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Earnings estimates for First Community Bancshares, Inc. (Bluefield) (NASDAQ:FCBC) 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 merger-related charges.

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%.

Reasonable Valuation

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. (NASDAQ:CFNL) and IberiaBank Corp. (NASDAQ:IBKC).

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Source: First Community Bancshares: Earnings Estimates Surge