EX-99.1 2 v191067_ex99-1.htm
NEWS RELEASE

FOR IMMEDIATE RELEASE: |  | FOR MORE INFORMATION,
July 27, 2010 |  | CONTACT: | David D. Brown
|  |  | (276) 326-9000

First Community Bancshares, Inc. Announces Second Quarter 2010 Results, Quarterly Dividend,
and Restatement of Allowance for Loan Losses for Prior Periods
Bluefield, Virginia – First Community Bancshares, Inc. (NASDAQ: FCBC) (www.fcbinc.com) (the “Company”) today reported net income for the quarter ended June 30, 2010, of $5.13 million, or $0.29 per diluted common share.
Commenting on second quarter results, Chief Executive Officer John M. Mendez stated, “We are pleased to see the continuation of solid earnings and credit measures through the second quarter of 2010. Compared to the same quarter in 2009, earnings available to common stockholders improved by 181% in the second quarter of 2010 and earnings per share increased by 107% in the second quarter of 2010 from $0.14 to $0.29 per common share. Core earnings also improved by 4% in the second quarter of 2010 compared to the same period on the prior year. Second quarter earnings closely parallel the first quarter of this year and appear to reflect stabilization of operations in the current economy and credit cycle.”
Mendez continued, “We are also encouraged by the continued strong performance of our loan portfolio in the face of a difficult credit environment, high unemployment and a sluggish economic recovery. For the second quarter of 2010, total delinquencies within our loan portfolio were 1.70% which is a substantial decrease from total delinquencies of 2.35% in the first quarter of this year and non-accrual loans were essentially unchanged compared to the first quarter of 2010. Although higher than historic levels through March 31, 2010, the most recent date for which data is available, our asset quality metrics compare favorably to our peers during this credit cycle.”
Additionally, the board of directors of the Company declared a quarterly cash dividend to common stockholders of ten cents ($0.10) per common share. The quarterly dividend is payable to common stockholders of record on August 13, 2010, and is expected to be paid on or about August 27, 2010. The current dividend reflects the Company’s practice of paying dividends based on a review of the results of the previous quarter.
As a result of a routine internal audit, the Company determined there was a computational error in the model that the Company uses to calculate the quantitative basis for its allowance for loan losses. In connection with its determination of the appropriate loan loss reserve at December 31, 2008, the Company made certain modifications to its loan loss reserve model with respect to a $130.76 million pool of loans. However, in calculating the loan loss reserves for this pool of loans, the historical quarterly net charge-off rates were not annualized as was the case with all other quarterly loss rates in the model. Based on the Company’s modeling using the corrected computations, the Company, in consultation with the audit committee of the Board of Directors, determined that the amount of the allowance for loan losses should be increased by an aggregate of $2.55 million for the period beginning December 31, 2008 and ending March 31, 2010.
The Company will be filing amendments to its Annual Reports on Form 10-K for the years ended December 31, 2009 and 2008, and its Quarterly Reports on Form 10-Q for the quarters ended March 31, 2009, June 30, 2009, September 30, 2009, and March 31, 2010, to correct for these computational errors and make other required disclosures. The financial tables included in this press release present the “As Reported” and “As Revised” amounts for the periods indicated to reflect the correction of these computational errors.
Second Quarter 2010 Highlights –

| · | The ratio of non-performing assets to total assets was 110 basis points, an increase from 97 basis points in the first quarter of 2010.

| · | Total loan delinquencies of 30 days or more, including non-accrual loans, as a percent of total loans were 1.70%, a decrease from 2.35% in the first quarter of 2010.

| · | Net interest margin for the second quarter was 3.92%, up 30 basis points from the comparable quarter of 2009.

| · | Net interest income increased $2.22 million, or 13.61%, from the second quarter of 2009.

| · | Tangible book value per common share increased to $9.95, up $0.88 from the quarter ended December 31, 2009.

| · | The Company remains “well-capitalized” with a total risk-based capital ratio of 13.6%, Tier 1 risk-based capital ratio of 12.3%, and a Tier 1 leverage ratio of 8.7% at June 30, 2010.

Net Interest Income
Tax-equivalent net interest margin for the second quarter of 2010 was 3.92%. Net interest income was $18.54 million for the second quarter of 2010, an increase of $2.22 million, or 13.61%, from the second quarter of 2009. Interest income was $26.16 million for the second quarter of 2010, a slight decrease of $34 thousand, or 0.13%, from the second quarter of 2009. The yield on loans decreased to 6.04% for the second quarter of 2010 from 6.19% in the same period in the prior year, while average loans increased $127.94 million to $1.40 billion for the second quarter 2010. The increase in the average loans is primarily due to the acquisition of TriStone Community Bank in July 2009. The Company continued to maintain a high level of liquidity with average cash balances of $72.78 million in the second quarter of 2010.
Second quarter 2010 interest expense was $7.61 million, a decrease of $2.26 million, or 22.85%, from the second quarter of 2009. Second quarter 2010 deposit costs decreased $1.97 million compared to the second quarter of 2009, which was primarily due to a decrease in the average rate paid on interest-bearing deposits of 65 basis points to 1.43% for the second quarter of 2010 compared to the same period in the prior year. Compared to the second quarter of 2009, interest costs on borrowings decreased $285 thousand to $2.51 million for the second quarter of 2010, while the average balance decreased $19.63 million for the comparable periods due to the redemption and restructuring of various wholesale borrowings. The cost of interest-bearing liabilities decreased 58 basis points during the second quarter of 2010 compared to the second quarter of 2009. Average interest-bearing liabilities increased $51.44 million, or 2.99% for the second quarter of 2010 compared with the second quarter of 2009, which included a decrease of $12.30 million in Federal Home Loan Bank (“FHLB”) borrowings.
Noninterest Income
During the second quarter of 2010, wealth management revenues decreased $121 thousand, or 10.68%, to $1.01 million from the second quarter of 2009, which was primarily due to the settlement of several large estates in the prior year. The Wealth Management Division reported $806 million in assets under management at June 30, 2010. Service charges on deposit accounts were $3.35 million for the second quarter of 2010, a decrease of $144 thousand, or 4.12%, from the second quarter of 2009. Insurance commissions were $1.39 million for the second quarter of 2010, a decrease of $250 thousand, or 15.25%.
Noninterest Expenses
Noninterest expenses for the second quarter of 2010 increased $557 thousand, or 3.47%, compared to the second quarter of 2009. The increase was primarily due to salaries and employee benefits which increased $1.08 million, or 14.61%, in the second quarter of 2010 compared to the same period in the prior year. The branches of TriStone Community Bank, which the company acquired in July 2009, accounted for an increase in salaries and employee benefits of $359 thousand during the comparable periods. Excluding these branches, the remainder of the Company presented an overall increase in salaries and benefits of $723 thousand in the second quarter of 2010 compared to the same period of the prior year. Federal Deposit Insurance Corporation (“FDIC”) deposit insurance premiums decreased $577 thousand, or 44.83% in the second quarter of 2010, compared to the second quarter of 2009 when the FDIC levied a special assessment. The efficiency ratio in the second quarter of 2010 was 58.26% compared to 58.15% in the second quarter of 2009.
Credit Quality
The Company’s loan quality measures at June 30, 2010, continue to compare favorably to the Company’s peer group of bank holding companies with total assets between $1 and $3 billion, as reported by the Federal Reserve. Total loan delinquencies of 30 days or more, including non-accrual loans, as a percent of total loans were 1.70% at June 30, 2010 a decrease from 2.35% at March 31, 2010, and 2.32% at December 31, 2009. The ratio of allowance for loan losses as a percent of loans held for investment was 1.79% at June 30, 2010, compared to 1.76% at March 31, 2010, and 1.74% at December 31, 2009.
Total non-performing assets, which include other real estate owned, were 1.10% of total assets at June 30, 2010, 0.97% at both March 31, 2010, and December 31, 2009. Non-performing loans as a percentage of loans held for investment remained stable at 1.26% for the periods ended June 30, 2010, March 31, 2010, and December 31, 2009.

Balance Sheet
Consolidated assets were $2.25 billion at June 30, 2010. At June 30, 2010, total stockholders’ equity was $267.93 million, resulting in a book value per common share outstanding of $15.05, compared to total stockholders’ equity of $252.27 million and a book value per common share of $14.20 at December 31, 2009. During the second quarter of 2010, the Company paid a $0.10 per share dividend on common shares. 2010 marks the Company’s 25th consecutive year of dividends to shareholders.
Non-GAAP Presentations
The Company prepares its financial statements under accounting principles generally accepted in the United States, or “GAAP”. However, this press release also refers to certain non-GAAP financial measures that we believe, when considered together with GAAP financial measures, provide investors with important information regarding our operational performance. An analysis of any non-GAAP financial measure should be used in conjunction with results presented in accordance with GAAP.
Core earnings is a non-GAAP financial measure that reflects net income excluding non-recurring income and expense items, taxes, loan loss provisions, losses on other real estate owned, as well as gains, losses, and impairment losses on securities from net income. These excluded items are difficult to predict and we believe that core earnings provides the Company and investors with a valuable tool to evaluate the company’s financial results.
The adjusted efficiency ratio is a non-GAAP financial measure that is computed by dividing core non-interest expense by the sum of net interest income on a tax equivalent basis and core non-interest income. We believe that this measure provides investors with important information about our operating efficiency. Comparison of out adjusted efficiency ratio with those of other companies may not be possible because other companies may calculate the adjusted efficiency ratio differently.
About First Community Bancshares, Inc.
First Community Bancshares, Inc., headquartered in Bluefield, Virginia, is a $2.25 billion financial holding company and is the parent company of First Community Bank, N. A. First Community Bank, N. A. operates through fifty-six locations in the five states of Virginia, West Virginia, North Carolina, South Carolina, and Tennessee. First Community Bank, N. A. offers wealth management services through its Trust & Financial Services Division and Investment Planning Consultants, Inc., a registered investment advisory firm which offers wealth management and investment advice. The Company’s Wealth Management Division managed assets with a market value of $806 million at June 30, 2010. The Company is also the parent company of GreenPoint Insurance Group, Inc., a full-service insurance agency headquartered in High Point, North Carolina, that operates eleven offices. The Company’s common stock is traded on the NASDAQ Global Select Market under the symbol, “FCBC”. Additional investor information can be found on the Internet at www.fcbinc.com.
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: changes in business or other market conditions; the timely development, production and acceptance of new products and services; 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. Pursuant to the Private Securities Litigation Reform Act of 1995, the Company does not undertake to update forward-looking statements contained within this news release.

First Community Bancshares, Inc.
Condensed Consolidated Statements of Income

(Unaudited) |  | Three Months Ended |  |  | Six Months Ended June 30, |
(In Thousands, Except Share and Per Share Data) |  | June 30, |  |  |  |  |  | 2009 |
|  | 2010 |  |  | 2009 |  |  | 2010 |  |  | As Reported |  |  | As Revised |
Interest Income |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Interest and fees on loans held for investment |  | $ | 20,997 |  |  | $ | 19,571 |  |  | $ | 42,351 |  |  | $ | 39,555 |  |  | $ | 39,555 |
Interest on securities – taxable |  |  | 3,730 |  |  |  | 5,177 |  |  |  | 7,516 |  |  |  | 10,341 |  |  |  | 10,341 |
Interest on securities – nontaxable |  |  | 1,394 |  |  |  | 1,402 |  |  |  | 2,820 |  |  |  | 3,078 |  |  |  | 3,078 |
Interest on federal funds sold and deposits |  |  | 34 |  |  |  | 39 |  |  |  | 80 |  |  |  | 78 |  |  |  | 78 |
Total interest income |  |  | 26,155 |  |  |  | 26,189 |  |  |  | 52,767 |  |  |  | 53,052 |  |  |  | 53,052 |
Interest Expense |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Interest on deposits |  |  | 5,106 |  |  |  | 7,076 |  |  |  | 10,608 |  |  |  | 14,643 |  |  |  | 14,643 |
Interest on borrowings |  |  | 2,507 |  |  |  | 2,792 |  |  |  | 4,998 |  |  |  | 5,655 |  |  |  | 5,655 |
Total interest expense |  |  | 7,613 |  |  |  | 9,868 |  |  |  | 15,606 |  |  |  | 20,298 |  |  |  | 20,298 |
Net interest income |  |  | 18,542 |  |  |  | 16,321 |  |  |  | 37,161 |  |  |  | 32,754 |  |  |  | 32,754 |
Provision for loan losses |  |  | 3,596 |  |  |  | 2,552 |  |  |  | 7,261 |  |  |  | 4,639 |  |  |  | 4,700 |
Net interest income after provision for loan losses |  |  | 14,946 |  |  |  | 13,769 |  |  |  | 29,900 |  |  |  | 28,115 |  |  |  | 28,054 |
Noninterest Income |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Wealth management income |  |  | 1,012 |  |  |  | 1,133 |  |  |  | 1,897 |  |  |  | 2,117 |  |  |  | 2,117 |
Service charges on deposit accounts |  |  | 3,347 |  |  |  | 3,491 |  |  |  | 6,339 |  |  |  | 6,648 |  |  |  | 6,648 |
Other service charges and fees |  |  | 1,250 |  |  |  | 1,133 |  |  |  | 2,531 |  |  |  | 2,311 |  |  |  | 2,311 |
Insurance commissions |  |  | 1,389 |  |  |  | 1,639 |  |  |  | 3,590 |  |  |  | 3,956 |  |  |  | 3,956 |
Net impairment losses recognized in earnings |  |  | (185 | ) |  |  | (3,776 | ) |  |  | (185 | ) |  |  | (3,985 | ) |  |  | (3,985 | )
Security gains |  |  | 1,201 |  |  |  | 1,653 |  |  |  | 1,451 |  |  |  | 2,064 |  |  |  | 2,064 |
Other operating income |  |  | 890 |  |  |  | 247 |  |  |  | 1,859 |  |  |  | 826 |  |  |  | 826 |
Total noninterest income |  |  | 8,904 |  |  |  | 5,520 |  |  |  | 17,482 |  |  |  | 13,937 |  |  |  | 13,937 |
Noninterest Expense |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Salaries and employee benefits |  |  | 8,487 |  |  |  | 7,405 |  |  |  | 16,456 |  |  |  | 15,271 |  |  |  | 15,271 |
Occupancy expense of bank premises |  |  | 1,570 |  |  |  | 1,333 |  |  |  | 3,279 |  |  |  | 2,936 |  |  |  | 2,936 |
Furniture and equipment expense |  |  | 918 |  |  |  | 892 |  |  |  | 1,822 |  |  |  | 1,830 |  |  |  | 1,830 |
Amortization of intangible assets |  |  | 253 |  |  |  | 244 |  |  |  | 509 |  |  |  | 489 |  |  |  | 489 |
FHLB debt prepayment fees |  |  | - |  |  |  | 88 |  |  |  | - |  |  |  | 88 |  |  |  | 88 |
FDIC premiums and assessments |  |  | 710 |  |  |  | 1,287 |  |  |  | 1,411 |  |  |  | 1,475 |  |  |  | 1,475 |
Merger-related expenses |  |  | - |  |  |  | 74 |  |  |  | - |  |  |  | 75 |  |  |  | 75 |
Other operating expense |  |  | 4,660 |  |  |  | 4,718 |  |  |  | 9,193 |  |  |  | 9,064 |  |  |  | 9,064 |
Total noninterest expense |  |  | 16,598 |  |  |  | 16,041 |  |  |  | 32,670 |  |  |  | 31,228 |  |  |  | 31,228 |
Income before income taxes |  |  | 7,252 |  |  |  | 3,248 |  |  |  | 14,712 |  |  |  | 10,824 |  |  |  | 10,763 |
Income tax expense |  |  | 2,121 |  |  |  | 843 |  |  |  | 4,303 |  |  |  | 3,189 |  |  |  | 3,166 |
Net income |  |  | 5,131 |  |  |  | 2,405 |  |  |  | 10,409 |  |  |  | 7,635 |  |  |  | 7,597 |
Dividends on preferred stock |  |  | - |  |  |  | 578 |  |  |  | - |  |  |  | 1,149 |  |  |  | 1,149 |
Net income available to common shareholders |  | $ | 5,131 |  |  | $ | 1,827 |  |  | $ | 10,409 |  |  | $ | 6,486 |  |  | $ | 6,448 |
Per Share |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Basic earnings per common share |  | $ | 0.29 |  |  | $ | 0.14 |  |  | $ | 0.59 |  |  | $ | 0.53 |  |  | $ | 0.53 |
Diluted earnings per common share |  | $ | 0.29 |  |  | $ | 0.14 |  |  | $ | 0.59 |  |  | $ | 0.53 |  |  | $ | 0.53 |
Weighted average shares outstanding: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Basic |  |  | 17,787,325 |  |  |  | 12,696,202 |  |  |  | 17,776,500 |  |  |  | 12,135,103 |  |  |  | 12,135,103 |
Diluted |  |  | 17,805,393 |  |  |  | 12,741,080 |  |  |  | 17,792,535 |  |  |  | 12,181,843 |  |  |  | 12,181,843 |
For the period: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Return on average assets |  |  | 0.91 | % |  |  | 0.34 | % |  |  | 0.93 | % |  |  | 0.60 | % |  |  | 0.60 | %
Return on average common equity |  |  | 7.68 | % |  |  | 3.82 | % |  |  | 7.97 | % |  |  | 7.07 | % |  |  | 7.03 | %
Cash dividends per common share |  | $ | 0.10 |  |  | $ | 0.20 |  |  | $ | 0.20 |  |  | $ | 0.20 |  |  | $ | 0.20 |

The “As Reported” columns reflect the amounts previously reported by the Company and the “As Revised” columns reflect the revised amounts based on the corrections made for the computational errors described in the text of this press release.

First Community Bancshares, Inc.
Condensed Quarterly Statements of Income (Loss)

|  | As of and for the Quarter Ended |
(Unaudited) |  | June 30, |  |  | March 31, |  |  | December 31, 2009 |
(In Thousands, Except Share and Per Share Data) |  | 2010 |  |  | 2010 |  |  | As Reported |  |  | As Revised |
Interest Income |  |  |  |  |  |  |  |  |  |  |  |
Interest and fees on loans held for investment |  | $ | 20,997 |  |  | $ | 21,354 |  |  | $ | 22,085 |  |  | $ | 22,085 |
Interest on securities – taxable |  |  | 3,730 |  |  |  | 3,786 |  |  |  | 4,190 |  |  |  | 4,190 |
Interest on securities – nontaxable |  |  | 1,394 |  |  |  | 1,426 |  |  |  | 1,445 |  |  |  | 1,445 |
Interest on federal funds sold and deposits |  |  | 34 |  |  |  | 46 |  |  |  | 32 |  |  |  | 32 |
Total interest income |  |  | 26,155 |  |  |  | 26,612 |  |  |  | 27,752 |  |  |  | 27,752 |
Interest Expense |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Interest on deposits |  |  | 5,106 |  |  |  | 5,502 |  |  |  | 6,155 |  |  |  | 6,155 |
Interest on borrowings |  |  | 2,507 |  |  |  | 2,491 |  |  |  | 2,635 |  |  |  | 2,635 |
Total interest expense |  |  | 7,613 |  |  |  | 7,993 |  |  |  | 8,790 |  |  |  | 8,790 |
Net interest income |  |  | 18,542 |  |  |  | 18,619 |  |  |  | 18,962 |  |  |  | 18,962 |
Provision for loan losses |  |  | 3,596 |  |  |  | 3,665 |  |  |  | 6,996 |  |  |  | 7,282 |
Net interest income after provision for loan losses |  |  | 14,946 |  |  |  | 14,954 |  |  |  | 11,966 |  |  |  | 11,680 |
Noninterest Income |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Wealth management income |  |  | 1,012 |  |  |  | 885 |  |  |  | 1,059 |  |  |  | 1,059 |
Service charges on deposit accounts |  |  | 3,347 |  |  |  | 2,992 |  |  |  | 3,585 |  |  |  | 3,585 |
Other service charges and fees |  |  | 1,250 |  |  |  | 1,281 |  |  |  | 1,248 |  |  |  | 1,248 |
Insurance commissions |  |  | 1,389 |  |  |  | 2,201 |  |  |  | 1,465 |  |  |  | 1,465 |
Net impairment losses recognized in earnings |  |  | (185 | ) |  |  | - |  |  |  | (44,067 | ) |  |  | (44,067 | )
Securities gains (losses) |  |  | 1,201 |  |  |  | 250 |  |  |  | (14,603 | ) |  |  | (14,603 | )
Acquisition gain |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |
Other operating income |  |  | 890 |  |  |  | 969 |  |  |  | 983 |  |  |  | 983 |
Total noninterest income |  |  | 8,904 |  |  |  | 8,578 |  |  |  | (50,330 | ) |  |  | (50,330 | )
Noninterest Expense |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Salaries and employee benefits |  |  | 8,487 |  |  |  | 7,969 |  |  |  | 8,254 |  |  |  | 8,254 |
Occupancy expense of bank premises |  |  | 1,570 |  |  |  | 1,709 |  |  |  | 1,687 |  |  |  | 1,687 |
Furniture and equipment expense |  |  | 918 |  |  |  | 904 |  |  |  | 988 |  |  |  | 988 |
Amortization of intangible assets |  |  | 253 |  |  |  | 256 |  |  |  | 277 |  |  |  | 277 |
FHLB debt prepayment fees |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |
FDIC premiums and assessments |  |  | 710 |  |  |  | 701 |  |  |  | 1,474 |  |  |  | 1,474 |
Merger-related expenses |  |  | - |  |  |  | - |  |  |  | 146 |  |  |  | 146 |
Other operating expense |  |  | 4,660 |  |  |  | 4,533 |  |  |  | 4,802 |  |  |  | 4,802 |
Total noninterest expense |  |  | 16,598 |  |  |  | 16,072 |  |  |  | 17,628 |  |  |  | 17,628 |
Income (loss) before income taxes |  |  | 7,252 |  |  |  | 7,460 |  |  |  | (55,992 | ) |  |  | (56,278 | )
Income tax expense (benefit) |  |  | 2,121 |  |  |  | 2,182 |  |  |  | (21,430 | ) |  |  | (21,537 | )
Net income (loss) |  |  | 5,131 |  |  |  | 5,278 |  |  |  | (34,562 | ) |  |  | (34,741 | )
Preferred dividends |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |
Net income (loss) available to common shareholders |  | $ | 5,131 |  |  | $ | 5,278 |  |  | $ | (34,562 | ) |  | $ | (34,741 | )
Per Share |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Basic EPS |  | $ | 0.29 |  |  | $ | 0.30 |  |  | $ | (1.95 | ) |  | $ | (1.96 | )
Diluted EPS |  | $ | 0.29 |  |  | $ | 0.30 |  |  | $ | (1.95 | ) |  | $ | (1.96 | )
Cash dividends per common share |  | $ | 0.10 |  |  | $ | 0.10 |  |  | $ | - |  |  | $ | - |
Weighted average shares outstanding: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Basic |  |  | 17,787,325 |  |  |  | 17,765,556 |  |  |  | 17,687,413 |  |  |  | 17,687,413 |
Diluted |  |  | 17,805,393 |  |  |  | 17,784,449 |  |  |  | 17,687,413 |  |  |  | 17,687,413 |

First Community Bancshares, Inc.
Reconciliation of GAAP Net Income to Core Earnings

|  | Three Months Ended |  |  | Six Months Ended June 30, |
(Unaudited) |  | June 30, |  |  |  |  |  | 2009 |
(In Thousands, Except Per Share Data) |  | 2010 |  |  | 2009 |  |  | 2010 |  |  | As Reported |  |  | As Revised |
Net income, GAAP |  | $ | 5,131 |  |  | $ | 2,405 |  |  | $ | 10,409 |  |  | $ | 7,635 |  |  | $ | 7,597 |
Non-GAAP adjustments: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Security gains |  |  | (1,201 | ) |  |  | (1,653 | ) |  |  | (1,451 | ) |  |  | (2,064 | ) |  |  | (2,064 | )
Merger-related expenses |  |  | - |  |  |  | 74 |  |  |  | - |  |  |  | 75 |  |  |  | 75 |
FHLB debt prepayment fees |  |  | - |  |  |  | 88 |  |  |  | - |  |  |  | 88 |  |  |  | 88 |
Other-than-temporary security impairments |  |  | 185 |  |  |  | 3,776 |  |  |  | 185 |  |  |  | 3,985 |  |  |  | 3,985 |
FDIC special assessments |  |  | - |  |  |  | 988 |  |  |  | - |  |  |  | 988 |  |  |  | 988 |
Other non-core, non-recurring items |  |  | 738 |  |  |  | 508 |  |  |  | 1,673 |  |  |  | 808 |  |  |  | 808 |
Total adjustments to core earnings |  |  | (278 | ) |  |  | 3,781 |  |  |  | 407 |  |  |  | 3,880 |  |  |  | 3,880 |
Tax effect |  |  | (104 | ) |  |  | 1,408 |  |  |  | 153 |  |  |  | 1,513 |  |  |  | 1,513 |
Core earnings, non-GAAP |  | $ | 4,957 |  |  | $ | 4,778 |  |  | $ | 10,663 |  |  | $ | 10,002 |  |  | $ | 9,964 |
Core return on average assets |  |  | 0.88 | % |  |  | 0.88 | % |  |  | 0.95 | % |  |  | 0.93 | % |  |  | 0.92 | %
Core return on average equity |  |  | 7.42 | % |  |  | 8.22 | % |  |  | 8.16 | % |  |  | 8.91 | % |  |  | 8.87 | %
Core diluted earnings per share |  | $ | 0.28 |  |  | $ | 0.37 |  |  | $ | 0.60 |  |  | $ | 0.82 |  |  | $ | 0.82 |

Efficiency Ratio Calculation

|  | Three Months Ended |  |  | Six Months Ended |
(Unaudited) |  | June 30, |  |  | June 30, |
(In Thousands) |  | 2010 |  |  | 2009 |  |  | 2010 |  |  | 2009 |
Noninterest expenses, GAAP |  | $ | 16,598 |  |  | $ | 16,041 |  |  | $ | 32,670 |  |  | $ | 31,228 |
Non-GAAP adjustments: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Merger-related expenses |  |  | - |  |  |  | (74 | ) |  |  | - |  |  |  | (75 | )
FHLB debt prepayment fees |  |  | - |  |  |  | (88 | ) |  |  | - |  |  |  | (88 | )
Other non-core, non-recurring items |  |  | (738 | ) |  |  | (1,496 | ) |  |  | (1,673 | ) |  |  | (1,796 | )
Adjusted noninterest expenses |  |  | 15,860 |  |  |  | 14,383 |  |  |  | 30,997 |  |  |  | 29,269 |
Net interest income, GAAP |  |  | 18,542 |  |  |  | 16,321 |  |  |  | 37,161 |  |  |  | 32,754 |
Noninterest income, GAAP |  |  | 8,904 |  |  |  | 5,520 |  |  |  | 17,482 |  |  |  | 13,937 |
Non-GAAP adjustments: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Tax-equivalency adjustment |  |  | 791 |  |  |  | 772 |  |  |  | 1,603 |  |  |  | 1,688 |
Security gains |  |  | (1,201 | ) |  |  | (1,653 | ) |  |  | (1,451 | ) |  |  | (2,064 | )
Other-than-temporary security impairments |  |  | 185 |  |  |  | 3,776 |  |  |  | 185 |  |  |  | 3,985 |
Adjusted net interest and noninterest income |  |  | 27,221 |  |  |  | 24,736 |  |  |  | 54,980 |  |  |  | 50,300 |
Efficiency Ratio |  |  | 58.26 | % |  |  | 58.15 | % |  |  | 56.38 | % |  |  | 58.19 | %

First Community Bancshares, Inc.
Quarterly Balance Sheets

|  | For the Quarter Ended |
(Unaudited) |  | June 30, |  |  | March 31, 2010 |  |  | December 31, 2009 |
(Dollars In Thousands) |  | 2010 |  |  | As Reported |  |  | As Revised |  |  | As Reported |  |  | As Revised |
Cash and due from banks |  | $ | 50,922 |  |  | $ | 74,962 |  |  | $ | 74,962 |  |  | $ | 97,641 |  |  | $ | 97,641 |
Interest-bearing deposits with banks |  |  | 25,609 |  |  |  | 12,744 |  |  |  | 12,744 |  |  |  | 3,700 |  |  |  | 3,700 |
Securities available-for-sale |  |  | 502,866 |  |  |  | 524,297 |  |  |  | 524,297 |  |  |  | 486,057 |  |  |  | 486,057 |
Securities held-to-maturity |  |  | 6,468 |  |  |  | 7,155 |  |  |  | 7,155 |  |  |  | 7,454 |  |  |  | 7,454 |
Loans held for sale |  |  | 2,141 |  |  |  | 1,494 |  |  |  | 1,494 |  |  |  | 11,576 |  |  |  | 11,576 |
Loans held for investment, net of unearned income |  |  | 1,399,885 |  |  |  | 1,390,874 |  |  |  | 1,390,874 |  |  |  | 1,393,931 |  |  |  | 1,393,931 |
Less allowance for loan losses |  |  | 25,011 |  |  |  | 21,956 |  |  |  | 24,508 |  |  |  | 21,725 |  |  |  | 24,277 |
Net loans |  |  | 1,377,015 |  |  |  | 1,370,412 |  |  |  | 1,367,860 |  |  |  | 1,383,782 |  |  |  | 1,381,230 |
Premises and equipment |  |  | 56,407 |  |  |  | 56,772 |  |  |  | 56,772 |  |  |  | 56,946 |  |  |  | 56,946 |
Other real estate owned |  |  | 7,108 |  |  |  | 4,740 |  |  |  | 4,740 |  |  |  | 4,578 |  |  |  | 4,578 |
Interest receivable |  |  | 7,859 |  |  |  | 8,630 |  |  |  | 8,630 |  |  |  | 8,610 |  |  |  | 8,610 |
Intangible assets |  |  | 90,757 |  |  |  | 90,805 |  |  |  | 90,805 |  |  |  | 91,061 |  |  |  | 91,061 |
Other assets |  |  | 121,835 |  |  |  | 130,017 |  |  |  | 130,974 |  |  |  | 135,049 |  |  |  | 136,006 |
Total Assets |  | $ | 2,246,846 |  |  | $ | 2,280,534 |  |  | $ | 2,278,939 |  |  | $ | 2,274,878 |  |  | $ | 2,273,283 |
Deposits: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Demand |  | $ | 205,731 |  |  | $ | 205,810 |  |  | $ | 205,810 |  |  | $ | 208,244 |  |  | $ | 208,244 |
Interest-bearing demand |  |  | 244,889 |  |  |  | 246,513 |  |  |  | 246,513 |  |  |  | 231,907 |  |  |  | 231,907 |
Savings |  |  | 404,820 |  |  |  | 427,883 |  |  |  | 427,883 |  |  |  | 381,381 |  |  |  | 381,381 |
Time |  |  | 757,979 |  |  |  | 775,405 |  |  |  | 775,405 |  |  |  | 824,428 |  |  |  | 824,428 |
Total Deposits |  |  | 1,613,419 |  |  |  | 1,655,611 |  |  |  | 1,655,611 |  |  |  | 1,645,960 |  |  |  | 1,645,960 |
Interest, taxes and other liabilities |  |  | 21,865 |  |  |  | 21,912 |  |  |  | 21,912 |  |  |  | 22,498 |  |  |  | 22,498 |
Securities sold under agreements to repurchase |  |  | 147,772 |  |  |  | 144,381 |  |  |  | 144,381 |  |  |  | 153,634 |  |  |  | 153,634 |
FHLB and other indebtedness |  |  | 195,865 |  |  |  | 195,873 |  |  |  | 195,873 |  |  |  | 198,924 |  |  |  | 198,924 |
Total Liabilities |  |  | 1,978,921 |  |  |  | 2,017,777 |  |  |  | 2,017,777 |  |  |  | 2,021,016 |  |  |  | 2,021,016 |
Preferred stock, net of discount |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |
Common stock |  |  | 18,083 |  |  |  | 18,083 |  |  |  | 18,083 |  |  |  | 18,083 |  |  |  | 18,083 |
Additional paid-in capital |  |  | 190,259 |  |  |  | 190,650 |  |  |  | 190,650 |  |  |  | 190,967 |  |  |  | 190,967 |
Retained earnings |  |  | 73,613 |  |  |  | 71,857 |  |  |  | 70,262 |  |  |  | 68,355 |  |  |  | 66,760 |
Treasury stock, at cost |  |  | (8,583 | ) |  |  | (9,342 | ) |  |  | (9,342 | ) |  |  | (9,891 | ) |  |  | (9,891 | )
Accumulated other comprehensive loss |  |  | (5,447 | ) |  |  | (8,491 | ) |  |  | (8,491 | ) |  |  | (13,652 | ) |  |  | (13,652 | )
Total Stockholders' Equity |  |  | 267,925 |  |  |  | 262,757 |  |  |  | 261,162 |  |  |  | 253,862 |  |  |  | 252,267 |
Total Liabilities and |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Stockholders' Equity |  | $ | 2,246,846 |  |  | $ | 2,280,534 |  |  | $ | 2,278,939 |  |  | $ | 2,274,878 |  |  | $ | 2,273,283 |
Actual shares outstanding at period end |  |  | 17,807,155 |  |  |  | 17,782,791 |  |  |  | 17,782,791 |  |  |  | 17,765,164 |  |  |  | 17,765,164 |
Book value per common share at period end |  | $ | 15.05 |  |  | $ | 14.78 |  |  | $ | 14.69 |  |  | $ | 14.29 |  |  | $ | 14.20 |
Tangible book value per common share at period end (1) |  | $ | 9.95 |  |  | $ | 9.67 |  |  | $ | 9.58 |  |  | $ | 9.16 |  |  | $ | 9.07 |

(1) | Tangible book value per common share is defined as stockholders' equity less goodwill and other intangibles divided by common shares outstanding.

First Community Bancshares, Inc.
Selected Financial Information

|  | As of and for the Quarter Ended |
(Unaudited) |  | June 30, |  |  | March 31, 2010 |  |  | December 31, 2009 |
(Dollars in Thousands) |  | 2010 |  |  | As Reported |  |  | As Revised |  |  | As Reported |  |  | As Revised |
Summary of Loan Loss Experience |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Allowance for loan losses: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Beginning balance |  | $ | 24,508 |  |  | $ | 21,725 |  |  | $ | 24,277 |  |  | $ | 17,444 |  |  | $ | 19,710 |
Balance acquired |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |
Provision for loan losses |  |  | 3,596 |  |  |  | 3,665 |  |  |  | 3,665 |  |  |  | 6,996 |  |  |  | 7,282 |
Charge-offs |  |  | (3,373 | ) |  |  | (3,732 | ) |  |  | (3,732 | ) |  |  | (2,954 | ) |  |  | (2,954 | )
Recoveries |  |  | 280 |  |  |  | 298 |  |  |  | 298 |  |  |  | 239 |  |  |  | 239 |
Net charge-offs |  |  | (3,093 | ) |  |  | (3,434 | ) |  |  | (3,434 | ) |  |  | (2,715 | ) |  |  | (2,715 | )
Ending balance |  | $ | 25,011 |  |  | $ | 21,956 |  |  | $ | 24,508 |  |  | $ | 21,725 |  |  | $ | 24,277 |
Summary of Asset Quality |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Non-accrual loans |  | $ | 17,668 |  |  | $ | 17,477 |  |  | $ | 17,477 |  |  | $ | 17,527 |  |  | $ | 17,527 |
Loans 90 days or more past due and still accruing |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |
Total non-performing loans |  |  | 17,668 |  |  |  | 17,477 |  |  |  | 17,477 |  |  |  | 17,527 |  |  |  | 17,527 |
Other real estate owned |  |  | 7,108 |  |  |  | 4,740 |  |  |  | 4,740 |  |  |  | 4,578 |  |  |  | 4,578 |
Total non-performing assets |  | $ | 24,776 |  |  | $ | 22,217 |  |  | $ | 22,217 |  |  | $ | 22,105 |  |  | $ | 22,105 |
Restructured loans performing in accordance with terms |  | $ | 2,763 |  |  | $ | 3,091 |  |  | $ | 3,091 |  |  | $ | 3,565 |  |  | $ | 3,565 |
Asset Quality Ratios |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Non-performing loans as a percentage of loans held for investment |  |  | 1.26 | % |  |  | 1.26 | % |  |  | 1.26 | % |  |  | 1.26 | % |  |  | 1.26 | %
Non-performing assets as a percentage of total assets |  |  | 1.10 | % |  |  | 0.97 | % |  |  | 0.97 | % |  |  | 0.97 | % |  |  | 0.97 | %
Annualized net charge-offs as a percentage of average loans held for investment |  |  | 0.89 | % |  |  | 1.00 | % |  |  | 1.00 | % |  |  | 0.77 | % |  |  | 0.77 | %
Allowance for loan losses as a percentage of loans held for investment |  |  | 1.79 | % |  |  | 1.58 | % |  |  | 1.76 | % |  |  | 1.56 | % |  |  | 1.74 | %
Ratio of allowance for loan losses to non-performing loans |  |  | 1.42 |  |  |  | 1.26 |  |  |  | 1.40 |  |  |  | 1.24 |  |  |  | 1.39 |

First Community Bancshares, Inc.
Non-accrual Loan Detail

|  | As of June 30, 2010 |
|  |  |  |  |  |  |  | Non-accrual |
(Unaudited) |  | Loans |  |  | Non-accrual |  |  | Loans to Loans |
(Dollars in Thousands) |  | Outstanding |  |  | Loans |  |  | Outstanding |
Commercial |  |  |  |  |  |  |  |  |
Commercial & industrial |  | $ | 109,344 |  |  | $ | 654 |  |  |  | 0.60 | %
Agriculture |  |  | 1,354 |  |  |  | - |  |  |  | 0.00 | %
Total commercial |  |  | 110,698 |  |  |  | 654 |  |  |  | 0.59 | %
Commercial real estate |  |  |  |  |  |  |  |  |  |  |  |
Construction, land development & vacant land |  |  | 114,207 |  |  |  | 1,876 |  |  |  | 1.64 | %
Non-owner occupied |  |  | 196,896 |  |  |  | 3,111 |  |  |  | 1.58 | %
Owner occupied |  |  | 155,946 |  |  |  | 2,571 |  |  |  | 1.65 | %
Farmland |  |  | 39,053 |  |  |  | 7 |  |  |  | 0.02 | %
Total commercial real estate |  |  | 506,102 |  |  |  | 7,565 |  |  |  | 1.49 | %
Consumer |  |  | 62,659 |  |  |  | 96 |  |  |  | 0.15 | %
Residential real estate |  |  |  |  |  |  |  |  |  |  |  |
Residential |  |  | 536,540 |  |  |  | 6,788 |  |  |  | 1.27 | %
Multi-family |  |  | 70,850 |  |  |  | 1,317 |  |  |  | 1.86 | %
Home equity lines |  |  | 113,036 |  |  |  | 1,248 |  |  |  | 1.10 | %
Total residential |  |  | 720,426 |  |  |  | 9,353 |  |  |  | 1.30 | %
Total loans |  | $ | 1,399,885 |  |  | $ | 17,668 |  |  |  | 1.26 | %

First Community Bancshares, Inc.
Consolidated Average Balance Sheets, Yields, and Rates

|  | Three Months Ended June 30, |
|  | 2010 |  |  | 2009 |
|  |  |  |  |  |  |  | Yield/ |  |  |  |  |  |  |  |  | Yield/ |
(Unaudited) |  | Average |  |  | Interest |  |  | Rate |  |  | Average |  |  | Interest |  |  | Rate |
(Dollars in Thousands) |  | Balance |  |  | (1) |  |  | (1) |  |  | Balance |  |  | (1) |  |  | (1) |
Earning assets |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Loans held for investment (2) |  | $ | 1,397,528 |  |  | $ | 21,039 |  |  |  | 6.04 | % |  | $ | 1,269,584 |  |  | $ | 19,589 |  |  |  | 6.19 | %
Securities available-for-sale |  |  | 498,880 |  |  |  | 5,728 |  |  |  | 4.61 | % |  |  | 557,110 |  |  |  | 7,169 |  |  |  | 5.16 | %
Securities held-to-maturity |  |  | 6,928 |  |  |  | 145 |  |  |  | 8.39 | % |  |  | 7,824 |  |  |  | 164 |  |  |  | 8.41 | %
Interest-bearing deposits with banks |  |  | 72,782 |  |  |  | 34 |  |  |  | 0.19 | % |  |  | 57,885 |  |  |  | 39 |  |  |  | 0.27 | %
Total earning assets |  |  | 1,976,118 |  |  |  | 26,946 |  |  |  | 5.47 | % |  |  | 1,892,403 |  |  |  | 26,961 |  |  |  | 5.71 | %
Other assets |  |  | 283,068 |  |  |  |  |  |  |  |  |  |  |  | 288,376 |  |  |  |  |  |  |  |  |
Total |  | $ | 2,259,186 |  |  |  |  |  |  |  |  |  |  | $ | 2,180,779 |  |  |  |  |  |  |  |  |
Interest-bearing liabilities |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Interest-bearing demand deposits |  | $ | 248,512 |  |  | $ | 250 |  |  |  | 0.40 | % |  | $ | 197,710 |  |  | $ | 81 |  |  |  | 0.16 | %
Savings deposits |  |  | 421,669 |  |  |  | 781 |  |  |  | 0.74 | % |  |  | 317,700 |  |  |  | 540 |  |  |  | 0.68 | %
Time deposits |  |  | 762,858 |  |  |  | 4,075 |  |  |  | 2.14 | % |  |  | 846,560 |  |  |  | 6,455 |  |  |  | 3.06 | %
Retail repurchase agreements |  |  | 94,197 |  |  |  | 252 |  |  |  | 1.07 | % |  |  | 101,525 |  |  |  | 333 |  |  |  | 1.32 | %
Wholesale repurchase agreements |  |  | 50,000 |  |  |  | 468 |  |  |  | 3.75 | % |  |  | 50,000 |  |  |  | 465 |  |  |  | 3.73 | %
FHLB borrowings & other long-term debt |  |  | 195,804 |  |  |  | 1,787 |  |  |  | 3.66 | % |  |  | 208,102 |  |  |  | 1,994 |  |  |  | 3.84 | %
Total interest-bearing liabilities |  |  | 1,773,040 |  |  |  | 7,613 |  |  |  | 1.72 | % |  |  | 1,721,597 |  |  |  | 9,868 |  |  |  | 2.30 | %
Noninterest-bearing demand deposits |  |  | 207,393 |  |  |  |  |  |  |  |  |  |  |  | 201,670 |  |  |  |  |  |  |  |  |
Other liabilities |  |  | 10,940 |  |  |  |  |  |  |  |  |  |  |  | 24,419 |  |  |  |  |  |  |  |  |
Stockholders' equity |  |  | 267,813 |  |  |  |  |  |  |  |  |  |  |  | 233,093 |  |  |  |  |  |  |  |  |
Total |  | $ | 2,259,186 |  |  |  |  |  |  |  |  |  |  | $ | 2,180,779 |  |  |  |  |  |  |  |  |
Net interest income, tax-equivalent |  |  |  |  |  | $ | 19,333 |  |  |  |  |  |  |  |  |  |  | $ | 17,093 |  |  |  |  |
Net interest rate spread (3) |  |  |  |  |  |  |  |  |  |  | 3.75 | % |  |  |  |  |  |  |  |  |  |  | 3.41 | %
Net interest margin (4) |  |  |  |  |  |  |  |  |  |  | 3.92 | % |  |  |  |  |  |  |  |  |  |  | 3.62 | %

(1) | Fully taxable equivalent at the rate of 35%.

(2) | Non-accrual loans are included in average balances outstanding but with no related interest income during the period of non-accrual.

(3) | Represents the difference between the yield on earning assets and cost of funds.

(4) | Represents tax-equivalent net interest income divided by average earning assets.

First Community Bancshares, Inc.
Consolidated Average Balance Sheets, Yields, and Rates

|  | Six Months Ended June 30, |
|  | 2010 |  |  | 2009 |
|  |  |  |  |  |  |  | Yield/ |  |  |  |  |  |  |  |  | Yield/ |
(Unaudited) |  | Average |  |  | Interest |  |  | Rate |  |  | Average |  |  | Interest |  |  | Rate |
(Dollars in Thousands) |  | Balance |  |  | (1) |  |  | (1) |  |  | Balance |  |  | (1) |  |  | (1) |
Earning assets |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Loans held for investment (2) |  | $ | 1,396,603 |  |  | $ | 42,436 |  |  |  | 6.13 | % |  | $ | 1,280,394 |  |  | $ | 39,585 |  |  |  | 6.23 | %
Securities available-for-sale |  |  | 490,062 |  |  |  | 11,561 |  |  |  | 4.76 | % |  |  | 535,326 |  |  |  | 14,741 |  |  |  | 5.55 | %
Securities held-to-maturity |  |  | 7,033 |  |  |  | 293 |  |  |  | 8.40 | % |  |  | 8,147 |  |  |  | 336 |  |  |  | 8.32 | %
Interest-bearing deposits with banks |  |  | 74,675 |  |  |  | 80 |  |  |  | 0.22 | % |  |  | 65,713 |  |  |  | 78 |  |  |  | 0.24 | %
Total earning assets |  |  | 1,968,373 |  |  |  | 54,370 |  |  |  | 5.57 | % |  |  | 1,889,580 |  |  |  | 54,740 |  |  |  | 5.84 | %
Other assets |  |  | 283,958 |  |  |  |  |  |  |  |  |  |  |  | 289,273 |  |  |  |  |  |  |  |  |
Total |  | $ | 2,252,331 |  |  |  |  |  |  |  |  |  |  | $ | 2,178,853 |  |  |  |  |  |  |  |  |
Interest-bearing liabilities |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Interest-bearing demand deposits |  | $ | 242,531 |  |  | $ | 450 |  |  |  | 0.37 | % |  | $ | 193,983 |  |  | $ | 160 |  |  |  | 0.17 | %
Savings deposits |  |  | 417,377 |  |  |  | 1,612 |  |  |  | 0.78 | % |  |  | 315,146 |  |  |  | 1,196 |  |  |  | 0.77 | %
Time deposits |  |  | 777,268 |  |  |  | 8,546 |  |  |  | 2.22 | % |  |  | 852,258 |  |  |  | 13,287 |  |  |  | 3.14 | %
Retail repurchase agreements |  |  | 93,093 |  |  |  | 528 |  |  |  | 1.14 | % |  |  | 103,984 |  |  |  | 723 |  |  |  | 1.40 | %
Wholesale repurchase agreements |  |  | 50,000 |  |  |  | 931 |  |  |  | 3.75 | % |  |  | 50,000 |  |  |  | 975 |  |  |  | 3.93 | %
FHLB borrowings & other long-term debt |  |  | 197,266 |  |  |  | 3,539 |  |  |  | 3.62 | % |  |  | 211,511 |  |  |  | 3,957 |  |  |  | 3.77 | %
Total interest-bearing liabilities |  |  | 1,777,535 |  |  |  | 15,606 |  |  |  | 1.77 | % |  |  | 1,726,882 |  |  |  | 20,298 |  |  |  | 2.37 | %
Noninterest-bearing demand deposits |  |  | 203,252 |  |  |  |  |  |  |  |  |  |  |  | 200,497 |  |  |  |  |  |  |  |  |
Other liabilities |  |  | 8,097 |  |  |  |  |  |  |  |  |  |  |  | 25,064 |  |  |  |  |  |  |  |  |
Stockholders' equity |  |  | 263,447 |  |  |  |  |  |  |  |  |  |  |  | 226,410 |  |  |  |  |  |  |  |  |
Total |  | $ | 2,252,331 |  |  |  |  |  |  |  |  |  |  | $ | 2,178,853 |  |  |  |  |  |  |  |  |
Net interest income, tax-equivalent |  |  |  |  |  | $ | 38,764 |  |  |  |  |  |  |  |  |  |  | $ | 34,442 |  |  |  |  |
Net interest rate spread (3) |  |  |  |  |  |  |  |  |  |  | 3.80 | % |  |  |  |  |  |  |  |  |  |  | 3.47 | %
Net interest margin (4) |  |  |  |  |  |  |  |  |  |  | 3.97 | % |  |  |  |  |  |  |  |  |  |  | 3.68 | %

(1) | Fully taxable equivalent at the rate of 35%.

(2) | Non-accrual loans are included in average balances outstanding but with no related interest income during the period of non-accrual.

(3) | Represents the difference between the yield on earning assets and cost of funds.

(4) | Represents tax-equivalent net interest income divided by average earning assets.