FORM 424B5
The information
in this preliminary prospectus supplement is not complete and
may be changed. This preliminary prospectus supplement and the
accompanying prospectus are not an offer to sell these
securities and are not soliciting offers to buy these securities
in any jurisdiction where the offer or sale is not permitted.
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Filed
pursuant to Rule 424(b)(5)
Registration
No. 333-153692
SUBJECT TO COMPLETION DATED JUNE
1, 2009
PRELIMINARY
PROSPECTUS SUPPLEMENT
(To Prospectus Dated October 6, 2008)
Shares
Common Stock
We are
offering shares
of our common stock to be sold in this offering. Our common
stock is traded on The NASDAQ Global Select Market under the
symbol FCBC. On May 29, 2009, the closing sale
price of our common stock was $17.44 per share, as reported
on The NASDAQ Global Select Market.
Investing in our common stock involves risks. See
Risk Factors beginning on
page S-6
of this prospectus supplement.
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Per Share
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Total
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Public offering price
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$
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$
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50,000,000
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Underwriting discounts and commissions
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$
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$
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Proceeds to us (before expenses)
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$
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$
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The underwriters have the option to purchase up to an additional
shares of our common stock at the public offering price, less
underwriting discount and commissions, within 30 days from
the date of this prospectus supplement solely to cover
over-allotments, if any.
Neither the Securities and Exchange Commission nor any state
securities commission has approved or disapproved of these
securities or determined that this prospectus supplement is
truthful or complete. Any representation to the contrary is a
criminal offense.
These securities are not savings accounts, deposits or other
obligations of any bank and are not insured or guaranteed by the
Federal Deposit Insurance Corporation or any other governmental
agency.
The underwriters expect to deliver the shares through the
facilities of The Depository Trust Company against payment
on or
about ,
2009.
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RAYMOND JAMES
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The date of this prospectus supplement
is ,
2009
TABLE OF
CONTENTS
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Prospectus Supplement
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Page
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S-ii
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S-ii
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S-1
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S-6
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S-16
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S-16
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S-17
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S-18
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S-19
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S-21
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S-21
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S-24
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S-24
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S-25
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Prospectus
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Page
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1
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1
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2
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2
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2
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3
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3
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5
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7
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9
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9
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11
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11
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11
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You should rely only on the information contained in or
incorporated by reference into this prospectus supplement and
the accompanying prospectus. We have not, and the underwriters
have not, authorized any other person to provide you with
information that is different from that contained in this
prospectus supplement or the accompanying prospectus. If anyone
provides you with different or inconsistent information, you
should not rely on it. We are not making an offer of these
securities in any jurisdiction where the offer is not permitted.
You should assume that the information appearing in or
incorporated by reference into this prospectus supplement and
the accompanying prospectus is accurate only as of their
respective dates. Our business, financial condition and results
of operations may have changed since those dates. This
prospectus supplement supersedes the accompanying prospectus to
the extent it contains information that is different from or in
addition to the information in that prospectus.
S-i
ABOUT
THIS PROSPECTUS SUPPLEMENT
This document is in two parts. The first part is this prospectus
supplement, which describes the specific terms of this offering
and certain other matters and also adds to and updates
information contained in the accompanying prospectus and the
documents incorporated by reference into this prospectus
supplement and the accompanying prospectus. The second part, the
accompanying prospectus, gives more general information about
us, the common stock offered hereby and other securities that we
may offer from time to time, some of which information may not
apply to this offering. Generally, when we refer to the
prospectus, we are referring to both parts of this document
combined. To the extent the description of this offering in the
prospectus supplement differs from the description in the
accompanying prospectus or any document incorporated by
reference filed prior to the date of this prospectus supplement,
you should rely on the information in this prospectus supplement.
We are offering to sell, and seeking offers to buy, shares of
our common stock only in jurisdictions where offers and sales
are permitted. The distribution of this prospectus and the
offering of the common stock in certain jurisdictions may be
restricted by law. Persons outside the United States who come
into possession of this prospectus must inform themselves about,
and observe any restrictions relating to, the offering of the
common stock and the distribution of this prospectus outside the
United States. This prospectus does not constitute, and may not
be used in connection with, an offer to sell, or a solicitation
of an offer to buy, any common stock offered by this prospectus
by any person in any jurisdiction in which it is unlawful for
such person to make such an offer or solicitation.
In this prospectus supplement, First Community, the
Company, we, our,
ours, and us refer to First Community
Bancshares, Inc., which is a financial holding company
headquartered in Bluefield, Virginia, and its subsidiaries on a
consolidated basis, unless the context otherwise requires.
References to First Community Bank or the
Bank refer to First Community Bank, N.A., a national
banking association, which is our principal banking subsidiary.
Unless specifically indicated, such references do not include
the business or operations of TriStone Community Bank, which is
the subject of a pending merger into the Bank.
SPECIAL
NOTE REGARDING FORWARD-LOOKING STATEMENTS
This prospectus supplement and the accompanying prospectus
contain or incorporate by reference forward-looking statements
within the meaning of Section 27A of the Securities Act of
1933, as amended, or the Securities Act, and Section 21E of
the Securities Exchange Act of 1934, as amended, or the Exchange
Act. These forward-looking statements represent plans,
estimates, objectives, goals, guidelines, expectations,
intentions, projections and statements of our beliefs concerning
future events, business plans, objectives, expected operating
results and the assumptions upon which those statements are
based. Forward-looking statements include without limitation,
any statement that may predict, forecast, indicate or imply
future results, performance or achievements, and are typically
identified with words such as may,
could, should, will,
would, believe, anticipate,
estimate, expect, intend,
plan, or words or phases of similar meaning. We
caution that the forward-looking statements are based largely on
our expectations and are subject to a number of known and
unknown risks and uncertainties that are subject to change based
on factors which are, in many instances, beyond our control.
Actual results, performance or achievements could differ
materially from those contemplated, expressed, or implied by the
forward-looking statements.
The following factors, among others, could cause our financial
performance to differ materially from that expressed in such
forward-looking statements:
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The strength of the United States economy in general and the
strength of the local economies in which we conduct operations;
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Geopolitical conditions, including acts or threats of terrorism,
actions taken by the United States or other governments in
response to acts or threats of terrorism
and/or
military
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S-ii
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conflicts, which could impact business and economic conditions
in the United States and abroad;
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The effects of, and changes in, trade, monetary and fiscal
policies and laws, including interest rate policies of the Board
of Governors of the Federal Reserve System, or the Federal
Reserve Board; inflation, interest rate, market and monetary
fluctuations;
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The timely development of competitive new products and services
and the acceptance of these products and services by new and
existing customers;
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The willingness of users to substitute competitors
products and services for our products and services;
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The impact of changes in financial services policies, laws and
regulations, including laws, regulations and policies concerning
taxes, banking, securities and insurance, and the application
thereof by regulatory bodies;
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Technological changes;
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The effect of acquisitions we may make, including, without
limitation, the failure to achieve the expected revenue growth
and/or
expense savings from such acquisitions;
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The growth and profitability of non-interest or fee income being
less than expected;
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Changes in the level of our non-performing assets and
charge-offs;
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The effect of changes in accounting policies and practices, as
may be adopted from time-to-time by bank regulatory agencies,
the Securities and Exchange Commission, or the SEC, the Public
Company Accounting Oversight Board, the Financial Accounting
Standards Board or other accounting standards setters;
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Possible other-than-temporary impairments of securities held by
us;
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The impact of current governmental efforts to restructure the
U.S. financial regulatory system;
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Changes in consumer spending and savings habits; and
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Unanticipated regulatory or judicial proceedings.
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If one or more of the factors affecting our forward-looking
information and statements proves incorrect, then our actual
results, performance or achievements could differ materially
from those expressed in, or implied by, forward-looking
information and statements contained in this prospectus
supplement and the accompanying prospectus, and in the
information incorporated by reference herein and therein.
Therefore, we caution you not to place undue reliance on our
forward-looking information and statements. We will not update
the forward-looking statements to reflect actual results or
changes in the factors affecting the forward-looking statements.
Forward-looking statements should not be viewed as predictions,
and should not be the primary basis upon which investors
evaluate First Community. Any investor in First Community should
consider all risks and uncertainties disclosed in our filings
with the SEC described below under the heading Where You
Can Find More Information, all of which are accessible on
the SECs website at
http://www.sec.gov.
S-iii
PROSPECTUS
SUPPLEMENT SUMMARY
This summary highlights some information from this prospectus
supplement and the accompanying prospectus, and it may not
contain all of the information that is important to you. To
understand the terms of the common stock offered by this
prospectus, you should read this prospectus supplement and the
accompanying prospectus carefully. Together, these documents
describe the specific terms of the shares we are offering. You
should carefully read the sections titled Risk
Factors in this prospectus supplement and in the
accompanying prospectus and the documents identified in the
section Where You Can Find More Information. Except
as otherwise noted, all information in this prospectus
supplement assumes no exercise of the underwriters
over-allotment option.
The
Company
We are a financial holding company incorporated under the laws
of the State of Nevada and serve as the holding company for
First Community Bank. Through First Community Bank, we provide
financial, trust and investment advisory services and insurance
products to individuals and commercial customers through 71
locations in Virginia, West Virginia, North Carolina, South
Carolina and Tennessee. The Company is also the parent of
GreenPoint Insurance Group, Inc., a North Carolina-based
full-service insurance agency offering commercial and personal
lines. The Bank is the parent of Investment Planning
Consultants, Inc., a registered investment advisory firm that
offers wealth management and investment advice. Our common stock
is traded on The NASDAQ Global Select Market under the symbol
FCBC.
We have focused our growth efforts on building financial
partnerships and more enduring and complete relationships with
businesses and individuals through a very personal and local
approach to banking and financial services. We and our
operations are guided by a strategic plan which includes growth
through acquisitions and through office expansion in new market
areas including strategically identified metro markets in the
five states noted above in which we conduct our business. While
our mission remains that of a community bank, management
believes that entry into new markets will accelerate our growth
rate by diversifying the demographics of our customer base and
customer prospects and by generally increasing our sales and
service network.
As of March 31, 2009, we had total assets of
$2.20 billion, total stockholders equity of
$217.71 million, net loans held for investment of
$1.26 billion, demand deposits of $721.89 million, and
total deposits of $1.58 billion.
Our principal executive offices are located at One Community
Place, Bluefield, Virginia 24605 and our telephone number is
(276) 326-9000.
Our Internet address is
http://www.fcbinc.com.
The reference to our website address does not constitute
incorporation by reference of the information contained on the
website, which should not be considered part of this prospectus
supplement or the accompanying prospectus.
Recent
Developments
On April 2, 2009, we signed a definitive agreement
providing for the acquisition of TriStone Community Bank, or
TriStone. TriStone is a North Carolina-chartered bank that was
established in 2004 and which is headquartered in Winston-Salem,
North Carolina. At December 31, 2008, TriStone had
$152.42 million of total assets, $126.84 million in
total deposits and $14.28 million in total equity. The loan
portfolio is predominantly composed of 1-4 family and commercial
/multi-family real estate loans, which comprised 27.7% and 31.4%
of the portfolio, respectively, at December 31, 2008. The
remaining loan portfolio segments at December 31, 2008
consisted of: consumer (14.1%), construction and development
(13.9%) and commercial business (13.9%). At December 31,
2008, TriStone had non-performing assets totaling
$1.05 million and a loan loss reserve of $1.9 million.
The definitive agreement provides for the exchange of
.5262 shares of our common stock for each outstanding share
of TriStone common stock upon completion of the merger of
TriStone with and into First Community Bank. The merger is
subject to the receipt of applicable regulatory approvals and
approval by the stockholders of TriStone, and is expected to
close in the third quarter of 2009.
S-1
The
Offering
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Issuer |
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First Community Bancshares, Inc. |
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Common stock offered by us, excluding the underwriters
over-allotment option |
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Shares |
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Common stock outstanding prior to this offering |
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11,596,949 Shares(1) |
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Common stock outstanding after this offering, excluding the
underwriters over-allotment option |
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Shares |
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Over-allotment option |
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Shares |
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Net proceeds |
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The net proceeds, after underwriting discounts and estimated
expenses, to us from the sale of the common stock offered will
be approximately $ million
(or approximately $ million
if the underwriters exercise their over-allotment option in
full). |
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Use of proceeds |
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We intend to use the net proceeds of this offering (i) for
general corporate purposes, (ii) to repurchase, before the
end of the year, subject to receipt of approval from our banking
regulators, the fixed rate cumulative perpetual preferred stock,
series A, or the Series A Preferred Stock, that we
issued to the U.S. Department of the Treasury, or the Treasury,
in November 2008, and (iii) to support our ongoing and
future anticipated growth, which may include opportunistic
acquisitions of other financial institutions. We expect to use
approximately $41.5 million of the net proceeds from this
offering to repurchase the Series A Preferred Stock,
subject to receipt of approval from our banking regulators. |
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The NASDAQ Global Select Market symbol |
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FCBC |
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(1)
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Based on the number of shares of
our common stock outstanding as of May 29, 2009, which
excludes 253,491 of our common stock issuable under our stock
compensation plans and 176,546 shares of our common stock
issuable upon the exercise of a warrant held by the U.S.
Department of the Treasury. If we raise qualifying
capital of at least $41.5 million prior to
December 31, 2009, then the number of shares of common
stock underlying the warrant issued to the Treasury will be
reduced by 50%, or 88,273 shares. The proceeds from this
offering will constitute qualifying capital. In
addition, the number of shares shown does not include
approximately 789,300 shares of our common stock to be
issued to TriStone shareholders in connection with our
acquisition of TriStone or up to 117,055 shares of our
common stock issuable in connection with prior acquisitions.
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Risk
Factors
Investing in our securities involves risks. You should carefully
consider the information under Risk Factors
beginning on
page S-6
and the other information included in this prospectus supplement
and the accompanying prospectus before investing in our
securities.
S-2
Summary
Selected Consolidated Financial Information
The following table sets forth summary historical consolidated
financial information as of and for the years ended
December 31, 2008, 2007, 2006, 2005 and 2004 (which has
been derived from our audited consolidated financial
statements), and as of and for the three months ended
March 31, 2009 and 2008. The summary historical financial
information as of and for the three months ended March 31,
2009 and 2008 is unaudited. The unaudited financial information
as of and for the three months ended March 31, 2009 and
2008 has been prepared on the same basis as our audited
financial statements and includes, in the opinion of management,
all adjustments necessary to fairly present the data for such
period. The results of operations for the three months ended
March 31, 2009 are not necessarily indicative of the
results of operations to be expected for the full year or any
future period. The following summary selected consolidated
financial information should be read in conjunction with our
consolidated financial statements and related notes and
Managements Discussion and Analysis of Financial
Condition and Results of Operations included in our Annual
Report on
Form 10-K
for the year ended December 31, 2008 and our Quarterly
Report on
Form 10-Q
for the quarter ended March 31, 2009, which have been filed
with the SEC and are incorporated herein by reference.
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At or for the
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Quarter Ended March 31,
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At or for the Year Ended December 31,
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2009
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2008
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2008
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2007
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2006
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2005
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2004
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(Unaudited)
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(Amounts in thousands, except per share data)
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Balance Sheet Summary (at end of period)
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Securities(1)
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$
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558,135
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$
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610,928
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$
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529,393
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$
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676,195
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$
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528,389
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$
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428,554
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$
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410,218
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Loans held for sale
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1,445
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2,116
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1,024
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811
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781
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1,274
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1,194
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Loans, net of unearned income
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1,276,790
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1,179,504
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1,298,159
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1,225,502
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1,284,863
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1,331,039
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1,238,756
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Allowance for loan losses
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16,555
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12,862
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15,978
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12,833
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14,549
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14,736
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16,339
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Total assets
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2,199,141
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2,065,113
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2,133,314
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2,149,838
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2,033,698
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1,952,483
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1,830,822
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Deposits
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1,583,444
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1,358,953
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1,503,758
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1,393,443
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1,394,771
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1,403,220
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1,356,719
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Borrowings
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396,694
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474,889
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381,791
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517,843
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406,556
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335,885
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274,212
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Total liabilities
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1,981,431
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1,856,135
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1,912,972
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1,932,740
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1,820,968
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1,757,982
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1,647,589
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Stockholders equity
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217,710
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208,978
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220,342
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217,098
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212,730
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194,501
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183,233
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Summary of Earnings
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Total interest income
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$
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26,863
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$
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29,547
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$
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110,765
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$
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127,591
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$
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120,026
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$
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109,508
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$
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96,136
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Total interest expense
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10,430
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13,187
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44,930
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59,276
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48,381
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35,880
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26,953
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Provision for loan losses
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2,087
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|
|
323
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7,422
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717
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2,706
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3,706
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2,671
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Non-interest income
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8,633
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|
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9,141
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|
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32,297
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|
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24,831
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|
|
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21,323
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|
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22,305
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|
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17,329
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Investment securities impairment
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209
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29,923
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Non-interest expense
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|
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15,194
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16,283
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60,516
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50,463
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49,837
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55,591
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48,035
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Income from continuing operations before income taxes
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7,576
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8,895
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271
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17,135
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19,102
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14,331
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18,477
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Income tax (benefit) expense
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2,346
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2,583
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(2,810
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)
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12,334
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|
11,477
|
|
|
|
10,191
|
|
|
|
9,786
|
|
Income from continuing operations
|
|
|
5,230
|
|
|
|
6,312
|
|
|
|
3,081
|
|
|
|
29,632
|
|
|
|
28,948
|
|
|
|
26,445
|
|
|
|
26,020
|
|
Loss from discontinued operations before income taxes
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(233
|
)
|
|
|
(5,746
|
)
|
Income tax benefit from discontinued operations
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(91
|
)
|
|
|
(2,090
|
)
|
Loss from discontinued operations
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(142
|
)
|
|
|
(3,656
|
)
|
Net income
|
|
|
5,230
|
|
|
|
6,312
|
|
|
|
3,081
|
|
|
|
29,632
|
|
|
|
28,948
|
|
|
|
26,303
|
|
|
|
22,364
|
|
Dividends on preferred stock
|
|
|
571
|
|
|
|
|
|
|
|
255
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income available to common shareholders
|
|
|
4,659
|
|
|
|
6,312
|
|
|
|
2,826
|
|
|
|
29,632
|
|
|
|
28,948
|
|
|
|
26,303
|
|
|
|
22,364
|
|
S-3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At or for the
|
|
|
|
|
|
|
Quarter Ended March 31,
|
|
|
At or for the Year Ended December 31,
|
|
|
|
2009
|
|
|
2008
|
|
|
2008
|
|
|
2007
|
|
|
2006
|
|
|
2005
|
|
|
2004
|
|
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Per Share Data
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic earnings per common share
|
|
$
|
0.40
|
|
|
$
|
0.57
|
|
|
$
|
0.26
|
|
|
$
|
2.64
|
|
|
$
|
2.58
|
|
|
$
|
2.33
|
|
|
$
|
1.99
|
|
Basic earnings per common share-continuing operations
|
|
|
0.40
|
|
|
|
0.57
|
|
|
|
0.26
|
|
|
|
2.64
|
|
|
|
2.58
|
|
|
|
2.35
|
|
|
|
2.32
|
|
Basic loss per common share-discontinued operations
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(0.02
|
)
|
|
|
(0.33
|
)
|
Core earnings per common
share(2)(3)
|
|
|
0.41
|
|
|
|
|
*
|
|
|
2.01
|
|
|
|
|
*
|
|
|
|
*
|
|
|
|
*
|
|
|
|
*
|
Diluted earnings per common share
|
|
|
0.40
|
|
|
|
0.57
|
|
|
|
0.25
|
|
|
|
2.62
|
|
|
|
2.57
|
|
|
|
2.32
|
|
|
|
1.97
|
|
Diluted earnings per common share-continuing operations
|
|
|
0.40
|
|
|
|
0.57
|
|
|
|
0.25
|
|
|
|
2.62
|
|
|
|
2.57
|
|
|
|
2.33
|
|
|
|
2.29
|
|
Diluted loss per common share-discontinued operations
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(0.01
|
)
|
|
|
(0.32
|
)
|
Core diluted earnings per common
share(3)(4)
|
|
|
0.41
|
|
|
|
|
*
|
|
|
2.00
|
|
|
|
|
*
|
|
|
|
*
|
|
|
|
*
|
|
|
|
*
|
Cash dividends per common
share(5)
|
|
|
|
|
|
|
0.28
|
|
|
|
1.12
|
|
|
|
1.08
|
|
|
|
1.04
|
|
|
|
1.02
|
|
|
|
1.00
|
|
Book value per common share at period-end
|
|
|
15.20
|
|
|
|
18.98
|
|
|
|
15.46
|
|
|
|
19.61
|
|
|
|
18.92
|
|
|
|
17.29
|
|
|
|
16.29
|
|
Selected Ratios
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Return on average assets
|
|
|
0.87
|
%
|
|
|
1.21
|
%
|
|
|
0.14
|
%
|
|
|
1.39
|
%
|
|
|
1.46
|
%
|
|
|
1.37
|
%
|
|
|
1.24
|
%
|
Return on average assets-continuing
|
|
|
0.87
|
|
|
|
1.21
|
|
|
|
0.14
|
|
|
|
1.39
|
|
|
|
1.46
|
|
|
|
1.38
|
|
|
|
1.45
|
|
Return on average equity
|
|
|
10.61
|
|
|
|
11.66
|
|
|
|
1.40
|
|
|
|
13.54
|
|
|
|
14.32
|
|
|
|
13.79
|
|
|
|
12.53
|
|
Return on average equity-continuing
|
|
|
10.61
|
|
|
|
11.66
|
|
|
|
1.40
|
|
|
|
13.54
|
|
|
|
14.32
|
|
|
|
13.87
|
|
|
|
14.58
|
|
Average equity to average assets
|
|
|
10.09
|
|
|
|
10.41
|
|
|
|
9.86
|
|
|
|
10.30
|
|
|
|
10.21
|
|
|
|
9.91
|
|
|
|
9.88
|
|
Average equity to average assets-continuing
|
|
|
10.09
|
|
|
|
10.41
|
|
|
|
9.86
|
|
|
|
10.30
|
|
|
|
10.21
|
|
|
|
9.91
|
|
|
|
9.96
|
|
Dividend payout ratio per common share
|
|
|
NM
|
|
|
|
49.12
|
|
|
|
430.77
|
|
|
|
40.91
|
|
|
|
40.31
|
|
|
|
43.78
|
|
|
|
50.25
|
|
Net interest margin
|
|
|
3.73
|
|
|
|
3.78
|
|
|
|
3.88
|
|
|
|
3.80
|
|
|
|
4.22
|
|
|
|
4.39
|
|
|
|
4.41
|
|
Efficiency
ratio(6)
|
|
|
58.25
|
|
|
|
58.00
|
|
|
|
57.54
|
|
|
|
51.20
|
|
|
|
51.05
|
|
|
|
53.83
|
|
|
|
53.18
|
|
Asset Quality Ratios
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-performing loans as a percentage of total loans
|
|
|
0.83
|
%
|
|
|
0.27
|
%
|
|
|
0.98
|
%
|
|
|
0.24
|
%
|
|
|
0.30
|
%
|
|
|
0.25
|
%
|
|
|
0.42
|
%
|
Non-performing assets as a percentage of total loans and other
real estate owned
|
|
|
1.07
|
|
|
|
0.30
|
|
|
|
1.08
|
|
|
|
0.28
|
|
|
|
0.32
|
|
|
|
0.36
|
|
|
|
0.53
|
|
Net charge-offs to average loans outstanding
|
|
|
0.47
|
|
|
|
0.10
|
|
|
|
0.45
|
|
|
|
0.19
|
|
|
|
0.22
|
|
|
|
0.38
|
|
|
|
0.24
|
|
Allowance for loan losses to total loans outstanding
|
|
|
1.30
|
|
|
|
1.09
|
|
|
|
1.23
|
|
|
|
1.05
|
|
|
|
1.13
|
|
|
|
1.11
|
|
|
|
1.32
|
|
Allowance for loan losses as a percentage of non-performing loans
|
|
|
155.8
|
|
|
|
410.0
|
|
|
|
125.2
|
|
|
|
439.0
|
|
|
|
381.6
|
|
|
|
434.2
|
|
|
|
316.2
|
|
Allowance for loan losses as a percentage of non-performing
assets
|
|
|
120.5
|
|
|
|
363.6
|
|
|
|
113.4
|
|
|
|
370.0
|
|
|
|
357.4
|
|
|
|
307.4
|
|
|
|
248.0
|
|
Capital
Ratios(7)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total capital to risk-weighted assets
|
|
|
12.64
|
%
|
|
|
12.70
|
%
|
|
|
12.91
|
%
|
|
|
12.34
|
%
|
|
|
12.69
|
%
|
|
|
11.65
|
%
|
|
|
12.09
|
%
|
Tier 1 capital to risk-weighted assets
|
|
|
11.70
|
|
|
|
11.78
|
|
|
|
11.92
|
|
|
|
11.45
|
|
|
|
11.60
|
|
|
|
10.54
|
|
|
|
10.80
|
|
Tier 1 capital to average assets (leverage)
|
|
|
9.77
|
|
|
|
8.32
|
|
|
|
9.75
|
|
|
|
8.09
|
|
|
|
8.50
|
|
|
|
7.77
|
|
|
|
7.62
|
|
|
|
|
(1)
|
|
Reflects the reclassification
during 2004 of Federal Reserve Bank and Federal Home Loan Bank
stock from securities available for sale to other assets,
consistent with the
2005-2008
presentation.
|
(2)
|
|
Core basic earnings per common
share is a non-GAAP measure which considers net income per
common share without taking into consideration non-cash
impairment charges on certain investment securities that have
occurred. The reconciliation of core basic earnings per share to
basic earnings per share is as follows:
|
|
|
|
|
|
|
|
|
|
|
|
For the
|
|
For the
|
|
|
Quarter Ended
|
|
Year Ended
|
|
|
March 31,
|
|
December 31,
|
|
|
2009
|
|
2008
|
|
Basic earnings per common share
|
|
$
|
0.40
|
|
|
$
|
0.26
|
|
Securities impairment, net of taxes
|
|
|
0.01
|
|
|
|
1.75
|
|
Core basic earnings per common share
|
|
|
0.41
|
|
|
|
2.01
|
|
|
|
|
(3)
|
|
We believe that this information is
useful to investors and can aid them in understanding our
current performance and financial condition. While core earnings
can be useful in evaluating current performance, we do not
believe that core earnings are a substitute for net income
calculated in accordance with Generally Accepted Accounting
Principles, or GAAP. We encourage investors and others to use
core earnings as a supplemental tool for analysis and not as a
substitute for GAAP net income. Our non-GAAP measures may not be
comparable to the non-GAAP measures of other companies. In
addition, future results of operations may include nonrecurring
items that would not be included in core earnings.
|
(footnotes continued on following page)
S-4
|
|
|
(4)
|
|
Core diluted earnings per common
share is a non-GAAP measure which considers net income per
common share without taking into consideration non-cash
impairment charges on certain investment securities that have
occurred. The reconciliation of core diluted earnings per share
to diluted earnings per share is as follows:
|
|
|
|
|
|
|
|
|
|
|
|
For the
|
|
For the
|
|
|
Quarter Ended
|
|
Year Ended
|
|
|
March 31,
|
|
December 31,
|
|
|
2009
|
|
2008
|
|
Diluted earnings per common share
|
|
$
|
0.40
|
|
|
$
|
0.25
|
|
Securities impairment, net of taxes
|
|
|
0.01
|
|
|
|
1.75
|
|
Core diluted earnings per common share
|
|
|
0.41
|
|
|
|
2.00
|
|
|
|
|
(5)
|
|
We paid a cash dividend aggregating
$1.16 million, or $0.10 per share, in April 2009.
|
(6)
|
|
The efficiency ratio is a non-GAAP
financial measure of operating expense control and efficiency of
operations. Management believes this ratio better focuses
attention on the core operating performance of the Company over
time than does a GAAP-based ratio, and is useful in comparing
period-to-period operating performance of our core business
operations. This ratio is used by management as part of its
assessment of its performance in managing noninterest expenses.
However, this measure is supplemental and is not a substitute
for an analysis of performance based on GAAP measures. Investors
are cautioned that the efficiency ratio used by us may not be
comparable to efficiency ratios reported by other financial
institutions. The efficiency ratio is comprised of noninterest
expenses as a percentage of net interest income plus noninterest
income. Noninterest expenses used in the calculation exclude
amortization of intangibles and non-recurring expenses. Income
for the ratio is increased for the favorable effect of
tax-exempt income, and excludes securities gains and losses,
which vary widely from period to period without appreciably
affecting operating expenses, non-recurring gains and losses,
and other-than-temporary impairment charges. The reconciliation
of the non-GAAP efficiency ratio to a GAAP ratio is as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At or for the
|
|
|
|
|
|
|
Quarter
|
|
|
|
|
|
|
Ended
|
|
|
|
|
|
|
March 31,
|
|
|
At or for the Year Ended December 31,
|
|
|
|
2009
|
|
|
2008
|
|
|
2008
|
|
|
2007
|
|
|
2006
|
|
|
2005
|
|
|
2004
|
|
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Dollars in thousands)
|
|
|
GAAP-based efficiency ratio
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Noninterest expenses
|
|
$
|
15,194
|
|
|
$
|
16,283
|
|
|
$
|
60,516
|
|
|
$
|
50,463
|
|
|
$
|
49,837
|
|
|
$
|
55,591
|
|
|
$
|
48,035
|
|
Net interest income plus noninterest income
|
|
|
24,857
|
|
|
|
25,501
|
|
|
|
68,209
|
|
|
|
93,146
|
|
|
|
92,968
|
|
|
|
95,933
|
|
|
|
86,512
|
|
GAAP-based efficiency ratio
|
|
|
61.13
|
%
|
|
|
63.85
|
%
|
|
|
88.72
|
%
|
|
|
54.18
|
%
|
|
|
53.61
|
%
|
|
|
57.95
|
%
|
|
|
55.52
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP efficiency ratio
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Noninterest expenses GAAP-based
|
|
$
|
15,194
|
|
|
$
|
16,283
|
|
|
$
|
60,516
|
|
|
$
|
50,463
|
|
|
$
|
49,837
|
|
|
$
|
55,591
|
|
|
$
|
48,035
|
|
Less non-GAAP adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreclosed property expense
|
|
|
(55
|
)
|
|
|
(85
|
)
|
|
|
(382
|
)
|
|
|
(185
|
)
|
|
|
(248
|
)
|
|
|
(288
|
)
|
|
|
(500
|
)
|
Amortization of intangibles
|
|
|
(245
|
)
|
|
|
(160
|
)
|
|
|
(689
|
)
|
|
|
(467
|
)
|
|
|
(410
|
)
|
|
|
(435
|
)
|
|
|
(399
|
)
|
Prepayment penalties on FHLB advances
|
|
|
|
|
|
|
(1,647
|
)
|
|
|
(1,647
|
)
|
|
|
|
|
|
|
|
|
|
|
(3,794
|
)
|
|
|
|
|
Other non-core, non-recurring expense items
|
|
|
|
|
|
|
|
|
|
|
(51
|
)
|
|
|
(100
|
)
|
|
|
(581
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted non-interest expenses
|
|
$
|
14,894
|
|
|
$
|
14,391
|
|
|
$
|
57,747
|
|
|
$
|
49,711
|
|
|
$
|
48,598
|
|
|
$
|
51,074
|
|
|
$
|
47,136
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest income plus noninterest income
GAAP-based
|
|
$
|
24,857
|
|
|
$
|
25,501
|
|
|
$
|
68,209
|
|
|
$
|
93,146
|
|
|
$
|
92,968
|
|
|
$
|
95,933
|
|
|
$
|
86,512
|
|
Plus non-GAAP adjustment:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tax-equivalency
|
|
|
916
|
|
|
|
1,131
|
|
|
|
4,133
|
|
|
|
4,470
|
|
|
|
4,010
|
|
|
|
4,072
|
|
|
|
3,719
|
|
Less non-GAAP adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Security gains
|
|
|
(411
|
)
|
|
|
(1,820
|
)
|
|
|
(1,899
|
)
|
|
|
(411
|
)
|
|
|
(75
|
)
|
|
|
(753
|
)
|
|
|
(1,604
|
)
|
Other-than-temporary security impairments
|
|
|
209
|
|
|
|
|
|
|
|
29,923
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Branch sale gains
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1,035
|
)
|
|
|
(4,366
|
)
|
|
|
|
|
Other non-core, non-recurring income items
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(104
|
)
|
|
|
(676
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted net interest income plus noninterest income
|
|
$
|
25,571
|
|
|
$
|
24,812
|
|
|
$
|
100,366
|
|
|
$
|
97,101
|
|
|
$
|
95,192
|
|
|
$
|
94,886
|
|
|
$
|
88,627
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP efficiency ratio
|
|
|
58.25
|
%
|
|
|
58.00
|
%
|
|
|
57.54
|
%
|
|
|
51.20
|
%
|
|
|
51.05
|
%
|
|
|
53.83
|
%
|
|
|
53.18
|
%
|
|
|
|
(7)
|
|
Capital ratios are those of the
Company.
|
*
|
|
We calculated the core earnings per
common share only for the periods ended March 31, 2009 and
December 31, 2008.
|
NM Not meaningful
S-5
RISK
FACTORS
An investment in our common stock involves certain risks. You
should carefully consider the risks described below, as well as
the other information included or incorporated by reference in
this prospectus supplement and the accompanying prospectus,
before making an investment decision. Additional risks and
uncertainties not presently known to us or that we currently
deem immaterial may also impair our business operations. If any
of these risks actually occurs, our business, financial
condition or results of operations could be materially adversely
affected. In that case, the trading price of our common stock
could decline substantially, and you may lose all or part of
your investment.
Risks
Related to this Offering and Ownership of Our Common
Stock
The
price of our common stock may fluctuate significantly, and this
may make it difficult for you to resell shares of common stock
owned by you at times or at prices you find
attractive.
Stock price volatility may make it difficult for you to resell
your common stock when you want and at prices you find
attractive. Our stock price can fluctuate significantly in
response to a variety of factors including, among other things:
|
|
|
|
|
Actual or anticipated variations in quarterly results of
operations;
|
|
|
|
Recommendations by securities analysts;
|
|
|
|
Operating and stock price performance of other companies that
investors deem comparable to us;
|
|
|
|
News reports relating to trends, concerns and other issues in
the financial services industry, including the failures of other
financial institutions in the current economic downturn;
|
|
|
|
Perceptions in the marketplace regarding us
and/or our
competitors;
|
|
|
|
New technology used, or services offered, by competitors;
|
|
|
|
Significant acquisitions or business combinations, strategic
partnerships, joint ventures or capital commitments by or
involving us or our competitors;
|
|
|
|
Failure to integrate acquisitions or realize anticipated
benefits from acquisitions;
|
|
|
|
Changes in government regulations; and
|
|
|
|
Geopolitical conditions such as acts or threats of terrorism or
military conflicts.
|
General market fluctuations, industry factors and general
economic and political conditions and events, such as economic
slowdowns or recessions, interest rate changes or credit loss
trends, could also cause our stock price to decrease regardless
of operating results as evidenced by the current volatility and
disruption of capital and credit markets.
The
trading volume in our common stock is less than that of other
larger financial services companies which may adversely affect
the price of our common stock.
Although our common stock is traded on The NASDAQ Global Select
Market, the trading volume in our common stock is less than that
of other larger financial services companies. A public trading
market having the desired characteristics of depth, liquidity
and orderliness depends on the presence in the marketplace of
willing buyers and sellers of our common stock at any given
time. This presence depends on the individual decisions of
investors and general economic and market conditions over which
we have no control. Given the lower trading volume of our common
stock, significant sales of our common stock, or the expectation
of these sales, could cause the our stock price to fall.
S-6
An
investment in our common stock is not an insured
deposit.
Our common stock is not a bank deposit and, therefore, is not
insured against loss by the Federal Deposit Insurance
Corporation, or FDIC, any other deposit insurance fund or by any
other public or private entity. Investment in our common stock
is inherently risky for the reasons described in this Risk
Factors section and elsewhere in this prospectus
supplement and is subject to the same market forces that affect
the price of common stock in any company. As a result, if you
acquire our common stock, you may lose some or all of your
investment.
There
may be future sales or other dilutions of our equity which may
adversely affect the market price of our common
stock.
Except as described under Underwriting, we are not
restricted from issuing additional shares of common stock,
including securities that are convertible into or exchangeable
for, or that represent the right to receive our common stock.
Because our decision to issue securities in any future offering
will depend on market conditions and other factors beyond our
control, we cannot predict or estimate the amount, timing or
nature of any future offerings. Thus, our stockholders bear the
risk of any future stock issuances reducing the market price of
our common stock and diluting their stock holdings in us. The
exercise of the underwriters over-allotment option, the
exercise of any options granted to directors, executive officers
and other employees under our stock compensation plans, the
issuance of shares of common stock in acquisitions and other
issuances of our common stock could have an adverse effect on
the market price of the shares of our common stock, and the
existence of options, or shares of our common stock reserved for
issuance as restricted shares of our common stock, may
materially adversely affect the terms upon which we may be able
to obtain additional capital in the future through the sale of
equity securities. In addition, future issuances of shares of
our common stock will be dilutive to existing stockholders.
In connection with its purchase of the Series A Preferred
Stock, the Treasury received a warrant to purchase
176,546 shares of our common stock at an initial per share
exercise price of $35.26, subject to adjustment, which expires
ten years from the issuance date. The issuance of any additional
shares of common stock as a result of exercise of the warrant
held by the Treasury or the issuance of any other common stock
or convertible securities could dilute the ownership interest of
our existing common stockholders. The market price of our common
stock could decline as a result of this offering as well as
other sales of a large block of shares of our common stock in
the market after this offering, or the perception that such
sales could occur. If we raise qualifying capital of
at least $41.5 million prior to December 31, 2009,
then the number of shares of common stock underlying the warrant
issued to the Treasury will be reduced by 50%, or
88,273 shares. The proceeds from this offering will
constitute qualifying capital.
Future
offerings of debt, which would be senior to our common stock
upon liquidation, and/or preferred equity securities which may
be senior to our common stock for purposes of dividend
distributions or upon liquidation, may adversely affect the
market price of our common stock.
In the future, we may attempt to increase our capital resources
or, if the Banks capital ratios fall below the required
minimums, we could be forced to raise additional capital by
making additional offerings of debt or preferred equity
securities, including medium-term notes, trust preferred
securities, senior or subordinated notes or preferred stock.
Upon liquidation, holders of our debt securities and shares of
preferred stock and lenders with respect to other borrowings
will receive distributions of our available assets prior to the
holders of our common stock. Additional equity offerings may
dilute the holdings of our existing stockholders or reduce the
market price of our common stock, or both. Holders of our common
stock are not entitled to preemptive rights or other protections
against dilution.
The
Banks ability to pay dividends is subject to regulatory
limitations which, to the extent we require such dividends in
the future, may affect our ability to pay our obligations and
pay dividends.
We are a separate legal entity from the Bank and our other
subsidiaries, and we do not have significant operations of our
own. We have historically depended on the Banks cash and
liquidity as well as dividends to
S-7
pay our operating expenses and dividends to stockholders.
Recently, we announced a reduction of the quarterly dividend
paid on our common stock to $0.10 per share. The reduction in
the dividend rate was made primarily to enhance the
Companys capital position, and we expect such reduction to
be temporary.
The availability of dividends from the Bank is limited by
various statutes and regulations. Under the National Bank Act,
without prior approval from the Office of the Comptroller of the
Currency, or OCC, the Banks primary regulator, a national
bank such as the Bank may not declare and pay dividends in any
year in excess of an amount equal to the sum of the total of the
net income of the bank for that year and the retained net income
of the bank for the preceding two years. As a result of reduced
net income during 2008 due to impairment charges on certain of
our investment securities and increased provisions for loan
losses, as well as the payment of a special dividend by the Bank
to permit us to purchase certain trust preferred securities from
the Bank in order to reduce the Banks holdings of the
securities of certain issuers in order to comply with regulatory
limits on investment concentrations, we currently need to
receive permission of the OCC for the Bank to pay dividends to
us. We believe that our cash and liquid securities are
sufficient to pay our expenses and dividend obligations to our
stockholders for 2009, including with respect to the increased
number of shares of common stock that are expected to be
outstanding after consummation of both the TriStone transaction
and this offering, without the need for any dividend from the
Bank. However, there can be no assurance that the Banks
future earnings will be sufficient to permit it to pay dividends
to us without the approval of the OCC, or that we will have the
capacity to pay dividends on our common stock or Series A
Preferred Stock without dividends from the Bank. In addition, it
is possible, depending upon the financial condition of the Bank
and other factors, that the OCC could assert that payment of
dividends or other payments by the Bank are an unsafe or unsound
practice. In the event the Bank is unable to pay dividends
sufficient to satisfy our obligations or is otherwise unable to
pay dividends to us, we may not be able to service our
obligations as they become due, including payments required to
be made to the FCBI Capital Trust, our business trust
subsidiary, or to pay dividends on our Series A Preferred
Stock or our common stock. Consequently, the inability to
receive dividends from the Bank could adversely affect our
financial condition, results of operations, cash flows and
prospects.
We are
subject to restrictions on our ability to declare or pay
dividends and repurchase our shares as a result of our
participation in the Treasurys Troubled Asset Relief
Program Capital Purchase Program.
On November 21, 2008, we issued to the Treasury, for
aggregate consideration of $41.50 million
(i) 41,500 shares of our Series A Preferred
Stock, and (ii) a warrant to purchase 176,546 shares
of our common stock pursuant to the terms of the Securities
Purchase Agreement Standard Terms with the Treasury,
or the Purchase Agreement. (If we raise qualifying
capital of at least $41.5 million prior to
December 31, 2009, then the number of shares of common
stock underlying the warrant issued to the Treasury will be
reduced by 50%, or 88,273 shares. The proceeds from this
offering will constitute qualifying capital.) We
intend to use a portion of the net proceeds of this offering to
repurchase, before the end of the year, the Series A
Preferred Stock that we issued to the Treasury. The repurchase
of our Series A Preferred Stock is subject to receipt of
approval from our banking regulators and there are no assurances
when or if such approval will be received.
Under the terms of the Purchase Agreement, our ability to
declare or pay dividends on any of our shares is restricted.
Specifically, we may not declare dividend payments on common,
junior preferred or pari passu preferred shares if we are
in arrears on the dividends on the Series A Preferred
Stock. Further, we may not increase the dividends on our common
stock above the amount of the last quarterly cash dividend per
share declared prior to October 14, 2008, which was $0.28
per share, without the Treasurys approval until the third
anniversary of the investment unless all of the Series A
Preferred Stock has been redeemed or transferred.
Our ability to repurchase our shares is also restricted under
the terms of the Purchase Agreement. The Treasurys consent
generally is required for us to make any stock repurchases until
the third anniversary of the investment by the Treasury unless
all of the Series A Preferred Stock has been redeemed or
transferred. Further, common, junior preferred or pari passu
preferred shares may not be repurchased if we are in arrears
on the Series A Preferred Stock dividends.
S-8
Potential
acquisitions may disrupt our business and dilute stockholder
value.
In recent years we have been an active acquirer of other
entities, both in the banking and insurance sectors. We have
sought merger or acquisition partners that are culturally
similar and have experienced management and possess either
significant market presence or have potential for improved
profitability through financial management, economies of scale
or expanded services. Acquiring other banks, businesses, or
branches involves various risks commonly associated with
acquisitions, including, among other things:
|
|
|
|
|
Potential exposure to unknown or contingent liabilities of the
target company;
|
|
|
|
Exposure to potential asset quality issues of the target company;
|
|
|
|
Difficulty and expense of integrating the operations and
personnel of the target company;
|
|
|
|
Potential disruption to our business;
|
|
|
|
Potential diversion of our managements time and attention;
|
|
|
|
The possible loss of key employees and customers of the target
company;
|
|
|
|
Difficulty in estimating the value of the target
company; and
|
|
|
|
Potential changes in banking or tax laws or regulations that may
affect the target company.
|
We regularly evaluate merger and acquisition opportunities and
conduct due diligence activities related to possible
transactions with other financial institutions and financial
services companies. As a result, merger or acquisition
discussions and, in some cases, negotiations may take place and
future mergers or acquisitions involving cash, debt or equity
securities may occur at any time. Acquisitions typically involve
the payment of a premium over book and market values, and,
therefore, some dilution of our tangible book value and net
income per common share may occur in connection with any future
transaction. Furthermore, failure to realize the expected
revenue increases, cost savings, increases in geographic or
product presence,
and/or other
projected benefits from an acquisition could have a material
adverse effect on our financial condition and results of
operations.
On April 2, 2009, we signed a definitive agreement
providing for the acquisition of TriStone. TriStone will be
merged with and into First Community Bank. The definitive
agreement provides for the exchange of .5262 shares of our
common stock for each outstanding share of TriStone common
stock. The merger is subject to the receipt of applicable
regulatory approvals and approval by the stockholders of
TriStone, and is expected to close in the third quarter of 2009.
Risks
Related to Our Business
Changes
in the fair value of our securities may reduce our
stockholders equity and net income.
At March 31, 2009, $549.7 million of our securities
were classified as available-for-sale. At such date, the
aggregate unrealized losses on our available-for-sale securities
was $115.1 million. We increase or decrease
stockholders equity by the amount of the change in the
unrealized gain or loss (the difference between the estimated
fair value and the amortized cost) of our available-for-sale
securities portfolio, net of the related tax benefit, under the
category of accumulated other comprehensive income/loss.
Therefore, a decline in the estimated fair value of this
portfolio will result in a decline in reported
stockholders equity, as well as book value per common
share and tangible book value per common share. This decrease
will occur even though the securities are not sold. In the case
of debt securities, if these securities are never sold and there
are no further credit impairments, the decrease will be
recovered over the life of the securities. In the case of equity
securities which have no stated maturity, the declines in fair
value may or may not be recovered over time.
We conduct a periodic review and evaluation of the entire
securities portfolio to determine if the decline in the fair
value of any security below its cost basis is
other-than-temporary. Factors which we consider in our analysis
of debt securities include, but are not limited to, intent to
sell the security, evidence available to determine if it is
more-likely-than not that the Company will have to sell the
securities before recovery of the amortized cost, and probable
credit losses. Probable credit losses are evaluated based upon,
but are not limited
S-9
to: the present value of future cash flows, the severity and
duration of the decline in fair value of the security below its
amortized cost, the financial condition and near-term prospects
of the issuer, whether the decline appears to be related to
issuer conditions or general market or industry conditions, the
payment structure of the security, failure of the security to
make scheduled interest or principal payments, and changes to
the rating of the security by rating agencies. We generally view
changes in fair value for debt securities caused by changes in
interest rates as temporary, which is consistent with our
experience. If we deem such decline to be other-than-temporary,
the security is written down to a new cost basis and the
resulting loss is charged to earnings as a component of
non-interest income. For the year ended December 31, 2008,
we reported a non-cash other-than-temporary impaired, or OTTI,
charge of $29.9 million on our debt securities portfolio.
Upon adoption of a new accounting accounting principle, we
recaptured $10.2 million of the December 31, 2008
impairment charge as a non-credit related impairment.
Factors that we consider in our analysis of equity securities
include, but are not limited to: intent to sell the security
before recovery of the cost, the severity and duration of the
decline in fair value of the security below its cost, the
financial condition and near-term prospects of the issuer, and
whether the decline appears to be related to issuer conditions
or general market or industry conditions.
We continue to monitor the fair value of our entire securities
portfolio as part of our ongoing OTTI evaluation process. No
assurance can be given that we will not need to recognize OTTI
charges related to securities in the future.
If
dividends paid on our investment in the Federal Home Loan Bank
of Atlanta continue to be suspended, or if our investment is
classified as OTTI or as permanently impaired, our earnings
and/or stockholders equity could decrease.
We own common stock of the Federal Home Loan Bank of Atlanta, or
FHLB, to qualify for membership in the Federal Home Loan Bank
system and to be eligible to borrow funds under the FHLBs
advance program. There is no market for our FHLB common stock.
The FHLB has reported losses for the quarter ended
March 31, 2009 and the year ended December 31, 2008,
primarily due to an OTTI charge on its private-label mortgage
backed securities portfolio. As a result of the losses, the FHLB
also suspended the dividend paid on its common stock. The
continued suspension of the dividend will decrease our income.
In an extreme situation, it is possible that the capitalization
of the FHLB could be substantially diminished or reduced to
zero. Consequently, we believe that there is a risk that our
investment in FHLB common stock could be deemed OTTI at some
time in the future, and if this occurs, it would cause our
earnings and stockholders equity to decrease by the
after-tax amount of the impairment charge.
The
current economic environment poses significant challenges for us
and could adversely affect our financial condition and results
of operations.
We are operating in a challenging and uncertain economic
environment, including generally uncertain national and local
conditions. Financial institutions continue to be affected by
sharp declines in the real estate market and constrained
financial markets. Dramatic declines in the housing market over
the past year, with falling home prices and increasing
foreclosures and unemployment, have resulted in significant
write-downs of asset values by financial institutions. Continued
declines in real estate values, home sales volumes, and
financial stress on borrowers as a result of the uncertain
economic environment could have an adverse effect on our
borrowers or their customers, which could adversely affect our
financial condition and results of operations. A worsening of
these conditions would likely exacerbate the adverse effects on
us and others in the financial institutions industry. For
example, further deterioration in local economic conditions in
our markets could drive losses beyond that which is provided for
in our allowance for loan losses. We may also face the following
risks in connection with these events:
|
|
|
|
|
Economic conditions that negatively affect housing prices and
the job market have resulted, and may continue to result, in a
deterioration in credit quality of our loan portfolios, and such
deterioration in credit quality has had, and could continue to
have, a negative impact on our business;
|
S-10
|
|
|
|
|
Market developments may affect consumer confidence levels and
may cause adverse changes in payment patterns, causing increases
in delinquencies and default rates on loans and other credit
facilities;
|
|
|
|
The processes we use to estimate our allowance for loan losses
and reserves may no longer be reliable because they rely on
complex judgments, including forecasts of economic conditions,
which may no longer be capable of accurate estimation;
|
|
|
|
Our ability to assess the creditworthiness of our customers may
be impaired if the models and approaches we use to select,
manage, and underwrite our customers become less predictive of
future charge-offs; and
|
|
|
|
We expect to face increased regulation of our industry, and
compliance with such regulation may increase our costs, limit
our ability to pursue business opportunities, and increase
compliance challenges.
|
As these conditions or similar ones continue to exist or worsen,
we could experience continuing or increased adverse effects on
our financial condition.
Our
business is subject to interest rate risk and variations in
interest rates may negatively affect our financial
performance.
Our earnings and cash flows are largely dependent upon our net
interest income. Net interest income is the difference between
interest income earned on interest-earning assets, such as loans
and securities, and interest expense paid on interest-bearing
liabilities, such as deposits and borrowed funds. Interest rates
are highly sensitive to many factors that are beyond our
control, including general economic conditions and policies of
various governmental and regulatory agencies and, in particular,
the Federal Reserve Board. Changes in monetary policy, including
changes in interest rates, could influence not only the interest
we receive on loans and securities and the amount of interest we
pay on deposits and borrowings, but such changes could also
affect (i) our ability to originate loans and obtain
deposits, and (ii) the fair value of our financial assets
and liabilities. If the interest rates paid on deposits and
other borrowings increase at a faster rate than the interest
rates received on loans and other investments, our net interest
income, and therefore earnings, could be adversely affected.
Earnings could also be adversely affected if the interest rates
received on loans and other investments fall more quickly than
the interest rates paid on deposits and other borrowings. Based
on net interest income simulations conducted as of
March 31, 2009, the Company is in a relatively neutral
position with respect to interest rate shocks that
simulate decreases in interest rates of 1% and increases in
interest rates of 1% and 2%.
The
Banks allowance for loan losses may not be adequate to
cover actual losses.
Like all financial institutions, the Bank maintains an allowance
for loan losses to provide for probable losses. The Banks
allowance for loan losses may not be adequate to cover actual
loan losses, and future provisions for loan losses could
materially and adversely affect the Banks operating
results. The Banks allowance for loan losses is determined
by analyzing historical loan losses, current trends in
delinquencies and charge-offs, plans for problem loan
resolution, changes in the size and composition of the loan
portfolio, and industry information. Also included in
managements estimates for loan losses are considerations
with respect to the impact of economic events, the outcome of
which are uncertain. The amount of future losses is susceptible
to changes in economic, operating and other conditions,
including changes in interest rates that may be beyond the
Banks control, and these losses may exceed current
estimates. Federal regulatory agencies, as an integral part of
their examination process, review the Banks loans and
allowance for loan losses. Although we believe that the
Banks allowance for loan losses is adequate to provide for
probable losses, we cannot assure you that we will not need to
increase the Banks allowance for loan losses or that
regulators will not require us to increase this allowance.
Either of these occurrences could materially and adversely
affect our earnings and profitability.
S-11
Our
business is subject to various lending and other economic risks
that could adversely impact our results of operations and
financial condition.
There was significant disruption and volatility in the financial
and capital markets during 2008 and the first three months of
2009. The financial markets and the financial services industry
in particular suffered unprecedented disruption, causing a
number of institutions to fail or require government
intervention to avoid failure. These conditions were largely the
result of the erosion of the U.S. and global credit
markets, including a significant and rapid deterioration in the
mortgage lending and related real estate markets. As a
consequence of the difficult economic environment, we
experienced losses, resulting primarily from significant
provisions for loan losses and substantial impairment charges on
our investment securities. There can be no assurance that the
economic conditions that have adversely affected the financial
services industry, and the capital, credit and real estate
markets generally, will improve in the near term, in which case
we could continue to experience losses and write-downs of
assets, and could face capital and liquidity constraints or
other business challenges. A further deterioration in economic
conditions, particularly within our geographic region, could
result in the following consequences, any of which could have a
material adverse effect on our business:
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Loan delinquencies may further increase causing additional
increases in our provision and allowance for loan losses;
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Problem assets and foreclosures may continue to increase;
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Demand for our products and services may further
decline; and
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Collateral for loans made by the Bank, especially real estate,
may continue to decline in value, in turn reducing a
clients borrowing power, and reducing the value of assets
and collateral associated with our loans held for investment.
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The
declining real estate market could impact our
business.
Our business activities are conducted in Virginia, West
Virginia, North Carolina, South Carolina, Tennessee and the
surrounding region. During 2008 and the first quarter of 2009,
the real estate market in these regions experienced declines
with falling home prices and increased foreclosures. As our net
charge-offs increased during this period and in recognition of
the continued deterioration in the real estate market and
corresponding expected further increases in non-performing
assets, we increased our provision for loan losses during 2008
and the first quarter of 2009. A continued downturn in this
regional real estate market could hurt our business because of
the geographic concentration within this regional area and
because the vast majority of our loans are secured by real
estate. If there is a further decline in real estate values, the
collateral for our loans will provide less security. As a
result, our ability to recover on defaulted loans by selling the
underlying real estate will be diminished, and we will be more
likely to suffer losses on defaulted loans.
Our
level of credit risk is increasing due to our focus on
commercial and construction lending, and the concentration on
small businesses and middle market customers with heightened
vulnerability to economic conditions.
As of March 31, 2009, our largest outstanding commercial
business loan and largest outstanding commercial real estate
loan amounted to $1.9 million ($2.5 million is
committed as of such date) and $13.0 million, respectively.
At such date, our commercial business loans amounted to
$81.9 million, or 6.4% of our total loan portfolio, and our
commercial real estate loans amounted to $405.5 million, or
31.8% of our total loan portfolio. Commercial business and
commercial real estate loans generally are considered riskier
than single-family residential loans because they have larger
balances to a single borrower or group of related borrowers.
Commercial business and commercial real estate loans involve
risks because the borrowers ability to repay the loans
typically depends primarily on the successful operation of the
businesses or the properties securing the loans. Most of the
Banks commercial business loans are made to small business
or middle market customers who may have a heightened
vulnerability to economic conditions. Moreover, a portion of
S-12
these loans have been made or acquired by us in recent years and
the borrowers may not have experienced a complete business or
economic cycle.
In addition to commercial real estate and commercial business
loans, we hold a portfolio of construction loans. At
March 31, 2009, our construction loans amounted to
$124.3 million, or 9.7% of our total loan portfolio.
Construction loans generally have a higher risk of loss than
single-family residential mortgage loans due primarily to the
critical nature of the initial estimates of a propertys
value upon completion of construction compared to the estimated
costs, including interest, of construction as well as other
assumptions. If the estimates upon which construction loans are
made prove to be inaccurate, we may be confronted with projects
that, upon completion, have values which are below the loan
amounts. The nature of the allowance for loan losses requires
that we must use assumptions regarding, among other factors,
individual loans and the economy. While we are not aware of any
specific, material impediments impacting any of our
builder/developer borrowers at this time, there continues to be
nationwide reports of significant problems which have adversely
affected many property developers and builders as well as the
institutions that have provided them loans. If any of the
builder/developers to which we have extended construction loans
experience the type of difficulties that are being reported, it
could have adverse consequences upon our future results of
operations.
The
Bank may suffer losses in its loan portfolio despite its
underwriting practices.
The Bank seeks to mitigate the risks inherent in the Banks
loan portfolio by adhering to specific underwriting practices.
These practices include analysis of a borrowers prior
credit history, financial statements, tax returns and cash flow
projections, valuation of collateral based on reports of
independent appraisers and verification of liquid assets.
Although the Bank believes that its underwriting criteria are
appropriate for the various kinds of loans it makes, the Bank
may incur losses on loans that meet its underwriting criteria,
and these losses may exceed the amounts set aside as reserves in
the Banks allowance for loan losses.
We have experienced increases in the levels of our
non-performing assets and loan charge-offs in recent periods.
Our total non-performing assets amounted to $13.7 million
at March 31, 2009, $14.1 million at December 31,
2008 and $3.5 million at December 31, 2007. We had
$1.5 million of net loan charge-offs for the quarter ended
March 31, 2009 compared to $5.4 million and
$2.4 million in net loan charge-offs for the years ended
December 31, 2008 and 2007, respectively. Our provision for
loan losses was $2.1 million for the quarter ended
March 31, 2009, $7.4 million for the year ended
December 31, 2008 and $717,000 for the year ended
December 31, 2007. At March 31, 2009, the ratios of
our allowance for loan losses to non-accrual loans and to total
loans outstanding was 155.8% and 1.3%, respectively. Additional
increases in our non-performing assets or loan charge-offs may
require us to increase our allowance for loan losses, which
would have an adverse effect upon our future results of
operations.
We and
our subsidiaries are subject to extensive regulation which could
adversely affect us.
Our and our subsidiaries operations are subject to
extensive regulation and supervision by federal and state
governmental authorities and are subject to various laws and
judicial and administrative decisions imposing requirements and
restrictions on part or all of our operations. Banking
regulations governing our operations are primarily intended to
protect depositors funds, federal deposit insurance funds
and the banking system as a whole, not security holders.
Congress and federal regulatory agencies continually review
banking laws, regulations and policies for possible changes.
Changes to statutes, regulations or regulatory policies,
including changes in interpretation or implementation of
statutes, regulations or policies, could affect us in
substantial and unpredictable ways. Such changes could subject
us to additional costs, limit the types of financial services
and products we may offer
and/or
increase the ability of non-banks to offer competing financial
services and products, among other things. Failure to comply
with laws, regulations or policies could result in sanctions by
regulatory agencies, civil money penalties
and/or
reputation damage, which could have a material adverse effect on
our business, financial condition and results of operations.
While we have policies and procedures designed to prevent any
such violations, there can be no assurance that such violations
will not occur. These laws, rules and regulations, or any other
laws, rules or regulations, that may be adopted in the
S-13
future, could make compliance more difficult or expensive,
restrict our ability to originate, broker or sell loans, further
limit or restrict the amount of commissions, interest or other
charges earned on loans originated or sold by the Bank and
otherwise adversely affect our business, financial condition or
prospects.
On October 3, 2008, the Emergency Economic Stabilization
Act of 2008, or the EESA, was signed into law. Pursuant to the
EESA, the Treasury was granted the authority to take a range of
actions for the purpose of stabilizing and providing liquidity
to the U.S. financial markets and has proposed several
programs, including the purchase by the Treasury of certain
troubled assets from financial institutions and the direct
purchase by the Treasury of equity of financial institutions.
There can be no assurance, however, as to the actual impact that
the foregoing or any other governmental program will have on the
financial markets. The failure of the financial markets to
stabilize and a continuation or worsening of current financial
market conditions could materially and adversely affect our
business, financial condition, results of operations, access to
credit or the trading price of our common stock. In addition,
current initiatives of President Obamas Administration and
the possible enactment of recently proposed bankruptcy
legislation may adversely affect our financial condition and
results of operations.
The financial services industry is likely to face increased
regulation and supervision as a result of the existing financial
crisis, and there may be additional requirements and conditions
imposed on us as a result of our participation in the Troubled
Asset Relief Program, or TARP, Capital Purchase Program. Such
additional regulation and supervision may increase our costs and
limit our ability to pursue business opportunities. The affects
of such recently enacted, and proposed, legislation and
regulatory programs on us cannot reliably be determined at this
time.
We
face strong competition from other financial institutions,
financial service companies and other organizations offering
services similar to those offered by us and our subsidiaries,
which could hurt our business.
Our business operations are conducted in Virginia, West
Virginia, North Carolina, South Carolina, Tennessee and the
surrounding region. Increased competition within this region may
result in reduced loan originations and deposits. Ultimately, we
may not be able to compete successfully against current and
future competitors. Many competitors offer the types of loans
and banking services that we offer. These competitors include
other savings associations, national banks, regional banks and
other community banks. We also face competition from many other
types of financial institutions, including finance companies,
brokerage firms, insurance companies, credit unions, mortgage
banks and other financial intermediaries. In particular, the
Banks competitors include other state and national banks
and major financial companies whose greater resources may afford
them a marketplace advantage by enabling them to maintain
numerous banking locations and mount extensive promotional and
advertising campaigns.
Additionally, banks and other financial institutions with larger
capitalization and financial intermediaries not subject to bank
regulatory restrictions have larger lending limits and are
thereby able to serve the credit needs of larger clients. These
institutions, particularly to the extent they are more
diversified than us, may be able to offer the same loan products
and services that we offer at more competitive rates and prices.
If we are unable to attract and retain banking clients, we may
be unable to continue the Banks loan and deposit growth
and our business, financial condition and prospects may be
negatively affected.
The
FDIC is imposing an emergency assessment on financial
institutions, which will decrease our earnings in
2009.
On May 22, 2009, the FDIC announced a five basis point
special assessment on each insured depository institutions
assets minus its Tier 1 capital as of June 30, 2009.
The amount of the special assessment for any institution will
not exceed ten basis points times the institutions
domestic deposit assessment base for the second quarter 2009
risk-based assessment. The FDIC will collect the special
assessment on September 30, 2009. Based on our assets and
Tier 1 capital at March 31, 2009, we estimate the
impact of the special assessment to be approximately $992,000.
An additional special assessment of up to five basis points
later in 2009 is probable, but the amount is uncertain.
S-14
We may
fail to complete the proposed merger with TriStone or to realize
the anticipated benefits of the proposed merger.
The proposed merger with TriStone is subject to a variety of
conditions, including the approval of the shareholders of
TriStone as well as the receipt of required regulatory
approvals. There can be no assurance that such approvals will be
obtained, or that the regulatory approvals will not contain a
material adverse condition precluding closing the merger.
In addition, if our merger with TriStone is completed, we will
face certain risks in integrating TriStones business with
ours. Among other things, we may be assuming greater risks in
the loans to be acquired from TriStone as their loan
underwriting standards are not the same as ours. The success of
the proposed merger with TriStone will depend on, among other
things, our ability to realize anticipated cost savings and to
combine the businesses of TriStone and First Community Bank in a
manner that permits growth opportunities and does not materially
disrupt the existing customer relationships of First Community
Bank nor result in decreased revenues resulting from any loss of
customers. If we are not able to successfully achieve these
objectives, the anticipated benefits of the merger may not be
realized fully or at all or may take longer to realize than
expected. Additionally, we will make fair value estimates of
certain assets and liabilities in recording the merger. Actual
values of these assets and liabilities could differ from our
estimates, which could result in our not achieving the
anticipated benefits of the merger.
Our
goodwill may be determined to be impaired.
As of March 31, 2009, the carrying amount of our goodwill
was $89.3 million. The Company tests goodwill for
impairment on an annual basis, or more frequently if necessary.
According to SFAS No. 142, Goodwill and Other
Intangible Assets, quoted market prices in active markets
are the best evidence of fair value and are to be used as the
basis for measuring impairment, when available. Other acceptable
valuation methods include present-value measurements based on
multiples of earnings or revenues, or similar performance
measures. If we were to determine that the carrying amount of
our goodwill exceeded its implied fair value, we would be
required to write down the value of the goodwill on our balance
sheet. This, in turn, would result in a charge against earnings
and, thus, a reduction in our stockholders equity and
certain related capital measures.
We may
lose members of our management team due to compensation
restrictions.
Our ability to retain key officers and employees may be
negatively impacted by recent legislation and regulation
affecting the financial services industry. On February 17,
2009, the American Recovery and Reinvestment Act of 2009, or the
ARRA, was signed into law. While the Treasury must promulgate
regulations to implement the restrictions and standards set
forth in the new law, the ARRA, among other things,
significantly expands the executive compensation restrictions
previously imposed by the EESA. Such restrictions apply to any
entity that has received or will receive financial assistance
under the TARP, and will generally continue to apply for as long
as any obligation arising from financial assistance provided
under the TARP, including preferred stock issued under the TARP
Capital Purchase Program, remains outstanding. As a result of
our participation in the TARP Capital Purchase Program, the
restrictions and standards set forth in the ARRA are applicable
to us. Such restrictions and standards may impact
managements ability to retain key officers and employees
as well as our ability to compete with financial institutions
that are not subject to the same limitations as we are under the
ARRA.
S-15
USE OF
PROCEEDS
The net proceeds, after underwriting discounts and estimated
expenses, to us from the sale of the common stock offered hereby
will be approximately
$ million. If the
underwriters exercise their over-allotment option in full, we
estimate that our net proceeds will be approximately
$ million. We intend to use
the net proceeds of this offering (i) for general corporate
purposes, (ii) to repurchase, before the end of the year,
subject to receipt of approval from our banking regulators, the
Series A Preferred Stock that we issued to the Treasury in
November 2008, and (iii) to support our ongoing and future
anticipated growth, which may include opportunistic acquisitions
of other financial institutions. Subject to receipt of approval
from our banking regulators, we expect to use approximately
$41.5 million of the net proceeds from this offering to
repurchase the Series A Preferred Stock.
CAPITALIZATION
The following table shows our capitalization as of
March 31, 2009 on an actual basis and on an as adjusted
basis to give effect to the receipt of the net proceeds from the
offering. The as adjusted capitalization assumes no exercise of
the underwriters over-allotment option, that
2,866,972 shares of common stock are sold by us at an
offering price of $17.44 per share (based on the closing price
of our common stock on The NASDAQ Global Select Market on
May 29, 2009), and that the net proceeds from the offering,
after deducting the estimated offering expenses payable by us,
are approximately $46.76 million. The table does not
reflect the proposed acquisition of TriStone, pursuant to which
we anticipate issuing approximately 789,300 shares of our
common stock to the shareholders of TriStone, or up to
117,055 shares of our common stock issuable in connection
with prior acquisitions. In addition, the table does not give
effect to our planned repurchase of the Series A Preferred
Stock before the end of the year, subject to receipt of approval
from our banking regulators.
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As of March 31,
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2009
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Actual
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As adjusted
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(Unaudited)
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(In thousands)
|
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Cash and cash equivalents
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$
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100,960
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$
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147,720
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|
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Debt:
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Securities sold under agreement to repurchase
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$
|
153,824
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|
|
$
|
153,824
|
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FHLB borrowings and other long-term debt
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|
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215,870
|
|
|
|
215,870
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|
|
|
|
|
|
|
|
|
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Total debt
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|
|
369,694
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|
|
|
369,694
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Stockholders equity:
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|
|
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Preferred stock, par value undesignated, $1,000 liquidation value
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Authorized shares 1,000,000
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|
|
|
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|
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Issued shares 41,500
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|
40,471
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|
|
|
40,471
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|
Common stock, $1.00 par value
|
|
|
|
|
|
|
|
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Authorized shares 25,000,000
|
|
|
|
|
|
|
|
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Issued shares 12,051,234, including 454,985 in
treasury
|
|
|
12,051
|
|
|
|
14,918
|
|
Additional paid-in capital
|
|
|
127,992
|
|
|
|
171,885
|
|
Retained earnings
|
|
|
118,021
|
|
|
|
118,021
|
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Treasury stock, at cost
|
|
|
(14,453
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)
|
|
|
(14,453
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)
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Accumulated other comprehensive loss
|
|
|
(66,372
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)
|
|
|
(66,372
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)
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|
|
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|
|
|
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Total stockholders equity
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|
|
217,710
|
|
|
|
264,470
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|
|
|
|
|
|
|
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Total capitalization
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|
$
|
587,404
|
|
|
$
|
634,164
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|
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S-16
DIVIDEND
POLICY
We currently pay cash dividends on our common stock on a
quarterly basis. However, declaration of dividends by our board
of directors will depend on a number of factors, including
capital requirements, regulatory limitations, our operating
results and financial condition and general economic conditions.
Recently, we announced a reduction of the quarterly dividend
paid on our common stock to $0.10 per share, which we expect
will be temporary. The reduction in the dividend rate was made
primarily to enhance the Companys capital position. We
paid total cash dividends of $1.12 per common share for the year
ended December 31, 2008. We paid no cash dividends on our
common stock for the three months ended March 31, 2009. We
paid $1.16 million of cash dividends in April 2009 and
$12.45 million for the year ended December 31, 2008.
Our principal source of funds to pay cash dividends on our
common stock is cash dividends from the Bank. The payment of
dividends by the Bank to the Company is subject to certain
restrictions imposed by federal banking laws, regulations and
authorities.
The availability of dividends from the Bank is limited by
various statutes and regulations. Under the National Bank Act,
without prior approval from the OCC, a national bank such as the
Bank may not declare and pay dividends in any year in excess of
an amount equal to the sum of the total of the net income of the
bank for that year and the retained net income of the bank for
the preceding two years. As a result of reduced net income
during 2008 due to impairment charges on certain of our
investment securities and increased provisions for loan losses,
as well as the payment of a special dividend by the Bank to
permit us to purchase certain trust preferred securities from
the Bank in order to reduce the Banks holdings of the
securities of certain issuers in order to comply with regulatory
limits on investment concentrations, we currently need to
receive permission of the OCC for the Bank to pay dividends to
us. We believe that our cash and liquid securities are
sufficient to pay our expenses and dividend obligations to our
stockholders for 2009, including with respect to the increased
number of shares of common stock that are expected to be
outstanding after consummation of both the TriStone transaction
and this offering, without the need for any dividend from the
Bank. However, there can be no assurance that the Banks
future earnings will be sufficient to permit it to pay dividends
to us without the approval of the OCC, or that we will have the
capacity to pay dividends on our common stock or Series A
Preferred Stock without dividends from the Bank.
In addition, as a condition to our participation in the TARP
Capital Purchase Program, our ability to declare or pay
dividends on any of our shares is restricted. Specifically, we
may not declare dividend payments on common, junior preferred,
or pari passu preferred shares if we are in arrears on
the dividends on the Series A Preferred Stock. Further, we
may not increase the dividends on our common stock above the
amount of the last quarterly cash dividend per share declared
prior to October 14, 2008, which was $0.28 per share,
without the Treasurys approval until the third anniversary
of the investment unless all of the Series A Preferred
Stock has been redeemed or transferred.
S-17
PRICE
RANGE OF COMMON STOCK
The following table presents the range of high and low sale
prices of our common stock as reported on The NASDAQ Global
Select Market and the cash dividends declared per share of our
common stock for the periods shown below:
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Cash Dividends
|
|
|
|
Sale Price Per Share
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|
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Declared Per Common
|
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|
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High
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|
Low
|
|
|
Share
|
|
|
Year Ended December 31, 2007
|
|
|
|
|
|
|
|
|
|
|
|
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First Quarter
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|
$
|
42.30
|
|
|
$
|
35.19
|
|
|
$
|
0.27
|
|
Second Quarter
|
|
|
39.21
|
|
|
|
28.89
|
|
|
|
0.27
|
|
Third Quarter
|
|
|
37.45
|
|
|
|
25.40
|
|
|
|
0.27
|
|
Fourth Quarter
|
|
|
38.85
|
|
|
|
30.07
|
|
|
|
0.27
|
|
Year Ended December 31, 2008
|
|
|
|
|
|
|
|
|
|
|
|
|
First Quarter
|
|
|
34.89
|
|
|
|
28.00
|
|
|
|
0.28
|
|
Second Quarter
|
|
|
34.89
|
|
|
|
27.79
|
|
|
|
0.28
|
|
Third Quarter
|
|
|
39.00
|
|
|
|
25.54
|
|
|
|
0.28
|
|
Fourth Quarter
|
|
|
38.00
|
|
|
|
23.49
|
|
|
|
0.28
|
|
Year Ending December 31, 2009
|
|
|
|
|
|
|
|
|
|
|
|
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First Quarter(1)
|
|
|
35.13
|
|
|
|
7.90
|
|
|
|
0.00
|
|
Second Quarter (through May 29, 2009)
|
|
|
17.55
|
|
|
|
10.27
|
|
|
|
0.10
|
|
|
|
|
(1)
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|
We paid a cash dividend aggregating
$1.16 million, or $0.10 per share, in April 2009.
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As of May 29, 2009, there were approximately
2,468 holders of record of our common stock and
approximately 11,596,949 shares of our common stock
outstanding. On May 29, 2009, the closing sale price for
our common stock was $17.44 per share, as reported on The NASDAQ
Global Select Market.
S-18
DESCRIPTION
OF COMMON STOCK
General
The following is a brief description of our common stock. This
summary does not purport to be complete in all respects. This
description is subject to and qualified in its entirety by
reference to our articles of incorporation, as amended, and our
bylaws, as amended, copies of which have been filed with the SEC
and are also available upon request from us, as well as
applicable provisions of Nevada law.
We have 25,000,000 shares of authorized common stock,
$1.00 par value per share, of which 11,596,949 shares
were outstanding as of May 29, 2009.
Each share of our common stock is entitled to one vote on all
matters submitted to a vote at any meeting of stockholders.
Holders of our common stock are entitled to receive dividends as
may be declared by our board of directors out of funds legally
available therefor and, upon liquidation, to receive pro rata
our assets, if any, available for distribution after the payment
of creditors and the preferences of Series A Preferred
Stock, and any other class or series of preferred stock
outstanding at the time of liquidation. Holders of our common
stock have no preemptive rights to subscribe for any additional
securities of any class that we may issue, nor any conversion,
redemption or sinking fund rights. Holders of our common stock
have the right to cumulate votes in the election of directors.
The rights and privileges of holders of our common stock are
subject to any preferences that our board of directors may set
for any series of our preferred stock that we may issue in the
future. We pay dividends on our common stock only if we have
paid or provided for all dividends on our outstanding series of
preferred stock, for the then current period and, in the case of
any cumulative preferred stock, all prior periods.
Our Series A Preferred Stock has, and any other series of
preferred stock upon issuance will have, preference over our
common stock with respect to the payment of dividends and the
distribution of assets in the event of our liquidation or
dissolution. Our preferred stock also has such other preferences
as currently, or as may be, fixed by our board of directors. As
described in Dividend Policy above, our ability to
declare and pay dividends on our shares of common stock is
restricted as a result of our participation in the TARP Capital
Purchase Program.
Holders of our common stock are entitled to one vote for each
share that they hold and are vested with all of the voting power
except as our board of directors has provided, or may provide in
the future, with respect to preferred stock or any other class
or series of preferred stock that the board of directors may
hereafter authorize. Shares of our common stock are not
redeemable, and have no subscription, conversion or preemptive
rights.
Our common stock is listed on The NASDAQ Global Select Market.
Holders of our common stock are not, and will not be, subject to
any liability as stockholders.
Transactions
with Interested Persons
Under the Nevada Revised Statutes, a transaction with First
Community (i) in which a First Community director or
officer has a direct or indirect interest, or
(ii) involving another corporation, firm or association in
which one or more of First Communitys directors or
officers are directors or officers of the corporation, firm or
association or have a financial interest in the corporation firm
or association, is not void or voidable solely because of the
directors or officers interest or common role in the
transaction if any one of the following circumstances exists:
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The fact of the common directorship, office or financial
interest is known to the board of directors or a committee of
the board of directors and a majority of disinterested directors
on the board of directors (or on the committee) authorized,
approved or ratified the transaction;
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S-19
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The fact of the common directorship, office or financial
interest is known to the stockholders and disinterested
stockholders holding a majority of the shares held by
disinterested stockholders authorized, approved or ratified the
transaction;
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The fact of the common directorship, office or financial
interest is not known to the director or officer at the time the
transaction is brought to the board of directors for
action; or
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The transaction was fair to First Community at the time it is
authorized or approved.
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Control
Share Acquisition Provisions
Nevada law contains provisions that, under certain
circumstances, would preclude an acquirer of the shares of a
Nevada corporation who crosses one of three voting thresholds
(20%,
331/3%
or 50%) from obtaining voting rights with respect to such shares
unless the disinterested holders of a majority of the shares of
First Community held by disinterested stockholders votes to
accord voting power to such shares. The statute provides that,
if authorized by the articles of incorporation or bylaws in
effect on the 10th day following the acquisition of the
controlling interest by an acquiring person, First Community may
call for redemption of not less than all of the control shares
at the average price paid for the control shares if the acquirer
has not complied with certain procedural requirements or if the
control shares are not accorded full voting rights by the
stockholders.
Combinations
with Interested Stockholders
Under the Nevada Revised Statutes, except under certain
circumstances, a corporation is not permitted to engage in a
business combination with any interested stockholder
for a period of three years following the date such stockholder
became an interested stockholder. An interested
stockholder is a person or entity who owns 10% or more of
the outstanding shares of voting stock. Nevada permits a
corporation to opt out of the application of these business
combination provisions by so providing in its articles of
incorporation. First Community opted out of the application of
these business combination provisions in its articles of
incorporation, as amended. Instead, our articles of
incorporation, as amended, require the approval of holders of
more than 85% of our outstanding shares entitled to vote thereon
for any of the following transactions between us and any
individual, firm, corporation or other entity (or any affiliate
of any of the foregoing) that directly or indirectly
beneficially owns 15% or more of our outstanding shares of stock
entitled to vote for the election of directors:
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Any merger or consolidation of First Community or any subsidiary
of First Community with or into the firm, corporation or other
entity;
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Any sale, lease, exchange, transfer or other disposition
(whether in a single transaction or a series of related
transactions) to or with the individual, firm, corporation or
other entity of any assets of First Community or any subsidiary
of First Community when such assets have an aggregate fair
market value of $5,000,000 or more;
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The issuance or transfer to or with the individual, firm,
corporation or other entity by First Community or any subsidiary
of First Community of any equity securities of First Community
or any subsidiary of First Community where any such equity
securities have an aggregate fair market value of $5,000,000 or
more;
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The adoption of any plan or proposal for the liquidation or
dissolution of First Community; or
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Any agreement, contract or other arrangement providing for any
of the foregoing.
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S-20
Restrictions
on Ownership
The Bank Holding Company Act of 1956 requires any bank
holding company, as defined in the Bank Holding Company
Act, to obtain the approval of the Federal Reserve Board prior
to the acquisition of 5% or more of our common stock. Any
person, other than a bank holding company, is required to obtain
prior approval of the Federal Reserve Board to acquire 10% or
more of our common stock under the Change in Bank Control Act.
Any holder of 25% or more of our common stock, or a holder of 5%
or more if such holder otherwise exercises a controlling
influence over us, is subject to regulation as a bank
holding company under the Bank Holding Company Act.
Transfer
Agent and Registrar
The transfer agent and registrar for our common stock is BNY
Mellon Shareholder Services.
CERTAIN
ERISA CONSIDERATIONS
The securities offered by this prospectus may, subject to
certain legal restrictions, be held by (1) pension, profit
sharing, and other employee benefit plans which are subject to
Title I of the Employee Retirement Security Act of 1974, as
amended (which we refer to as ERISA), (2) plans, accounts,
and other arrangements that are subject to Section 4975 of
the Code, or provisions under federal, state, local,
non-U.S., or
other laws or regulations that are similar to any of the
provisions of Title I of ERISA or Section 4975 of the
Code (which we refer to as Similar Laws), and (3) entities
whose underlying assets are considered to include plan
assets of any such plans, accounts, or arrangement.
Section 406 of ERISA and Section 4975 of the Code
prohibit plans from engaging in specified transactions involving
plan assets with persons who are parties in
interest under ERISA or disqualified persons
under the Code with respect to such pension, profit sharing, or
other employee benefit plans that are subject to
Section 406 of ERISA and Section 4975 of the Code. A
violation of these prohibited transaction rules may result in an
excise tax or other liabilities under ERISA
and/or
Section 4975 of the Code. A violation of these prohibited
transaction rules may result in an excise tax or other
liabilities under ERISA
and/or
Section 4975 of the Code for such persons, unless exemptive
relief is available under an applicable statutory or
administrative exemption. A fiduciary of any such plan, account,
or arrangement must determine that the purchase and holding of
an interest in the offered securities is consistent with its
fiduciary duties and will not constitute or result in a
non-exempt prohibited transaction under Section 406 of
ERISA or Section 4975 of the Code, or a violation under any
applicable Similar Laws.
UNDERWRITING
We are offering the shares of our common stock described in this
prospectus supplement in an underwritten offering in which
Sandler ONeill & Partners, L.P. is acting as
representative of the underwriters. We have entered into an
underwriting agreement with Sandler ONeill &
Partners, L.P., acting as representative of the underwriters
named below, with respect to the common stock being offered.
Subject to the terms and conditions contained in the
underwriting agreement, each underwriter has severally agreed to
purchase the respective number of shares of our common stock set
forth opposite its name below.
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Name
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Number of Shares
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Sandler ONeill & Partners, L.P.
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Raymond James & Associates, Inc.
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Total
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S-21
The underwriting agreement provides that the underwriters
obligation to purchase shares of our common stock depends on the
satisfaction of the conditions contained in the underwriting
agreement, including:
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the representations and warranties made by us are true and
agreements have been performed;
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there is no material adverse change in the financial markets or
in our business; and
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we deliver customary closing documents.
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Subject to these conditions, the underwriters are committed to
purchase and pay for all shares of our common stock offered by
this prospectus supplement, if any such shares are taken.
However, the underwriters are not obligated to take or pay for
the shares of our common stock covered by the underwriters
over-allotment option described below, unless and until such
option is exercised.
Over-Allotment Option. We have granted the
underwriters an option, exercisable no later than 30 days
after the date of the underwriting agreement, to purchase up to
an aggregate
of
additional shares of common stock at the public offering price,
less the underwriting discounts and commissions set forth on the
cover page of this prospectus supplement. We will be obligated
to sell these shares of common stock to the underwriters to the
extent the over-allotment option is exercised. The underwriters
may exercise this option only to cover over-allotments, if any,
made in connection with the sale of our common stock offered by
this prospectus supplement.
Commissions and Expenses. The underwriters
propose to offer our common stock directly to the public at the
offering price set forth on the cover page of this prospectus
supplement and to dealers at the public offering price less a
concession not in excess of $ per
share. The underwriters may allow, and the dealers may re-allow,
a concession not in excess of $
per share on sales to other brokers and dealers. After the
public offering of our common stock, the underwriters may change
the offering price, concessions and other selling terms.
The following table shows the per share and total underwriting
discounts and commissions that we will pay to the underwriters
and the proceeds we will receive before expenses. These amounts
are shown assuming both no exercise and full exercise of the
underwriters option to purchase additional shares of our
common stock.
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Total Without
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Total With
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Over-Allotment
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Over-Allotment
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Per Share
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Exercise
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Exercise
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Public offering price
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$
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$
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$
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Underwriting discount and commissions payable by us
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$
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$
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$
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Proceeds to us (before expenses)
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$
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$
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$
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In addition to the underwriting discount, we will reimburse the
underwriters for their reasonable out-of-pocket expenses
incurred in connection with their engagement as underwriters,
regardless of whether this offering is consummated, including,
without limitation, legal fees and expenses, marketing,
syndication and travel expenses, up to a maximum aggregate
amount of $100,000. We estimate that the total expenses of this
offering, exclusive of underwriting discounts and commissions,
will be approximately $240,000, and are payable by us.
Indemnity. We have agreed to indemnify the
underwriters, and persons who control the underwriters, against
certain liabilities, including liabilities under the Securities
Act, and to contribute to payments that the underwriters may be
required to make in respect of these liabilities.
Lock-Up
Agreement. Except for shares held by our trust
department in a fiduciary capacity, we and each of our directors
and executive officers, have agreed, for a period of
90 days after the date of this prospectus
S-22
supplement, not to sell, offer, agree to sell, contract to sell,
hypothecate, pledge, grant any option to sell, make any short
sale or otherwise dispose of or hedge, directly or indirectly,
any common shares or securities convertible into, exchangeable
or exercisable for any common shares or warrants or other rights
to purchase our common shares or other similar securities
without, in each case the prior written consent of Sandler
ONeill & Partners, L.P. These restrictions are
expressly agreed to preclude us, and our executive officers and
directors, from engaging in any hedging or other transactions or
arrangement that is designed to, or which reasonably could be
expected to, lead to or result in a sale, disposition or
transfer, in whole or in part, of any of the economic
consequences of ownership of our common shares, whether such
transaction would be settled by delivery of common shares or
other securities, in cash or otherwise. The
90-day
restricted period described above will be automatically extended
if (1) during the last 18 days of the
90-day
restricted period, we issue an earnings release or material news
or a material event relating to us occurs or (2) prior to
the expiration of the
90-day
restricted period, we announce we will release earnings results
or become aware that material news or a material event will
occur during the
16-day
period beginning on the last day of the
90-day
restricted period, in which case the restricted period will
continue to apply until the expiration of the 18 day period
beginning on the date on which the earnings release is issued or
the material news or material event related to us.
Stabilization. In connection with this
offering, the underwriters may engage in stabilizing
transactions, over-allotment transactions, syndicate covering
transactions and penalty bids.
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Stabilizing transactions permit bids to purchase shares of
common stock so long as the stabilizing bids do not exceed a
specified maximum, and are engaged in for the purpose of
preventing or retarding a decline in the market price of the
common stock while the offering is in progress.
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Over-allotment transactions involve sales by the underwriters of
shares of common stock in excess of the number of shares the
underwriters are obligated to purchase. This creates a syndicate
short position which may be either a covered short position or a
naked short position. In a covered short position, the number of
shares of common stock over-allotted by the underwriters is not
greater than the number of shares that they may purchase in the
over-allotment option. In a naked short position, the number of
shares involved is greater than the number of shares in the
over-allotment option. The underwriters may close out any short
position by exercising their over-allotment option
and/or
purchasing shares in the open market.
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Syndicate covering transactions involve purchases of common
stock in the open market after the distribution has been
completed in order to cover syndicate short positions. In
determining the source of shares to close out the short
position, the underwriters will consider, among other things,
the price of shares available for purchase in the open market as
compared with the price at which they may purchase shares
through exercise of the over-allotment option. If the
underwriters sell more shares than could be covered by exercise
of the over-allotment option and, therefore, have a naked short
position, the position can be closed out only by buying shares
in the open market. A naked short position is more likely to be
created if the underwriters are concerned that after pricing
there could be downward pressure on the price of the shares in
the open market that could adversely affect investors who
purchase in the offering.
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Penalty bids permit the underwriters to reclaim a selling
concession from a syndicate member when the common stock
originally sold by that syndicate member is purchased in
stabilizing or syndicate covering transactions to cover
syndicate short positions.
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These stabilizing transactions, syndicate covering transactions
and penalty bids may have the effect of raising or maintaining
the market price of our common stock or preventing or retarding
a decline in the market price of our common stock. As a result,
the price of our common stock in the open market may be higher
than it would otherwise be in the absence of these transactions.
Neither we nor the underwriters make any representation or
prediction as to the effect that the transactions described
above may have on the price of our common stock. These
transactions may be effected on The NASDAQ Global Select Market,
in the over-the-counter market or otherwise and, if commenced,
may be discontinued at any time.
S-23
Passive Market Making. In connection with this
offering, the underwriters and selected dealers, if any, who are
qualified market makers on The NASDAQ Global Select Market, may
engage in passive market making transactions in our common stock
on The NASDAQ Global Select Market in accordance with
Rule 103 of Regulation M under the Securities Act.
Rule 103 permits passive market making activity by the
participants in our common stock offering. Passive market making
may occur before the pricing of our offering, or before the
commencement of offers or sales of our common stock. Each
passive market maker must comply with applicable volume and
price limitations and must be identified as a passive market
maker. In general, a passive market maker must display its bid
at a price not in excess of the highest independent bid for the
security. If all independent bids are lowered below the bid of
the passive market maker, however, the bid must then be lowered
when purchase limits are exceeded. Net purchases by a passive
market maker on each day are limited to a specified percentage
of the passive market makers average daily trading volume
in the common stock during a specified period and must be
discontinued when that limit is reached. The underwriters and
other dealers are not required to engage in passive market
making and may end passive market making activities at any time.
Our Relationship with the
Underwriters. Sandler ONeill &
Partners, L.P. and Raymond James & Associates, Inc.
and some of their respective affiliates have performed and
expect to continue to perform financial advisory and investment
banking services for us in the ordinary course of their
respective businesses, and may have received, and may continue
to receive, compensation for such services.
Sandler ONeill & Partners, L.P. acted as our
financial advisor in connection with our proposed acquisition of
TriStone. Sandler ONeill & Partners, L.P. has
received a fee for such services and will receive an additional
fee upon the closing of the acquisition.
A Raymond James & Associates, Inc. affiliate provides
us with certain securities brokerage services on a networking
basis for the customers of the Banks subsidiary,
Investment Planning Consultants, Inc.
Our common stock is being offered by the underwriters, subject
to prior sale, when, as and if issued to an accepted by them,
subject to approval of certain legal matters by counsel for the
underwriters and other conditions.
LEGAL
MATTERS
The validity of the securities offered hereby will be passed
upon for us by Patton Boggs LLP and Robert L. Schumacher, Senior
Vice President and General Counsel to the Company. Certain legal
matters will be passed upon for the underwriters by Elias, Matz,
Tiernan & Herrick L.L.P.
EXPERTS
The consolidated financial statements of First Community
appearing in First Communitys Annual Report on
Form 10-K
for the year ended December 31, 2008 and the effectiveness
of First Communitys internal control over financial
reporting as of December 31, 2008 have been audited by
Dixon Hughes PLLC, independent registered public accounting
firm, as set forth in their reports thereon included therein,
and incorporated herein by reference. Such consolidated
financial statements are incorporated herein by reference in
reliance upon such reports given on the authority of such firm
as experts in accounting and auditing.
S-24
WHERE YOU
CAN FIND MORE INFORMATION
We file annual, quarterly and current reports, proxy statements
and other information with the SEC. Our SEC filings are
available to the public over the Internet at the SECs
website at http:/www.sec.gov. Copies of certain
information filed by us with the SEC are also available on our
website at
http://www.fcbinc.com.
Our website is not a part of this prospectus supplement or the
accompanying prospectus. You may also read and copy any document
we file at the SECs public reference room,
100 F Street, N.E., Washington, D.C. 20549.
Please call the SEC at
1-800-SEC-0330
for further information on the operation of the public reference
room.
The SEC allows us to incorporate by reference
information we file with it, which means that we can disclose
important information to you by referring you to other
documents. The information incorporated by reference is
considered to be a part of this prospectus supplement and
accompanying prospectus, and information that we file later with
the SEC will automatically update and supersede this
information. In all cases, you should rely on the later
information over different information included in this
prospectus supplement and accompanying prospectus.
We incorporate by reference the documents listed below and all
future filings we make with the SEC under Sections 13(a),
13(c), 14 or 15(d) of the Exchange Act, prior to the termination
of the offering, except to the extent that any information
contained in such filings is deemed furnished in
accordance with SEC rules, including, but not limited to,
information furnished under Items 2.02 and 7.01 of any
Current Report on
Form 8-K
including related exhibits:
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Our Annual Report on
Form 10-K
for the year ended December 31, 2008, filed on
March 13, 2009.
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Our Quarterly Report on
Form 10-Q
for the quarter ended March 31, 2009, filed on May 11,
2009.
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Our Current Reports on
Form 8-K
filed on January 5, 2009, January 16, 2009,
March 5, 2009, April 2, 2009, April 3, 2009 and
June 1, 2009.
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Portions of our proxy statement for the annual meeting of
stockholders held on April 28, 2009 that have been
incorporated by reference in our 2008 Annual Report on
Form 10-K.
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The description of our common stock contained in our
Registration Statement on
Form 8-A
as filed with the SEC pursuant to Sections 12(b) and 12(g)
of the Exchange Act, on May 20, 1991.
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You may request a copy of these filings, at no cost, by writing
or telephoning us at the following address:
First Community Bancshares, Inc.
One Community Place
Bluefield, Virginia
24605-0989
Attention: Robert L. Schumacher,
General Counsel
(276) 326-9000
You should rely only on the information contained or
incorporated by reference in this prospectus supplement and
accompanying prospectus. We have not authorized anyone else to
provide you with additional or different information.
S-25
PROSPECTUS
FIRST
COMMUNITY BANCSHARES, INC.
$100,000,000
Common
Stock, Preferred Stock,
Warrants
and Units
We may offer from time to time common stock, preferred stock,
warrants and units. We may also issue any of the common stock,
preferred stock, warrants or units upon the conversion, exchange
or exercise of any of the securities listed above. The aggregate
initial offering price of the securities that we offer will not
exceed $100,000,000.
We will offer the securities in amounts, at prices and on terms
to be determined by market conditions at the time of the
offering. We will provide the specific terms of these securities
in supplements to this prospectus. You should read this
prospectus and the accompanying prospectus supplement carefully
before you invest.
Our common stock is listed on The NASDAQ Global Select Market
under the symbol FCBC.
We may offer and sell these securities to or through one or more
underwriters, dealers and agents, or directly to purchasers, on
a continuous or delayed basis.
You should refer to the risk factors that may be included in
a prospectus supplement and in our periodic reports and other
information we file with the U.S. Securities and Exchange
Commission and carefully consider that information before
investing in our securities.
These securities will be our equity securities or unsecured
obligations of us, will not be savings accounts, deposits or
other obligations of any bank or savings association, and will
not be insured by the Federal Deposit Insurance Corporation or
any other governmental agency or instrumentality.
Neither the U.S. Securities and Exchange Commission nor
any state securities commission has approved or disapproved of
these securities or determined that this prospectus is truthful
or complete. Any representation to the contrary is a criminal
offense.
The date of this prospectus is October 6, 2008.
TABLE OF
CONTENTS
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ABOUT
THIS PROSPECTUS
This prospectus is part of a registration statement that we
filed with the U.S. Securities and Exchange Commission, or
the SEC, utilizing the shelf registration process.
Under this shelf process, we may sell, either separately or
together, any combination of the securities described in this
prospectus in one or more offerings. We may also issue any of
the common stock, preferred stock, warrants or units upon
conversion, exchange or exercise of any of the securities
mentioned above. The aggregate amount of securities that we may
offer under the registration statement is $100,000,000.00,
denominated in U.S. dollars or the equivalent in foreign
currencies, currency units or composite currencies.
This prospectus provides you with a general description of the
securities that we may offer. Each time we sell securities
pursuant to this prospectus, we will provide a prospectus
supplement that will contain specific information about the
offering and the specific terms of the securities being offered.
The prospectus supplement may also add, update or change
information contained in this prospectus. You should read both
this prospectus and the applicable prospectus supplement,
together with the additional information described under the
heading Where You Can Find More Information.
The registration statement that contains this prospectus,
including the exhibits to the registration statement, contains
additional information about us and the securities offered under
this prospectus. That registration statement can be read at the
SEC web site, our website, or at the SEC offices, which are
mentioned in this prospectus under the heading Where You
Can Find More Information.
The words we, our, us,
the Company, and First Community refer
to First Community Bancshares, Inc., unless we indicate
otherwise.
SPECIAL
NOTE REGARDING FORWARD-LOOKING STATEMENTS
This prospectus and any accompanying prospectus supplements
contain or incorporate by reference forward-looking statements
within the meaning of Section 27A of the Securities Act of
1933, as amended, or the Securities Act, and Section 21E of
the Securities Exchange Act of 1934, as amended, or the Exchange
Act. These forward-looking statements represent plans,
estimates, objectives, goals, guidelines, expectations,
intentions, projections and statements of our beliefs concerning
future events, business plans, objectives, expected operating
results and the assumptions upon which those statements are
based. Forward-looking statements include without limitation,
any statement that may predict, forecast, indicate or imply
future results, performance or achievements, and are typically
identified with words such as may,
could, should, will,
would, believe, anticipate,
estimate, expect, intend,
plan, or words or phases of similar meaning. We
caution that the forward-looking statements are based largely on
our expectations and are subject to a number of known and
unknown risks and uncertainties that are subject to change based
on factors which are, in many instances, beyond our control.
Actual results, performance or achievements could differ
materially from those contemplated, expressed, or implied by the
forward-looking statements.
The following factors, among others, could cause our financial
performance to differ materially from that expressed in such
forward-looking statements:
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the strength of the United States economy in general and the
strength of the local economies in which the Company conducts
operations;
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geopolitical conditions, including acts or threats of terrorism,
actions taken by the United States or other governments in
response to acts or threats of terrorism
and/or
military conflicts, which could impact business and economic
conditions in the United States and abroad;
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the effects of, and changes in, trade, monetary and fiscal
policies and laws, including interest rate policies of the Board
of Governors of the Federal Reserve System, or the Federal
Reserve Board; inflation, interest rate, market and monetary
fluctuations;
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the timely development of competitive new products and services
and the acceptance of these products and services by new and
existing customers;
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the willingness of users to substitute competitors
products and services for our products and services;
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the impact of changes in financial services policies, laws and
regulations, including laws, regulations and policies concerning
taxes, banking, securities and insurance, and the application
thereof by regulatory bodies;
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technological changes;
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the effect of acquisitions we may make, including, without
limitation, the failure to achieve the expected revenue growth
and/or
expense savings from such acquisitions;
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the growth and profitability of non-interest or fee income being
less than expected;
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changes in consumer spending and savings habits; and
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unanticipated regulatory or judicial proceedings.
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If one or more of the factors affecting our forward-looking
information and statements proves incorrect, then our actual
results, performance or achievements could differ materially
from those expressed in, or implied by, forward-looking
information and statements contained in this prospectus and in
the information incorporated by reference herein. Therefore, we
caution you not to place undue reliance on our forward-looking
information and statements. We will not update the
forward-looking statements to reflect actual results or changes
in the factors affecting the forwarding-looking statements.
FIRST
COMMUNITY BANCSHARES, INC.
We are a financial holding company incorporated under the laws
of the State of Nevada and serve as the holding company for
First Community Bank, a national banking association, or the
Bank, that conducts commercial banking operations within the
states of Virginia, West Virginia, North Carolina and Tennessee.
In addition, the Bank maintains a loan production office in
South Carolina. We also own Greenpoint Insurance Group, Inc., a
full-service insurance agency, and Investment Planning
Consultants, an investment advisory firm. First Community Bank
conducts its banking operations through 58 locations and four
wealth management offices and is regulated by The Office of the
Comptroller of the Currency.
Our principal executive offices are located at One Community
Place, Bluefield, Virginia 24605 and our telephone number is
(276) 326-9000.
RISK
FACTORS
An investment in our securities involves a high degree of risk.
Before making an investment decision, you should carefully read
and consider the risk factors incorporated by reference in this
prospectus, as well as those contained in any applicable
prospectus supplement, as the same may be updated from time to
time by our future filings with the SEC under the Exchange Act.
You should also refer to other information contained in or
incorporated by reference in this prospectus and any applicable
prospectus supplement, including our financial statements and
the related notes incorporated by reference herein. Additional
risks and uncertainties not presently known to us at this time
or that we currently deem immaterial may also materially and
adversely affect our business and operations.
USE OF
PROCEEDS
Unless otherwise specified in the applicable prospectus
supplement, we will use the proceeds from the sale of the
securities described in this prospectus for general corporate
purposes and to support our ongoing and future anticipated
growth. Pending such use, we may temporarily invest the proceeds
or use them to reduce short-term indebtedness. The applicable
prospectus supplement will provide more details on the use of
proceeds of any specific offering.
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DESCRIPTION
OF SECURITIES WE MAY OFFER
This prospectus contains summary descriptions of our common
stock, preferred stock, warrants and units that we may offer
from time to time. These summary descriptions are not meant to
be complete descriptions of each security. The particular terms
of any security will be described in the accompanying prospectus
supplement and other offering material. The accompanying
prospectus supplement may add, update or change the terms and
conditions of the securities as described in this prospectus.
DESCRIPTION
OF COMMON STOCK
General
This section of the prospectus describes the material terms and
provisions of our common stock. When we offer to sell shares of
our common stock, we will describe the specific terms of the
offering and the shares in a supplement to this prospectus. This
summary does not purport to be exhaustive and is qualified in
its entirety by reference to our articles of incorporation, as
amended, our bylaws, as amended, and the applicable provisions
of Nevada law.
Our authorized capital stock consists of 25,000,000 shares
of our common stock, par value $1.00 per share. Our authorized
capital stock may be increased and altered from time to time in
the manner prescribed by Nevada law upon the vote of at least a
majority of the shares entitled to vote on the matter. Our
shares of common stock are traded on The NASDAQ Global Select
Market under the symbol FCBC.
Each share of our common stock is entitled to one vote on all
matters submitted to a vote at any meeting of stockholders.
Holders of our common stock are entitled to receive dividends
when, as, and if declared by our board of directors out of funds
legally available therefor and, upon liquidation, to receive pro
rata all assets, if any, of the Company that are available for
distribution after the payment of creditors. Holders of our
common stock have no preemptive rights to subscribe for any
additional securities of any class that we may issue, nor any
conversion, redemption or sinking fund rights. Holders of our
common stock have no right to cumulate votes in the election of
directors. The rights and privileges of holders of our common
stock are subject to any preferences that our board of directors
may set for any series of preferred stock that we may issue in
the future.
Transactions
with Interested Persons
Under the Nevada Revised Statutes, or NRS, a transaction with
First Community (i) in which a First Community director or
officer has a direct or indirect interest, or
(ii) involving another corporation, firm or association in
which one or more of First Communitys directors or
officers are directors or officers of the corporation, firm or
association or have a financial interest in the corporation firm
or association, is not void or voidable solely because of the
directors or officers interest or common role in the
transaction if any one of the following circumstances exists:
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the fact of the common directorship, office or financial
interest is known to the board of directors or a committee of
the board of directors and a majority of disinterested directors
on the board of directors (or on the committee) authorized,
approved or ratified the transaction;
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the fact of the common directorship, office or financial
interest is known to the stockholders and disinterested
stockholders holding a majority of the shares held by
disinterested stockholders authorized, approved or ratified the
transaction;
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the fact of the common directorship, office or financial
interest is not known to the director or officer at the time the
transaction is brought to the board of directors for
action; or
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the transaction was fair to First Community at the time it is
authorized or approved.
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Control
Share Acquisition Provisions
Nevada law contains provisions that, under certain
circumstances, would preclude an acquirer of the shares of a
Nevada corporation who crosses one of three voting thresholds
(20%,
331/3%
or 50%) from obtaining voting rights with respect to such shares
unless the disinterested holders of a majority of the shares of
First Community held by disinterested stockholders votes to
accord voting power to such shares. The statute provides that,
if authorized by the articles of incorporation or bylaws in
effect on the 10th day following the acquisition of the
controlling interest by an acquiring person, First Community may
call for redemption of not less than all of the control shares
at the average price paid for the control shares if the acquirer
has not complied with certain procedural requirements or if the
control shares are not accorded full voting rights by the
stockholders.
Combinations
with Interested Stockholders
Under the NRS, except under certain circumstances, a corporation
is not permitted to engage in a business combination with any
interested stockholder for a period of three years
following the date such stockholder became an interested
stockholder. An interested stockholder is a person
or entity who owns 10% or more of the outstanding shares of
voting stock. Nevada permits a corporation to opt out of the
application of these business combination provisions by so
providing in the articles of incorporation. First Community
opted out of the application of these business combination
provisions in its articles of incorporation, as amended.
Instead, First Communitys articles of incorporation, as
amended, require the approval of holders of more than 85% of
First Communitys outstanding shares entitled to vote
thereon for any of the following transactions between First
Community and any individual, firm, corporation or other entity
(or any affiliate of any of the foregoing) that directly or
indirectly beneficially owns 15% or more of First
Communitys outstanding shares of stock entitled to vote
for the election of directors:
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any merger or consolidation of First Community or any subsidiary
of First Community with or into the firm, corporation or other
entity;
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any sale, lease, exchange, transfer or other disposition
(whether in a single transaction or a series of related
transactions) to or with the individual, firm, corporation or
other entity of any assets of First Community or any subsidiary
of First Community when such assets have an aggregate fair
market value of $5,000,000 or more;
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the issuance or transfer to or with the individual, firm,
corporation or other entity by First Community or any subsidiary
of First Community of any equity securities of First Community
or any subsidiary of First Community where any such equity
securities have an aggregate fair market value of $5,000,000 or
more;
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the adoption of any plan or proposal for the liquidation or
dissolution of First Community; or
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any agreement, contract or other arrangement providing for any
of the foregoing.
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Restrictions
on Ownership
The Bank Holding Company Act of 1956, as amended, or BHC Act,
generally would prohibit any company that is not engaged in
banking activities and activities that are permissible for a
bank holding company or a financial holding company from
acquiring control of First Community. Control is generally
defined as ownership of 25% or more of the voting stock or other
exercise of a controlling influence. Under the BHC Act, any
existing bank holding company would require the prior approval
of the Federal Reserve Board, before acquiring 5% or more of the
voting stock of First Community. In addition, the Change in Bank
Control Act of 1978, as amended, or CBC Act, prohibits a person
or group of persons from acquiring control of a bank
holding company unless the Federal Reserve Board has been
notified and has not objected to the transaction. Under a
rebuttable presumption established by the Federal Reserve Board,
the acquisition of 10% or more of a class of voting stock of a
bank holding company with a class of securities registered under
Section 12 of the Exchange Act, such as First Community,
would, under the circumstances set forth in the presumption,
constitute acquisition of control of the bank holding company.
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Transfer
Agent
The transfer agent and registrar for First Community common
stock is BNY Mellon Shareowner Services.
DESCRIPTION
OF PREFERRED STOCK
General
This section of the prospectus describes the material terms and
provisions of our preferred stock. When we offer to sell shares
of our preferred stock, we will describe the specific terms of
the offering and the shares in a supplement to this prospectus.
The prospectus supplement will also indicate whether the terms
and provisions described in this prospectus apply to the
particular series of preferred stock. This summary does not
purport to be exhaustive and is qualified in its entirety by
reference to our articles of incorporation, as amended, our
bylaws, as amended, and the applicable provisions of Nevada law.
Our authorized capital stock consists of 1,000,000 shares
of our preferred stock, with par value to be determined by our
board of directors. Under our articles of incorporation, as
amended, we may issue shares of preferred stock in one or more
series, as may be determined by our board of directors or a duly
authorized committee. Our board of directors or a committee
thereof may also establish, from time to time, the number of
shares to be included in each series and may fix the
designation, powers, preferences and rights of the shares of
each such series and any qualifications, limitations or
restrictions thereof, and may increase or decrease the number of
shares of any series without any further vote or action by the
stockholders. Any preferred stock we may issue will rank senior
to our common stock with respect to the payment of dividends or
amounts paid upon liquidation, dissolution or winding up of our
company, or both. In addition, any shares of our preferred stock
may have class or series voting rights. Under certain
circumstances, the issuance of shares of our preferred stock, or
merely the existing authorization of our board of directors to
issue shares of our preferred stock, may tend to discourage or
impede a merger or other change in control of our company. No
shares of preferred stock are currently outstanding. Each series
of preferred stock will be issued under a certificate of
designation, which will be filed with the SEC as an exhibit to a
document incorporated by reference in this prospectus
concurrently with the offering of such preferred stock. It is
also subject to our articles of incorporation, as amended, which
is incorporated by reference as an exhibit to this registration
statement.
Our board of directors is authorized to determine or fix from
time to time by resolution the following terms for each series
of preferred stock, which will be described in a prospectus
supplement:
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the designation of such series and the number of shares to
constitute such series;
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the par value of the shares of such series, if any;
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the voting rights, if any;
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the dividend rate;
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whether dividends are cumulative and, if so, the date from which
dividends cumulate;
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the payment date for dividends;
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redemption rights, the applicable redemption prices and such
other conditions of redemption;
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amounts payable to holders on our liquidation, dissolution or
winding up;
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the amount of the sinking fund, if any;
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whether the shares will be convertible or exchangeable into
equity, and, if so, the prices and terms of conversion and such
other terms and conditions of such conversion or exchange;
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whether future shares of the series or any future series or
other class of stock is subject to any restrictions, and, if so,
the nature of the restrictions;
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the conditions or restrictions, if any, upon the issuance of any
additional stock; and
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any other powers, preferences and relative, participating,
optional and other special rights, and any qualifications,
limitations and restrictions thereof.
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The preferred stock will be, when issued, fully paid and
nonassessable. Holders of preferred stock will not have any
preemptive or subscription rights to acquire more stock of the
Company.
The transfer agent, registrar, dividend disbursing agent and
redemption agent for shares of each series of preferred stock
will be named in the prospectus supplement relating to such
series.
The rights of holders of the preferred stock offered may be
adversely affected by the rights of holders of any shares of
preferred stock that may be issued in the future. The board of
directors may cause shares of preferred stock to be issued in
public or private transactions for any proper corporate purpose.
Examples of proper corporate purposes include issuances to
obtain additional financing in connection with acquisitions or
otherwise, and issuances to our officers, directors and
employees and our subsidiaries pursuant to benefit plans or
otherwise.
Rank
Unless otherwise specified in the prospectus supplement relating
to the shares of any series of preferred stock, such shares will
rank on an equal basis with each other series of preferred stock
and prior to the common stock as to dividends and distributions
of assets.
Dividends
The holders of each series of preferred stock will be entitled
to receive cash dividends if declared by our board of directors
out of funds we can legally use for payment The prospectus
supplement will indicate the dividend rates and the dates on
which we will pay dividends as to each series of preferred stock
The rates may be fixed or variable or both. If the dividend rate
is variable, the formula used to determine the dividend rate
will be described in the prospectus supplement. We will pay
dividends to the holders of record of each series of preferred
stock as they appear on the record dates fixed by our board of
directors.
Our board of directors will not declare and pay a dividend on
any series of preferred stock unless full dividends for all
series of preferred stock ranking equal as to dividends have
been declared or paid and sufficient funds are set aside for
payment If dividends are not paid in full to each series of
preferred stock, we will declare any dividends pro rata among
the preferred stock of each series and any series of preferred
stock ranking equal to any other series as to dividends. A
pro rata declaration means that the dividends we
declare per share on each series of preferred stock will bear
the same relationship to each other that the full accrued
dividends per share on each series of the preferred stock bear
to each other.
Unless all dividends on the preferred stock of each series have
been paid in full, we will not declare or pay any dividends or
set aside sums for payment of dividends or distributions on any
common stock or on any class of security ranking junior to a
series of preferred stock, except for dividends or distributions
paid for with securities ranking junior to the preferred stock.
We also will not redeem, purchase, or otherwise acquire any
securities ranking junior to a series of preferred stock as to
dividends or liquidation preferences, except by conversion into
or exchange for stock ranking junior to the series of preferred
stock.
Conversion
or Exchange
The applicable prospectus supplement for any series of preferred
stock will state the terms, if any, on which shares of that
series are convertible or exchangeable into shares of our common
stock or another series of our preferred stock. The terms of any
such conversion or exchange and any such preferred stock will be
described in the prospectus supplement relating to such series
of preferred stock.
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Redemption
If so specified in the applicable prospectus supplement, a
series of preferred stock may be redeemable at any time, in
whole or in part, at our option of or the holder thereof and may
be mandatory redeemed.
Any partial redemptions of preferred stock will be made in a way
that our board of directors decides is equitable.
Unless we default in the payment of the redemption price,
dividends will cease to accrue after the redemption date on
shares of preferred stock called for redemption and all rights
of holders of such shares will terminate, except for the right
to receive the redemption price.
Liquidation
Preference
Upon any voluntary or involuntary liquidation, dissolution or
winding up of First Community, holders of each series of
preferred stock will be entitled to receive distributions upon
liquidation in the amount set forth in the prospectus supplement
relating to such series of preferred stock. Such distributions
will be made before any distribution is made on any securities
ranking junior relating to liquidation, including common stock.
If the liquidation amounts payable relating to the preferred
stock of any series and any other securities ranking on a parity
regarding liquidation rights are not paid in full, the holders
of the preferred stock of such series and such other securities
will share in any such distribution of our available assets on a
ratable basis in proportion to the full liquidation preferences.
Holders of such series of preferred stock will not be entitled
to any other amounts from us after they have received their full
liquidation preference.
Voting
rights
The holders of shares of preferred stock will have no voting
rights, except:
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as otherwise stated in the prospectus supplement;
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as otherwise stated in the certificate of designation
establishing such series; or
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as required by applicable law.
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Under regulations adopted by the Federal Reserve Board, if the
holders of the preferred stock of any series become entitled to
vote for the election of directors because dividends on the
preferred stock of such series are in arrears, preferred stock
of such series could be deemed a class of voting
securities. In this instance, a holder of 25% or more of
the preferred stock of such series could then be subject to
regulation as a bank holding company in accordance with the BHC
Act. A holder of 5% or more of such series that otherwise
exercises a controlling influence over us could also
be subject to regulation under the BHC Act. In addition, at any
time a series of the preferred stock is deemed a class of voting
securities, (1) any other bank holding company may be
required to obtain the approval of the Federal Reserve Board to
acquire or retain 5% or more of the outstanding shares of such
series of preferred stock, and (2) any person other than a
bank holding company may be required to file with the Federal
Reserve Board under the CBC Act to acquire or retain 10% or more
of that series.
DESCRIPTION
OF WARRANTS
In this section, we describe the general terms and provisions of
the warrants for the purchase of preferred stock or common stock
that we may issue. Warrants issued pursuant to this prospectus
may be issued independently or together with any preferred stock
or common stock. Warrants sold with other securities may be
attached to or separate from the other securities. Each series
of warrants will be issued under a separate warrant agreement to
be entered into between us and a warrant agent who will be
specified in the warrant agreement and in the prospectus
supplement. The warrant agent will act solely as our agent in
connection with the warrants of that series and will not assume
any obligation or relationship of agency or trust for or with
any holders or beneficial owners of warrants.
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This summary of some of the terms and other provisions of the
warrants that may be issued is not complete and is qualified in
its entirety by reference to the applicable warrant agreement
and related warrant certificate and the prospectus supplement,
which both will be filed with the SEC. You should refer to this
prospectus, the prospectus supplement, the warrant agreement,
including the forms of securities warrant certificate
representing the securities warrants, relating to the specific
warrants that we may offer for the complete terms of the warrant
agreement and the warrants. For more information on how you can
obtain copies of the applicable warrant agreement, if we offer
warrants, see Where You Can Find More Information.
We urge you to read the applicable warrant agreement and the
applicable prospectus supplement and any other offering material
in their entirety.
The applicable prospectus supplement related to an issuance of
warrants will describe the following terms, where applicable, of
the warrants in respect of which this prospectus is being
delivered:
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the title of the warrants;
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the aggregate number of the warrants;
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the price or prices at which the warrants will be issued;
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the currency or currencies (including composite currencies) in
which the price or prices of the warrants may be payable;
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the designation, amount and terms of the offered securities
purchasable upon exercise of the warrants;
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if applicable, the date on and after which the warrants and the
offered securities purchasable upon exercise of the warrants
will be separately transferable;
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the terms of the securities purchasable upon exercise of such
warrants and the procedures and conditions relating to the
exercise of such warrants;
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any provisions for adjustment of the number or amount of
securities receivable upon exercise of the warrants or the
exercise price of the warrants;
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the price or prices at which and currency or currencies in which
the offered securities purchasable upon exercise of the warrants
may be purchased;
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the date on which the right to exercise the warrants shall
commence and the date on which the right shall expire;
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if applicable, the minimum or maximum amount of the warrants
that may be exercised at anyone time;
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information with respect to book-entry procedures, if
any; and
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any other material terms of the warrants, including terms,
procedures and limitations relating to the exchange and exercise
of the warrants.
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The prospectus supplement relating to any warrants to purchase
equity securities may also include, if applicable, a discussion
of certain U.S. federal income tax and ERISA considerations.
Warrants for the purchase of preferred stock and common stock
will be offered and exercisable for U.S. dollars only.
Warrants will be issued in registered form only.
Each warrant will entitle its holder to purchase the number of
shares of preferred stock or common stock at the exercise price
set forth in, or calculable as set forth in, the applicable
prospectus supplement and warrant agreement.
After the close of business on the expiration date, unexercised
warrants will become void. We will specify the place or places
where, and the manner in which, warrants may be exercised in the
applicable prospectus supplement.
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Upon receipt of payment and the warrant certificate properly
completed and duly executed at the corporate trust office of the
warrant agent or any other office indicated in the applicable
prospectus supplement, we will, as soon as practicable, forward
the purchased securities. If less than all of the warrants
represented by the warrant certificate are exercised, a new
warrant certificate will be issued for the remaining warrants.
Prior to the exercise of any warrants to purchase preferred
stock or common stock, holders of the warrants will not have any
of the rights of holders of the preferred stock or common stock
purchasable upon exercise, including, the right to vote or to
receive any payments of dividends on the preferred stock or
common stock purchasable upon exercise.
DESCRIPTION
OF UNITS
In this section, we describe the general terms and provisions of
the units that we may offer. We may issue units comprising one
or more of the securities described in this prospectus in any
combination. Each unit will be issued so that the holder of the
unit also is the holder of each security included in the unit.
Thus, the holder of a unit will have the rights and obligations
of a holder of each included security. The unit agreement under
which a unit is issued may provide that the securities included
in the unit may not be held or transferred separately at any
time or at any time before a specified date.
The applicable prospectus supplement will specify the following
terms of any units in respect of which this prospectus is being
delivered:
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the terms of the units and of any of the common stock, preferred
stock and warrants comprising the units, including whether and
under what circumstances the units may be traded separately;
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a description of the terms of any unit agreement governing the
units;
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a description of the provisions for the payment, settlement,
transfer or exchange of the units or the securities comprising
those units; and
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whether the units will be issued fully registered or in global
form.
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The description in the applicable prospectus supplement and
other offering material of any units we offer will not
necessarily be complete and will be qualified in its entirety by
reference to the applicable unit agreement, which will be filed
with the SEC if we offer units. For more information on how you
can obtain copies of the applicable unit agreement if we offer
units, see Where You Can Find More Information. We
urge you to read the applicable unit agreement and the
applicable prospectus supplement and any other offering material
in their entirety.
PLAN OF
DISTRIBUTION
We may sell the securities described in this prospectus to or
through one or more agents, underwriters, dealers or directly to
purchasers on a continuous or delayed basis.
The distribution of the securities may be effected from time to
time in one or more transactions at a fixed price or prices,
which may be changed from time to time, at market prices
prevailing at the times of sale, at prices related to such
prevailing market prices or at negotiated prices.
Each time that we use this prospectus to sell our securities, we
will also provide a prospectus supplement. For each series of
securities, the applicable prospectus supplement will set forth
the terms of the offering including:
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the public offering price;
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the name or names of any underwriters, dealers or agents;
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the purchase price of the securities;
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the proceeds from the sale of the securities to us;
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any underwriting discounts, agency fees, or other compensation
payable to underwriters or agents;
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any discounts or concessions allowed or reallowed or repaid to
dealers; and
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the securities exchanges on which the securities will be listed,
if any.
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If we use underwriters in the sale of securities, the securities
will be acquired by the underwriters for their own account. The
underwriters may then resell the securities in one or more
transactions at a fixed public offering price or at varying
prices determined at the time of sale or thereafter. The
securities may be either offered to the public through
underwriting syndicates represented by managing underwriters, or
directly by underwriters. The obligations of the underwriters to
purchase the securities will be subject to certain conditions.
The underwriters will be obligated to purchase all the
securities offered if they purchase any securities. The public
offering price and any discounts or concessions allowed or
re-allowed or paid to dealers may be changed from time to time.
If we use dealers in the sale of securities, we will sell
securities to such dealers as principals. The dealers may then
resell the securities to the public at varying prices to be
determined by such dealers at the time of resale. We may solicit
offers to purchase the securities directly, and we may sell the
securities directly to institutional or other investors, who may
be deemed underwriters within the meaning of the Securities Act
with respect to any resales of those securities. The terms of
these sales will be described in the applicable prospectus
supplement. If we use agents in the sale of securities, unless
otherwise indicated in the prospectus supplement, they will use
their reasonable best efforts to solicit purchases for the
period of their appointment. Unless otherwise indicated in a
prospectus supplement, if we sell directly, no underwriters,
dealers or agents would be involved. We will not make an offer
of securities in any jurisdiction that does not permit such an
offer.
We may grant underwriters who participate in the distribution of
securities an option to purchase additional securities to cover
overallotments, if any, in connection with the distribution. Any
underwriter may engage in overallotment, stabilizing
transactions, short covering transactions and penalty bids in
accordance with SEC orders, rules and regulations and applicable
law. To the extent permitted by applicable law and SEC orders,
rules and regulations, an overallotment involves sales in excess
of the offering size, which create a short position. Stabilizing
transactions permit bids to purchase the underlying security so
long as the stabilizing bids do not exceed a specified maximum.
To the extent permitted by applicable law and SEC orders, rules
and regulations, short covering transactions involve purchases
of the common stock in the open market after the distribution is
completed to cover short positions. Penalty bids permit the
underwriters to reclaim a selling concession from a dealer when
the common stock originally sold by the dealer is purchased in a
covering transaction to cover short positions. Those activities
may cause the price of the common stock to be higher than it
would otherwise be. If commenced, the underwriters may
discontinue any of the activities at any time.
Any underwriters who are qualified market makers on the NASDAQ
Stock Market may engage in passive market making transactions in
the common stock on the NASDAQ Stock Market in accordance with
Rule 103 of Regulation M, during the business day
prior to the pricing of the offering, before the commencement of
offers or sales of the common stock. Passive market makers must
comply with applicable volume and price limitations and must be
identified as passive market makers. In general a passive market
maker must display its bid at a price not in excess of the
highest independent bid for such security; if all independent
bids are lowered below the passive market makers bid,
however, the passive market makers bid must then be
lowered when certain purchase limits are exceeded.
Underwriters, dealers and agents that participate in any
distribution of securities may be deemed to be underwriters as
defined in the Securities Act. Any discounts, commissions or
profit they receive when they resell the securities may be
treated as underwriting discounts and commissions under the
Securities Act of 1933. Only underwriters named in the
prospectus supplement are underwriters of the securities offered
in the prospectus supplement. We may have agreements with
underwriters, dealers and agents to indemnify them against
certain civil liabilities, including certain liabilities under
the Securities Act, or to contribute with respect to payments
that they may be required to make.
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We may authorize underwriters, dealers or agents to solicit
offers from certain institutions whereby the institution
contractually agrees to purchase the securities from us on a
future date at a specific price. This type of contract may be
made only with institutions that we specifically approve. Such
institutions could include banks, insurance companies, pension
funds, investment companies and educational and charitable
institutions. The underwriters, dealers or agents will not be
responsible for the validity or performance of these contracts.
Each series of securities will be a new issue of securities and
will have no established trading market, other than our common
stock, which is listed on The NASDAQ Global Select Market.
Unless otherwise specified in the applicable prospectus
supplement, the securities will not be listed on any exchange.
It has not presently been established whether the underwriters,
if any, of the securities will make a market in the securities.
If the underwriters make a market in the securities, such market
making may be discontinued at any time without notice. No
assurance can be given as to the liquidity of the trading market
for the securities.
Agents, dealers and underwriters may be entitled to
indemnification by us against certain civil liabilities,
including liabilities under the Securities Act, or to
contribution with respect to payments which the agents, dealers
or underwriters may be required to make in respect thereof.
Agents, dealers or underwriters may be customers of, engage in
transactions with, or perform services for us and our
subsidiaries in the ordinary course of business.
LEGAL
MATTERS
Patton Boggs LLP, Washington, D.C., will pass upon certain
legal matters with respect to the securities offered by us from
time to time pursuant to this prospectus, unless we indicate
otherwise in a prospectus supplement. The name of the law firm
advising any underwriters or agents with respect to certain
issues relating to any offering will be set forth in the
applicable prospectus supplement.
EXPERTS
The consolidated financial statements incorporated in this
prospectus by reference from First Community Bancshares
Inc.s Annual Report on
Form 10-K
for the two years in the period ended December 31, 2007
have been audited by Dixon Hughes PLLC, independent registered
public accounting firm, and for the year ended December 31,
2005 have been audited by Ernst & Young LLP,
independent registered public accounting firm, as stated in
their respective reports, which are incorporated herein by
reference, and have been so incorporated in reliance upon such
reports of such firms given upon their authority as experts in
accounting and auditing.
WHERE YOU
CAN FIND MORE INFORMATION
This prospectus is a part of a registration statement on
Form S-3
filed by us with the SEC under the Securities Act.
This prospectus does not contain all the information set forth
in the registration statement, certain parts of which are
omitted in accordance with the rules and regulations of the SEC.
For further information with respect to us and the securities
offered by this prospectus, reference is made to the
registration statement. Statements contained in this prospectus
concerning the provisions of such documents are necessarily
summaries of such documents and each such statement is qualified
in its entirety by reference to the copy of the applicable
document filed with the SEC.
We file periodic reports, proxy statements and other information
with the SEC. Our filings with the SEC are available to the
public over the Internet at the SECs website at
http://www.sec.gov.
Our filings with the SEC are also available to the public on our
website at www.fcbinc.com, as well as through document retrieval
services. You may read and copy any periodic reports, proxy
statements or other information we file at the SECs public
reference room in Washington, D.C., which is located at the
following address: Public Reference Room, 100 F Street
N.E., Washington, D.C. 20549. You can request copies of
these documents, upon payment of a duplicating fee, by writing
to the SEC. Please call the SEC at
1-800-SEC-0330
for further information on the operation of the SECs
public reference rooms.
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We incorporate by reference into this prospectus the
information we file with the SEC, which means that we can
disclose important information to you by referring you to those
documents. The information incorporated by reference is an
important part of this prospectus and information that we file
subsequently with the SEC will automatically update this
prospectus. We incorporate by reference the documents listed
below and any filings we make with the SEC under
Sections 13(a), 13(c), 14, or 15(d) of the Exchange Act,
after the initial filing of the registration statement that
contains this prospectus and prior to the time that we sell all
the securities offered by this prospectus, provided, however,
that we are not incorporating any information furnished under
either Item 2.02 or Item 7.01 of any Current Report on
Form 8-K:
(a) Our Annual Report on
Form 10-K
for the year ended December 31, 2007, filed on
March 13, 2008.
(b) Our Quarterly Report on
Form 10-Q
for the quarter ended March 31, 2008, filed on May 12,
2008, and our Quarterly Report on Form
10-Q for the
quarter ended June 30, 2008, filed on August 11, 2008.
(c) Our Current Reports on
Form 8-K
filed on February 25, 2008; February 20, 2008;
February 26, 2008; May 27, 2008; May 30, 2008;
June 4, 2008; July 31, 2008; August 5, 2008; and
August 26, 2008.
(d) Portions of our proxy statement for the annual meeting
of stockholders held on April 29, 2008, that have been
incorporated by reference in our 2007 Annual Report on
Form 10-K.
(e) The description of our common stock contained in our
Form 8-A
as filed with the SEC pursuant to Sections 12(b) and 12(g)
of the Exchange Act, on May 20, 1991.
You may request a copy of these filings (other than an exhibit
to a filing unless that exhibit is specifically incorporated by
reference into that filing) at no cost, by writing to or
telephoning us at the following address and telephone number:
First Community Bancshares, Inc.
One Community Place
Bluefield, Virginia
24605-0989
Attention: Robert L. Schumacher,
General Counsel
(276) 326-9000
You should rely only on the information contained or
incorporated by reference in this prospectus and the applicable
prospectus supplement. We have not authorized anyone else to
provide you with additional or different information. We may
only use this prospectus to sell securities if it is accompanied
by a prospectus supplement. We are only offering these
securities in states where the offer is permitted. You should
not assume that the information in this prospectus or the
applicable prospectus supplement is accurate as of any date
other than the dates on the front of those documents.
12
Shares
Common
Stock
PROSPECTUS SUPPLEMENT
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RAYMOND JAMES
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, 2009.