Exhibit 99.1
NEWS RELEASE
FOR IMMEDIATE RELEASE: FOR MORE INFORMATION,
JULY 16, 2002 CONTACT: ROBERT L. SCHUMACHER
AT (276) 326-9000
FIRST COMMUNITY BANCSHARES, INC. (FCBC) ANNOUNCES
SECOND QUARTER OPERATING RESULTS
First Community Bancshares, Inc. (Nasdaq: FCBC; www.fcbinc.com) today
reported earnings of $5.9 million for the Second Quarter of 2002, or $0.59
earnings per basic and diluted share. This represents a $1.3 million improvement
over results for the Second Quarter of 2001 of $4.6 million. Second Quarter 2002
net income and earnings per share each improved by 28% over the Second Quarter
of 2001. Return on average equity increased to 16.84% in the Second Quarter of
2002 compared to 14.55% for the same quarter last year. In addition, return on
average assets increased to 1.62% in the Second Quarter of 2002 compared to
1.47% for the comparable period in 2001.
Net interest income for the Second Quarter improved by $2.92 million.
This improvement was offset, in part, by an increase in non-interest expenses of
$1.05 million due to an increase in commissions paid on additional mortgage
originations and the addition of employee salaries related to the acquisition of
four branches in Virginia late in the fourth quarter of 2001.
Net income for the six months ended June 30, 2002 was $12.1 million,
versus $9.1 million for the six months ended June 30, 2001, an increase of $3.0
million. This 33% improvement in net income of the Company for the first six
months of 2001, is due to a 22.7% increase in net interest income associated
with a $213 million increase in average earning assets. Net interest margin also
improved from 4.57% for the six months ended June 30, 2001 to 4.70% for the
first six months of 2002.
Also contributing to improved results for the first half of 2002 were
increases in service charges on deposit accounts, up $461,000 compared to the
first six months of 2001, and a $1.07 million increase in mortgage banking
income compared to the same six months last year. The improved financial
performance of the Company translates into an increase of $0.30 in both basic
and diluted earnings per share ($1.21 vs. $0.91) for the first six months of
2002 compared
to the same six month period last year. Return on average equity for the first
six months of this year was 17.54% compared to 14.56% for the first six months
last year. Return on average assets also improved to 1.67% compared to 1.47% for
the first six months in 2001.
Despite the continuing slower economy, FCBC's asset quality ratios
remain sound. The ratio of non-performing assets to total assets stood at 0.50%
at the end of the Second Quarter of 2002, compared to 0.54% at March 31, 2002
and 0.58% at December 31, 2001. At June 30, 2002, loans 90 days or more past due
stood at 0.03%, while non-accruing loans totaled 0.44% as a percentage of total
loans. These performance indicators compare favorably to the corresponding
ratios at March 31, 2002 and December 31, 2001. The coverage ratio (allowance
for loan losses divided by non-performing loans) at the end of the Second
Quarter of 2002 was 323.69% compared to 295.10% at the end of the First Quarter
2002 and 274.92% at December 31, 2001.
Total assets at June 30, 2002 were virtually the same as at December
31, 2001. Growth was realized in retail customer deposits, which increased by
$3.26 million since the previous year end. Total equity for the Company
increased to $143.9 million, bringing book value per common share outstanding to
$14.50, up from $13.39 at year end 2001. At June 30, 2002, the market value of
FCBC stock was $33.00, compared to $26.95 at December 31, 2001.
First Community is a $1.45 billion bank holding company with
headquarters in Bluefield, Virginia. The Company, through its wholly-owned
subsidiary First Community Bank, N. A., operates 38 branches throughout
Virginia, West Virginia and North Carolina. First Community Bank, N. A. also
owns United First Mortgage, Inc. based in Richmond, Virginia, which operates 11
offices from Virginia Beach to Harrisonburg, Virginia.
First Community Bancshares, Inc. common stock is traded on the Nasdaq
SmallCap market under the symbol, "FCBC." The Company is also proud to announce
that it was included for the second consecutive year in both the Russell 2000
and Russell 3000 Indices with the final release of Russell's newly reconstituted
lists on July 9, 2002.
*****
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: the timely
development, production and acceptance of new products and services and their
feature sets; 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.
FIRST COMMUNITY BANCSHARES, INC.
CONSOLIDATED STATEMENTS OF INCOME
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(Dollars in Thousands, Except Per Share Data)(Unaudited)
Six Months
Ended
June 30
---------------------------
2002 2001
---------------------------
INTEREST Interest and fees on loans held for investment $ 36,049 $ 36,391
INCOME Interest on loans held for sale 1,670 1,347
Interest on securities-taxable 6,999 4,871
Interest on securities-nontaxable 3,422 2,850
Interest on federal funds sold and interest-bearing balances
with banks 82 577
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TOTAL INTEREST INCOME 48,222 46,036
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Interest Interest on deposits 13,397 16,707
EXPENSE Interest on borrowings 5,180 5,161
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TOTAL INTEREST EXPENSE 18,577 21,868
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NET INTEREST INCOME 29,645 24,168
Provision for loan losses 1,959 1,732
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NET INTEREST INCOME AFTER PROVISION FOR
LOAN LOSSES 27,686 22,436
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Non-Interest Fiduciary income 844 910
INCOME Service charges on deposit accounts 3,269 2,808
Other service charges, commissions and fees 681 676
Mortgage banking income 5,356 4,289
Other operating income 482 494
Gain on sale of securities 186 44
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TOTAL NON-INTEREST INCOME 10,818 9,221
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Non-Interest Salaries and employee benefits 11,549 9,665
EXPENSE Occupancy expense of bank premises 1,422 1,337
Furniture and equipment expense 1,065 959
Amortization of intangible assets 580 1,119
Other operating expense 6,900 5,501
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TOTAL NON-INTEREST EXPENSE 21,516 18,581
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Income before income taxes 16,988 13,076
Income tax expense 4,914 4,011
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NET INCOME (1) 12,074 9,065
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BASIC AND DILUTED EARNINGS PER COMMON SHARE (EPS) (1) $ 1.21 $ 0.91
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Weighted Average Shares Outstanding:
Basic 9,939,223 9,946,916
Diluted 9,985,704 9,964,161
For the year:
Return on average equity 17.54% 14.56%
Return on average assets 1.67% 1.47%
Cash dividends per share $ 0.50 $ 0.42
At period end:
Book value per share $ 14.50 $ 12.85
Market value (closing price) $ 33.00 $ 27.17
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(1) Effective January 1, 2002, FCBC ceased amortization of certain goodwill in
accordance with FASB Statement 142. An adjustment of $714 would be necessary to
conform the prior period amount to current year presentation resulting in an
adjusted net income and earnings per share for the corresponding period in 2001
of $9,779 and $0.98, respectively.
FIRST COMMUNITY BANCSHARES, INC.
CONSOLIDATED BALANCE SHEETS
- -----------------------------------------------------------------------------
(Dollars in Thousands, Except Per Share Data)(Unaudited)
JUNE 30, DECEMBER 31,
2002 2001
-------- ------------
ASSETS Cash and due from banks $ 31,448 $ 47,566
Interest-bearing balances with banks 255 249
Securities available for sale (amortized cost of $330,567
June 301, 2002; $352,759, December 31, 2001) 338,572 354,007
Investment securities held to maturity (market value of $43,477
June 30, 2002; $43,393, December 31, 2001) 41,327 41,884
Loans held for sale 52,095 65,532
Loans held for investment, net of unearned income 928,541 904,496
Less allowance for loan losses 14,194 13,952
- -----------------------------------------------------------------------------------------------------------------------------
Net loans 914,347 890,544
Premises and equipment 22,314 21,713
Other real estate owned 2,452 3,029
Interest receivable 8,330 8,765
Other assets 18,348 18,468
Intangible assets 25,846 26,478
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TOTAL ASSETS $1,455,334 $1,478,235
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LIABILITIES Deposits:
Demand $ 156,820 $ 161,346
Interest-bearing demand 180,585 183,685
Savings 175,431 142,839
Time 568,679 590,390
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Total Deposits 1,081,515 1,078,260
Interest, taxes and other liabilities 13,704 15,852
Fed Funds Purchased 8,950 26,500
Securities sold under agreements to repurchase 83,015 79,262
FHLB and other indebtedness 124,266 145,320
- -----------------------------------------------------------------------------------------------------------------------------
TOTAL LIABILITIES 1,311,450 1,345,194
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STOCKHOLDERS' Common stock, $1 par value; 15,000,000 shares authorized in 2002
EQUITY and 2001, respectively; 9,956,714 issued in 2002 and 9,955,425
issued in 2001; and 9,925,982 and 9,936,442 outstanding in
2002 and 2001, respectively 9,957 9,955
Additional paid-in capital 58,600 60,189
Retained earnings 71,394 62,566
Treasury stock, at cost (870) (424)
Accumulated other comprehensive income (loss) 4,803 755
- -----------------------------------------------------------------------------------------------------------------------------
TOTAL STOCKHOLDERS' EQUITY 143,884 133,041
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TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $1,455,334 $1,478,235
- -----------------------------------------------------------------------------------------------------------------------------
FIRST COMMUNITY BANCSHARES, INC.
QUARTERLY PERFORMANCE SUMMARY AS OF AND FOR THE QUARTER ENDED
INCOME STATEMENTS JUNE 30, MARCH 31, DECEMBER 31, SEPTEMBER 30, JUNE 30,
(Dollars in Thousands Except Per Share Data) 2002 2002 2001 2001 2001
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INTEREST Interest and fees on loans held for investment $ 18,013 $ 18,036 $ 17,963 $ 18,228 $ 18,262
INCOME Interest on loans held for sale 826 844 846 763 736
Interest on securities-taxable 3,621 3,378 2,792 2,596 2,193
Interest on securities-nontaxable 1,680 1,742 1,706 1,634 1,465
Interest on federal funds sold and
interest-bearing balances with banks 39 43 96 169 479
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TOTAL INTEREST INCOME 24,179 24,043 23,403 23,390 23,135
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Interest Interest on deposits 6,404 6,993 7,298 7,879 8,296
EXPENSE Interest on borrowings 2,603 2,577 2,663 2,701 2,586
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TOTAL INTEREST EXPENSE 9,007 9,570 9,961 10,580 10,882
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NET INTEREST INCOME 15,172 14,473 13,442 12,810 12,253
Provision for loan losses 1,022 937 2,120 1,282 985
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NET INTEREST INCOME AFTER PROVISION FOR
LOAN LOSSES 14,150 13,536 11,322 11,528 11,268
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Non-Int Fiduciary income 501 343 435 470 501
INCOME Service charges on deposit accounts 1,806 1,463 1,641 1,517 1,503
Other service charges, commissions and fees 355 326 427 332 199
Mortgage banking income 2,107 3,249 2,515 2,778 2,544
Other operating income 186 296 566 236 263
Gain (loss) on Sale of Securities 9 177 (16) 153 (7)
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TOTAL NON-INTEREST INCOME 4,964 5,854 5,568 5,486 5,003
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Non-Int Salaries and employee benefits 5,746 5,803 4,926 5,239 4,994
EXPENSE Occupancy expense of bank premises 679 743 610 668 675
Furniture and equipment expense 562 503 452 403 496
Goodwill amortization 293 287 598 568 563
Other operating expense 3,399 3,501 3,155 2,825 2,900
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TOTAL NON-INTEREST EXPENSE 10,679 10,837 9,741 9,703 9,628
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Income before income taxes 8,435 8,553 7,149 7,311 6,643
Income tax expense 2,539 2,375 2,080 2,311 2,034
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NET INCOME 5,896 6,178 5,069 5,000 4,609
FAS 142 GOODWILL ADJUSTMENT 0 0 371 361 359
ADJUSTED NET INCOME $ 5,896 $ 6,178 $ 5,440 $ 5,361 $ 4,968
Taxable Equivalent Net Interest Income $ 16,123 $ 15,458 $ 14,410 $ 13,747 $ 13,112
Per Basic and diluted earnings per common share (EPS) $ 0.59 $ 0.62 $ 0.51 $ 0.50 $ 0.46
SHARE EPS adjusted for FAS 142 (1) $ 0.59 $ 0.62 $ 0.55 $ 0.54 $ 0.50
DATA Cash dividends per share $ 0.25 $ 0.25 $ 0.26 $ 0.21 $ 0.21
Weighted Average Shares Outstanding:
Basic 9,945,158 9,933,222 9,939,974 9,943,522 9,948,374
Diluted 9,993,812 9,977,531 9,991,895 10,003,547 9,967,091
Actual shares oustanding at period end 9,925,982 9,950,982 9,936,442 9,942,602 9,946,624
Book Value per share at period end $ 14.50 $ 13.67 $ 13.39 $ 13.33 $ 12.85
Market Value per share at period end $ 33.00 $ 30.26 $ 26.95 $ 28.82 $ 27.17
RATIOS Return on average assets 1.62% 1.72% 1.47% 1.53% 1.47%
Return on average equity 16.84% 18.26% 14.89% 15.21% 14.55%
Net yield on earning assets 4.77% 4.64% 4.52% 4.60% 4.53%
Efficiency Ratio at end of period 48.99% 47.14% 47.81% 48.71% 49.40%
Equity as a percent of total assets at end of period 9.89% 9.27% 9.00% 10.07% 10.00%
Average earning assets as a percentage of
average total assets 92.64% 92.77% 92.69% 92.46% 92.09%
Average loans (not including loans held for sale) as
a percentage of average deposits 98.99% 84.78% 88.27% 90.39% 89.08%
End of Period:
Total Assets $ 1,455,334 $ 1,467,608 $ 1,478,235 $ 1,315,775 $ 1,278,130
Total Equity $ 143,884 $ 136,002 $ 133,041 $ 132,472 $ 127,791
QTD Average Loans (Not including Loans Held for Sale) $ 917,319 $ 914,749 $ 876,744 $ 850,759 $ 826,055
AVERAGES Average Earning Assets $ 1,355,841 $ 1,351,598 $ 1,265,381 $ 1,197,447 $ 1,160,550
Average Total Assets $ 1,463,573 $ 1,456,863 $ 1,365,173 $ 1,295,051 $ 1,260,167
Average Deposits $ 926,649 $ 1,079,022 $ 993,252 $ 941,190 $ 927,309
Average Equity $ 140,408 $ 137,184 $ 135,114 $ 130,437 $ 127,007
(1) Effective January 1, 2002, FCBC ceased certain amortization of
goodwill in accordance with FASB Statement No. 142. This
adjustment conforms prior period amounts with current year
presentation.
FIRST COMMUNITY BANCSHARES, INC.
QUARTERLY PERFORMANCE SUMMARY
Balance Sheets
(Dollars in Thousands Except Per Share Data)
JUNE 30, MARCH 31, DECEMBER 31, SEPTEMBER 30, JUNE 30,
2002 2002 2001 2001 2001
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Cash and due from banks $ 31,448 $ 28,547 $ 47,566 $ 35,275 $ 29,296
Interest-bearing balances with banks 255 830 249 15,018 13,441
Securities available for sale 338,572 368,526 354,007 261,409 254,368
Investment securities held to maturity 41,327 41,446 41,884 42,001 42,114
Loans held for sale 52,095 47,596 65,532 40,759 34,303
Loans held for investment, net of unearned income 928,541 911,746 904,496 862,689 845,390
Less allowance for loan losses 14,194 14,271 13,952 12,889 12,688
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Net loans 914,347 897,475 890,544 849,800 832,702
Premises and equipment 22,314 21,927 21,713 19,452 19,412
Other real estate owned 2,452 2,538 3,029 2,595 2,614
Interest receivable 8,330 9,139 8,765 8,746 8,464
Other assets 18,348 23,459 18,468 18,199 18,327
Intangible assets 25,846 26,125 26,478 22,521 23,089
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TOTAL ASSETS $1,455,334 $1,467,608 $1,478,235 $1,315,775 $1,278,130
======================================================================
Deposits:
Demand $ 156,820 $ 152,980 $ 161,346 $ 140,754 $ 130,245
Interest-bearing demand 180,585 191,284 183,685 145,927 139,225
Savings 175,431 160,544 142,839 131,306 130,350
Time 568,679 577,398 590,390 535,700 528,642
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Total Deposits 1,081,515 1,082,206 1,078,260 953,687 928,462
Interest, taxes and other liabilities 13,704 16,135 15,852 15,760 13,909
Federal funds purchased 8,950 4,560 26,500 - -
Securities sold under agreements to repurchase 83,015 79,238 79,262 66,126 60,447
FHLB and other indebtedness 124,266 149,467 145,320 147,730 147,521
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TOTAL LIABILITIES 1,311,450 1,331,606 1,345,194 1,183,303 1,150,339
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Common stock, $1 par value 9,957 9,957 9,052 9,052 9,052
Additional paid-in capital 58,600 58,600 35,302 35,302 35,302
Retained earnings 71,394 67,981 88,356 85,910 82,991
Treasury stock, at cost (870) (167) (424) (276) (201)
Accumulated other comprehensive income (loss) 4,803 (369) 755 2,484 647
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TOTAL STOCKHOLDERS' EQUITY 143,884 136,002 133,041 132,472 127,791
----------------------------------------------------------------------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $1,455,334 $1,467,608 $1,478,235 $1,315,775 $1,278,130
======================================================================
FIRST COMMUNITY BANCSHARES, INC.
SELECTED FINANCIAL INFORMATION
(DOLLARS IN THOUSANDS)
AS OF AND FOR THE QUARTER ENDED
JUNE 30, MARCH 31, DECEMBER 31, SEPTEMBER 30, JUNE 30,
2002 2002 2001 2001 2001
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ASSET QUALITY ANALYSIS:
Allowance for Loan and Lease Losses:
Beginning balance $ 14,271 $ 13,952 $ 12,889 $ 12,688 $ 12,408
Provision 1,022 937 2,120 1,282 985
Acquisition balance - - 484 - -
Charge-offs (1,243) (820) (1,781) (1,193) (1,045)
Recoveries 144 202 240 112 340
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Net charge-offs (1,099) (618) (1,541) (1,081) (705)
Ending balance $ 14,194 $ 14,271 $ 13,952 $ 12,889 $ 12,688
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NONPERFORMING ASSETS:
Nonaccrual loans & leases $ 4,131 $ 4,644 $ 3,633 $ 5,361 $ 5,167
Foreclosed real estate 2,452 2,538 3,029 2,595 2,614
Repossessions 436 495 599 620 423
Loans 90 days or more past due & still accruing 254 192 1,351 1,418 1,442
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Nonperforming assets $ 7,273 $ 7,869 $ 8,612 $ 9,994 $ 9,646
=====================================================================
Loans 90 days or more past due & still accruing
as a percentage of total loans and leases 0.03% 0.02% 0.15% 0.16% 0.17%
ASSET QUALITY RATIOS:
Nonaccrual loans and leases as a
percentage of total loans and leases 0.44% 0.51% 0.40% 0.62% 0.61%
Nonperforming assets as a percentage of:
Total assets 0.50% 0.54% 0.58% 0.77% 0.75%
Loans & leases plus foreclosed property and repossessions 0.78% 0.86% 0.95% 1.15% 1.14%
Net charge-offs as a percentage of average loans & leases 0.12% 0.07% 0.18% 0.13% 0.09%
Allowance for loan & lease losses as a percentage of loans
and leases 1.53% 1.57% 1.54% 1.49% 1.50%
Ratio of allowance for loans and lease losses to:
Nonaccrual loans & leases 3.44 3.07 3.84 2.40 2.46
Restructured loans performing according to modified terms $ 440 $ 354 $ 449 $ 443 $ 445
MORTGAGE SUBSIDIARY SUPPLEMENTAL INFORMATION:
End of period:
Fee Income $ 1,669
Gain on sale of loans, net of hedge activity $ 3,687
Option adjusted mortgage loan commitments outstanding $ 74,367
Year to date loan production $ 329,367
Number of employees 106