Unassociated Document

First Community Bancshares, Inc. Announces Fourth Quarter 2009 Results

Bluefield, Virginia – First Community Bancshares, Inc. (NASDAQ: FCBC) (www.fcbinc.com) today reported operating results for the quarter and year ended December 31, 2009. The results were significantly impacted by the Company’s decision to sell and write down certain pooled trust preferred securities affected by continuing weakness in a number of underlying bank issuers.

During fourth quarter 2009, the Company sold four positions from its portfolio of pooled trust preferred securities and realized after-tax losses on the final disposition of $26.78 million to secure tax benefits associated with the sales. All remaining positions in this sector were written down to nominal fair market values to reflect the Company’s view of the current valuation and prospects for these securities. The cumulative effect of these transactions was a net loss available to common shareholders for the quarter ended December 31, 2009, of $34.56 million, or $1.95 per diluted common share. Net loss available to common shareholders amounted to $40.39 million, or $2.72 per diluted common share for the twelve months ended December 31, 2009.

Core earnings for the fourth quarter of 2009 were $2.27 million, or $0.13 per diluted common share, and $16.71 million, or $1.12 per diluted common share for the twelve months ended December 31, 2009 (see the attached reconciliation of GAAP to core earnings).

The combination of security sales and write-downs have substantially eliminated further exposure to these bonds and positions the Company to move forward without the prospect of further impairment charges related to pooled trust preferred securities. Commenting on these initiatives, Chief Executive Officer John M. Mendez said, “We can now move beyond the substantial distraction associated with these securities and devote our full attention to the business of banking. We are now positioned with a strong capital base and stronger overall asset quality measures. Following the balance sheet restructuring the Company continues to report capital levels in excess of the regulatory definitions of well capitalized.” The sales and write-downs of all pooled trust preferred securities beyond the amounts already included in other comprehensive income resulted in a reduction in tangible book value of approximately $0.76.

Fourth Quarter 2009 Highlights –

Asset quality metrics continue to compare favorably to peers with a ratio of non-performing assets to total assets at December 31, 2009, of 97 basis points

Net interest margin increased to 3.92%, up 24 basis points from the quarter ended September 30, 2009

First Community Bank, N. A. remains “well-capitalized” with a total risk-based capital ratio of 11.9%, Tier 1 risk-based capital ratio of 10.6%, and a Tier 1 leverage ratio of 7.2% at December 31, 2009

Net Interest Income

Tax-equivalent net interest margin for the fourth quarter of 2009 was 3.92%. Net interest income was $18.96 million, an increase of $2.44 million, or 14.73%, from the fourth quarter of 2008. Interest income was $27.75 million, an increase of $517 thousand, or 1.90%, from fourth quarter of 2008. The yield on loans dropped to 6.24% from 6.39% while average loans increased $171.47 million to $1.41 billion from fourth quarter 2008, which also reflects the acquisition of TriStone Community Bank in July 2009. The Company continues to maintain a high level of liquidity with an average federal funds sold position of $32.62 million in the fourth quarter.

- 1 -

Fourth quarter interest expense was $8.79 million, a decrease of $1.92 million, or 17.91%, from the fourth quarter of 2008. Fourth quarter deposit costs decreased $1.09 million compared to the fourth quarter of 2008, while the average rate paid on interest-bearing deposits decreased 66 basis points to 1.68%. Compared to the fourth quarter of 2008, interest costs on borrowings decreased $824 thousand to $2.64 million, while the average balance decreased $53.40 million due to the redemption and restructuring of various wholesale borrowings. The cost of interest-bearing liabilities decreased 67 basis points during the fourth quarter of 2009 compared to the fourth quarter of 2008. Average interest bearing liabilities increased $168.42 million, or 10.33%, compared with the fourth quarter of 2008, and included a decrease of $22.96 million in Federal Home Loan Bank (“FHLB”) borrowings.

Non-interest Income

Insurance commissions were $1.47 million for the fourth quarter of 2009, an increase of $207 thousand, or 16.45%, from the same period in 2008. During the fourth quarter of 2009, wealth management revenues decreased $87 thousand, or 7.59%, to $1.06 million, and at December 31, 2009 the Wealth Management Division reported $825 million in assets under management. Service charges on deposit accounts were $3.59 million for the fourth quarter of 2009, a decrease of $112 thousand, or 3.03%, from the fourth quarter of 2008.

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. During the fourth quarter of 2009, the Company recognized pre-tax credit related net impairment losses on its pooled trust preferred securities of $43.70 million, or $1.54 per common share on an after-tax basis. The impairment charges reflect the Company’s change in its intent to hold the securities to recovery. The Company’s remaining exposure to these investment securities is reduced to only $1.65 million at December 31, 2009. The Company also recognized additional impairment of $369 thousand on four equity security positions at December 31, 2009.

Non-interest Expenses

Non-interest expenses for the fourth quarter of 2009 increased $2.54 million, or 16.87%, from the fourth quarter of 2008. The large increase was due to increased Federal Deposit Insurance Corporation (“FDIC”) deposit insurance premiums, salaries and employee benefits, and furniture and equipment expense. Salaries and employee benefits increased $1.86 million, or 26.00%, from the fourth quarter of 2008. Coddle Creek Financial branches accounted for an increase in salaries and employee benefits of $78 thousand, TriStone Community Bank branches accounted for an increase of $390 thousand, and GreenPoint Insurance Group’s acquisitions accounted for an increase of $234 thousand. The remainder of the Company showed an overall increase in salaries and benefits of $1.15 million. Fourth quarter 2008 expenses were significantly reduced by the reversal of all incentive compensation accruals. Other operating expenses decreased $1.29 million, or 24.09%, compared to the fourth quarter of 2008. The fourth quarter of 2009 efficiency ratio was 61.29% compared to 57.97% in the fourth quarter of 2008.

Credit Quality

The Company’s loan quality measures at December 31, 2009, continue to compare favorably to the Company’s Federal Reserve peer group of bank holding companies with total assets between $1 and $3 billion. Total loan delinquencies of 30 days or more, including non-accrual loans, as a percent of total loans were 2.32% at December 31, 2009, compared to 4.65% for the Federal Reserve peer group at September 30, 2009, and the ratio of allowance for loan losses as a percent of loans held for investment was 1.56%. The increase in non-accrual loans from September 30, 2009, was due largely to increases in the residential real estate portfolio. Substantially all of the increase in non-accrual single-family real estate loans was due to loans in the Richmond, Virginia, and Winston-Salem, North Carolina, markets. The increase in multi-family non-accrual loans is attributed to one loan relationship in the southern West Virginia market.

Non-performing assets increased to $22.11 million at December 31, 2009, or 0.97% of total assets and non-performing loans as a percentage of loans held for investment was 1.26% at December 31, 2009. The Federal Reserve peer group reported non-performing assets to total assets of 3.23% and non-performing loans to total loans held for investment of 3.52% at September 30, 2009.

Balance Sheet

Since December 31, 2008, consolidated assets have increased $141.56 million to $2.27 billion at December 31, 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 $253.86 million, resulting in a book value per common share outstanding of $14.29 at December 31, 2009, compared to $220.34 million and $15.46 per common share at December 31, 2008.

- 2 -

The Company will host an investor and media teleconference and webcast on Thursday, January 28, 2010 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 fourth 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 $2.27 billion financial holding company and is the parent company of First Community Bank, N. A. First Community Bank, N. A. operates through fifty-nine 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 $825 million at December 31, 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.

- 3 -

First Community Bancshares, Inc.

Condensed Consolidated Statements of Income/(Loss)

(Unaudited)		Three Months Ended						Year Ended
(In Thousands, Except Share and Per Share Data)		December 31,						December 31,
		2009			2008			2009			2008

Interest	Interest and fees on loans held for investment	$	22,085		$	19,830		$	82,704		$	80,224
Income	Interest on securities-taxable		4,190			5,613			19,093			22,714
	Interest on securities-nontaxable		1,445			1,746			5,972			7,521
	Interest on federal funds sold and deposits		32			46			165			306
	Total interest income		27,752			27,235			107,934			110,765
Interest	Interest on deposits		6,155			7,249			27,796			29,792
Expense	Interest on borrowings		2,635			3,459			10,886			15,138
	Total interest expense		8,790			10,708			38,682			44,930
	Net interest income		18,962			16,527			69,252			65,835
	Provision for loan losses		6,996			2,701			15,053			7,422
	Net interest income after provision for loan losses		11,966			13,826			54,199			58,413
Non-Interest	Wealth management income		1,059			1,146			4,147			4,100
Income	Service charges on deposit accounts		3,585			3,697			13,892			14,067
	Other service charges and fees		1,248			1,023			4,715			4,248
	Insurance commissions		1,465			1,258			6,988			4,988
	Net impairment losses recognized in earnings		(44,067	)		(29,872	)		(78,863	)		(29,923	)
	Security (losses) gains		(14,603	)		(234	)		(11,673	)		1,899
	Acquisition gain		-			-			4,493			-
	Other operating income		983			659			2,733			2,995
	Total non-interest income		(50,330	)		(22,323	)		(53,568	)		2,374
Non-Interest	Salaries and employee benefits		8,990			7,135			32,121			29,876
Expense	Occupancy expense of bank premises		1,687			1,385			5,889			5,102
	Furniture and equipment expense		988			942			3,746			3,740
	Amortization of intangible assets		277			205			1,028			689
	FHLB debt prepayment fees		-			-			88			1,647
	FDIC premiums and assessments		1,474			61			4,262			202
	Merger-related expenses		146			-			1,726			-
	Other operating expense		4,066			5,356			17,873			19,260
	Total non-interest expense		17,628			15,084			66,733			60,516
	(Loss) income before income taxes		(55,992	)		(23,581	)		(66,102	)		271
	Income tax (benefit) expense		(21,430	)		(9,561	)		(27,874	)		(2,810	)
	Net (loss) income		(34,562	)		(14,020	)		(38,228	)		3,081
	Dividends on preferred stock		-			255			2,160			255
	Net (loss) income available to common shareholders	$	(34,562	)	$	(14,275	)	$	(40,388	)	$	2,826
Per	Basic earnings per common share (EPS)	$	(1.95	)	$	(1.25	)	$	(2.72	)	$	0.26
Share	Diluted earnings per common share (DEPS)	$	(1.95	)	$	(1.25	)	$	(2.72	)	$	0.25
	Weighted average shares outstanding:
	Basic		17,687,413			11,252,183			14,868,547			11,058,076
	Diluted		17,687,413			11,252,183			14,868,547			11,134,025
	For the period:
	Return on average assets		-5.99	%		-2.77	%		-1.81	%		0.14	%
	Return on average common equity		-51.15	%		-33.28	%		-16.46	%		1.43	%
	Cash dividends per common share	$	-		$	0.28		$	0.30		$	1.12

- 4 -

First Community Bancshares, Inc.

Condensed Quarterly Income/(Loss) Statements

		As of and for the Quarter Ended
(Unaudited)		December 31,			September 30,			June 30,			March 31,			December 31,
(In Thousands, Except Share and Per Share Data)		2009			2009			2009			2009			2008

Interest	Interest and fees on loans held for investment	$	22,085		$	21,064		$	19,571		$	19,984		$	19,830
Income	Interest on securities-taxable		4,190			4,562			5,177			5,164			5,613
	Interest on securities-nontaxable		1,445			1,449			1,402			1,676			1,746
	Interest on federal funds sold and deposits		32			55			39			39			46
	Total interest income		27,752			27,130			26,189			26,863			27,235
Interest	Interest on deposits		6,155			6,998			7,076			7,567			7,249
Expense	Interest on borrowings		2,635			2,596			2,792			2,863			3,459
	Total interest expense		8,790			9,594			9,868			10,430			10,708
	Net interest income		18,962			17,536			16,321			16,433			16,527
	Provision for loan losses		6,996			3,418			2,552			2,087			2,701
	Net interest income after provision
	for loan losses		11,966			14,118			13,769			14,346			13,826
Non-Int	Wealth management income		1,059			971			1,133			984			1,146
Income	Service charges on deposit accounts		3,585			3,659			3,491			3,157			3,697
	Other service charges and fees		1,248			1,156			1,133			1,178			1,023
	Insurance commissions		1,465			1,567			1,639			2,317			1,258
	Net impairment losses recognized in earnings		(44,067	)		(30,811	)		(3,776	)		(209	)		(29,872	)
	Securities (losses) gains		(14,603	)		866			1,653			411			(234	)
	Acquisition gain		-			4,493			-			-			-
	Other operating income		983			815			349			586			659
	Total non-interest income		(50,330	)		(17,284	)		5,622			8,424			(22,323	)
Non-Int	Salaries and employee benefits		8,990			7,860			7,405			7,866			7,135
Expense	Occupancy expense of bank premises		1,687			1,266			1,333			1,603			1,385
	Furniture and equipment expense		988			928			892			938			942
	Amortization of intangible assets		277			262			244			245			205
	FHLB debt prepayment fees		-			-			88			-			-
	FDIC premiums and assessments		1,474			1,313			1,287			188			61
	Merger-related expenses		146			1,505			74			1			-
	Other operating expense		4,066			4,634			4,820			4,353			5,356
	Total non-interest expense		17,628			17,768			16,143			15,194			15,084
	(Loss) income before income taxes		(55,992	)		(20,934	)		3,248			7,576			(23,581	)
	Income tax (benefit) expense		(21,430	)		(9,633	)		843			2,346			(9,561	)
	Net (loss) income		(34,562	)		(11,301	)		2,405			5,230			(14,020	)
	Preferred dividends		-			1,011			578			571			255
	Net (loss) income available to
	common shareholders	$	(34,562	)	$	(12,312	)	$	1,827		$	4,659		$	(14,275	)
Per	Basic EPS	$	(1.95	)	$	(0.71	)	$	0.14		$	0.40		$	(1.27	)
Share	Diluted EPS	$	(1.95	)	$	(0.71	)	$	0.14		$	0.40		$	(1.27	)
	Cash dividends per common share	$	-		$	0.10		$	0.20		$	-		$	0.28
	Weighted average shares outstanding:
	Basic		17,687,413			17,427,434			12,696,202			11,567,769			11,252,183
	Diluted		17,687,413			17,427,434			12,741,080			11,616,568			11,252,183

- 5 -

First Community Bancshares, Inc.

Reconciliation of GAAP Net Income/(Loss) to Core Earnings

(Unaudited)		Three Months Ended						Year Ended
(In Thousands, Except Per Share Data)		December 31,						December 31,
		2009			2008			2009			2008

Net (loss) income, GAAP		$	(34,562	)	$	(14,020	)	$	(38,228	)	$	3,081
	Non-GAAP adjustments:
	Security (gains)/losses		14,603			234			11,673			(1,899	)
	Acquisition gain		-			-			(4,493	)		-
	Merger expenses		146			-			1,726			-
	FHLB debt prepayment fees		-			-			88			1,647
	Other-than-temporary security impairments		44,067			29,872			78,863			29,923
	FDIC special assessments		-			-			988			-
	Other non-core, non-recurring items		118			385			1,676			1,071
	Total adjustments to core earnings		58,934			30,491			90,521			30,742
	Tax effect		22,100			11,891			35,581			11,989
Core earnings, non-GAAP		$	2,272		$	4,580		$	16,712		$	21,834

Core return on average assets			0.39	%		0.89	%		0.75	%		1.07	%
Core return on average equity			3.36	%		9.63	%		6.81	%		10.82	%
Core diluted earnings per share		$	0.13		$	0.40		$	1.12		$	1.96

Efficiency Ratio Calculation

(Unaudited)	Three Months Ended						Year Ended
(In Thousands)	December 31,						December 31,
	2009			2008			2009			2008

Noninterest expenses, GAAP	$	17,628		$	15,084		$	66,733		$	60,516
Non-GAAP adjustments:
Merger expenses		(146	)		-			(1,726	)		-
FHLB debt prepayment fees		-			-			(88	)		(1,647	)
Other non-core, non-recurring items		(458	)		(436	)		(3,004	)		(1,122	)
Adjusted noninterest expenses		17,024			14,648			61,915			57,747

Net interest income, GAAP		18,962			16,527			69,252			65,835
Noninterest income, GAAP		(50,330	)		(22,323	)		(53,568	)		2,374
Non-GAAP adjustments:
Tax-equivalency adjustment		816			959			3,297			4,133
Security (gains)/losses		14,603			234			11,673			(1,899	)
Other-than-temporary security impairments		44,067			29,872			78,863			29,923
Other non-core, non-recurring items		(340	)					(340	)
Acquisition gain		-			-			(4,493	)		-
Adjusted net interest and noninterest income		27,778			25,269			104,684			100,366

Efficiency Ratio		61.29	%		57.97	%		59.14	%		57.54	%

- 6 -

First Community Bancshares, Inc.

Quarterly Balance Sheets

	For the Quarter Ended
(Unaudited)	December 31,			September 30,			June 30,			March 31,			December 31,
(Dollars In Thousands)	2009			2009			2009			2009			2008

Cash and due from banks	$	97,641		$	51,905		$	116,095		$	100,881		$	39,310
Interest-bearing deposits with banks		3,700			3,352			28,354			79			7,129
Securities available for sale		486,057			575,800			521,879			549,664			520,723
Securities held to maturity		7,454			7,452			7,725			8,471			8,670
Loans held for sale		11,576			4,376			802			1,445			1,024
Loans held for investment, net of unearned income		1,393,931			1,396,617			1,269,443			1,276,790			1,298,159
Less allowance for loan losses		21,725			17,444			16,678			16,555			15,978
Net loans		1,383,782			1,383,549			1,253,568			1,261,680			1,283,205
Premises and equipment		56,946			57,695			55,193			54,893			55,024
Other real estate owned		4,578			3,955			3,615			3,114			1,326
Interest receivable		8,610			9,046			8,934			8,848			10,084
Intangible assets		91,061			90,134			89,534			89,338			89,612
Other assets		135,049			115,453			118,313			122,173			118,231
Total Assets	$	2,274,878		$	2,298,341		$	2,203,210		$	2,199,141		$	2,133,314
Deposits:
Demand	$	208,244		$	198,107		$	202,543		$	207,947		$	199,712
Interest-bearing demand		231,907			216,184			195,905			194,934			185,117
Savings		381,381			351,450			311,435			319,007			309,577
Time		824,428			896,716			837,475			861,556			809,352
Total Deposits		1,645,960			1,662,457			1,547,358			1,583,444			1,503,758
Interest, taxes and other liabilities		22,498			24,374			27,630			28,293			27,423
Federal funds purchased		-			-			-			-			-
Securities sold under agreements to repurchase		153,634			147,042			153,804			153,824			165,914
FHLB and other indebtedness		198,924			198,932			190,863			215,870			215,877
Total Liabilities		2,021,016			2,032,805			1,919,655			1,981,431			1,912,972

Preferred stock, net of discount		-			-			40,525			40,471			40,419
Common stock		18,083			18,083			17,341			12,051			12,051
Additional paid-in capital		190,967			192,799			183,955			127,992			128,526
Retained earnings		68,355			102,920			116,997			118,021			107,231
Treasury stock, at cost		(9,891	)		(12,768	)		(13,712	)		(14,453	)		(15,368	)
Accumulated other comprehensive loss		(13,652	)		(35,498	)		(61,551	)		(66,372	)		(52,517	)
Total Stockholders' Equity		253,862			265,536			283,555			217,710			220,342
Total Liabilities and
Stockholders' Equity	$	2,274,878		$	2,298,341		$	2,203,210		$	2,199,141		$	2,133,314

Actual shares outstanding at period end		17,765,164			17,680,328			16,909,592			11,596,249			11,567,449
Book value per common share at period end	$	14.29		$	15.02		$	14.31		$	15.20		$	15.46
Tangible book value per common share
at period end (1)	$	9.16		$	9.92		$	9.02		$	7.49		$	7.71

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

- 7 -

First Community Bancshares, Inc.

Selected Financial Information

	As of and for the Quarter Ended
(Unaudited)	December 31,			September 30,			June 30,			March 31,			December 31,
(Dollars in Thousands)	2009			2009			2009			2009			2008
Summary of Loan Loss Experience
Allowance for loan losses:
Beginning balance	$	17,444		$	16,678		$	16,555		$	15,978		$	14,510
Balance acquired		-			-			-			-			1,169
Provision for loan losses		6,996			3,418			2,552			2,087			2,701
Charge-offs		(2,957	)		(2,990	)		(2,681	)		(1,730	)		(2,606	)
Recoveries		242			338			252			220			204
Net charge-offs		(2,715	)		(2,652	)		(2,429	)		(1,510	)		(2,402	)
Ending balance	$	21,725		$	17,444		$	16,678		$	16,555		$	15,978

Summary of Asset Quality
Nonaccrual loans	$	17,527		$	12,278		$	11,645		$	10,628		$	12,763
Loans 90 days or more past due and still accruing		-			-			-			-			-
Total non-performing loans		17,527			12,278			11,645			10,628			12,763

Other real estate owned		4,578			3,955			3,615			3,114			1,326
Total non-performing assets	$	22,105		$	16,233		$	15,260		$	13,742		$	14,089

Asset Quality Ratios
Non-performing loans as a percentage
of loans held for investment		1.26	%		0.88	%		0.92	%		0.83	%		0.98	%
Non-performing assets as a percentage
of total assets		0.97	%		0.71	%		0.69	%		0.62	%		0.66	%
Annualized net charge-offs as a percentage of
average loans held for investment		0.77	%		0.77	%		0.77	%		0.47	%		0.77	%
Allowance for loan losses as a percentage of loans
held for investment		1.56	%		1.25	%		1.31	%		1.30	%		1.23	%
Ratio of allowance for loan losses to
non-performing loans		1.24			1.42			1.43			1.56			1.25

- 8 -

First Community Bancshares, Inc.

Nonaccrual Loan Detail

(Unaudited)	As of December 31, 2009
					Nonaccrual
					Loans to
	Loans		Nonaccrual		Loans
(Dollars in Thousands)	Outstanding		Loans		Outstanding
Commercial
Commercial & industrial	$	99,716	$	1,821		1.83	%
Agriculture		1,251		188		15.03	%
Total commercial		100,967		2,009		1.99	%

Commercial real estate
Construction, land development & vacant land		124,896		3,518		2.82	%
Non-owner occupied		160,965		1,336		0.83	%
Owner occupied		183,010		2,706		1.48	%
Farmland		41,033		10		0.02	%
Total commercial real estate		509,904		7,570		1.48	%

Consumer		60,090		63		0.10	%

Residential real estate
Residential		545,770		6,324		1.16	%
Multi-family		65,603		979		1.49	%
Home equity lines		111,597		582		0.52	%
Total residential		722,970		7,885		1.09	%

Total loans	$	1,393,931	$	17,527		1.26	%

Pooled Trust Preferred Securities Detail

December 31, 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	$	10,088	$	188	$	188	$	-	$	5,569	$	9,900
PreTSL XII		B1		20,212		366		366		-		12,319		19,748
PreTSL XIV		B1		9,026		901		901		-		7,989		8,099
PreTSL XXII		C1		12,670		119		119		-		9,931		12,559
PreTSL XXIII		C1		7,952		74		74		-		7,890		7,890
			$	59,948	$	1,648	$	1,648	$	-	$	43,698	$	58,196

- 9 -

First Community Bancshares, Inc.

Selected Financial Information

	As of and for the Quarter Ended
(Unaudited)	December 31,			September 30,			June 30,			March 31,			December 31,
(Dollars in Thousands)	2009			2009			2009			2009			2008
Ratios
Return on average assets		-5.99	%		-2.15	%		0.34	%		0.87	%		-2.77	%
Return on average common equity		-51.15	%		-18.78	%		3.82	%		10.61	%		-33.28	%
Net interest margin		3.92	%		3.68	%		3.62	%		3.73	%		3.93	%
Efficiency ratio for the quarter		61.29	%		59.40	%		58.62	%		58.25	%		57.97	%
Efficiency ratio year-to-date		59.14	%		58.37	%		58.43	%		58.25	%		57.54	%
Equity as a percent of total assets at end of period		11.16	%		11.55	%		12.87	%		9.90	%		10.33	%
Average earning assets as a percentage of average total assets		87.41	%		87.14	%		86.78	%		86.68	%		86.38	%
Average loans as a percentage of average deposits		85.13	%		83.25	%		81.19	%		82.83	%		86.01	%

Average Balances
Investments	$	549,386		$	536,485		$	564,934		$	521,776		$	508,289
Loans		1,406,497			1,362,603			1,269,584			1,292,179			1,235,023
Earning assets		2,001,576			1,978,626			1,892,403			1,887,583			1,768,113
Total assets		2,289,946			2,270,592			2,180,779			2,177,762			2,046,879
Deposits		1,652,082			1,636,744			1,563,640			1,560,109			1,435,956
Interest-bearing deposits		1,452,369			1,437,763			1,361,970			1,360,798			1,230,547
Borrowings		346,990			347,292			359,628			372,282			400,393
Interest-bearing liabilities		1,799,359			1,785,055			1,721,597			1,733,080			1,630,940
Equity		268,074			260,126			233,093			219,653			189,122
Tax equivalent net interest income		19,778			18,329			17,093			17,349			17,486

- 10 -

First Community Bancshares, Inc.

Consolidated Average Balance Sheets, Yields, and Rates

	Three Months Ended December 31,
	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)	$	1,406,497	$	22,123		6.24	%	$	1,235,023	$	19,848		6.39	%
Securities available for sale		541,933		6,261		4.58	%		499,617		8,127		6.47	%
Held to maturity securities		7,453		152		8.09	%		8,672		173		7.94	%
Interest-bearing deposits with banks		45,693		32		0.28	%		24,801		46		0.74	%
Total earning assets		2,001,576	$	28,568		5.66	%		1,768,113	$	28,194		6.34	%
Other assets		288,370							278,766
Total	$	2,289,946						$	2,046,879
Interest-bearing liabilities
Interest-bearing demand deposits	$	226,061	$	173		0.30	%	$	184,184	$	79		0.17	%
Savings deposits		366,352		752		0.81	%		304,800		846		1.10	%
Time deposits		859,956		5,230		2.41	%		741,563		6,324		3.39	%
Fed funds purchased		-		-		-			9,097		32		1.40	%
Retail repurchase agreements		98,141		319		1.29	%		119,485		489		1.63	%
Wholesale repurchase agreements		50,000		473		3.75	%		50,000		552		4.39	%
FHLB borrowings & other long-term debt		198,849		1,843		3.68	%		221,811		2,386		4.28	%
Total interest-bearing liabilities		1,799,359		8,790		1.94	%		1,630,940		10,708		2.61	%
Noninterest-bearing demand deposits		199,713							205,409
Other liabilities		22,800							21,408
Stockholders' equity		268,074							189,122
Total	$	2,289,946						$	2,046,879
Net interest income			$	19,778						$	17,486
Net interest rate spread (3)						3.72	%						3.73	%
Net interest margin (4)						3.92	%						3.93	%

(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.

- 11 -

First Community Bancshares, Inc.

Consolidated Average Balance Sheets, Yields, and Rates

	Year Ended December 31,
	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)	$	1,333,112	$	82,785		6.21	%	$	1,199,076	$	80,305		6.70	%
Securities available for sale		537,278		27,638		5.14	%		576,864		33,438		5.80	%
Held to maturity securities		7,828		643		8.21	%		10,302		849		8.24	%
Interest-bearing deposits with banks		62,242		165		0.27	%		15,489		306		1.98	%
Total earning assets		1,940,460	$	111,231		5.73	%		1,801,731	$	114,898		6.38	%
Other assets		289,724							244,455
Total	$	2,230,184						$	2,046,186
Interest-bearing liabilities
Interest-bearing demand deposits	$	205,997	$	443		0.22	%	$	174,809	$	292		0.17	%
Savings deposits		334,217		2,588		0.77	%		312,363		4,693		1.50	%
Time deposits		863,357		24,765		2.87	%		671,729		24,807		3.69	%
Fed funds purchased		-		-		-			15,942		362		2.27	%
Retail repurchase agreements		101,775		1,375		1.35	%		143,159		3,029		2.12	%
Wholesale repurchase agreements		50,000		1,922		3.84	%		50,000		1,630		3.26	%
FHLB borrowings & other long-term debt		204,678		7,589		3.71	%		244,801		10,117		4.13	%
Total interest-bearing liabilities		1,760,024		38,682		2.20	%		1,612,803		44,930		2.79	%
Noninterest-bearing demand deposits		199,917							211,791
Other liabilities		24,832							19,850
Stockholders' equity		245,411							201,742
Total	$	2,230,184						$	2,046,186
Net interest income			$	72,549						$	69,968
Net interest rate spread (3)						3.53	%						3.59	%
Net interest margin (4)						3.74	%						3.88	%

(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.

- 12 -



FOR IMMEDIATE RELEASE: January 27, 2010		FOR MORE INFORMATION, CONTACT: David D. Brown (276) 326-9000