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First Community Bancshares Inc. Reports Operating Results (10-Q)
Posted by: gurufocus (IP Logged)
Date: May 7, 2010 09:20PM
First Community Bancshares Inc. (FCBC) filed Quarterly Report for the period ended 2010-03-31. First Community Bancshares Inc. has a market cap of $272.3 million; its shares were traded at around $15.33 with a P/E ratio of 17.6 and P/S ratio of 5. The dividend yield of First Community Bancshares Inc. stocks is 2.5%.FCBC is in the portfolios of Jim Simons of Renaissance Technologies LLC.
Highlight of Business Operations:
In July 2009, the Company acquired TriStone Community Bank (“TriStone”), based in Winston-Salem, North Carolina. TriStone had two full service locations in Winston-Salem. At acquisition, TriStone had total assets of $166.82 million, total loans of $132.23 million and total deposits of $142.27 million. Each outstanding common share of TriStone was exchanged for .5262 shares of the Company s common stock and the overall acquisition cost was approximately $10.78 million. The acquisition of TriStone significantly augmented the Company s market presence and human resources in the Winston-Salem, North Carolina market.
Net income for the three months ended March 31, 2010, was $5.28 million, or $0.30 per diluted common share, compared with net income of $4.66 million, or $0.40 per diluted common share, for the three months ended March 31, 2009, an increase of $619 thousand. Net income available to common stockholders for the three month period ended March 31, 2009 was impacted by the required payment of dividends on preferred stock totaling $571 thousand. On July 8, 2009, the Company repurchased and retired the $41.5 million of Series A perpetual preferred stock from the Treasury.
Net interest income, the largest contributor to earnings, was $18.62 million for the three months ended March 31, 2010, compared with $16.43 million for the corresponding period in 2009, an increase of $2.19 million, or 13.30%. Tax-equivalent net interest income totaled $19.43 million for the three months ended March 31, 2010, an increase of $2.08 million, or 12.01%, from $17.35 million for the first quarter of 2009. The increase in tax-equivalent net interest income was due primarily to increases in total earning assets, largely from the TriStone acquisition, and decreases in deposit and borrowing costs.
Compared with the first quarter of 2009, average earning assets increased $72.93 million while interest-bearing liabilities increased $49.00 million. The changes include the impact of the July 2009 TriStone acquisition. The yield on average earning assets decreased 30 basis points to 5.67% from 5.97% between the three months ended March 31, 2010 and 2009, respectively. Total cost of interest-bearing liabilities decreased 62 basis points between the first quarters of 2009 and 2010, which resulted in a net interest rate spread that was 32 basis points higher, at 3.85%, for the first quarter of 2010 compared with 3.53% for the same period last year. The Company s tax-equivalent net interest margin of 4.02% for the three months ended March 31, 2010 increased 29 basis points from 3.73% for the same period of 2009.
Compared with the same period in 2009, the average balances of interest-bearing demand deposits increased $46.27 million, or 24.32%, while the average rate paid during the first quarter of 2010 increased by 17 basis points. During the three months ended March 31, 2010, the average balances of savings deposits increased $100.47 million, or 32.15%, while the average rate paid decreased three basis points compared to the same period in 2009. Average time deposits decreased $66.18 million, or 7.71%, while the average rate paid on time deposits decreased 94 basis points from 3.23% in the first quarter of 2009 to 2.29% in the first quarter of 2010. The level of average noninterest-bearing demand deposits decreased $246 thousand, or 0.12%, to $199.07 million during the quarter ended March 31, 2010, compared with the corresponding period of the prior year. The overall increase in the level of average deposits reflects the addition of TriStone.
Retail repurchase agreements, which consist of collateralized retail deposits and commercial treasury accounts, decreased $14.49 million, or 13.61%, to $91.98 million for the first quarter of 2010, while the rate decreased 27 basis points to 1.22% during the same period. The decrease in average balance can be largely attributed to the customers converting retail repurchase agreements to certificates of deposit and businesses using cash during more difficult economic times. There were no federal funds purchased on average during the first quarters of 2010 and 2009. Wholesale repurchase agreements remained unchanged at $50.00 million, while the rate decreased 38 basis points between the two periods due to structure within those borrowings. The average balance of FHLB borrowings and other long-term debt decreased by $17.07 million, or 7.91%, in the first quarter of 2010 to $198.74 million, while the rate paid on those borrowings decreased 11 basis points.
Stocks Discussed: FCBC,