First Community Bankshares (FCBC) 8-K First Community Bancshares, Inc. Announces Proposed Sale of Mortgage Subsidiary and 2004 First Quarter Results

Exhibit 99.1

NEWS RELEASE

FOR IMMEDIATE RELEASE: April 27, 2004	FOR MORE INFORMATION, CONTACT:   Robert L. Schumacher
	at (276) 326-9000

     First Community Bancshares, Inc. Announces Proposed Sale of Mortgage
                         Subsidiary and 2004 First Quarter Results

     Bluefield, Virginia – First Community Bancshares, Inc. (NASDAQ): FCBC;www.fcbinc.com) released quarterly results today along with information related to the proposed sale of its United First Mortgage subsidiary headquartered in Richmond Virginia. Net income for the first quarter of 2004 totaled $4.2 million as compared with $6.7 million in the first quarter of 2003. Basic and diluted earnings per share for the first quarter were $0.37, down from $0.62, in the first quarter of 2003. When comparing the first quarter 2004 earnings with that of 2003, the reduction in the Company’s earnings was largely attributable to a $1.9 million decline in net income of the mortgage-banking segment. Reduced loan production and margins in the segment combined with an impairment charge of $651,000 produced the decline in mortgage banking net income. The community-banking segment reported segment net income of $5.7 million, which represents a decrease from the community banking segment net income of $6.4 million in the first quarter of 2003. The decrease is attributed, in part, to increased overhead and operating expense relative to the development and growth of the Company into new markets including the Richmond, Virginia and Winston-Salem, North Carolina markets.

     The proposed sale of the mortgage subsidiary reflects the Company’s strategic plans for exiting the mortgage banking business which will allow greater focus on the Company’s core community banking business. President and Chief Executive Officer John M. Mendez announced the proposed transaction, which involves a sale of 100% of the stock of UFM to certain members of UFM’s present management. Although completion of the transaction

remains subject to the execution of a definitive agreement and satisfaction of the conditions which will be set forth therein, the Company indicated that the proposed sale did result in a charge to net income of $651,000 in the first quarter of 2004. The parties anticipate that the proposed sale of the mortgage subsidiary will close by June 30, 2004.

     Compression of the Company’s net interest margin decreased first quarter 2004 net interest income by $0.5 million; however, this decrease was offset by the $1.4 million net interest income contribution made by the CommonWealth branches purchased in June 2003, resulting in a consolidated net interest income increase of $0.9 million, or 5.6% when compared to first quarter 2003. The Company’s tax-equivalent net interest margin at 4.41% compares with 4.64% for the first quarter of 2003. The Company attributes the decrease in net interest margin to reduced loan yields on new and renewed business throughout the continued low interest rate environment during 2004. During the first quarter 2004, tax equivalent net interest income increased by $6.6 million due to volume and decreased $5.8 million as a result of rate changes resulting in a net increase of $0.8 million.

     The provision for loan losses remained relatively stable, decreasing slightly by $57,000 from the first quarter of 2003. The provision is directionally consistent with the Company’s calculation of the adequacy of the allowance for loan losses. Non-performing assets (including other real estate owned) as a percentage of total assets were 0.37% at March 31, 2004 versus .31% at December 31, 2003, and 0.44% at March 31, 2003. The slight increase from December 31, 2003 is attributable to a $903,000 property in the Richmond area, which has been considered in the calculation of the adequacy of the allowance for loan losses.

     Non-interest income decreased by $2.3 million; however, this amount included a $2.5 million decrease in mortgage banking income. Non-interest expense increased $2.2 million which included the $651,000 impairment charge related to the mortgage segment. Increases in other operating expenses largely related to the additional costs (salaries, occupancy, furniture & equipment and other operating expenses) associated with the opening of three new branches in Winston-Salem and two loan production offices in Charlotte and Mount Airy, North Carolina, the acquisition of The CommonWealth Bank in Richmond, Virginia and costs associated with pre-merger activities leading to the acquisition of Peoples Bancorp, headquartered in Johnson City, Tennessee, which became effective the second quarter 2004.

     Return on equity (“ROE”) and (“ROA”) for the Company were 9.40% and 1.00%, respectively, for the first three months of 2004, compared to 17.63% and 1.81%, respectively in 2003. The decrease was attributable to the loss incurred by UFM and, as noted, the costs related to the pending sale of this business. In addition, the ROE dilution is attributable to the stock issuance in connection with the acquisition of The CommonWealth Bank in June 2003.

     PCB Bancorp and its wholly owned subsidiary, People’s Community Bank, headquartered in Johnson City, Tennessee were acquired by the Company effective April 1, 2004, and marked the Company’s first entry into East Tennessee. People’s Community, which has six branches located in Johnson City, Kingsport and Washington and Sullivan counties had total assets of $171 million, total loans of $128 million and total deposits of $150 million.

     First Community Bancshares, Inc. is a $1.7 billion bank holding company and the parent company of First Community Bank, N. A. First Community Bank, N. A. operates in the three states of Virginia, West Virginia and North Carolina with 51 full-service commercial banking locations and, offers wealth management and investment advice through its wholly owned subsidiary, Stone Capital Management, Inc. First Community Bancshares, Inc.’s common stock is currently traded on the NASDAQ National market under the symbol FCBC.

DISCLAIMER

     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: 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 Act of 1995, the Company does not undertake to update forward-looking statements contained within this news release.

First Community Bancshares, Inc.
Consolidated Statements of Income

(Dollars in Thousands, Except Per Share Data)(Unaudited)		Three Months
		Ended
		March 31,
		2004			2003
Interest	Interest and fees on loans held for investment	$	17,130		$	16,892
Income	Interest and fees on loans held for sale		203			629
	Interest on securities-taxable		3,270			3,145
	Interest on securities-nontaxable		1,636			1,657
	Interest on federal funds sold and deposits		199			215
	Total interest income		22,438			22,538
Interest	Interest on deposits		4,315			5,317
Expense	Interest on borrowings		2,091			2,041
	Total interest expense		6,406			7,358
	Net interest income		16,032			15,180
	Provision for loan losses		532			589
	Net interest income after provision for loan losses		15,500			14,591
Non-Interest	Fiduciary income		418			416
Income	Service charges on deposit accounts		1,960			1,821
	Other service charges, commissions and fees		559			513
	Mortgage banking income		507			2,964
	Other operating income		295			297
	Gain on sale of securities		11			20
	Total non-interest income		3,750			6,031
Non-Interest	Salaries and employee benefits		7,213			6,333
Expense	Occupancy expense of bank premises		951			849
	Furniture and equipment expense		673			530
	Amortization of intangible assets		64			63
	Other operating expense		4,455			3,356
	Total non-interest expense		13,356			11,131
	Income before income taxes		5,894			9,491
	Income tax expense		1,733			2,743
	Net Income	$	4,161		$	6,748
	Basic earnings per common share (EPS)	$	0.37		$	0.62
	Diluted earnings per common share (DEPS)	$	0.37		$	0.62
	Weighted Average Shares Outstanding:
	Basic		11,245,465			10,857,307
	Diluted		11,347,748			10,913,481
	For the period:
	Return on average equity		9.40	%		17.63	%
	Return on average assets		1.00	%		1.81	%
	Cash dividends per share	$	0.25		$	0.24
	At period end:
	Book value per share	$	15.83		$	14.28
	Market value	$	30.54		$	30.15

First Community Bancshares, Inc.
Consolidated Balance Sheets

(Dollars in Thousands, Except Per Share Data)(Unaudited)
		March 31,			December 31,
		2004			2003
Assets	Cash and due from banks	$	38,482		$	39,416
	Interest-bearing deposits with banks		40,157			22,136
	Fed Funds Sold		—			—
	Securities available for sale (amortized cost of $432,733 March 31, 2004; $436,194, December 31, 2003)		443,844			444,491
	Securities held to maturity (fair value of $39,629 March 31, 2004; $40,060, December 31, 2003)		37,425			38,020
	Loans held for sale		28,656			18,152
	Loans held for investment, net of unearned income		1,019,829			1,026,191
	Less allowance for loan losses		14,536			14,624
	Net loans		1,005,293			1,011,567
	Premises and equipment		30,633			30,021
	Other real estate owned		2,571			2,091
	Interest receivable		8,448			8,345
	Other assets		18,792			17,762
	Intangible assets		40,159			40,726
	Total Assets	$	1,694,460		$	1,672,727
Liabilities	Deposits:
	Demand	$	197,330		$	194,127
	Interest-bearing demand		243,226			234,458
	Savings		194,722			190,366
	Time		607,426			606,666
	Total Deposits		1,242,704			1,225,617
	Interest, taxes and other liabilities		12,363			12,037
	Securities sold under agreements to repurchase		98,035			97,651
	FHLB and other indebtedness		163,324			162,387
	Total Liabilities		1,516,426			1,497,692
Stockholders’	Preferred stock, par value undesignated; 1,000,000 shares authorized;
Equity	no shares issued and outstanding in 2004 and 2003		—			—
	Common stock, $1 par value; 15,000,000 shares authorized in 2004 and 2003, respectively; 11,449,841 issued in 2004 and 11,442,348 issued in 2003; and 11,244,894 and 11,242,443 outstanding in 2004 and 2003, respectively		11,450			11,442
	Additional paid-in capital		108,243			108,128
	Retained earnings		58,241			56,894
	Treasury stock, at cost		(6,566	)		(6,407	)
	Accumulated other comprehensive income		6,666			4,978
	Total Stockholders’ Equity		178,034			175,035
	Total Liabilities and Stockholders’ Equity	$	1,694,460		$	1,672,727

First Community Bancshares, Inc.
Quarterly Performance Summary								As of and for the Quarter Ended
Income Statements		March 31,			December 31,			September 30,			June 30,			March 31,
(Dollars in Thousands Except Per Share Data)		2004			2003			2003			2003			2003
Interest	Interest and fees on loans held for investment	$	17,130		$	17,967		$	18,591		$	16,982		$	16,892
Income	Interest and fees on loans held for sale		203			283			800			655			629
	Interest on securities-taxable		3,270			3,531			3,075			3,387			3,145
	Interest on securities-nontaxable		1,636			1,637			1,552			1,642			1,657
	Interest on federal funds sold and deposits		199			125			128			147			215
	Total interest income		22,438			23,543			24,146			22,813			22,538
Interest	Interest on deposits		4,315			4,557			4,934			5,142			5,317
Expense	Interest on borrowings		2,091			2,119			2,180			2,084			2,041
	Total interest expense		6,406			6,676			7,114			7,226			7,358
	Net interest income		16,032			16,867			17,032			15,587			15,180
	Provision for loan losses		532			740			782			1,308			589
	Net interest income after provision          for loan losses		15,500			16,127			16,250			14,279			14,591
Non-Interest	Fiduciary income		418			513			463			480			332
Income	Service charges on deposit accounts		1,960			2,166			2,098			1,986			1,821
	Other service charges, commissions and fees		559			507			639			641			597
	Mortgage banking income		507			244			507			3,450			2,964
	Other operating income		295			220			340			244			297
	Gain (loss) on Securities		11			7			1,038			133			20
	Total non-interest income		3,750			3,657			5,085			6,934			6,031
Non-Interest	Salaries and employee benefits		7,213			6,797			7,190			6,439			6,333
Expense	Occupancy expense of bank premises		951			815			861			823			849
	Furniture and equipment expense		673			635			563			520			530
	Amortization of intangible assets		64			65			64			51			63
	Other operating expense		4,455			3,920			3,896			3,581			3,356
	Total non-interest expense		13,356			12,232			12,574			11,414			11,131
	Income before income taxes		5,894			7,552			8,761			9,799			9,491
	Income tax expense		1,733			2,258			2,532			2,832			2,743
	Net Income		4,161			5,294			6,229			6,967			6,748
Per	Basic EPS	$	0.37		$	0.47		$	0.55		$	0.63		$	0.62
Share	Diluted EPS	$	0.37		$	0.47		$	0.55		$	0.63		$	0.62
Data	Cash dividends per share	$	0.25		$	0.25		$	0.25		$	0.24		$	0.24
	Weighted Average Shares Outstanding:
	Basic		11,245,465			11,244,382			11,262,180			10,969,748			10,857,307
	Diluted		11,347,748			11,362,269			11,383,941			11,084,847			10,913,481
	Actual shares outstanding at period end		11,244,894			11,242,443			11,250,931			11,256,674			10,830,701
	Book Value per share at period end	$	15.83		$	15.57		$	15.33		$	15.57		$	14.28
	Market Value per share at period end	$	30.54		$	33.16		$	35.29		$	35.58		$	30.15
Ratios	Return on average assets		1.00	%		1.25	%		1.46	%		1.78	%		1.81	%
	Return on average equity		9.40	%		12.01	%		14.10	%		17.29	%		17.63	%
	Net yield on earning assets		4.41	%		4.56	%		4.55	%		4.55	%		4.64	%
	Efficiency Ratio at end of period		61.71	%		51.92	%		51.16	%		48.68	%		49.67	%
	Equity as a percent of total assets at end of period		10.51	%		10.46	%		10.27	%		10.12	%		10.12	%
	Average earning assets as a percentage of average total assets		92.21	%		91.92	%		91.91	%		92.67	%		92.99	%
	Average loans (not including loans held for sale) as a percentage of average deposits		83.10	%		84.17	%		83.04	%		79.23	%		79.50	%
QTD	Average Loans (Not including Loans Held for Sale)	$	1,016,309		$	1,034,786		$	1,030,875		$	931,488		$	906,856
Averages	Average Earning Assets	$	1,543,157		$	1,545,585		$	1,559,472		$	1,454,319		$	1,408,749
	Average Total Assets	$	1,673,585		$	1,681,510		$	1,696,647		$	1,569,302		$	1,514,900
	Average Deposits	$	1,223,032		$	1,229,439		$	1,241,420		$	1,175,618		$	1,140,746
	Average Equity	$	178,037		$	174,923		$	175,228		$	161,622		$	155,222
	Taxable Equivalent Net Interest Income	$	16,937		$	17,773		$	17,899		$	16,504		$	16,115
	Average Interest-bearing deposits	$	1,036,976		$	1,038,341		$	1,046,364		$	1,008,130		$	983,242

First Community Bancshares, Inc.
Quarterly Performance Summary
Balance Sheets
(Dollars in Thousands Except Per Share Data)

	March 31,			December 31,			September 30,			June 30,			March 31,
	2004			2003			2003			2003			2003
Cash and due from banks	$	38,482		$	39,416		$	32,889		$	43,551		$	36,979
Interest-bearing deposits with banks		40,157			22,136			76,309			25,795			63,146
Federal funds sold		—			—			—			7,353			4
Securities available for sale		443,844			444,491			395,496			419,815			372,926
Securities held to maturity		37,425			38,020			39,433			39,745			40,084
Loans held for sale		28,656			18,152			16,689			45,458			50,753
Loans held for investment, net of unearned income		1,019,829			1,026,191			1,028,189			1,027,928			897,194
Less allowance for loan losses		14,536			14,624			15,680			15,707			13,782
Net loans		1,005,293			1,011,567			1,012,509			1,012,221			883,412
Premises and equipment		30,633			30,021			29,661			29,449			25,417
Other real estate owned		2,571			2,091			2,403			2,787			2,545
Interest receivable		8,448			8,345			8,433			8,381			8,210
Other assets		18,792			17,762			24,184			22,966			18,524
Intangible assets		40,159			40,726			41,330			42,791			27,110
Total Assets	$	1,694,460		$	1,672,727		$	1,679,336		$	1,700,312		$	1,529,110
Deposits:
Demand	$	197,330		$	194,127		$	194,060		$	210,347		$	162,998
Interest-bearing demand		243,226			234,458			234,737			234,551			207,098
Savings		194,722			190,366			188,021			185,284			183,738
Time		607,426			606,666			615,680			626,539			599,868
Total Deposits		1,242,704			1,225,617			1,232,498			1,256,721			1,153,702
Interest, taxes and other liabilities		12,363			12,037			12,090			21,686			14,663
Federal funds purchased		—			—			—			—			—
Securities sold under agreements to repurchase		98,035			97,651			102,449			93,742			95,621
FHLB and other indebtedness		163,324			162,387			159,815			152,855			110,429
Total Liabilities		1,516,426			1,497,692			1,506,852			1,525,004			1,374,415
Preferred Stock		—			—			—			—			—
Common stock, $1 par value		11,450			11,442			11,433			11,390			9,965
Additional paid-in capital		108,243			108,128			108,078			108,286			58,970
Retained earnings		58,241			56,894			54,407			51,149			83,267
Treasury stock, at cost		(6,566	)		(6,407	)		(5,762	)		(4,028	)		(3,543	)
Accumulated other comprehensive income		6,666			4,978			4,328			8,511			6,036
Total Stockholders’ Equity		178,034			175,035			172,484			175,308			154,695
Total Liabilities and Stockholders’ Equity	$	1,694,460		$	1,672,727		$	1,679,336		$	1,700,312		$	1,529,110

First Community Bancshares, Inc.
Selected Financial Information
(Dollars in Thousands)

	As of and for the Quarter Ended
	March 31,			December 31,			September 30,			June 30,			March 31,
	2004			2003			2003			2003			2003
Asset Quality Analysis:
Allowance for Loan Losses:
Beginning balance	$	14,624		$	15,680		$	15,707		$	13,782		$	14,410
Provision		532			740			782			1,308			589
Acquisition balance		—			—			—			1,583			—
Charge-offs		(911	)		(2,022	)		(990	)		(1,441	)		(1,668	)
Recoveries		291			226			181			475			451
Net charge-offs		(620	)		(1,796	)		(809	)		(966	)		(1,217	)
Ending balance	$	14,536		$	14,624		$	15,680		$	15,707		$	13,782
Nonperforming Assets:
Nonaccrual loans	$	3,588		$	2,993		$	2,277		$	2,547		$	3,997
Foreclosed real estate		2,571			2,091			2,403			2,787			2,544
Repossessions		60			75			125			140			188
Loans 90 days or more past due & still accruing		—			—			124			86			21
Nonperforming assets	$	6,219		$	5,159		$	4,929		$	5,560		$	6,750
Loans 90 days or more past due & still accruing as a percentage of loans held for investment		0.00	%		0.00	%		0.01	%		0.01	%		0.00	%
Asset Quality Ratios:
Nonaccrual loans and leases as a percentage of loans held for investment		0.35	%		0.29	%		0.22	%		0.25	%		0.45	%
Nonperforming assets as a percentage of:
Total assets		0.37	%		0.31	%		0.29	%		0.33	%		0.44	%
Loans held for investment plus foreclosed property		0.61	%		0.50	%		0.48	%		0.54	%		0.75	%
Net charge-offs as a % of average loans held for investment		0.06	%		0.17	%		0.08	%		0.10	%		0.13	%
Allowance for loan & lease losses as a percentage of loans held for investment		1.43	%		1.43	%		1.53	%		1.53	%		1.54	%
Ratio of allowance for loans losses to:
Nonaccrual loans		4.05			4.89			6.89			6.17			3.45
Restructured loans performing according to modified terms	$	392		$	356		$	362		$	368		$	341

Segment Information:

	Community		Mortgage
Year-to-date Income	Banking		Banking			Parent			Eliminations			Total
March 31, 2004	(Amounts in Thousands)
Net interest income	$	16,199	$	48		$	(119	)	$	(96	)	$	16,032
Provision for loan losses		532		—			—			—			532
Net interest income after provision for loan losses		15,667		48			(119	)		(96	)		15,500
Non-interest income		3,434		507			—			(191	)		3,750
Non-interest expenses		11,055		2,446			142			(287	)		13,356
Income (loss) before income taxes		8,046		(1,891	)		(261	)		—			5,894
Income tax expense (benefit)		2,334		(450	)		(151	)		—			1,733
Net income	$	5,712	$	(1,441	)	$	(110	)	$	—		$	4,161
Average assets	$	1,666,330	$	19,466		$	193,354		$	(205,565	)	$	1,673,585

	Community		Mortgage
Year-to-date income	Banking		Banking		Parent			Eliminations			Total
March 31, 2003	(Amounts in Thousands)
Net interest income	$	15,011	$	124	$	55		$	(10	)	$	15,180
Provision for loan losses		589		—		—			—			589
Net interest income after provision for loan losses		14,422		124		55			(10	)		14,591
Non-interest income		3,237		2,964		(4	)		(166	)		6,031
Non-interest expenses		8,645		2,387		275			(176	)		11,131
Income (loss) before income taxes		9,014		701		(224	)		—			9,491
Income tax expense (benefit)		2,600		273		(130	)		—			2,743
Net income	$	6,414	$	428	$	(94	)	$	—		$	6,748
Average assets	$	1,510,362	$	55,642	$	154,576		$	(205,680	)	$	1,514,900