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First Community Bancshares Inc. Reports Operating Results (10-Q)

November 14, 2012 | About:
10qk

10qk

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First Community Bancshares Inc. (FCBC) filed Quarterly Report for the period ended 2012-09-30.

First Community Bancshares Inc Bluefield has a market cap of $294.1 million; its shares were traded at around $14.25 with a P/E ratio of 11.9 and P/S ratio of 2.3. The dividend yield of First Community Bancshares Inc Bluefield stocks is 3%.

Highlight of Business Operations:

For beneficial interest debt securities, the Company reviews cash flow analyses on each applicable security to determine if an adverse change in cash flows expected to be collected has occurred. Beneficial interest debt securities consist of corporate FDIC insured securities and mortgage-backed securities (MBS). An adverse change in cash flows expected to be collected has occurred if the present value of cash flows previously projected is greater than the present value of cash flows projected at the current reporting date and less than the current book value. If an adverse change in cash flows is deemed to have occurred, then an OTTI has occurred. The Company then compares the present value of cash flows using the current yield for the current reporting period to the reference amount, or current net book value, to determine the credit-related OTTI. The credit-related OTTI is then recorded through earnings and the noncredit-related OTTI is accounted for in OCI. During the three and nine months ended September 30, 2012, the Company incurred credit-related OTTI charges on beneficial interest debt securities of $942 thousand. During the three and nine months ended September 30, 2011, the Company incurred credit-related OTTI charges on beneficial interest debt securities of $210 thousand and $737 thousand, respectively. These charges were related to a non-Agency MBS.

Net income increased $4.74 million, or 89.15%, to $10.06 million for the third quarter of 2012 compared with $5.32 million for the third quarter of 2011. Net income available to common shareholders increased $4.81 million, or 95.53%, to $9.84 million for the third quarter of 2012 compared with $5.03 million for the third quarter of 2011. The increase was largely attributed to the substantial increase in earning assets as a result of the Peoples and Waccamaw acquisitions. Also impacting the third quarter of 2012 was a $2.39 million out-of-period adjustment of historical charge-offs, offset by increases in the net impairment loss recognized on earnings and merger related expenses. Diluted earnings per common share totaled $0.47 for the third quarter of 2012 compared to 0.28 for the third quarter of 2011.

Wealth management revenues increased $147 thousand, or 5.46%, for the nine months ended September 30, 2012, compared with the same period of 2011. Service charges on deposit accounts increased $449 thousand, or 4.59%, for the nine months ended September 30, 2012, compared with the same period of 2011, due to the Waccamaw acquisition. Other service charges, commissions, and fees increased $487 thousand, or 11.34%, for the nine months ended September 30, 2012, compared with the same period of 2011. Insurance commissions decreased $499 thousand, or 9.93%, for the nine months ended September 30, 2012, compared with the same period of 2011. Profit-sharing commissions from our carriers were lower in the first quarter of 2012 compared with the first quarter of 2011 as a result of higher loss experience on our customers policies. Further, the commissions earned for the first nine months of 2011 include the agency offices sold as part of strategic realignment during the third quarter of 2011.

Consolidated income taxes were $10.17 million for the first nine months of 2012 compared to $7.42 million for the first nine months of 2011. The effective tax expense rates for the nine months ended September 30, 2012 and 2011 were 33.56% and 30.65%, respectively. The increases in the effective tax rates are largely due to an increase in taxable revenues as a percent of net earnings and decrease in the relative amounts of nontaxable revenues.

During the third quarter of 2012, we recognized OTTI charges in earnings of $942 thousand compared to $210 thousand recognized during the third quarter of 2011, which were related to a non-Agency MBS. During the first nine months of 2012, we recognized OTTI charges in earnings of $942 thousand compared to $737 thousand recognized during the first nine months of 2011, which were related to a non-Agency MBS. We incurred no OTTI charges on equity securities during the three and nine months ended September 30, 2012, and 2011. See Note 4, Investment Securities, of the Notes to Condensed Consolidated Financial Statements in Item 1, Financial Statements, herein for additional information.

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