First Community Bancshares, Inc. (NASDAQ: FCBC) (www.fcbinc.com) today reported a net loss for the quarter ended September 30, 2009, of $11.30 million, or $0.65 per common share, and a net loss available to common shareholders for the third quarter of 2009 of $12.31 million, or $0.71 per common share. Net loss and net loss available to common shareholders amounted to $3.67 million, or $0.26 per share, and $5.83 million, or $0.42 per share, respectively, for the nine months ended September 30, 2009. The losses recognized during the three and nine months ended September 30, 2009, were due to after-tax securities impairment charges of $19.33 million and $21.83 million, respectively, and are discussed in more detail below. Core earnings for the third quarter of 2009 amounted to $4.32 million, or $0.25 per diluted share, and $14.53 million, or $1.04 per diluted share for the nine months ended September 30, 2009 (see the attached reconciliation of GAAP to core earnings).

Third Quarter 2009 Highlights -

• Repaid the U. S. Treasury''s $41.50 million preferred stock investment
• Completed the TriStone Community Bank acquisition and integration
• Continued stable and strong asset quality metrics with a ratio of non-performing assets to total assets at September 30, 2009 of 71 basis points
• Net interest margin increased to 3.68%, up six basis points from the quarter ended June 30, 2009
• Declared cash dividend of $0.10 per share of common stock
• First Community Bank, N. A. remains “well-capitalized” as defined by regulatory measures with a total risk-based capital ratio of 11.4% and a Tier 1 leverage ratio of 8.7% at September 30, 2009

Commenting on third quarter results, Chief Executive Officer John M. Mendez said, “We have achieved a great deal in the third quarter and throughout 2009. The TriStone Community Bank acquisition, our continued loan quality, our capital raise and repayment of the TARP investment have resulted in a stronger balance sheet with greater earnings capacity, which has positioned us for success in 2010. The impairment charges are certainly a distraction and provide additional confirmation of how difficult the economy has been for the financial services industry. Although we have not completely eliminated our exposure to our investment securities, we believe that we have significantly reduced an element of risk in our balance sheet and will evaluate our position in these securities very closely in the fourth quarter.”

On July 31, 2009, the Company completed its acquisition of TriStone Community Bank in Winston-Salem, North Carolina. TriStone Community Bank''s Chief Executive Officer, Simpson O. “Skip” Brown, remains with First Community Bank and has assumed the role of Regional President for the Winston-Salem and East Tennessee areas.

Net Interest Income

Tax-equivalent net interest margin for the third quarter of 2009 was 3.68%. Net interest income was $17.54 million, an increase of $1.21 million, or 7.43%, from the third quarter of 2008. Interest income was $27.13 million, an increase of $580 thousand, or 2.18%, from the third quarter of 2008. The yield on loans dropped to 6.14% from 6.53% while average loans increased $187.75 million to $1.36 billion from the third quarter 2008, which was reflective of the acquisitions of Coddle Creek Financial and TriStone Community Bank in November 2008 and July 2009, respectively. Yields on loans have dropped as a direct result of the precipitous declines in market rates of interest as the prime lending rate decreased 175 basis points to 3.25% in the third quarter of 2009 from 5.00% in the third quarter of 2008.

The Company also maintained an average federal funds sold position of $65.52 million through the third quarter. This increased liquidity position continued to have a negative impact on net interest margin.

Third quarter interest expense was $9.59 million, a decrease of $633 thousand, or 6.60%, from the third quarter of 2008. Third quarter deposit costs increased $314 thousand compared to the third quarter of 2008, while the average rate paid on interest-bearing deposits decreased 44 basis points to 1.93%. Compared to the third quarter of 2008, interest costs on borrowings decreased $947 thousand to $2.60 million, while the average balance decreased $69.48 million due to the redemption of various wholesale borrowings and the Company''s relatively liquid balance sheet. The cost of interest-bearing liabilities decreased 45 basis points during the third quarter of 2009 compared to the third quarter of 2008. Average interest bearing liabilities increased $205.44 million, or 13.01%, compared with the third quarter of 2008, and included a decrease of $20.56 million in Federal Home Loan Bank (“FHLB”) borrowings.

Non-interest Income

During the third quarter of 2009, wealth management revenues increased 1.46% to $971 thousand, and at September 30, 2009 the Wealth Management Division reported $841 million in assets under management. Service charges on deposit accounts were $3.66 million for the third quarter of 2009, a decrease of $149 thousand, or 4.07%, from the third quarter of 2008. Insurance commissions were $1.57 million for the third quarter of 2009, an increase of $327 thousand, or 26.37%, from the same period in 2008. These revenues reflect GreenPoint Insurance Group''s acquisition of Carr & Hyde Insurance in December 2008. Also, during the third quarter the Company recognized a preliminary gain on the acquisition of TriStone Community Bank of approximately $4.49 million.

Investment Securities Impairment Charges

The Company maintains a portfolio of investment securities that include pooled trust preferred securities. These securities generally represent obligations of banks and, to a lesser extent, insurance companies and real estate investment trusts. For the year ended December 31, 2008 and the six months ended June 30, 2009, the Company previously reported non-cash other-than-temporary impairment (“OTTI”) charges of $15.46 million and $3.37 million, respectively, on its pooled trust preferred securities. During the third quarter of 2009, an increasing number of the banks and other companies that have issued obligations that collateralize the pooled trust preferred securities that the Company holds have defaulted or deferred the payment of interest, which adversely impacted the cash flows from such pooled trust preferred securities.

In order to enhance its methodology and assumptions for predicting individual issuer defaults within each of the securities, the Company recently migrated to a proprietary prediction analysis that considers many data points regarding the individual banks underlying the securities. Application of this predictive analysis to our pooled trust preferred securities portfolio resulted in an increase of projected default rates by issuers of the securities.

During the third quarter of 2009, the Company recognized pre-tax credit-related net impairment losses on its pooled trust preferred securities of $30.53 million, or $1.10 per common share on an after-tax basis. Both the credit-related net impairment losses and other comprehensive income (“OCI”) noncredit-related losses primarily reflect the continuing deterioration of some of the banks that underlie these securities. The majority of the impairment recognized in the third quarter is related to the pooled trust preferred securities where the underlying collateral is predominantly from banking institutions. The pooled trust preferred securities were all originally rated “A” and had a carrying value at 21% of par at September 30, 2009. The Company also recognized additional impairment of $284 thousand on two equity securities in the third quarter.

Non-interest Expenses

Excluding OTTI, non-interest expenses for the third quarter of 2009 increased $3.38 million, or 23.48%, from the third quarter of 2008. The large increase is due to increased federal Deposit Insurance Corporation (“FDIC”) deposit insurance premiums and merger-related expenses. Salaries and employee benefits increased $489 thousand, or 6.63%, from the third quarter of 2008. Coddle Creek Financial branches accounted for an increase in salaries and employee benefits of $294 thousand, TriStone Community Bank branches accounted for an increase of $148 thousand, and GreenPoint Insurance Group''s acquisitions accounted for an increase of $309 thousand. The remainder of the Company showed an overall decrease in salaries and benefits of $262 thousand.

Occupancy and furniture and equipment expenses decreased $27 thousand, or 1.23%, during the third quarter of 2009 as compared to the same period in the prior year. Other operating expenses increased $268 thousand, or 5.86%, compared to the third quarter of 2008. The third quarter of 2009 efficiency ratio was 59.04% compared to 56.62% in the third quarter of 2008.

The acquisition of TriStone Community Bank was completed in July 2009 and its integration is largely complete. The Company is on track to realize its projected pre-tax cost savings of approximately $1.00 million, or 25%. During the third quarter of 2009 the Company incurred expenses related to the merger of approximately $1.51 million.

Credit Quality

The Company''s loan quality measures at September 30, 2009 continue to compare favorably to the Company''s peers and the industry. Total loan delinquencies of 30 days or more, including non-accrual loans, as a percent of total loans were 1.62% at September 30, 2009 compared with 1.35% at June 30, 2009. The ratio of allowance for loan losses as a percent of loans held for investment was 1.25% at September 30, 2009 compared with 1.31% at June 30, 2009. Accounting for the acquisition of TriStone Community Bank caused this ratio to decline by approximately 13 basis points, as no allowance was recorded at acquisition. Non-performing assets increased slightly to $16.23 million at September 30, 2009, or 0.71% of total assets, from $15.26 million at June 30, 2009. Non-performing loans as a percentage of loans held for investment decreased to 0.88% at September 30, 2009, compared with 0.92% at June 30, 2009.

Balance Sheet

Since December 31, 2008, consolidated assets have increased $165.03 million to $2.30 billion at September 30, 2009, due to the acquisition of TriStone Community Bank, an increasing deposit base, and $61.67 million in new capital from the June 2009 equity offering. Total stockholders'' equity for the Company was $265.54 million, resulting in a book value per common share outstanding of $15.02 at September 30, 2009, compared to $220.34 million and $15.46 per common share at December 31, 2008. In September 2009, the Company''s board of directors announced a $0.10 per share dividend on its common stock. 2009 is the Company''s 24^th consecutive year of paying dividends to common shareholders.

The Company will host an investor and media teleconference and webcast on Thursday, October 29, 2009 at 11:00 a.m. To access the teleconference, the toll-free number is (877) 407-8033. Alternatively, individuals may listen to the live or archived webcast of the conference call. To listen to the webcast, visit www.fcbinc.com and follow the link under the Current News Releases section. The Company''s press release and financial summary will be available in this section, as well. Copies of the Company''s third quarter 2009 earnings press release and financial summary will also be made available upon request via fax, email or postal service mail. To request a copy, contact David D. Brown, Chief Financial Officer, at (800) 425-0839.

First Community Bancshares, Inc., headquartered in Bluefield, Virginia, is a $2.30 billion financial holding company and is the parent company of First Community Bank, N. A. First Community Bank, N. A. operates through sixty-one locations in the five states of Virginia, West Virginia, North Carolina, South Carolina, and Tennessee. First Community Bank, N. A. offers wealth management services through its Trust & Financial Services Division and Investment Planning Consultants, Inc., a registered investment advisory firm which offers wealth management and investment advice. The Company''s wealth management division managed assets with a market value of $841 million at September 30, 2009. First Community is also the parent company of GreenPoint Insurance Group, Inc., a full-service insurance agency located in High Point, North Carolina. First Community Bancshares, Inc.''s common stock is traded on the NASDAQ Global Select Market under the symbol, “FCBC”. Additional investor information can be found on the Internet at www.fcbinc.com.

This news release may include forward-looking statements.These forward-looking statements are based on current expectations that involve risks, uncertainties and assumptions.Should one or more of these risks or uncertainties materialize or should underlying assumptions prove incorrect, actual results may differ materially.These risks include:changes in business or other market conditions; the timely development, production and acceptance of new products and services; the challenge of managing asset/liability levels; the management of credit risk and interest rate risk; the difficulty of keeping expense growth at modest levels while increasing revenues; and other risks detailed from time to time in the Company''s Securities and Exchange Commission reports, including but not limited to the Annual Report on Form 10-K for the most recent year ended.Pursuant to the Private Securities Litigation Reform Act of 1995, the Company does not undertake to update forward-looking statements contained within this news release.

Contacts:

First Community Bancshares, Inc.
David D. Brown
(276) 326-9000