Exhibit 99.1 [First Community Bancshares, Inc. logo] NEWS RELEASE FOR IMMEDIATE RELEASE: FOR MORE INFORMATION, APRIL 22, 2003 CONTACT: ROBERT L. SCHUMACHER AT (276) 326-9000 FIRST COMMUNITY BANCSHARES, INC. (FCBC) ANNOUNCES FIRST QUARTER OPERATING RESULTS First Community Bancshares, Inc. (Nasdaq: FCBC; www.fcbinc.com) today reported record earnings of $6.7 million for the first quarter of 2003, or $0.68 earnings per basic and diluted share. This represents a 6.3% improvement compared to the first quarter of 2002 of $6.3 million net income and $0.64 per basic and diluted share. Return on average equity in the first quarter of 2003 was 17.63% compared to 18.67% for the first quarter of last year. In addition, return on average assets increased to 1.81% in 2003 compared to 1.76% for the first quarter of last year. Net income for the first quarter of 2003, compared to last year's first quarter, was up $431,000. Factors contributing to this increase were a $707,000 improvement in net interest income and an increase in fiduciary income and other service charge income of $618,000. Also adding to the improvement in earnings was a $348,000 decline in the provision for loan losses. These improvements helped to offset a $285,000 decrease in mortgage banking income during the first quarter of 2003 compared to the first quarter of last year, an increase of $530,000 in salaries and benefits and an increase of $279,000 in income tax expense. The $6.7 million first quarter 2003 net income also compares favorably with the fourth quarter of 2002 net income of $5.8 million, resulting in a linked quarter-to-quarter increase of $970,000 or 16.7%. Basic and diluted earnings per share of $0.68 in the first quarter of 2003 show a 17.2% and a 19.3% improvement, respectively, versus the linked quarter. First quarter 2003 produced net interest income after provision for loan losses of $14.6 million, which was virtually identical to the linked quarter. Non-interest income increased overall by $1.8 million versus the linked quarter. The two main components of the improvement from the linked quarter were a $1.1 million increase in mortgage banking income and a $599,000 loss recorded in the linked quarter due to the write-down of securities whose decline in market value was deemed to be other than temporary, whereas no such loss was recorded in the first quarter of 2003. Non-interest expense increased by a modest 1.5% during the first quarter of this year versus the linked quarter. Despite the continued slow economy, First Community's asset quality ratios remain sound. The ratio of non-performing assets to total assets stood at ..44% on March 31, 2003, slightly higher than the year-end 2002 level of .41%. The Company reported only $21,000 in loans past due 90 days and still accruing, while non-accruing loans were .45% of total loans at March 31, 2003 versus $91,000 and .33% in these two categories at prior year end. Total delinquencies as a percent of total loans were 1.09%, slightly better than the year-end level of 1.11%. The coverage ratio at the end of the first quarter of 2003 was 343% compared to 295% at the end of the first quarter last year and 455% at December 31, 2002. Average assets for the first quarter of 2003 increased by $16.3 million over the fourth quarter 2002 average. Average deposits increased $22.1 million when compared to the linked quarter's average. Included in the average deposit growth was approximately $29 million attributed to the fourth quarter 2002 acquisition of Monroe Financial. Total equity for the Company increased to $154.7 million, bringing book value per common share outstanding to $15.71, up from $13.67 at the end of the first quarter of last year and $15.42 at the end of the fourth quarter of 2002. First Community is a $1.5 billion bank holding company and the parent of First Community Bank, N. A. First Community Bank, N. A. operates with 41 full-service branches throughout Virginia, West Virginia and North Carolina and two trust and investment management offices. 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, as well as Stone Capital Management, Inc., an investment advisory firm. In January, First Community entered into a definitive agreement with The CommonWealth Bank, which has four locations in and around Richmond, Virginia. The Company anticipates completion of this acquisition in the second quarter of 2003. First Community Bancshares' 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: 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 ================================================================================================================ (Dollars in Thousands, Except Per Share Data)(Unaudited) Three Months Ended March 31 --------------------------- 2003 2002 --------------------------- INTEREST Interest and fees on loans held for investment $ 16,892 $ 18,036 INCOME Interest and fees on loans held for sale 629 844 Interest on securities-taxable 3,145 3,378 Interest on securities-nontaxable 1,657 1,742 Interest on federal funds sold and deposits 215 43 ----------------------------------------------------------------------------------------------------------------- TOTAL INTEREST INCOME 22,538 24,043 ----------------------------------------------------------------------------------------------------------------- INTEREST Interest on deposits 5,317 6,993 EXPENSE Interest on borrowings 2,041 2,577 ----------------------------------------------------------------------------------------------------------------- TOTAL INTEREST EXPENSE 7,358 9,570 ----------------------------------------------------------------------------------------------------------------- NET INTEREST INCOME 15,180 14,473 Provision for loan losses 589 937 ----------------------------------------------------------------------------------------------------------------- NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES 14,591 13,536 ----------------------------------------------------------------------------------------------------------------- NON-INTEREST Fiduciary income 416 343 INCOME Service charges on deposit accounts 1,821 1,463 Other service charges, commissions and fees 513 326 Mortgage banking income 2,964 3,249 Other operating income 297 296 Gain on sale of securities 20 177 ----------------------------------------------------------------------------------------------------------------- TOTAL NON-INTEREST INCOME 6,031 5,854 ----------------------------------------------------------------------------------------------------------------- NON-INTEREST Salaries and employee benefits 6,333 5,803 EXPENSE Occupancy expense of bank premises 849 743 Furniture and equipment expense 530 503 Amortization of intangible assets 63 59 Other operating expense 3,356 3,501 ----------------------------------------------------------------------------------------------------------------- TOTAL NON-INTEREST EXPENSE 11,131 10,609 ----------------------------------------------------------------------------------------------------------------- Income before income taxes 9,491 8,781 Income tax expense 2,743 2,464 ----------------------------------------------------------------------------------------------------------------- NET INCOME $ 6,748 $ 6,317 ----------------------------------------------------------------------------------------------------------------- BASIC AND DILUTED EARNINGS PER COMMON SHARE (EPS) $ 0.68 $ 0.64 ----------------------------------------------------------------------------------------------------------------- Weighted Average Shares Outstanding: Basic 9,870,279 9,933,222 Diluted 9,921,346 9,977,531 For the period: Return on average equity 17.63% 18.67% Return on average assets 1.81% 1.76% Cash dividends per share $ 0.26 $ 0.25 At period end: Book value per share $ 15.71 $ 13.67 Market value (average bid and ask) $ 33.17 $ 30.26 ================================================================================================================= FIRST COMMUNITY BANCSHARES, INC. CONSOLIDATED BALANCE SHEETS - ------------------------------------------------------------------------------------------------------------------------------ (Dollars in Thousands, Except Per Share Data)(Unaudited) MARCH 31, DECEMBER 31, 2003 2002 ----------- ----------- ASSETS Cash and due from banks $ 36,979 $ 33,364 Interest-bearing deposits with banks 63,146 88,064 Fed Funds Sold 4 3,157 Securities available for sale (amortized cost of $362,865 March 31, 2003; $289,616, December 31, 2002) 372,926 300,885 Securities held to maturity (market value of $42,410 March 31, 2003; $43,342, December 31, 2002) 40,084 41,014 Loans held for sale 50,753 66,364 Loans held for investment, net of unearned income 897,194 927,621 Less allowance for loan losses 13,782 14,410 - ------------------------------------------------------------------------------------------------------------------------------ Net loans 883,412 913,211 Premises and equipment 25,417 25,078 Other real estate owned 2,545 2,855 Interest receivable 8,210 7,897 Other assets 18,524 15,391 Intangible assets 27,110 27,083 - ------------------------------------------------------------------------------------------------------------------------------ TOTAL ASSETS $ 1,529,110 $ 1,524,363 - ------------------------------------------------------------------------------------------------------------------------------ LIABILITIES Deposits: Demand $ 162,998 $ 165,557 Interest-bearing demand 207,098 200,297 Savings 183,738 180,786 Time 599,868 593,087 - ------------------------------------------------------------------------------------------------------------------------------ Total Deposits 1,153,702 1,139,727 Interest, taxes and other liabilities 14,663 15,940 Fed Funds Purchased -- -- Securities sold under agreements to repurchase 95,621 91,877 FHLB and other indebtedness 110,429 124,357 - ------------------------------------------------------------------------------------------------------------------------------ TOTAL LIABILITIES 1,374,415 1,371,901 - ------------------------------------------------------------------------------------------------------------------------------ STOCKHOLDERS' Preferred stock, par value undesignated; 1,000,000 shares authorized; EQUITY no shares issued and outstanding in 2003 and 2002 -- -- Common stock, $1 par value; 15,000,000 shares authorized in 2003 and 2002, respectively; 9,965,123 issued in 2003 and 9,956,714 issued in 2002; and 9,846,092 and 9,888,482 outstanding in 2003 and 2002, respectively 9,965 9,957 Additional paid-in capital 58,970 58,642 Retained earnings 83,267 79,084 Treasury stock, at cost (3,543) (1,982) Accumulated other comprehensive income 6,036 6,761 - ------------------------------------------------------------------------------------------------------------------------------ TOTAL STOCKHOLDERS' EQUITY 154,695 152,462 - ------------------------------------------------------------------------------------------------------------------------------ TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 1,529,110 $ 1,524,363 ============================================================================================================================== FIRST COMMUNITY BANCSHARES, INC. QUARTERLY PERFORMANCE SUMMARY INCOME STATEMENTS (Dollars in Thousands Except Per Share Data) AS OF AND FOR THE QUARTER ENDED MARCH 31, DECEMBER 31, SEPTEMBER 30, JUNE 30, MARCH 31, 2003 2002 2002 2002 2002 -------------------------------------------------------------------- INTEREST Interest and fees on loans held for investment $ 16,892 $ 17,769 $ 18,597 $ 18,013 $ 18,036 INCOME Interest and fees on loans held for sale 629 1,063 851 826 844 Interest on securities-taxable 3,145 2,766 3,236 3,621 3,378 Interest on securities-nontaxable 1,657 1,718 1,679 1,680 1,742 Interest on federal funds sold and deposits 215 215 88 39 43 -------------------------------------------------------------------- TOTAL INTEREST INCOME 22,538 23,531 24,451 24,179 24,043 -------------------------------------------------------------------- INTEREST Interest on deposits 5,317 5,763 6,206 6,404 6,993 EXPENSE Interest on borrowings 2,041 2,228 2,234 2,603 2,577 -------------------------------------------------------------------- TOTAL INTEREST EXPENSE 7,358 7,991 8,440 9,007 9,570 -------------------------------------------------------------------- NET INTEREST INCOME 15,180 15,540 16,011 15,172 14,473 Provision for loan losses 589 947 1,302 1,022 937 -------------------------------------------------------------------- NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES 14,591 14,593 14,709 14,150 13,536 -------------------------------------------------------------------- NON-INT Fiduciary income 416 486 443 501 343 INCOME Service charges on deposit accounts 1,821 1,921 1,866 1,806 1,463 Other service charges, commissions and fees 513 371 328 355 326 Mortgage banking income 2,964 1,841 2,238 2,107 3,249 Other operating income 297 214 100 186 296 Gain (loss) on Securities 20 (599) 22 9 177 -------------------------------------------------------------------- TOTAL NON-INTEREST INCOME 6,031 4,234 4,997 4,964 5,854 -------------------------------------------------------------------- NON-INT Salaries and employee benefits 6,333 5,972 5,746 5,746 5,803 EXPENSE Occupancy expense of bank premises 849 714 738 679 743 Furniture and equipment expense 530 488 529 562 503 Amortization of intangible assets 63 65 61 60 59 Other operating expense 3,356 3,724 3,177 3,399 3,501 -------------------------------------------------------------------- TOTAL NON-INTEREST EXPENSE 11,131 10,963 10,251 10,446 10,609 -------------------------------------------------------------------- Income before income taxes 9,491 7,864 9,455 8,668 8,781 Income tax expense 2,743 2,086 2,869 2,630 2,464 -------------------------------------------------------------------- NET INCOME* 6,748 5,778 6,586 6,038 6,317 ==================================================================== PER Basic EPS* $ 0.68 $ 0.58 $ 0.66 $ 0.61 $ 0.64 SHARE Diluted EPS * $ 0.68 $ 0.57 $ 0.66 $ 0.61 $ 0.64 DATA Cash dividends per share $ 0.26 $ 0.25 $ 0.25 $ 0.25 $ 0.25 Weighted Average Shares Outstanding: Basic 9,870,279 9,892,504 9,928,069 9,945,158 9,933,222 Diluted 9,921,346 9,945,032 9,978,136 9,993,812 9,977,531 Actual shares outstanding at period end 9,846,092 9,888,482 9,918,482 9,925,982 9,950,982 Book Value per share at period end $ 15.71 $ 15.42 $ 15.10 $ 14.50 $ 13.67 Average Bid and Ask per share at period end $ 33.17 $ 30.75 $ 29.33 $ 33.00 $ 30.26 RATIOS Return on average assets* 1.81% 1.64% 1.78% 1.65% 1.76% Return on average equity* 17.63% 16.36% 17.64% 17.25% 18.67% Net yield on earning assets 4.64% 4.70% 4.93% 4.77% 4.64% Efficiency Ratio at end of period 49.67% 49.01% 48.09% 48.99% 47.14% Equity as a percent of total assets at end of period 10.12% 10.00% 10.09% 9.89% 9.27% Average earning assets as a percentage of average total assets 92.99% 93.05% 92.82% 92.64% 92.77% Average loans (not including loans held for sale) as a percentage of average deposits 79.50% 81.20% 84.86% 84.83% 84.78% QTD Average Loans (Not including Loans Held for Sale) $ 906,856 $ 908,342 $ 929,494 $ 917,319 $ 914,749 AVERAGES Average Earning Assets $1,408,749 $1,394,399 $1,364,045 $1,355,841 $1,351,598 Average Total Assets $1,514,900 $1,498,567 $1,469,609 $1,463,573 $1,456,863 Average deposits $1,140,746 $1,118,597 $1,095,377 $1,081,316 $1,079,022 Average Equity $ 155,222 $ 150,449 $ 148,124 $ 140,408 $ 137,184 Taxable Equivalent Net Interest Income $ 16,115 $ 16,513 $ 16,963 $ 16,123 $ 15,458 Average Interest-bearing deposits $ 983,242 $ 959,708 $ 936,578 $ 926,649 $ 921,967 * - In accordance with FAS 147, goodwill amortization on certain branch acquisitions ceased on October 1, 2002 and, as required, First Community restated quarterly amounts in its 2002 annual report. FIRST COMMUNITY BANCSHARES, INC. QUARTERLY PERFORMANCE SUMMARY BALANCE SHEETS (DOLLARS IN THOUSANDS EXCEPT PER SHARE DATA) MARCH DECEMBER 31, SEPTEMBER 30, JUNE 30, MARCH 31, 2003 2002 2002 2002 2002 --------------------------------------------------------------------------- Cash and due from banks $ 36,979 $ 33,364 $ 30,331 $ 31,448 $ 28,547 Interest-bearing deposits with banks 63,146 88,064 20,246 255 830 Federal funds sold 4 3,157 75 Securities available for sale 372,926 300,885 334,408 338,572 368,526 Securities held to maturity 40,084 41,014 40,211 41,327 41,446 Loans held for sale 50,753 66,364 68,821 52,095 47,596 Loans held for investment, net of unearned income 897,194 927,621 926,400 928,541 911,746 Less allowance for loan losses 13,782 14,410 14,080 14,194 14,271 --------------------------------------------------------------------------- Net loans 883,412 913,211 912,320 914,347 897,475 Premises and equipment 25,417 25,078 23,632 22,314 21,927 Other real estate owned 2,545 2,855 2,668 2,452 2,538 Interest receivable 8,210 7,897 8,340 8,330 9,139 Other assets 18,524 15,391 16,843 18,348 23,459 Intangible assets 27,110 27,083 26,012 25,846 26,125 --------------------------------------------------------------------------- TOTAL ASSETS $ 1,529,110 $ 1,524,363 $ 1,483,907 $ 1,455,334 $ 1,467,608 ================================================================----------- Deposits: Demand $ 162,998 $ 165,557 $ 161,249 $ 156,820 $ 152,980 Interest-bearing demand 207,098 200,297 185,866 180,585 191,284 Savings 183,738 180,786 179,888 175,431 160,544 Time 599,868 593,087 578,223 568,679 577,398 --------------------------------------------------------------------------- Total Deposits 1,153,702 1,139,727 1,105,226 1,081,515 1,082,206 Interest, taxes and other liabilities 14,663 15,940 13,928 13,704 16,135 Federal funds purchased -- -- -- 8,950 4,560 Securities sold under agreements to repurchase 95,621 91,877 94,964 83,015 79,238 FHLB and other indebtedness 110,429 124,357 120,053 124,266 149,467 --------------------------------------------------------------------------- TOTAL LIABILITIES 1,374,415 1,371,901 1,334,171 1,311,450 1,331,606 --------------------------------------------------------------------------- Preferred Stock -- -- -- -- -- Common stock, $1 par value 9,965 9,957 9,957 9,957 9,957 Additional paid-in capital 58,970 58,642 58,642 58,600 58,600 Retained earnings 83,267 79,084 75,353 71,394 67,981 Treasury stock, at cost (3,543) (1,982) (1,098) (870) (167) Accumulated other comprehensive income (loss) 6,036 6,761 6,882 4,803 (369) --------------------------------------------------------------------------- TOTAL STOCKHOLDERS' EQUITY 154,695 152,462 149,736 143,884 136,002 --------------------------------------------------------------------------- TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 1,529,110 $ 1,524,363 $ 1,483,907 $ 1,455,334 $ 1,467,608 ================================================================----------- FIRST COMMUNITY BANCSHARES, INC. SELECTED FINANCIAL INFORMATION (DOLLARS IN THOUSANDS) AS OF AND FOR THE QUARTER ENDED MARCH 31, DECEMBER 31, SEPTEMBER 30, JUNE 30, MARCH 31, 2003 2002 2002 2002 2002 ----------------------------------------------------------------- ASSET QUALITY ANALYSIS: Allowance for Loan Losses: Beginning balance $ 14,410 $ 14,080 $ 14,194 $ 14,271 $ 13,952 Provision 589 947 1,302 1,022 937 Acquisition balance -- 395 -- -- -- Charge-offs (1,668) (1,212) (1,593) (1,243) (820) Recoveries 451 200 177 144 202 ---------------------------------------------------------------- Net charge-offs (1,217) (1,012) (1,416) (1,099) (618) Ending balance $ 13,782 $ 14,410 $ 14,080 $ 14,194 $ 14,271 ================================================================ NONPERFORMING ASSETS: Nonaccrual loans $ 3,997 $ 3,075 $ 4,987 $ 4,131 $ 4,644 Foreclosed real estate 2,544 2,855 2,668 2,452 2,538 Repossessions 188 172 341 436 495 Loans 90 days or more past due & still accruing 21 91 367 254 192 ---------------------------------------------------------------- Nonperforming assets $ 6,750 $ 6,193 $ 8,363 $ 7,273 $ 7,869 ================================================================ Loans 90 days or more past due & still accruing as a percentage of loans held for investment 0.00% 0.01% 0.04% 0.03% 0.02% ASSET QUALITY RATIOS: Nonaccrual loans and leases as a percentage of loans held for investment 0.45% 0.33% 0.54% 0.44% 0.51% Nonperforming assets as a percentage of: Total assets 0.44% 0.41% 0.56% 0.50% 0.54% Loans held for investment plus foreclosed property 0.75% 0.67% 0.90% 0.78% 0.86% Net charge-offs as a % of average loans held for investment 0.13% 0.11% 0.15% 0.12% 0.07% Allowance for loan & lease losses as a percentage of loans held for investment 1.54% 1.55% 1.52% 1.53% 1.57% Ratio of allowance for loans losses to: Nonaccrual loans 3.45 4.69 2.82 3.44 3.07 Restructured loans performing according to modified terms $ 341 $ 345 $ 347 $ 440 $ 354