for sale		391,623			429,478			443,657			444,194			395,203
Securities held to maturity		34,719			36,209			37,425			38,020			39,433
Loans held for sale		1,163			774			257			424			206
Loans held for investment, net of unearned income		1,229,270			1,186,954			1,019,829			1,026,191			1,028,189
Less allowance for loan losses		16,233			16,160			14,536			14,624			15,680
Net loans		1,213,037			1,170,794			1,005,293			1,011,567			1,012,509
Premises and equipment		36,499			35,071			30,507			29,816			29,467
Other real estate owned		1,636			2,166			2,571			2,091			2,403
Interest receivable		8,770			8,653			8,434			8,327			8,388
Other assets		22,302			25,566			18,269			17,266			24,647
Intangible assets		61,715			62,003			39,226			39,341			38,121
Assets related to discontinued operations		—			22,192			32,275			22,372			21,735
Total Assets	$	1,826,542		$	1,849,238		$	1,694,460		$	1,672,727		$	1,679,336
Deposits:
Demand	$	218,818		$	225,241		$	197,282		$	194,046		$	193,941
Interest-bearing demand		312,594			318,932			243,226			234,458			234,737
Savings		222,065			224,706			194,722			190,366			188,021
Time		609,076			626,150			607,426			606,666			615,680
Total Deposits		1,362,553			1,395,029			1,242,656			1,225,536			1,232,379
Interest, taxes and other liabilities		14,616			11,501			12,619			11,897			12,474
Securities sold under agreements to repurchase		111,481			109,252			98,035			97,651			102,449
FHLB and other indebtedness		157,060			140,941			133,774			144,616			143,635
Liabilities related to discontinued operations		—			21,130			29,342			17,992			15,915
Total Liabilities		1,645,710			1,677,853			1,516,426			1,497,692			1,506,852
Preferred Stock		—			—			—			—			—
Common stock, $1 par value		11,470			11,451			11,450			11,442			11,433
Additional paid-in capital		108,280			108,078			108,243			108,128			108,078
Retained earnings		64,752			61,153			58,241			56,894			54,407
Treasury stock, at cost		(7,029	)		(7,321	)		(6,566	)		(6,407	)		(5,762	)
Accumulated other comprehensive (loss) income		3,359			(1,976	)		6,666			4,978			4,328
Total Stockholders’ Equity		180,832			171,385			178,034			175,035			172,484
Total Liabilities and Stockholders’ Equity	$	1,826,542		$	1,849,238		$	1,694,460		$	1,672,727		$	1,679,336

First Community Bancshares, Inc.
Selected Financial Information
(Dollars in Thousands)

	As of and for the Quarter Ended
	September 30,			June 30,			March 31,			December 31,			September 30,
	2004			2004			2004			2003			2003
Asset Quality Analysis:
Allowance for Loan Losses:
Beginning balance	$	16,160		$	14,536		$	14,624		$	15,680		$	15,707
Provision		1,152			723			532			740			782
Acquisiton balance		—			1,786			—			—			—
Charge-offs		(1,312	)		(1,233	)		(911	)		(2,022	)		(990	)
Recoveries		233			348			291			226			181
Net charge-offs		(1,079	)		(885	)		(620	)		(1,796	)		(809	)
Ending balance	$	16,233		$	16,160		$	14,536		$	14,624		$	15,680
Nonperforming Assets:
Nonaccrual loans	$	3,679		$	2,630		$	3,588		$	2,993		$	2,277
Foreclosed real estate		1,636			2,166			2,571			2,091			2,403
Repossessions		40			92			60			75			125
Loans 90 days or more past due & still accruing		—			—			—			—			124
Nonperforming assets	$	5,355		$	4,888		$	6,219		$	5,159		$	4,929
Loans 90 days or more past due & still accruing as a percentage of loans held for investment		0.00	%		0.00	%		0.00	%		0.00	%		0.01	%
Asset Quality Ratios:
Nonaccrual loans and leases as a percentage of loans held for investment		0.30	%		0.22	%		0.35	%		0.29	%		0.22	%
Nonperforming assets as a percentage of:
Total assets		0.29	%		0.26	%		0.37	%		0.31	%		0.29	%
Total assets-continued		0.29	%		0.27	%		0.37	%		0.31	%		0.30	%
Loans held for investment plus foreclosed property		0.44	%		0.41	%		0.61	%		0.50	%		0.48	%
Net charge-offs as a % of average loans held for investment		0.09	%		0.08	%		0.06	%		0.17	%		0.08	%
Allowance for loan & lease losses as a percentage of loans held for investment		1.32	%		1.36	%		1.43	%		1.43	%		1.53	%
Ratio of allowance for loans losses to:
Nonaccrual loans		4.41			6.14			4.05			4.89			6.89
Restructured loans performing according to modified terms	$	368		$	392		$	392		$	356		$	362