<PAGE> 1
Exhibit 99.1
NEWS RELEASE
FOR IMMEDIATE RELEASE: FOR MORE INFORMATION,
OCTOBER 20, 2000 CONTACT: ROBERT L. SCHUMACHER
AT (540) 326-9000
FIRST COMMUNITY BANCSHARES, INC. (FCBC) ANNOUNCES
THIRD QUARTER OPERATING RESULTS
First Community Bancshares, Inc. (FCBC) reported a 5.7% increase in
earnings for the Third Quarter of 2000 when compared to the third quarter of
1999. Net income for the quarter totaled $4.29 million, up from $4.05 million in
the corresponding quarter of 1999. Earnings for the Third Quarter of 2000 also
exceeded expected results for the quarter by 1.8%. Earnings per share for the
Third Quarter of 2000 totaled $0.50 and represent an increase of 8.7% over the
Third Quarter of 1999 earnings per share of $0.46.
For the nine months ending September 30, 2000, earnings and earnings
per share reached $12.3 million and $1.42, increasing from $12 million and $1.37
for the comparable period in 1999. Exclusive of a nonrecurring gain recorded in
1999, earnings and earnings per share for the first nine months of 2000
increased by 4.2% and 5.9%, respectively, from $11.8 million and $1.34 for the
first nine months of 1999. Return on assets and return on equity were 1.48% and
15.48% in the first nine months of 2000, compared to 1.55% and 15.49% in the
corresponding and comparable period of 1999.
Continued growth in the loan portfolio of $58.9 million or 8.4% along
with repricing of adjustable rate loans led to a $7.37 million increase in total
loan revenues for the first nine months of 2000. This increase in loan revenue,
coupled with an increase in the cost of funds, resulted in a tax equivalent net
interest margin of 4.94% compared to 4.99% in 1999.
<PAGE> 2
Asset quality continued to reflect an improvement over year-end 1999
levels. Nonperforming assets declined from 1.6% of total loans and other real
estate owned (OREO) at December 31, 1999 to 1.3% at September 30, 2000. Total
delinquencies were 1.82% at September 30, 2000. The reserve for loan losses as a
percentage of nonperforming loans, or coverage ratio, improved from 130% at
December 31, 1999 to 167% at September 30, 2000. The improvement noted above
includes the resolution in June 2000 of the Company's largest nonperforming
loan.
On June 27, 2000, First Community executed a Definitive Agreement
providing for the acquisition of Citizens Southern Bank, Inc., a $65 million
state-chartered bank with two offices in Beckley, West Virginia. The acquisition
will be completed through the issuance of 435,000 shares of First Community
common stock currently valued at $6.15 million. Regulatory approval has been
obtained for the merger, which is scheduled to be completed during Fourth
Quarter 2000 subject to shareholder approval. This acquisition will add an
important market area for First Community in South Central West Virginia.
On October 10, 2000, a significant piece of litigation was resolved in
the Bank's favor when the Circuit Court of Mercer County, West Virginia directed
a verdict for the Company. The plaintiffs in the lawsuit had contested the
validity of a charitable trust for which the Bank is serving as Trustee.
First Community Bancshares is a $1.1 billion bank holding company
operating through 31 offices in Virginia, West Virginia and North Carolina and
10 mortgage origination offices throughout eastern Virginia. First Community
Bancshares, Inc.'s common stock is traded in the over-the-counter market under
the symbol FCBC with daily bid and ask quotations on the NASDAQ Level III
Billboard system.
This press release contains forward-looking statements as defined by
federal securities laws. These statements may address issues that involve
significant risks, uncertainties, estimates and assumptions made by management.
Actual results could differ materially from current projections. Please refer to
First Community Bancshares' filings with the Securities and Exchange Commission
for a summary of important factors that could affect First Community Bancshares'
forward-looking statements. First Community Bancshares undertakes no obligation
to revise these statements following the date of this press release.
<PAGE> 3
<TABLE>
<CAPTION>
CONSOLIDATED STATEMENTS OF INCOME
-----------------------------------------------------------------------------------------------------------------------------------
(Amounts in thousands, Except Share and Per Share Data)(Unaudited) Nine Months Three Months
Ended Ended
September 30 September 30
-------------------------- ------------------------
2000 1999 2000 1999
-------------------------- ------------------------
<S> <C> <C> <C> <C>
INTEREST Interest and fees on loans $ 50,043 $ 42,675 $ 17,369 $ 14,646
INCOME Interest on securities available for sale 9,732 9,925 3,229 3,331
Interest on investment securities 3,134 3,293 1,024 1,087
Interest on federal funds sold and deposits 167 827 10 24
-----------------------------------------------------------------------------------------------------------------------------------
TOTAL INTEREST INCOME 63,076 56,720 21,632 19,088
-----------------------------------------------------------------------------------------------------------------------------------
INTEREST Interest on deposits 22,200 22,092 7,697 7,076
EXPENSE Interest on borrowings 6,099 2,009 2,335 695
-----------------------------------------------------------------------------------------------------------------------------------
TOTAL INTEREST EXPENSE 28,299 24,101 10,032 7,771
-----------------------------------------------------------------------------------------------------------------------------------
NET INTEREST INCOME 34,777 32,619 11,600 11,317
Provision for loan losses 2,722 1,340 842 505
-----------------------------------------------------------------------------------------------------------------------------------
NET INTEREST INCOME AFTER PROVISION FOR
LOAN LOSSES 32,055 31,279 10,758 10,812
-----------------------------------------------------------------------------------------------------------------------------------
NON-INTEREST Fiduciary income 1,314 1,664 382 479
INCOME Service charges on deposit accounts 2,748 2,727 952 928
Other service charges, commissions and fees 2,008 1,236 680 424
Other operating income 3,024 654 1,040 97
-----------------------------------------------------------------------------------------------------------------------------------
TOTAL NON-INTEREST INCOME 9,094 6,281 3,054 1,928
-----------------------------------------------------------------------------------------------------------------------------------
NON-INTEREST Salaries and employee benefits 11,951 9,161 3,901 3,048
EXPENSE Occupancy expense of bank premises 1,885 1,552 635 519
Furniture and equipment expense 1,376 1,346 398 446
Goodwill amortization 1,586 1,525 534 514
Other operating expense 6,548 6,500 2,223 2,218
-----------------------------------------------------------------------------------------------------------------------------------
TOTAL NON-INTEREST EXPENSE 23,346 20,084 7,691 6,745
-----------------------------------------------------------------------------------------------------------------------------------
Income before income taxes 17,803 17,476 6,121 5,995
Income tax expense 5,511 5,470 1,836 1,941
-----------------------------------------------------------------------------------------------------------------------------------
NET INCOME 12,292 12,006 4,285 4,054
-----------------------------------------------------------------------------------------------------------------------------------
BASIC EARNINGS PER COMMON SHARE $ 1.42 $ 1.37 $ 0.50 $ 0.46
-----------------------------------------------------------------------------------------------------------------------------------
For the period:
Return on average equity 15.48% 15.49% 15.71% 15.53%
Return on average assets 1.48% 1.55% 1.52% 1.56%
Cash dividends per share $ 0.68 $ 0.63 $ 0.23 $ 0.22
At period end:
Book value per share $ 12.69 $ 11.74
Market value (average bid and ask) $ 16.00 $ 20.25
-----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE> 4
<TABLE>
<CAPTION>
CONSOLIDATED BALANCE SHEETS
----------------------------------------------------------------------------------------------------------------------------------
(Amounts in thousands, Except Share Data)(Unaudited)
SEPTEMBER 30 DECEMBER 31
2000 1999
------------- ------------
<S> <C> <C>
ASSETS Cash and due from banks $ 30,510 $ 37,797
Securities available for sale (amortized cost of $211,085
September 30, 2000; $221,226, December 31, 1999) 204,208 212,105
Investment securities held to maturity (market value of $77,774,
September 30, 2000; $78,917, December 31, 1999) 76,312 78,768
Loans held for investment, net of unearned income 762,983 704,096
Less reserve for loan losses 11,872 11,900
----------------------------------------------------------------------------------------------------------------------------------
Net loans 751,111 692,196
Premises and equipment 18,033 18,630
Other real estate owned 2,780 1,950
Interest receivable 7,848 8,090
Other assets 19,926 15,178
Intangible assets 21,899 23,448
----------------------------------------------------------------------------------------------------------------------------------
TOTAL ASSETS $1,132,627 $1,088,162
----------------------------------------------------------------------------------------------------------------------------------
LIABILITIES Deposits:
Demand $ 115,308 $ 115,288
Interest-bearing demand 127,421 133,073
Savings 132,011 138,107
Time 463,559 446,790
----------------------------------------------------------------------------------------------------------------------------------
Total Deposits 838,299 833,258
Interest, taxes and other liabilities 13,308 13,436
Federal funds purchased 16,000 86,700
Securities sold under agreements to repurchase 43,338 41,062
FHLB and other indebtedness 112,110 10,218
----------------------------------------------------------------------------------------------------------------------------------
TOTAL LIABILITIES 1,023,055 984,674
----------------------------------------------------------------------------------------------------------------------------------
STOCKHOLDERS' Common stock, $1 par value; 15,000,000 and 10,000,000 shares
EQUITY authorized in 2000 and 1999, respectively; 8,991,586 issued in
2000 and 1999; 8,635,014 and 8,726,836 shares outstanding
in 2000 and 1999, respectively 8,992 8,992
Additional paid-in capital 34,168 34,264
Retained earnings 75,768 69,372
Unallocated common stock held by ESOP, at cost -- (722)
Treasury stock, at cost (5,229) (2,945)
Accumulated other comprehensive loss (4,127) (5,473)
----------------------------------------------------------------------------------------------------------------------------------
TOTAL STOCKHOLDERS' EQUITY 109,572 103,488
----------------------------------------------------------------------------------------------------------------------------------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $1,132,627 $1,088,162
----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE> 5
QUARTERLY PERFORMANCE SUMMARY
FIRST COMMUNITY BANCSHARES, INC.
<TABLE>
<CAPTION>
AS OF/ FOR THE QUARTER ENDED
9/30/00 6/30/00 3/31/00 12/31/99 9/30/99
----------------------------------------------------------
<S> <C> <C> <C> <C> <C>
INTEREST Interest and fees on loans $ 17,369 $ 16,679 $ 15,995 $ 15,361 $ 14,646
INCOME Interest on securities available for sale 3,229 3,243 3,260 3,292 3,331
Interest on investment securities 1,024 1,049 1,061 1,061 1,087
Interest on federal funds sold and deposits 10 98 59 58 24
----------------------------------------------------------
TOTAL INTEREST INCOME 21,632 21,069 20,375 19,772 19,088
----------------------------------------------------------
INTEREST Interest on deposits 7,697 7,342 7,161 7,045 7,076
EXPENSE Interest on borrowings 2,335 2,020 1,744 1,104 695
----------------------------------------------------------
TOTAL INTEREST EXPENSE 10,032 9,362 8,905 8,149 7,771
----------------------------------------------------------
NET INTEREST INCOME 11,600 11,707 11,470 11,623 11,317
Provision for loan losses 842 1,218 662 1,553 505
----------------------------------------------------------
NET INTEREST INCOME AFTER PROVISION FOR
LOAN LOSSES 10,758 10,489 10,808 10,070 10,812
----------------------------------------------------------
NON-INT Fiduciary income 382 432 500 428 479
INCOME Service charges on deposit accounts 952 984 812 913 928
Other service charges, commissions and fees 680 681 647 240 424
Other operating income 1,040 1,179 805 2,870 97
----------------------------------------------------------
TOTAL NON-INTEREST INCOME 3,054 3,276 2,764 4,451 1,928
----------------------------------------------------------
NON-INT Salaries and employee benefits 3,901 4,003 4,047 3,971 3,048
EXPENSE Occupancy expense of bank premises 635 610 640 576 519
Furniture and equipment expense 398 500 478 397 446
Goodwill amortization 534 526 526 524 514
Other operating expense 2,223 1,840 2,485 1,905 2,218
----------------------------------------------------------
TOTAL NON-INTEREST EXPENSE 7,691 7,479 8,176 7,373 6,745
----------------------------------------------------------
Income before income taxes 6,121 6,286 5,396 7,148 5,995
Income tax expense 1,836 1,957 1,718 2,302 1,941
----------------------------------------------------------
NET INCOME 4,285 4,329 3,678 4,846 4,054
PER SHARE DATA EXCLUDING NONRECURRING ITEMS:
Basic earnings per common share $ 0.50 $ 0.50 $ 0.42 $ 0.55 $ 0.46
Diluted earnings per common share $ 0.50 $ 0.50 $ 0.42 $ 0.55 $ 0.46
Cash dividends per share $ 0.23 $ 0.23 $ 0.22 $ 0.25 $ 0.22
Book Value per share $ 12.69 $ 12.25 $ 12.02 $ 11.86 $ 11.74
</TABLE>
<PAGE> 6
QUARTERLY PERFORMANCE SUMMARY
FIRST COMMUNITY BANCSHARES, INC.
<TABLE>
<CAPTION>
9/30/00 6/30/00 3/31/00 12/31/99 9/30/99
----------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Cash and due from banks $ 30,510 $ 32,679 $ 46,720 $ 37,797 $ 31,845
Interest bearing balances 283
Federal funds sold 7
Securities available for sale 204,208 202,754 205,155 212,105 218,150
Investment securities held to maturity 76,312 77,208 78,616 78,768 80,175
Loans held for investment, net of unearned income 762,983 741,581 724,347 704,096 665,642
Less reserve for loan losses 11,872 11,828 11,851 11,900 11,091
----------------------------------------------------------------------------
Net loans 751,111 729,753 712,496 692,196 654,551
Premises and equipment 18,033 18,215 18,494 18,630 18,943
Other real estate owned 2,780 2,463 2,422 1,950 1,786
Interest receivable 7,848 8,249 7,450 8,090 7,421
Other assets 19,926 21,236 21,275 15,178 11,735
Intangible assets 21,899 22,396 22,922 23,448 24,048
----------------------------------------------------------------------------
TOTAL ASSETS $1,132,627 $1,114,953 $1,115,550 $1,088,162 $1,048,944
----------------------------------------------------------------------------
Deposits:
Demand $ 115,308 $ 119,221 $ 115,598 $ 115,288 $ 117,555
Interest-bearing demand 127,421 126,380 134,050 133,073 136,959
Savings 132,011 137,054 139,478 138,107 144,067
Time 463,559 449,971 455,292 446,790 444,938
----------------------------------------------------------------------------
Total Deposits 838,299 832,626 844,418 833,258 843,519
Interest, taxes and other liabilities 13,308 11,698 13,102 13,436 14,791
Federal funds purchased 16,000 10,050 86,700 36,000
Securities sold under agreements to repurchase 43,338 41,492 39,610 41,062 41,672
FHLB and other indebtedness 112,110 112,935 113,842 10,218 10,230
----------------------------------------------------------------------------
TOTAL LIABILITIES 1,023,055 1,008,801 1,010,972 984,674 946,212
----------------------------------------------------------------------------
Common stock, $1 par value 8,992 8,992 8,992 8,992 8,992
Additional paid-in capital 34,168 34,168 34,168 34,264 34,264
Retained earnings 75,768 73,468 71,130 69,372 66,714
Unallocated common stock held by ESOP, at cost (722) (722)
Treasury stock, at cost (5,229) (4,714) (3,996) (2,945) (2,420)
Accumulated other comprehensive loss (4,127) (5,762) (5,716) (5,473) (4,096)
----------------------------------------------------------------------------
TOTAL STOCKHOLDERS' EQUITY 109,572 106,152 104,578 103,488 102,732
----------------------------------------------------------------------------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $1,132,627 $1,114,953 $1,115,550 $1,088,162 $1,048,944
----------------------------------------------------------------------------
</TABLE>
<PAGE> 7
QUARTERLY PERFORMANCE SUMMARY
FIRST COMMUNITY BANCSHARES, INC.
<TABLE>
<CAPTION>
AS OF/ FOR THE QUARTER ENDED
9/30/00 6/30/00 3/31/00 12/31/99 9/30/99
----------------------------------------------------------------
(Dollars in thousands)
<S> <C> <C> <C> <C> <C>
ASSET QUALITY ANALYSIS:
Allowance for Loan and Lease Losses:
Beginning balance $11,828 $11,851 $11,900 $11,091 $11,111
Provision 842 1,218 662 1,553 505
Charge-offs (1,033) (1,491) (910) (860) (653)
Recoveries 235 250 199 116 128
----------------------------------------------------------------
Net charge-offs (798) (1,241) (711) (744) (525)
Ending balance $11,872 $11,828 $11,851 $11,900 $11,091
================================================================
NONPERFORMING ASSETS:
Nonaccrual loans & leases $ 5,939 $ 5,359 $ 7,455 $ 7,889 $ 8,246
Foreclosed real estate 2,780 2,463 2,422 1,950 1,786
Restructured loans 448 448 449 505 458
Loans 90 days or more past due & still accruing 1,182 1,323 1,090 1,259 417
Nonperforming assets $ 9,167 $ 8,270 $10,326 $10,344 $10,490
Loans 90 days or more past due & still accruing
as a percentage of total loans and leases 0.15% 0.18% 0.15% 0.18% 0.06%
ASSET QUALITY RATIOS:
Nonaccrual and restructured loans and leases as a
percentage of total loans and leases 0.84% 0.78% 1.09% 1.19% 1.31%
Nonperforming assets as a percentage of:
Total assets 0.81% 0.74% 0.93% 0.95% 1.00%
Loans & leases plus foreclosed property 1.20% 1.11% 1.42% 1.47% 1.57%
Net charge-offs as a percentage of average loans & leases 0.11% 0.17% 0.10% 0.11% 0.08%
Allowance for loan & lease losses as a percentage of loans
and leases 1.56% 1.59% 1.64% 1.69% 1.67%
Ratio of allowance for loans and lease losses to:
Nonaccrual and restructured loans & leases 1.86 2.04 1.50 1.42 1.27
</TABLE>
<TABLE>
<CAPTION>
AS OF/ FOR THE NINE MONTHS ENDED
(Dollars in thousands)
ASSET QUALITY ANALYSIS: 9/30/00 9/30/99
-------- --------
<S> <C> <C>
Allowance for Loan and Lease Losses:
Beginning balance $ 11,900 $11,404
Provision 2,722 1,340
Charge-offs (3,434) (2,148)
Recoveries 684 495
Net charge-offs (2,750) (1,653)
-------- --------
Ending balance $ 11,872 $11,091
======== ========
ASSET QUALITY RATIOS:
Net charge-offs as a percentage of average loans & leases 0.38% 0.26%
</TABLE>
