Earnings estimates for
First Community Bancshares, Inc. (Bluefield)
) have advanced since this regional bank announced its third
straight quarter with a positive earnings surprise. Moreover, with
a P/B multiple as low as 0.90, this Zacks #1 Rank (Strong Buy) is
an attractive pick for value investors.
Impressive 3Q Results
On Nov 2, First Community Bancshares reported third quarter core
earnings of 44 cents per share, outpacing the Zacks Consensus
Estimate by 25.7% and last year's earnings by 57.1%. The
better-than-expected results were driven by growth in the top line,
partially offset by higher operating expenses.
Net interest income rose 49.2% from the year-ago quarter to $26.5
million. Similarly, net interest margin was up 71 basis points
(bps) to 4.48%. Moreover, non-interest income jumped 38.4% to $11.2
million. Yet, non-interest expenses rose 26.6% to $20.3 million, as
a result of higher salaries and employee benefit costs, including
First Community Bancshares witnessed a decent improvement in its
asset quality during the quarter. As of Sep 30, 2012, allowance for
loan losses as a percentage of total loans was 1.47%, down 45 bps
year over year. Likewise, nonperforming loans were 1.66% to total
loans, falling 7 bps from the prior-year quarter.
Surge in Earnings Estimates
Over the last 60 days, the Zacks Consensus Estimate for 2012
advanced 11.3% to $1.48 per share with all 4 estimates revised
upward. For 2013, the Zacks Consensus Estimate improved 7.1% to
$1.50 on 3 upward revisions out of 5 total estimates.
The Zacks Consensus Estimate for 2012 reflects year-over-year
growth of about 37.9%.
Along with an attractive P/B multiple, First Community Bancshares
has a forward P/E ratio of 10.2 (a P/E ratio under 15.0 and P/B
ratio below 3.0 generally indicate value). Moreover, the company
has a trailing 12-month ROE of 8.1%, compared with the peer group
average of 7.9%. This implies that the company reinvests its
earnings more efficiently than its industry peers.
Additionally, First Community Bancshares currently enjoys a decent
dividend yield of 2.9%. Therefore, in addition to being a value
stock, the company offers a steady income opportunity.
First Community Bancshares is a financial holding company for First
Community Bank. The company, through its 74 banking locations,
provides commercial and consumer banking services and products
along with wealth management and insurance services. The company
has a market capitalization of about $302.5 million. Other banks
with Zacks #1 Rank (Strong Buy) include Cardinal Financial Corp. (
) and IberiaBank Corp. (
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