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Regulatory Capital Requirements and Restrictions
 12 Months Ended
Dec. 31, 2012
Regulatory Capital Requirements and Restrictions
Note 15. Regulatory Capital Requirements and Restrictions

The Company and the Bank are subject to various regulatory capital requirements administered by state and federal banking agencies. Failure to meet minimum capital requirements can initiate certain mandatory and possibly additional discretionary actions by regulators that, if undertaken, could have a direct material effect on the Company’s financial statements. Under the capital adequacy guidelines and the regulatory framework for prompt corrective action, which applies only to the Bank, the Bank must meet specific capital guidelines that involve quantitative measures of the entity’s assets, liabilities, and certain off-balance sheet items as calculated under regulatory accounting practices. The Bank’s capital amounts and classifications are also subject to qualitative judgments by the regulators about components, risk weightings, and other factors. Quantitative measures established by regulation to ensure capital adequacy require the Company and the Bank to maintain minimum amounts and ratios for total and Tier 1 capital (as defined in the regulations) to risk-weighted assets (as defined), and of Tier 1 capital (as defined) to average assets (as defined).

To be categorized as well capitalized, the Bank must maintain minimum total capital to risk-weighted assets, Tier 1 capital to risk-weighted assets, and Tier 1 capital to average assets (leverage) ratios established by banking regulators. At December 31, 2012, the Company and the Bank met all capital adequacy requirements to which they are subject. At December 31, 2012 and 2011, the most recent notifications from regulators categorized the Bank as well capitalized under the regulatory framework for prompt corrective action. There are no conditions or events since those notifications that management believes have changed the institution’s category.

The following tables present the Company’s and the Bank’s capital ratios at December 31, 2012 and 2011:

 

     December 31, 2012  
     Actual     For Capital
Adequacy
Purposes		     To Be Well
Capitalized Under
Prompt Corrective
Action Provisions		  
(Amounts in thousands)    Amount      Ratio     Amount      Ratio     Amount      Ratio  

Total Capital to Risk-Weighted Assets

                

First Community Bancshares, Inc.

    $ 282,729         16.70 %    $ 135,441         8.00 %      N/A         N/A   

First Community Bank

      255,219         15.23 %      134,087         8.00 %    $ 167,609         10.00 % 

Tier 1 Capital to Risk-Weighted Assets

                

First Community Bancshares, Inc.

      261,467         15.44 %      67,720         4.00 %      N/A         N/A   

First Community Bank

      234,226         13.97 %      67,043         4.00 %      100,565         6.00 % 

Tier 1 Capital to Average Assets (Leverage)

                

First Community Bancshares, Inc.

      261,467         9.96 %      104,974         4.00 %      N/A         N/A   

First Community Bank

      234,226         8.98 %      104,304         4.00 %      130,381         5.00 % 

 

     December 31, 2011  
     Actual     For Capital
Adequacy
Purposes		     To Be Well
Capitalized Under
Prompt Corrective
Action Provisions		  
(Amounts in thousands)    Amount      Ratio     Amount      Ratio     Amount      Ratio  

Total Capital to Risk-Weighted Assets

                

First Community Bancshares, Inc.

    $ 257,836         18.15 %    $ 113,626         8.00 %      N/A         N/A   

First Community Bank

      226,508         16.12 %      112,411         8.00 %    $ 140,514         10.00 % 

Tier 1 Capital to Risk-Weighted Assets

                

First Community Bancshares, Inc.

      239,928         16.89 %      56,813         4.00 %      N/A         N/A   

First Community Bank

      208,833         14.86 %      56,206         4.00 %      84,308         6.00 % 

Tier 1 Capital to Average Assets (Leverage)

                

First Community Bancshares, Inc.

      239,928         11.50 %      83,474         4.00 %      N/A         N/A   

First Community Bank

      208,833         10.08 %      82,909         4.00 %      103,637         5.00 % 

 

The primary source of funds for dividends paid by the Company is dividends received from the Bank. Dividends paid by the Bank are subject to restrictions by banking regulations. Approval by regulatory authorities is required if the effect of dividends declared would cause the regulatory capital of the Bank to fall below specified minimum levels. Approval is also required if dividends declared exceed the net profits for that year combined with the retained net profits for the preceding two years.