First Community Bancshares Inc. (FCBC) filed Quarterly Report for the period ended 2009-09-30.
First Community Bancshares Inc. is a multi-state holding company headquartered in Bluefield Virginia. The bank provides financial mortgage brokerage and origination and trust services to individualsand commercial customers through full-service banking locations in West Virginia Virginia and North Carolina as well as mortgage brokerage facilities operated by United First Mortgage Inc. First Community Bancshares Inc. has a market cap of $206.3 million; its shares were traded at around $11.66 with and P/S ratio of 1.8. The dividend yield of First Community Bancshares Inc. stocks is 3.5%. First Community Bancshares Inc. had an annual average earning growth of 8.4% over the past 10 years. GuruFocus rated First Community Bancshares Inc. the business predictability rank of 4.5-star.
Highlight of Business Operations:
On November 14, 2008, the Company completed the acquisition of Coddle Creek Financial Corp. (“Coddle Creek”), based in Mooresville, North Carolina. Coddle Creek had three full service locations in Mooresville, Cornelius, and Huntersville, North Carolina. At acquisition, Coddle Creek had total assets of approximately $158.66 million, loans of approximately $136.99 million, and deposits of approximately $137.06 million. Under the terms of the merger agreement, shares of Coddle Creek were exchanged for .9046 shares of the Company’s common stock and $19.60 in cash, for a total purchase price of approximately $32.29 million. As a result of the acquisition and purchase price allocation, approximately $14.41 million in goodwill was recorded, which represents the excess purchase price over the fair market value of the net assets acquired and identified intangibles.
Net loss available to common shareholders for the three months ended September 30, 2009, was $12.31 million, or $0.71 per diluted share, compared with net income of $4.55 million, or $0.41 per diluted share, for the three months ended September 30, 2008, a decrease of $16.86 million. The principal cause of the decrease in net income between the three months ended September 30, 2009 and 2008 was other-than-temporary impairment of debt securities totaling $30.53 million.
Net interest income, the largest contributor to earnings, was $17.54 million for the three months ended September 30, 2009, compared with $16.32 million for the corresponding period in 2008, an increase of $1.21 million, or 7.43%. Tax-equivalent net interest income totaled $18.33 million for the three months ended September 30, 2009, an increase of $1.07 million, or 6.17%, from $17.26 million for the third quarter of 2008. The increase in tax-equivalent net interest income was due primarily to increases in total earning assets and decreases in deposit and borrowing costs.
Retail repurchase agreements, which consist of collateralized retail deposits and commercial treasury accounts, decreased $48.92 million, or 32.62%, to $101.07 million for the third quarter of 2009, while the rate decreased 63 basis points to 1.31% 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 difficult economic times. There were no federal funds purchased on average during the third quarter of 2009, compared with $42.70 million in the same period in 2008. Wholesale repurchase agreements remained unchanged at $50.00 million, while the rate increased 66 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 $20.56 million, or 9.48%, in the third quarter of 2009 to $196.23 million, while the rate paid on those borrowings decreased 37 basis points.
Net interest income was $50.29 million for the nine months ended September 30, 2009, compared with $49.31 million for the corresponding period in 2008, an increase of $982 thousand, or 1.99%. Tax-equivalent net interest income totaled $52.77 million for the nine months ended September 30, 2009, an increase of $293 thousand, or 0.56%, from $52.48 million for the first nine months ended September 30, 2008. The increase in tax-equivalent net interest income was due primarily to decreases in savings and time deposit yields.
Compared with the same period in 2008, the average balances of interest-bearing demand deposits increased $27.57 million, or 16.06%, while the average rate paid during the first nine months of 2009 increased one basis point compared with the same period of 2008. During the nine months ended September 30, 2009, the average balances of savings deposits increased $8.48 million, or 2.69%, while the average rate paid decreased 87 basis points compared to the same period in 2008. The decline in yield reflects downward repricing of money market products consistent with declines in short-term benchmark rates. Average time deposits increased $216.22 million, or 33.35%, while the average rate paid on time deposits decreased 79 basis points from 3.81% in the first nine months of 2008 to 3.02% in the first nine months of 2009. The level of average non-interest-bearing demand deposits decreased $13.95 million, or 6.97%, to $199.99 million during the nine months ended September 30, 2009, compared with the corresponding period of the prior year. The overall increase in the level of average deposits reflects the addition of Coddle Creek and TriStone. Movements within the deposit types reflect customers seeking yield enhancement within FDIC insured products.
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