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Earnings momentum for First Community Bancshares, Inc. (Bluefield) (FCBC - Snapshot Report) has advanced since this regional bank posted strong second quarter results, which included year-over-year earnings growth of 55%. Moreover, positive estimate revisions over the last 30 days helped the stock hit its 52-week high on July 17, 2012. With a P/B multiple as low as 0.74, this Zacks #1 Rank (Strong Buy) stock is an attractive pick for value investors.

Remarkable Second Quarter Results

On July 27, First Community Bancshares reported second quarter 2012 earnings of 31 cents per share that outpaced the Zacks Consensus Estimate of 29 cents by 6.9%. This was also substantially better than last year’s 20 cents. Results improved on the back of higher net interest income, partially offset by higher expenses and a dip in non-interest income.

Net interest income surged 9.7% from the year-ago quarter to $19.5 million. Similarly, net interest margin was up 10 basis points to 3.93%. Nevertheless, non-interest income fell 26.6% to $8.3 million. Furthermore, non-interest expenses jumped 13.5% to $20.1 million as a result of higher salaries and employee benefit costs.

First Community Bancshares witnessed a decent improvement in its asset quality during the quarter. The provision for loan losses was $1.6 million, down 65.5% on a year-over-year basis. As of June 30, 2012, allowance for loan losses as a percentage of total loans was 1.45%, compared with 1.88% as of June 30, 2011.

Earnings Estimates Rising

Over the last 30 days, the Zacks Consensus Estimate for 2012 increased 6.4% to $1.33 per share with all four estimates revised upward. This implies a year-over-year growth of 23.8%. For 2013, three of four estimates moved north over the same timeframe, helping the Zacks Consensus Estimate improve 5.3% to $1.40.

Reasonable Valuation

Along with a P/B multiple of 0.74, First Community Bancshares has a forward P/E ratio of 10.8 (A P/E ratio under 15.0 and P/B ratio below 3.0 generally indicate value).

Additionally, First Community Bancshares currently enjoys a robust dividend yield of 3.02%. Therefore, in addition to being a value stock, the company also offers a steady income opportunity.

Headquartered in Bluefield, Virginia, First Community Bancshares is a financial holding company and conducts its banking operations through 55 locations. The company provides commercial and consumer banking services and products along with wealth management and insurance services. With a market capitalization of about $256.3 million, First Community Bancshares competes with Community Trust Bancorp Inc. (CTBI) and Monarch Financial Holdings Inc. (MNRK).

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