EX-99.1 2 v451174_ex99-1.htm EXHIBIT 99.1

Exhibit 99.1



NEWS RELEASE
FOR IMMEDIATE RELEASE:		FOR MORE INFORMATION, CONTACT:
October 25, 2016		David D. Brown
		(276) 326-9000

First Community Bancshares, Inc. Announces Third Quarter 2016 Results

and Quarterly Dividend

Bluefield, Virginia – First Community Bancshares, Inc. (NASDAQ: FCBC) (www.fcbinc.com) (the “Company”) today reported its unaudited results of operations and other financial information for the quarter and nine months ended September 30, 2016. The Company reported net income available to common shareholders of $6.38 million, or $0.37 per diluted common share for the quarter ended September 30, 2016, which represents an 8.82% increase in per share earnings compared to the same quarter of 2015. Net income available to common shareholders was $18.72 million, or $1.07 per diluted common share for the nine months ended September 30, 2016, which represents a 10.31% increase in per share earnings compared to the same period of 2015.

The Company also announced today that the Board of Directors declared a quarterly cash dividend to common shareholders of sixteen cents ($0.16) per common share. The quarterly dividend is payable to common shareholders of record on November 4, 2016, and is expected to be paid on or about November 18, 2016. The current year marks the 31^st consecutive year of cash dividends paid to stockholders.

On July 15, 2016, the Company completed the previously announced branch exchange with First Bank, North Carolina, pursuant to which First Community Bank (the “Bank”) sold six branches in the Winston-Salem and Mooresville areas of North Carolina and acquired seven branches in Southwestern Virginia. At closing, First Bank assumed total assets of $158.25 million, including total loans of $154.03 million, and total liabilities of $111.20 million, including total deposits of $110.99 million. The Company received a deposit premium from First Bank of $4.07 million and recorded a net gain of $3.07 million in connection with the divestiture transaction. At closing, the acquired branches added total assets of $156.88 million, including total loans of $151.04 million, and total liabilities of $134.41 million, including total deposits of $134.26 million. The Company paid a deposit premium to First Bank of $3.84 million and recorded goodwill of $2.45 million in connection with the branch acquisitions.

On October 1, 2016, the Company sold two North Carolina offices operating under the Greenpoint Insurance Group, Inc. trade name and two Virginia offices operating under the trade name Carr & Hyde Insurance to Ascension Insurance Agency, Inc. The transaction does not impact the Company’s in-branch insurance offices operating as First Community Insurance Services, Inc. in West Virginia and Virginia.

Third Quarter 2016 Highlights

●

Income Statement

Net income available to common shareholders increased $124 thousand, or 1.98%, to $6.38 million compared to the same quarter of 2015.

Diluted earnings per share increased $0.03, or 8.82%, to $0.37 compared to the same quarter of 2015.

Core, non-GAAP diluted earnings per common share increased $0.04 to $0.38 compared to the same quarter of 2015.

The net interest margin decreased 10 basis points to 3.95%, while the normalized net interest margin increased 9 basis points to 3.77% compared to the same quarter of 2015.

●

Balance Sheet

The non-covered loan portfolio increased $151.04 million, or 9.30%, compared to December 31, 2015.

Book value per common share increased $0.92 to $19.87 compared to December 31, 2015.

The Company repurchased 171,225 common shares during the quarter resulting in 1,152,776 shares repurchased year-to-date. The Company has repurchased 3.93 million shares since September 30, 2013.

The Company and its subsidiary bank both significantly exceed regulatory “well capitalized” targets as of September 30, 2016.

●

Asset Quality

Annualized net charge-offs were only 0.07% of average loans compared to 0.10% for the same period of the prior year.

Total nonperforming assets decreased $2.63 million compared to December 31, 2015, and decreased $2.32 million compared to September 30, 2015.

Total non-covered nonperforming assets decreased $1.08 million compared to December 31, 2015, and decreased $549 thousand compared to September 30, 2015.

Non-covered delinquent loans, which are comprised of loans 30 days or more past due and nonaccrual loans, as a percentage of total non-covered loans improved 21 basis points to 1.51% as of September 30, 2016, from 1.72% as of December 31, 2015.

The Company recognized a net loan loss recovery of $1.15 million as a result of the reversal of $1.35 million in loan loss provisions related to loans sold to First Bank.

Non-GAAP Financial Measures

The Company prepares its financial statements in accordance with generally accepted accounting principles in the United States (“GAAP”). This press release also refers to certain non-GAAP financial measures that the Company believes provide investors with important information, when used in conjunction with results presented in accordance with GAAP, regarding its operational performance. The Company’s non-GAAP financial measures presented in this release include core earnings, the efficiency ratio, tangible book value per common share, average tangible common equity, and normalized net interest margin. Management believes that core earnings provide the Company and investors a valuable tool to evaluate the Company’s financial results. Management believes that the efficiency ratio provides important information about the Company’s operating expense control and efficiency of operations. Management also believes this ratio focuses attention on the core operating performance of the Company over time and is highly useful in comparing period-to-period operating performance of core business operations. The efficiency ratio used by the Company may not be comparable to efficiency ratios reported by other financial institutions. The reconciliations of these measures to GAAP measures are provided within this news release.

About First Community Bancshares, Inc.

First Community Bancshares, Inc., a financial holding company headquartered in Bluefield, Virginia, provides banking products and services through its wholly-owned subsidiary First Community Bank. First Community Bank operated 48 branch banking locations throughout Virginia, West Virginia, North Carolina, and Tennessee as of September 30, 2016. First Community Bank offers wealth management and investment services through its wholly-owned subsidiary First Community Wealth Management and the Bank’s Trust Division, which collectively managed $767 million in combined assets as of September 30, 2016. The Company’s common stock is listed on the NASDAQ Global Select Market under the trading symbol, “FCBC”. The Company reported consolidated assets of $2.45 billion as of September 30, 2016. Additional investor information is available on the Company’s website 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 fiscal year end. Pursuant to the Private Securities Litigation Reform Act of 1995, the Company does not undertake to update forward-looking statements to reflect circumstances or events that occur after the date the forward-looking statements are made.

Financial Performance

CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Unaudited)

	Three Months Ended															Nine Months Ended
	September 30,			June 30,			March 31,			December 31,			September 30,			September 30,
(Amounts in thousands, except share and per share data)	2016			2016			2016			2015			2015			2016			2015
Interest income
Interest and fees on loans	$	21,952		$	22,237		$	21,573		$	21,633		$	22,259		$	65,762		$	65,999
Interest on securities		1,643			1,891			1,957			2,023			2,056			5,491			6,180
Interest on deposits in banks		26			9			20			21			33			55			246
Total interest income		23,621			24,137			23,550			23,677			24,348			71,308			72,425
Interest expense
Interest on deposits		1,133			1,087			1,114			1,202			1,384			3,334			4,676
Interest on borrowings		1,367			1,359			1,325			1,300			1,295			4,051			4,171
Total interest expense		2,500			2,446			2,439			2,502			2,679			7,385			8,847
Net interest income		21,121			21,691			21,111			21,175			21,669			63,923			63,578
(Recovery of) provision for loan losses		(1,154	)		722			1,187			434			381			755			1,757
Net interest income after(recovery) provision		22,275			20,969			19,924			20,741			21,288			63,168			61,821
Total noninterest income		5,895			7,030			7,903			7,483			7,074			20,828			22,047
Total noninterest expense		18,557			18,722			18,814			19,083			19,019			56,093			57,088
Income before income taxes		9,613			9,277			9,013			9,141			9,343			27,903			26,780
Income tax expense		3,230			3,022			2,929			2,993			3,084			9,181			8,388
Net income		6,383			6,255			6,084			6,148			6,259			18,722			18,392
Dividends on preferred stock		-			-			-			-			-			-			105
Net income available to common shareholders	$	6,383		$	6,255		$	6,084		$	6,148		$	6,259		$	18,722		$	18,287

Earnings per common share
Basic	$	0.37		$	0.36		$	0.34		$	0.34		$	0.34		$	1.07		$	0.98
Diluted		0.37			0.36			0.34			0.34			0.34			1.07			0.97
Cash dividends per common share		0.16			0.14			0.14			0.14			0.14			0.44			0.40
Weighted average shares outstanding
Basic		17,031,074			17,414,320			17,859,197			18,193,824			18,470,348			17,433,406			18,644,679
Diluted		17,083,526			17,462,845			17,892,531			18,226,719			18,500,975			17,475,211			18,895,909
Performance ratios
Return on average assets		1.03	%		1.02	%		0.99	%		0.99	%		1.00	%		1.01	%		0.96	%
Return on average common equity		7.58	%		7.47	%		7.15	%		7.05	%		7.18	%		7.40	%		7.07	%
Return on average tangible common equity⁽¹⁾		11.07	%		10.88	%		10.34	%		10.17	%		10.38	%		10.76	%		10.23	%

(1)

A non-GAAP financial measure defined as average stockholders’ equity less average goodwill, other intangibles, and preferred stock liquidation preference

RECONCILIATION OF GAAP NET INCOME TO CORE EARNINGS (Unaudited)

	Three Months Ended															Nine Months Ended
	September 30,			June 30,			March 31,			December 31,			September 30,			September 30,
(Amounts in thousands, except per share data)	2016			2016			2016			2015			2015			2016			2015
Net income, GAAP	$	6,383		$	6,255		$	6,084		$	6,148		$	6,259		$	18,722		$	18,392
Non-GAAP adjustments:
Net gain on divestiture		(3,065	)		-			-			-			-			(3,065	)		-
Allowance reversal for sold loans		(1,354	)		-			-			-			-			(1,354	)		-
Merger, acquisition, and divestiture expense		226			410			39			-			-			675			86
Net (gain) loss on sale of securities		(25	)		79			(1	)		7			39			53			(151	)
FHLB debt prepayment fees		-			-			-			-			-			-			1,702
Net impairment losses		4,635			11			-			-			-			4,646			-
Other non-core items		(264	)		-			(240	)		31			(75	)		(504	)		(1,035	)
Total adjustments to core earnings		153			500			(202	)		38			(36	)		451			602
Tax effect		56			184			(74	)		14			(13	)		166			646
Core earnings, non-GAAP⁽¹⁾	$	6,480		$	6,571		$	5,956		$	6,172		$	6,236		$	19,007		$	18,348

Core diluted earnings per common share	$	0.38		$	0.38		$	0.33		$	0.34		$	0.34		$	1.09		$	0.97
Performance ratios
Core return on average assets		1.05	%		1.07	%		0.97	%		0.99	%		1.00	%		1.03	%		0.97	%
Core return on average common equity		7.70	%		7.85	%		7.00	%		7.08	%		7.16	%		7.51	%		7.09	%
Core return on average tangible common equity₍₂₎		11.24	%		11.43	%		10.12	%		10.21	%		10.34	%		10.92	%		10.26	%

(1)

A non-GAAP financial measure that excludes gains, losses, and impairment losses on securities; goodwill and intangible impairment; taxes; and other non-recurring income and expense items from net income

(2)

A non-GAAP financial measure defined as average stockholders’ equity less average goodwill, other intangibles, and preferred stock liquidation preference

Net Interest Income and Margin

AVERAGE BALANCE SHEETS AND NET INTEREST INCOME ANALYSIS (Unaudited)

	Three Months Ended September 30,
	2016							2015
	Average				Average Yield/			Average				Average Yield/
(Amounts in thousands)	Balance		Interest⁽¹⁾		Rate⁽¹⁾			Balance		Interest⁽¹⁾		Rate⁽¹⁾
Assets
Earning assets
Loans⁽²⁾	$	1,820,899	$	21,974		4.80	%	$	1,675,787	$	22,291		5.28	%
Securities available for sale		266,162		1,941		2.90	%		382,099		2,394		2.49	%
Securities held to maturity		72,210		189		1.04	%		72,624		195		1.07	%
Interest-bearing deposits		19,025		26		0.54	%		48,750		33		0.27	%
Total earning assets		2,178,296		24,130		4.41	%		2,179,260		24,913		4.53	%
Other assets		282,310							305,331
Total assets	$	2,460,606						$	2,484,591

Liabilities and stockholders' equity
Interest-bearing deposits
Demand deposits	$	337,893	$	60		0.07	%	$	335,831	$	52		0.06	%
Savings deposits		523,503		62		0.05	%		532,445		83		0.06	%
Time deposits		529,344		1,011		0.76	%		613,598		1,249		0.81	%
Total interest-bearing deposits		1,390,740		1,133		0.32	%		1,481,874		1,384		0.37	%
Borrowings
Federal funds purchased		3,696		6		0.65	%		7		-		-
Retail repurchase agreements		64,385		12		0.07	%		72,740		16		0.09	%
Wholesale repurchase agreements		50,000		473		3.76	%		50,000		473		3.75	%
FHLB advances and other borrowings		133,838		876		2.60	%		80,985		806		3.95	%
Total borrowings		251,919		1,367		2.16	%		203,732		1,295		2.52	%
Total interest-bearing liabilities		1,642,659		2,500		0.61	%		1,685,606		2,679		0.63	%
Noninterest-bearing demand deposits		462,588							433,164
Other liabilities		20,462							20,028
Total liabilities		2,125,709							2,138,798
Stockholders' equity		334,897							345,793
Total liabilities and stockholders' equity	$	2,460,606						$	2,484,591
Net interest income, FTE			$	21,630						$	22,234
Net interest rate spread						3.80	%						3.90	%
Net interest margin						3.95	%						4.05	%

(1)

Fully taxable equivalent ("FTE") basis based on the federal statutory rate of 35%

(2)

Nonaccrual loans are included in average balances; however, no related interest income is recorded during the period of nonaccrual.

AVERAGE BALANCE SHEETS AND NET INTEREST INCOME ANALYSIS (Unaudited)

	Nine Months Ended September 30,
	2016							2015
	Average				Average Yield/			Average				Average Yield/
(Amounts in thousands)	Balance		Interest⁽¹⁾		Rate⁽¹⁾			Balance		Interest⁽¹⁾		Rate⁽¹⁾
Assets
Earning assets
Loans⁽²⁾	$	1,775,744	$	65,836		4.95	%	$	1,675,118	$	66,107		5.28	%
Securities available for sale		318,891		6,403		2.68	%		358,690		7,225		2.69	%
Securities held to maturity		72,350		575		1.06	%		70,454		577		1.09	%
Interest-bearing deposits		13,288		55		0.55	%		125,295		246		0.26	%
Total earning assets		2,180,273		72,869		4.47	%		2,229,557		74,155		4.45	%
Other assets		287,784							311,825
Total assets	$	2,468,057						$	2,541,382

Liabilities and stockholders' equity
Interest-bearing deposits
Demand deposits	$	339,920	$	177		0.07	%	$	342,639	$	156		0.06	%
Savings deposits		533,799		191		0.05	%		532,641		289		0.07	%
Time deposits		527,056		2,966		0.75	%		655,314		4,231		0.86	%
Total interest-bearing deposits		1,400,775		3,334		0.32	%		1,530,594		4,676		0.41	%
Borrowings
Federal funds purchased		5,393		26		0.64	%		2		-		0.00	%
Retail repurchase agreements		69,347		37		0.07	%		70,325		53		0.10	%
Wholesale repurchase agreements		50,000		1,410		3.77	%		50,000		1,405		3.76	%
FHLB advances and other borrowings		124,803		2,578		2.76	%		91,305		2,713		3.97	%
Total borrowings		249,543		4,051		2.17	%		211,632		4,171		2.64	%
Total interest-bearing liabilities		1,650,318		7,385		0.60	%		1,742,226		8,847		0.68	%
Noninterest-bearing demand deposits		457,250							429,661
Other liabilities		22,581							20,472
Total liabilities		2,130,149							2,192,359
Stockholders' equity		337,908							349,023
Total liabilities and stockholders' equity	$	2,468,057						$	2,541,382
Net interest income, FTE			$	65,484						$	65,308
Net interest rate spread						3.88	%						3.77	%
Net interest margin						4.01	%						3.92	%

(1)

Fully taxable equivalent ("FTE") basis based on the federal statutory rate of 35%

(2)

Nonaccrual loans are included in average balances; however, no related interest income is recorded during the period of nonaccrual.

RECONCILIATION OF GAAP NET INTEREST MARGIN TO NON-GAAP NORMALIZED NET INTEREST MARGIN (Unaudited)

	Three Months Ended September 30,
	2016					2015
(Amounts in thousands)	Interest⁽¹⁾		Average Yield/ Rate⁽¹⁾			Interest⁽¹⁾		Average Yield/ Rate⁽¹⁾
Earning assets
Loans⁽²⁾	$	21,974		4.80	%	$	22,291		5.28	%
Accretion income		1,683					2,930
Less: cash accretion income		699					903
Non-cash accretion income		984					2,027
Loans, normalized⁽³⁾		20,990		4.59	%		20,264		4.80	%
Other earning assets		2,156		2.40	%		2,622		2.07	%
Total earning assets		23,146		4.23	%		22,886		4.17	%
Total interest-bearing liabilities		2,500		0.61	%		2,679		0.63	%
Net interest income, FTE⁽³⁾	$	20,646				$	20,207
Net interest rate spread, normalized⁽³⁾				3.62	%				3.54	%
Net interest margin, normalized⁽³⁾				3.77	%				3.68	%

(1)

FTE basis based on the federal statutory rate of 35%

(2)

Nonaccrual loans are included in average balances; however, no related interest income is recorded during the period of nonaccrual.

(3)

Normalized totals are non-GAAP financial measures that exclude non-cash loan interest accretion related to PCI loans.

	Nine Months Ended September 30,
	2016					2015
(Amounts in thousands)	Interest⁽¹⁾		Average Yield/ Rate⁽¹⁾			Interest⁽¹⁾		Average Yield/ Rate⁽¹⁾
Earning assets
Loans⁽²⁾	$	65,836		4.95	%	$	66,107		5.28	%
Accretion income		6,183					8,765
Less: cash accretion income		2,290					3,326
Non-cash accretion income		3,893					5,439
Loans, normalized⁽³⁾		61,943		4.66	%		60,668		4.84	%
Other earning assets		7,033		2.32	%		8,048		1.94	%
Total earning assets		68,976		4.23	%		68,716		4.12	%
Total interest-bearing liabilities		7,385		0.60	%		8,847		0.68	%
Net interest income, FTE⁽³⁾	$	61,591				$	59,869
Net interest rate spread, normalized⁽³⁾				3.63	%				3.44	%
Net interest margin, normalized⁽³⁾				3.77	%				3.59	%

(1)

FTE basis based on the federal statutory rate of 35%

(2)

Nonaccrual loans are included in average balances; however, no related interest income is recorded during the period of nonaccrual.

(3)

Normalized totals are non-GAAP financial measures that exclude non-cash loan interest accretion related to PCI loans.

Noninterest Income and Expense

CONDENSED QUARTERLY STATEMENTS OF INCOME (Unaudited)

	Three Months Ended															Nine Months Ended
	September 30,			June 30,			March 31,			December 31,			September 30,			September 30,
(Amounts in thousands)	2016			2016			2016			2015			2015			2016			2015
Noninterest income
Wealth management		653			810			684			744			790			2,147			2,231
Service charges on deposits		3,494			3,361			3,291			3,563			3,744			10,146			10,154
Other service charges and fees		2,024			2,054			2,010			2,058			1,974			6,088			5,987
Insurance commissions		1,592			1,600			2,191			1,563			1,650			5,383			5,336
Net impairment losses recognized in earnings		(4,635	)		(11	)		-			-			-			(4,646	)		-
Net (loss) gain on sale of securities		25			(79	)		1			(7	)		(39	)		(53	)		151
Net FDIC indemnification asset amortization		(1,369	)		(1,328	)		(1,159	)		(1,200	)		(1,768	)		(3,856	)		(5,179	)
Net gain on divestiture		3,065			-			-			-			-			3,065			-
Other operating income		1,046			623			885			762			723			2,554			3,367
Total noninterest income		5,895			7,030			7,903			7,483			7,074			20,828			22,047
Noninterest expense
Salaries and employee benefits		9,828			10,198			10,475			10,268			9,971			30,501			29,357
Occupancy expense		1,249			1,359			1,531			1,413			1,443			4,139			4,404
Furniture and equipment expense		1,066			1,109			1,096			1,345			1,259			3,271			3,854
Amortization of intangibles		316			277			278			281			281			871			837
FDIC premiums and assessments		363			372			374			332			377			1,109			1,181
FHLB debt prepayment fees		-			-			-			-			-			-			1,702
Merger, acquisition, and divestiture expense		226			410			39			-			-			675			86
Other operating expense		5,509			4,997			5,021			5,444			5,688			15,527			15,667
Total noninterest expense		18,557			18,722			18,814			19,083			19,019			56,093			57,088

Efficiency Ratio

EFFICIENCY RATIO CALCULATION (Unaudited)

	Three Months Ended															Nine Months Ended
	September 30,			June 30,			March 31,			December 31,			September 30,			September 30,
(Amounts in thousands)	2016			2016			2016			2015			2015			2016			2015
Noninterest expense, GAAP	$	18,557		$	18,722		$	18,814		$	19,083		$	19,019		$	56,093		$	57,088
Non-GAAP adjustments
Merger, acquisition, and divestiture expense		(226	)		(410	)		(39	)		-			-			(675	)		(86	)
FHLB debt prepayment fees		-			-			-			-			-			-			(1,702	)
OREO expense and net loss		(278	)		(247	)		(711	)		(475	)		(1,220	)		(1,236	)		(1,963	)
Goodwill impairment		-			-			-			-			-			-			-
Other non-core items		(168	)		(30	)		(174	)		(61	)		15			(372	)		(198	)
Adjusted noninterest expense		17,885			18,035			17,890			18,547			17,814			53,810			53,139

Net interest income, GAAP		21,121			21,691			21,111			21,175			21,669			63,923			63,578
Noninterest income, GAAP		5,895			7,030			7,903			7,483			7,074			20,828			22,047
Non-GAAP adjustments
Tax equivalency adjustment		509			521			531			548			565			1,561			2,402
Net impairment losses		4,635			11			-			-			-			4,646			-
Net (gain) loss on sale of securities		(25	)		79			(1	)		7			39			53			(151	)
Net gain on divestiture		(3,065	)		-			-			-			-			(3,065	)		-
Other non-core items		(432	)		(30	)		(414	)		(30	)		(60	)		(876	)		(1,233	)
Adjusted net interest and noninterest income		28,638			29,302			29,130			29,183			29,287			87,070			86,643

Non-GAAP efficiency ratio⁽¹⁾		62.45	%		61.55	%		61.41	%		63.55	%		60.83	%		61.80	%		61.33	%
GAAP efficiency ratio		68.69	%		65.19	%		64.84	%		66.59	%		66.17	%		66.19	%		66.67	%

(1)

A non-GAAP financial measure computed by dividing adjusted noninterest expense by the sum of tax equivalent net interest income and adjusted noninterest income

Balance Sheet and Capital

CONDENSED CONSOLIDATED QUARTERLY BALANCE SHEETS (Unaudited)

	September 30,			June 30,			March 31,			December 31,			September 30,
(Amounts in thousands, except per share data)	2016			2016			2016			2015			2015
Assets
Total cash and cash equivalents		65,929			44,301			39,587			51,787			62,024
Securities available for sale		220,856			322,699			338,469			366,173			382,212
Securities held to maturity		72,182			72,239			72,485			72,541			72,596
Loans held for sale		-			-			-			-			523
Loans held for investment, net of unearned income
Non-covered		1,774,547			1,733,398			1,685,891			1,623,506			1,600,271
Covered		61,837			68,585			76,538			83,035			90,203
Less allowance for loan losses		(19,633	)		(21,099	)		(20,467	)		(20,233	)		(20,127	)
Loans held for investment, net		1,816,751			1,780,884			1,741,962			1,686,308			1,670,347
FDIC indemnification asset		14,332			16,431			18,787			20,844			22,049
Premises and equipment, net		50,564			50,199			50,799			52,756			53,442
Other real estate owned, non-covered		4,052			4,187			5,313			4,873			5,088
Other real estate owned, covered		2,437			2,017			2,279			4,034			4,079
Interest receivable		5,498			6,115			5,968			6,007			5,910
Goodwill		101,776			100,486			100,486			100,486			100,810
Other intangible assets		7,964			4,688			4,965			5,243			5,583
Other assets		87,932			91,082			89,187			91,224			93,453
Total assets	$	2,450,273		$	2,495,328		$	2,470,287		$	2,462,276		$	2,478,116

Liabilities
Deposits
Noninterest-bearing	$	473,509		$	451,003		$	453,336		$	451,511		$	442,021
Interest-bearing		1,388,390			1,373,412			1,421,329			1,421,748			1,460,881
Total deposits		1,861,899			1,824,415			1,874,665			1,873,259			1,902,902
Interest, taxes, and other liabilities		26,599			25,553			24,576			26,630			25,356
Federal funds purchased		-			42,000			18,000			-			-
Securities sold under agreements to repurchase		118,532			113,392			134,661			138,614			124,076
FHLB borrowings		90,000			140,000			65,000			65,000			65,000
Other borrowings		15,707			15,756			15,756			15,756			15,955
Total liabilities		2,112,737			2,161,116			2,132,658			2,119,259			2,133,289

Stockholders' equity
Common stock		21,382			21,382			21,382			21,382			21,382
Additional paid-in capital		227,884			227,791			227,725			227,692			227,621
Retained earnings		166,689			163,030			159,223			155,647			152,046
Treasury stock, at cost		(78,789	)		(74,974	)		(64,968	)		(56,457	)		(52,484	)
Accumulated other comprehensive income (loss)		370			(3,017	)		(5,733	)		(5,247	)		(3,738	)
Total stockholders' equity		337,536			334,212			337,629			343,017			344,827
Total liabilities and stockholders' equity	$	2,450,273		$	2,495,328		$	2,470,287		$	2,462,276		$	2,478,116

Shares outstanding at period-end		16,988,972			17,155,322			17,631,011			18,098,141			18,313,425
Book value per common share⁽¹⁾	$	19.87		$	19.48		$	19.15		$	18.95		$	18.83
Tangible book value per common share⁽²⁾		13.41			13.35			13.17			13.11			13.02

(1)

Stockholders' equity divided by as-converted common shares outstanding

(2)

A non-GAAP financial measure defined as stockholders’ equity less goodwill and other intangibles, divided by as-converted common shares outstanding

Asset Quality

SELECTED CREDIT QUALITY INFORMATION (Unaudited)

	September 30,			June 30,			March 31,			December 31,			September 30,
(Amounts in thousands)	2016			2016			2016			2015			2015
Allowance for Loan Losses
Beginning balance	$	21,099		$	20,467		$	20,233		$	20,127		$	20,258
(Recovery of) provision for loan losses charged to operations		(1,154	)		722			1,187			434			381
(Recovery of) provision for loan losses recorded through the FDIC indemnification asset		-			(10	)		9			-			(75	)
Charge-offs		(772	)		(691	)		(1,228	)		(805	)		(689	)
Recoveries		460			611			266			477			252
Net charge-offs		(312	)		(80	)		(962	)		(328	)		(437	)
Ending balance	$	19,633		$	21,099		$	20,467		$	20,233		$	20,127

Nonperforming Assets
Non-covered nonperforming assets
Nonaccrual loans	$	17,487		$	16,626		$	16,196		$	17,847		$	17,100
Accruing loans past due 90 days or more		62			64			243			-			3
Troubled debt restructurings ("TDRs")⁽¹⁾		115			115			158			73			74
Total non-covered nonperforming loans		17,664			16,805			16,597			17,920			17,177
OREO		4,052			4,187			5,313			4,873			5,088
Total non-covered nonperforming assets	$	21,716		$	20,992		$	21,910		$	22,793		$	22,265

Covered nonperforming assets
Nonaccrual loans	$	688		$	680		$	1,955		$	647		$	815
Total covered nonperforming loans		688			680			1,955			647			815
OREO		2,437			2,017			2,279			4,034			4,079
Total covered nonperforming assets	$	3,125		$	2,697		$	4,234		$	4,681		$	4,894

Additional Information
Performing TDRs⁽²⁾	$	13,336		$	13,562		$	13,474		$	13,889		$	13,965
Total TDRs⁽³⁾		13,451			13,677			13,632			13,962			14,039

Non-covered ratios
Nonperforming loans to total loans		1.00	%		0.97	%		0.98	%		1.10	%		1.07	%
Nonperforming assets to total assets		0.91	%		0.87	%		0.92	%		0.96	%		0.93	%
Non-PCI allowance to nonperforming loans		111.08	%		125.48	%		123.17	%		112.61	%		117.06	%
Non-PCI allowance to total loans		1.11	%		1.22	%		1.21	%		1.24	%		1.26	%
Annualized net charge-offs to average loans		0.07	%		0.02	%		0.23	%		0.08	%		0.11	%

Total ratios
Nonperforming loans to total loans		1.00	%		0.97	%		1.05	%		1.09	%		1.06	%
Nonperforming assets to total assets		1.01	%		0.95	%		1.06	%		1.12	%		1.10	%
Allowance for loan losses to nonperforming loans		106.98	%		120.67	%		110.32	%		108.97	%		111.87	%
Allowance for loan losses to total loans		1.07	%		1.17	%		1.16	%		1.19	%		1.19	%
Annualized net charge-offs to average loans		0.07	%		0.02	%		0.22	%		0.08	%		0.10	%

(1)	Accruing TDRs restructured within the past six months or nonperforming
(2)	Accruing TDRs with six months or more of satisfactory payment performance
(3)	Accruing total TDRs