First Community Bancshares, Inc. Announces Third Quarter 2009 Results

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 [phone]. 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 [phone].

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.

�
First Community Bancshares, Inc.
Condensed Consolidated Statements of Income/(Loss)
�
�
(Unaudited)			�	Three Months Ended							�	Nine Months Ended
(In Thousands, Except Share and Per Share Data)				September 30,								September 30,
	�			2009			�	2008				2009			�	2008
																		�
Interest		Interest and fees on loans held for investment		$	21,064			$	19,266			$	60,619			$	60,394
Income		Interest on securities-taxable			4,562				5,567				14,903				17,101
		Interest on securities-nontaxable			1,449				1,708				4,527				5,775
		Interest on federal funds sold and deposits		�	55	�		�	9	�		�	133	�		�	260	�
		Total interest income		�	27,130	�		�	26,550	�		�	80,182	�		�	83,530	�
Interest		Interest on deposits			6,998				6,684				21,641				22,543
Expense		Interest on borrowings		�	2,596	�		�	3,543	�		�	8,251	�		�	11,679	�
		Total interest expense		�	9,594	�		�	10,227	�		�	29,892	�		�	34,222	�
		Net interest income			17,536				16,323				50,290				49,308
		Provision for loan losses		�	3,418	�		�	3,461	�		�	8,057	�		�	4,721	�
		Net interest income after provision for loan losses		�	14,118	�		�	12,862	�		�	42,233	�		�	44,587	�
Non-Interest		Wealth management income			971				957				3,088				2,954
Income		Service charges on deposit accounts			3,659				3,808				10,307				10,370
		Other service charges and fees			1,156				1,040				3,467				3,225
		Insurance commissions			1,567				1,240				5,523				3,730
		Net impairment losses recognized in earnings			(30,811	)			(51	)			(34,796	)			(51	)
		Security gains			866				163				2,930				2,133
		Acquisition gain			4,493				-				4,493				-
		Other operating income		�	815	�		�	675	�		�	1,750	�		�	2,336	�
		Total non-interest income		�	(17,284	)		�	7,832	�		�	(3,238	)		�	24,697	�
Non-Interest		Salaries and employee benefits			7,860				7,371				23,131				22,741
Expense		Occupancy expense of bank premises			1,266				1,297				4,202				3,717
		Furniture and equipment expense			928				924				2,758				2,798
		Amortization of intangible assets			262				166				751				484
		FHLB debt prepayment fees			-				-				88				1,647
		FDIC premiums and assessments			1,109				62				2,584				141
		Merger-related expenses			1,505				-				1,580				-
		Other operating expense		�	4,838	�		�	4,570	�		�	14,011	�		�	13,904	�
		Total non-interest expense		�	17,768	�		�	14,390	�		�	49,105	�		�	45,432	�
		(Loss) income before income taxes			(20,934	)			6,304				(10,110	)			23,852
		Income tax (benefit) expense		�	(9,633	)		�	1,753	�		�	(6,444	)		�	6,751	�
		Net (loss) income			(11,301	)			4,551				(3,666	)			17,101
		Dividends on preferred stock		�	1,011	�		�	-	�		�	2,160	�		�	-	�
		Net (loss) income available to common shareholders		$	(12,312	)		$	4,551	�		$	(5,826	)		$	17,101	�
Per		Basic earnings per common share (EPS)		$	(0.71	)		$	0.42			$	(0.42	)		$	1.56
Share		Diluted earnings per common share (DEPS)		$	(0.71	)		$	0.41			$	(0.42	)		$	1.54
		Weighted average shares outstanding:
		Basic			17,427,434				10,956,867				13,918,599				10,992,901
		Diluted			17,427,434				11,034,059				13,918,599				11,071,925
		For the period:
		Return on average assets			-2.15	%			0.90	%			-0.35	%			1.12	%
		Return on average common equity			-18.78	%			9.39	%			-3.28	%			11.09	%
		Cash dividends per common share		$	0.10			$	0.28			$	0.30			$	0.84
																		�

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First Community Bancshares, Inc.
Condensed Quarterly Income/(Loss) Statements
�
�
	�		�	As of and for the Quarter Ended
(Unaudited)				September 30,			�	June 30,			�	March 31,			�	December 31,			�	September 30,
(In Thousands, Except Share and Per Share Data)				2009				2009				2009				2008				2008
																						�
Interest		Interest and fees on loans held for investment		$	21,064			$	19,571			$	19,984			$	19,830			$	19,266
Income		Interest on securities-taxable			4,562				5,177				5,164				5,613				5,567
		Interest on securities-nontaxable			1,449				1,402				1,676				1,746				1,708
		Interest on federal funds sold and deposits		�	55	�		�	39	�		�	39	�		�	46	�		�	9	�
		Total interest income		�	27,130	�		�	26,189	�		�	26,863	�		�	27,235	�		�	26,550	�
Interest		Interest on deposits			6,998				7,076				7,567				7,249				6,684
Expense		Interest on borrowings		�	2,596	�		�	2,792	�		�	2,863	�		�	3,459	�		�	3,543	�
		Total interest expense		�	9,594	�		�	9,868	�		�	10,430	�		�	10,708	�		�	10,227	�
		Net interest income			17,536				16,321				16,433				16,527				16,323
		Provision for loan losses		�	3,418	�		�	2,552	�		�	2,087	�		�	2,701	�		�	3,461	�
		Net interest income after provision for loan losses		�	14,118	�		�	13,769	�		�	14,346	�		�	13,826	�		�	12,862	�
Non-Int		Wealth management income			971				1,133				984				1,146				957
Income		Service charges on deposit accounts			3,659				3,491				3,157				3,697				3,808
		Other service charges and fees			1,156				1,133				1,178				1,023				1,040
		Insurance commissions			1,567				1,639				2,317				1,258				1,240
		Net impairment losses recognized in earnings			(30,811	)			(3,776	)			(209	)			(29,923	)			(51	)
		Securities gains (losses)			866				1,653				411				(234	)			163
		Acquisition gain			4,493				-				-				-				-
		Other operating income		�	815	�		�	349	�		�	586	�		�	659	�		�	675	�
		Total non-interest income		�	(17,284	)		�	5,622	�		�	8,424	�		�	(22,374	)		�	7,832	�
Non-Int		Salaries and employee benefits			7,860				7,405				7,866				7,135				7,371
Expense		Occupancy expense of bank premises			1,266				1,333				1,603				1,385				1,297
		Furniture and equipment expense			928				892				938				942				924
		Amortization of intangible assets			262				244				245				205				166
		FHLB debt prepayment fees			-				88				-				-				-
		FDIC premiums and assessments			1,109				1,287				188				61				62
		Merger-related expenses			1,505				74				1				-				-
		Other operating expense		�	4,838	�		�	4,820	�		�	4,353	�		�	5,305	�		�	4,570	�
		Total non-interest expense		�	17,768	�		�	16,143	�		�	15,194	�		�	15,033	�		�	14,390	�
		(Loss) income before income taxes			(20,934	)			3,248				7,576				(23,581	)			6,304
		Income tax (benefit) expense		�	(9,633	)		�	843	�		�	2,346	�		�	(9,561	)		�	1,753	�
		Net (loss) income			(11,301	)			2,405				5,230				(14,020	)			4,551
		Preferred dividends		�	1,011	�		�	578	�		�	571	�		�	255	�		�	-	�
		Net (loss) income available to common shareholders		$	(12,312	)		$	1,827	�		$	4,659	�		$	(14,275	)		$	4,551	�
Per		Basic EPS		$	(0.71	)		$	0.14			$	0.40			$	(1.27	)		$	0.42
Share		Diluted EPS		$	(0.71	)		$	0.14			$	0.40			$	(1.27	)		$	0.41
		Cash dividends per common share		$	0.10			$	0.20			$	-			$	0.28			$	0.28
		Weighted average shares outstanding:
		Basic			17,427,434				12,696,202				11,567,769				11,252,183				10,956,867
		Diluted			17,427,434				12,741,080				11,616,568				11,252,183				11,034,059
																						�

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First Community Bancshares, Inc.
Reconciliation of GAAP Net Income/(Loss) to Core Earnings
�
�
(Unaudited)	�	Three Months Ended							�	Nine Months Ended
(In Thousands, Except Per Share Data)		September 30,								September 30,
		2009			�	2008				2009			�	2008
																�
Net (loss) income, GAAP		$	(11,301	)		$	4,551			$	(3,666	)		$	17,101
Non-GAAP adjustments:
Security (gains)/losses			(866	)			(163	)			(2,930	)			(2,133	)
Acquisition gain			(4,493	)			-				(4,493	)			-
Merger expenses			1,505								1,580
FHLB debt prepayment fees			-				-				88				1,647
Other-than-temporary security impairments			30,811				51				34,796				51
FDIC special assessments			-				-				988				-
Other non-core, non-recurring items		�	525	�		�	243	�		�	1,558	�		�	686	�
Total adjustments to core earnings			27,482				131				31,587				251
Tax effect		�	11,862	�		�	51	�		�	13,391	�		�	98	�
Core earnings, non-GAAP		$	4,319	�		$	4,631	�		$	14,530	�		$	17,254	�
																�
Core return on average assets			0.75	%			0.92	%			0.88	%			1.13	%
Core return on average equity			6.59	%			9.56	%			8.17	%			11.19	%
Core diluted earnings per share		$	0.25			$	0.42			$	1.04			$	1.56
																�
�
Efficiency Ratio Calculation
																�
(Unaudited)		Three Months Ended								Nine Months Ended
(Dollars In Thousands)		September 30,								September 30,
		2009				2008				2009				2008
																�
Noninterest expenses, GAAP		$	17,768			$	14,390			$	49,105			$	45,432
Non-GAAP adjustments:
Merger expenses			(1,505	)			-				(1,580	)			-
FHLB debt prepayment fees			-				-				(88	)			(1,647	)
Other non-core, non-recurring items		�	(525	)		�	(243	)		�	(2,546	)		�	(686	)
Adjusted noninterest expenses			15,738				14,147				44,891				43,099
																�
Net interest income, GAAP			17,536				16,323				50,290				49,308
Noninterest income, GAAP			(17,284	)			7,832				(3,238	)			24,697
Non-GAAP adjustments:
Tax-equivalency adjustment			793				941				2,482				3,171
Security (gains)/losses			(866	)			(163	)			(2,930	)			(2,133	)
Other-than-temporary security impairments			30,811				51				34,796				51
Acquisition gain		�	(4,493	)		�	-	�		�	(4,493	)		�	-	�
Adjusted net interest and noninterest income			26,497				24,984				76,907				75,094
																�
Efficiency Ratio			59.40	%			56.62	%			58.37	%			57.39	%
																�

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First Community Bancshares, Inc.
Quarterly Balance Sheets
�
�
	�	For the Quarter Ended
		September 30,			�	June 30,			�	March 31,			�	December 31,			�	September 30,
		2009				2009				2009				2008				2008
(Unaudited)		(Dollars In Thousands)
																				�
Cash and due from banks		$	51,905			$	116,095			$	100,881			$	39,310			$	53,238
Interest-bearing deposits with banks			3,352				28,354				79				7,129				664
Securities available for sale			575,800				521,879				549,664				520,723				513,001
Securities held to maturity			7,452				7,725				8,471				8,670				9,043
Loans held for sale			4,376				802				1,445				1,024				140
Loans held for investment, net of unearned income			1,396,617				1,269,443				1,276,790				1,298,159				1,168,286
Less allowance for loan losses		�	17,444	�		�	16,678	�		�	16,555	�		�	15,978	�		�	14,510	�
Net loans			1,383,549				1,253,568				1,261,680				1,283,205				1,153,916
Premises and equipment			57,695				55,193				54,893				55,024				50,504
Other real estate owned			3,955				3,615				3,114				1,326				896
Interest receivable			9,046				8,934				8,848				10,084				9,156
Intangible assets			90,134				89,534				89,338				89,612				72,222
Other assets		�	115,453	�		�	118,313	�		�	122,173	�		�	118,231	�		�	104,817	�
Total Assets		$	2,298,341	�		$	2,203,210	�		$	2,199,141	�		$	2,133,314	�		$	1,967,457	�
Deposits:
Demand		$	198,107			$	202,543			$	207,947			$	199,712			$	214,582
Interest-bearing demand			216,184				195,905				194,934				185,117				186,403
Savings			351,450				311,435				319,007				309,577				312,451
Time		�	896,716	�		�	837,475	�		�	861,556	�		�	809,352	�		�	636,108	�
Total Deposits			1,662,457				1,547,358				1,583,444				1,503,758				1,349,544
Interest, taxes and other liabilities			24,374				27,630				28,293				27,423				20,494
Federal funds purchased			-				-				-				-				29,500
Securities sold under agreements to repurchase			147,042				153,804				153,824				165,914				180,388
FHLB and other indebtedness		�	198,932	�		�	190,863	�		�	215,870	�		�	215,877	�		�	216,720	�
Total Liabilities		�	2,032,805	�		�	1,919,655	�		�	1,981,431	�		�	1,912,972	�		�	1,796,646	�
																				�
Preferred stock, net of discount			-				40,525				40,471				40,419				-
Common stock			18,083				17,341				12,051				12,051				11,499
Additional paid-in capital			192,799				183,955				127,992				128,526				108,862
Retained earnings			102,920				116,997				118,021				107,231				124,731
Treasury stock, at cost			(12,768	)			(13,712	)			(14,453	)			(15,368	)			(16,882	)
Accumulated other comprehensive loss		�	(35,498	)		�	(61,551	)		�	(66,372	)		�	(52,517	)		�	(57,399	)
Total Stockholders' Equity		�	265,536	�		�	283,555	�		�	217,710	�		�	220,342	�		�	170,811	�
Total Liabilities and Stockholders' Equity		$	2,298,341	�		$	2,203,210	�		$	2,199,141	�		$	2,133,314	�		$	1,967,457	�
																				�
Actual shares outstanding at period end			17,680,328				16,909,592				11,596,249				11,567,449				10,967,597
Book value per common share at period end		$	15.02			$	14.31			$	15.20			$	15.46			$	15.57
Tangible book value per common share at period end (1)		$	9.92			$	9.02			$	7.49			$	7.71			$	8.99
�

	�
(1)		Tangible book value per common share is defined as stockholders' equity less goodwill and other intangibles divided by common shares outstanding.
		�

�
First Community Bancshares, Inc.
Selected Financial Information
�
�
	�	As of and for the Quarter Ended
		September 30,			�	June 30,			�	March 31,			�	December 31,			�	September 30,
(Unaudited)		2009				2009				2009				2008				2008
Summary of Loan Loss Experience		(Dollars in Thousands)
Allowance for loan losses:
Beginning balance		$	16,678			$	16,555			$	15,978			$	14,510			$	13,433
Balance acquired			-				-				-				1,169				-
Provision for loan losses			3,418				2,552				2,087				2,701				3,461
Charge-offs			(2,990	)			(2,681	)			(1,730	)			(2,606	)			(2,601	)
Recoveries		�	338	�		�	252	�		�	220	�		�	204	�		�	217	�
Net charge-offs		�	(2,652	)		�	(2,429	)		�	(1,510	)		�	(2,402	)		�	(2,384	)
Ending balance		$	17,444	�		$	16,678	�		$	16,555	�		$	15,978	�		$	14,510	�
																				�
Summary of Asset Quality
Nonaccrual loans		$	12,278			$	11,645			$	10,628			$	12,763			$	6,997
Loans 90 days or more past due and still accruing		�	-	�		�	-	�		�	-	�		�	-	�		�	-	�
Total non-performing loans			12,278				11,645				10,628				12,763				6,997
																				�
Other real estate owned		�	3,955	�		�	3,615	�		�	3,114	�		�	1,326	�		�	896	�
Total non-performing assets		$	16,233	�		$	15,260	�		$	13,742	�		$	14,089	�		$	7,893	�
																				�
Asset Quality Ratios
Non-performing loans as a percentage of loans held for investment			0.88	%			0.92	%			0.83	%			0.98	%			0.60	%
Non-performing assets as a percentage of total assets			0.71	%			0.69	%			0.62	%			0.66	%			0.40	%
Annualized net charge-offs as a percentage of average loans held for investment			0.77	%			0.77	%			0.47	%			0.77	%			0.81	%
Allowance for loan losses as a percentage of loans held for investment			1.25	%			1.31	%			1.30	%			1.23	%			1.24	%
Ratio of allowance for loan losses to non-performing loans			1.42				1.43				1.56				1.25				2.07
																				�

�
First Community Bancshares, Inc.
Nonaccrual Loan Detail
�
�
(Unaudited)	�	As of September 30, 2009
				�			�	Nonaccrual
								Loans to
		Loans			Nonaccrual			Loans
(Dollars in Thousands)		Outstanding			Loans			Outstanding
Commercial
Commercial & industrial		$	90,015		$	454		0.50	%
Agriculture		�	1,033		�	185		17.95	%
Total commercial			91,048			639		0.70	%
									�
Commercial real estate
Construction, land development & vacant land			137,750			2,078		1.51	%
Non-owner occupied			176,029			1,934		1.10	%
Owner occupied			164,193			2,296		1.40	%
Farmland		�	39,159		�	68		0.17	%
Total commercial real estate			517,131			6,376		1.23	%
									�
Consumer			62,995			157		0.25	%
									�
Residential real estate
Residential			543,689			4,736		0.87	%
Multi-family			73,289			-		0.00	%
Home equity lines		�	108,466		�	369		0.34	%
Total residential		�	725,444		�	5,105		0.70	%
									�
Total loans		$	1,396,618		$	12,278		0.88	%
									�

�
Pooled Trust Preferred Securities Detail
September 30, 2009
�
(Unaudited)	�		�			�			�			�	Unrealized			�			�
													(Loss)				Current
		Class/		Par			Book			Fair			Recognized				Quarter			Cumulative
Deal Name		Tranche		Value			Value			Value			In OCI				OTTI			OTTI
(In Thousands)
																				�
PreTSL X		B1		$	10,028		$	5,697		$	2,967		$	(2,730	)		$	3,110		$	4,331
PreTSL XII		B1			20,114			12,685			8,016			(4,669	)			6,980			7,429
PreTSL XIV		B1			9,000			8,890			4,650			(4,240	)			110			110
PreTSL XVI		C			4,039			1,639			838			(801	)			2,403			2,402
PreTSL XXII		C1			12,624			10,050			2,575			(7,475	)			2,628			2,628
PreTSL XXIII		C1			7,923			7,964			2,811			(5,153	)			-			-
PreTSL XXVI		C1			7,010			6,102			1,194			(4,908	)			908			908
SOLOSO 2007 1A		A3L			18,400			-			-			-				1,244			18,400
Trapeza Ser 13A		D		�	20,233		�	7,089		�	51		�	(7,038	)		�	13,144		�	13,144
				$	109,371		$	60,116		$	23,102		$	(37,014	)		$	30,527		$	49,352
																				�

�
First Community Bancshares, Inc.
Selected Financial Information
�
�
	�	As of and for the Quarter Ended
		September 30,			�	June 30,			�	March 31,			�	December 31,			�	September 30,
(Unaudited)		2009				2009				2009				2008				2008
		(Dollars in Thousands)
Ratios
Return on average assets			-2.15	%			0.34	%			0.87	%			-2.77	%			0.90	%
Return on average common equity			-18.78	%			3.82	%			10.61	%			-33.28	%			9.39	%
Net interest margin			3.68	%			3.62	%			3.73	%			3.93	%			3.90	%
Efficiency ratio for the quarter			59.40	%			58.62	%			58.25	%			57.97	%			56.62	%
Efficiency ratio year-to-date			58.37	%			58.43	%			58.25	%			57.54	%			57.39	%
Equity as a percent of total assets at end of period			11.55	%			12.87	%			9.90	%			10.33	%			8.68	%
Average earning assets as a percentage of average total assets			87.14	%			86.78	%			86.68	%			86.38	%			87.89	%
Average loans as a percentage of average deposits			83.25	%			81.19	%			82.83	%			86.01	%			88.25	%
																				�
Average Balances
Investments		$	536,485			$	564,934			$	521,776			$	508,289			$	582,605
Loans			1,362,603				1,269,584				1,292,179				1,235,023				1,174,855
Earning assets			1,978,626				1,892,403				1,887,583				1,768,113				1,758,895
Total assets			2,270,592				2,180,779				2,177,762				2,046,879				2,001,191
Deposits			1,636,744				1,563,640				1,560,109				1,435,956				1,331,293
Interest-bearing deposits			1,437,763				1,361,970				1,360,798				1,230,547				1,120,138
Borrowings			347,292				359,628				372,282				400,393				459,475
Interest-bearing liabilities			1,785,055				1,721,597				1,733,080				1,630,940				1,579,613
Equity			260,126				233,093				219,653				189,122				192,743
Tax equivalent net interest income			18,329				17,093				17,349				17,483				17,264
																				�

�
First Community Bancshares, Inc.
Consolidated Average Balance Sheets, Yields, and Rates
�
�
	�	Three Months Ended September 30,
		2009									�	2008
				�				�	Yield/					�				�	Yield/
		Average			Interest				Rate			Average			Interest				Rate
(Unaudited)		Balance			(1)				(1)			Balance			(1)				(1)
		(Dollars in Thousands)
Earning assets
Loans held for investment (2)		$	1,362,603		$	21,078			6.14	%		$	1,174,855		$	19,286			6.53	%
Securities available for sale			536,485			6,636			4.91	%			573,046			8,035			5.58	%
Held to maturity securities			7,575			154			8.07	%			9,559			161			6.70	%
Interest-bearing deposits with banks		�	71,963		�	55	�		0.30	%		�	1,435		�	9	�		2.50	%
Total earning assets			1,978,626		$	27,923			5.60	%			1,758,895		$	27,491			6.22	%
Other assets		�	291,966									�	242,296
Total		$	2,270,592									$	2,001,191
Interest-bearing liabilities
Interest-bearing demand deposits		$	209,569		$	110			0.21	%		$	178,632		$	73			0.16	%
Savings deposits			339,601			639			0.75	%			309,364			1,172			1.51	%
Time deposits			888,593			6,249			2.79	%			632,142			5,439			3.42	%
Fed funds purchased			-			-			-				42,702			251			2.34	%
Retail repurchase agreements			101,065			333			1.31	%			149,984			730			1.94	%
Wholesale repurchase agreements			50,000			474			3.76	%			50,000			389			3.10	%
FHLB borrowings & other long-term debt		�	196,227		�	1,789	�		3.62	%		�	216,789		�	2,173	�		3.99	%
Total interest-bearing liabilities			1,785,055			9,594			2.13	%			1,579,613			10,227			2.58	%
Noninterest-bearing demand deposits			198,981										211,155
Other liabilities			26,430										17,680
Stockholders' equity		�	260,126									�	192,743
Total		$	2,270,592		�	�	�					$	2,001,191		�	�	�
Net interest income					$	18,329	�								$	17,264	�
Net interest rate spread (3)									3.47	%									3.64	%
Net interest margin (4)									3.68	%									3.90	%
																				�

	�
(1)		Fully taxable equivalent at the rate of 35%.
(2)		Non-accrual loans are included in average balances outstanding but with no related interest income during the period of non-accrual.
(3)		Represents the difference between the yield on earning assets and cost of funds.
(4)		Represents tax equivalent net interest income divided by average earning assets.
		�

�
First Community Bancshares, Inc.
Consolidated Average Balance Sheets, Yields, and Rates
�
�
	�	Nine Months Ended September 30,
		2009									�	2008
				�				�	Yield/					�				�	Yield/
		Average			Interest				Rate			Average			Interest				Rate
(Unaudited)		Balance			(1)				(1)			Balance			(1)				(1)
		(Dollars in Thousands)
Earning assets
Loans held for investment (2)		$	1,308,380		$	60,662			6.20	%		$	1,187,006		$	60,456			6.80	%
Securities available for sale			535,710			21,377			5.34	%			602,802			25,310			5.61	%
Held to maturity securities			7,954			490			8.24	%			10,849			675			8.31	%
Interest-bearing deposits with banks		�	67,819		�	133	�		0.26	%		�	12,363		�	260	�		2.81	%
Total earning assets			1,919,863		$	82,662			5.76	%			1,813,020		$	86,701			6.39	%
Other assets		�	290,180									�	232,933
Total		$	2,210,043									$	2,045,953
Interest-bearing liabilities
Interest-bearing demand deposits		$	199,235		$	270			0.18	%		$	171,661		$	213			0.17	%
Savings deposits			323,387			1,835			0.76	%			314,903			3,847			1.63	%
Time deposits			864,503			19,535			3.02	%			648,282			18,483			3.81	%
Fed funds purchased			-			-			-				18,241			330			2.42	%
Retail repurchase agreements			103,000			1,056			1.37	%			151,107			2,540			2.25	%
Wholesale repurchase agreements			50,000			1,449			3.87	%			50,000			1,077			2.88	%
FHLB borrowings & other long-term debt		�	206,643		�	5,745	�		3.72	%		�	252,520		�	7,732	�		4.09	%
Total interest-bearing liabilities			1,746,768			29,890			2.29	%			1,606,714			34,222			2.85	%
Noninterest-bearing demand deposits			199,986										213,934
Other liabilities			25,517										19,326
Stockholders' equity		�	237,772									�	205,979
Total		$	2,210,043		�	�	�					$	2,045,953		�	�	�
Net interest income					$	52,772	�								$	52,479	�
Net interest rate spread (3)									3.47	%									3.54	%
Net interest margin (4)									3.68	%									3.87	%
																				�

	�
(1)		Fully taxable equivalent at the rate of 35%.
(2)		Non-accrual loans are included in average balances outstanding but with no related interest income during the period of non-accrual.
(3)		Represents the difference between the yield on earning assets and cost of funds.
(4)		Represents tax equivalent net interest income divided by average earning assets.
		�

Contacts:

First Community Bancshares, Inc.
David D. Brown
[phone]