First Community Bankshares (FCBC) 8-K First Community Bancshares, Inc. Announces First Quarter 2005 Results

EXHIBIT 99.1

NEWS RELEASE

FOR IMMEDIATE RELEASE:
May 2, 2005 FOR MORE INFORMATION,     
CONTACT:Robert L. Schumacher
(276) 326-9000           

First Community Bancshares, Inc. Announces First Quarter 2005 Results

     Bluefield, Virginia – First Community Bancshares, Inc. (NASDAQ): FCBC;(www.fcbinc.com) today reported earnings of $6.0 million for the first quarter of 2005, or $0.53 basic and diluted earnings per share. This compares favorably to, and is a 43% increase from, first quarter 2004 earnings of $4.2 million, or $0.37 basic and diluted earnings per share.

     Income from continuing operations for the first three months of 2005 was $6.1 million or $0.54 basic earnings per share, up 8.0% from $5.6 million or $0.50 basic earnings per share from continuing operations in the first quarter of 2004. Diluted earnings per share from continuing operations for the first quarter of 2005 was $0.53 compared to $0.49 from continuing operations in the first quarter of 2004. Return on average equity from continuing operations for the first quarter of 2005 was 13.17%, which compared favorably to 12.66% for the first quarter of last year. Return on average assets from continuing operations remained stable at 1.32% for the first quarter of 2005, compared to 1.36% for the first quarter of last year.

     As previously announced, during the third quarter of 2004, First Community sold its mortgage banking subsidiary, completing its exit from the wholesale mortgage banking business. For the first quarter of 2005, there was a net loss of approximately $80,000 from discontinued operations, less than $.01 per basic and diluted share, compared to a loss of $1.4 million or $0.13 per basic and $0.12 per diluted share in the previous year. The strategic decision to exit the wholesale mortgage business reduced the Company’s exposure to risk associated with the volume-driven, wholesale mortgage banking business and the related interest rate volatility associated with that business. This change in direction permits the Company to continue to focus

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its resources on its core community banking business, which has grown over the past three years and continues to produce strong returns as highlighted in the discussion of continuing operations.

     When comparing the first quarter 2005 earnings from continuing operations with that of the first quarter of 2004, net interest income improved by 11.1% or $1.77 million, due primarily to an increase of $244 million in the average balance of loans held for investment. A large portion of the increase in loans held for investment was due to the March 31, 2004 acquisition of People’s Community Bank in East Tennessee (“PCB”), with loans totaling $128 million at the time of acquisition. The Bank’s branch and loan production office expansion into Winston-Salem, Charlotte, and Mt. Airy, North Carolina and Blacksburg and Norfolk, Virginia contributed another $69.1 million in loan growth.

     The first quarter 2005 tax equivalent net interest margin from continuing operations was 4.47% compared to 4.40% for the first quarter of 2004. The increase seen in the net interest margin is attributable to the recent increases in the prime lending rate, and the asset-sensitive nature of the balance sheet.

     During the first quarter of 2005, the Company completed another phase of its strategic branch expansion plan, by consummating the planned sale of a tract of land to a charitable foundation, reducing its overall land cost by approximately $750,000. The sale resulted in a pre-tax loss of $232,000, or $.01 per share on an after-tax basis, and allowed the Bank to acquire a prime branch location in a southern West Virginia market.

     Non-interest income from continuing operations for the first quarter of 2005 improved by $479,000, or 14.8%, compared to the first quarter of 2004, $237,000 of which is attributable to the PCB acquisition in 2004. The $479,000 increase is net of the $232,000 charge previously discussed. The increase in non-interest income was due to continued improvement in the areas of trust services, service charges on deposit accounts, and all other service charges, commissions and fees. Trust services income increased $120,000, or 28.7%, as a result of growth in trust accounts, trust assets and the related fees generated by such growth in all areas, including estates, employee benefits and investment related accounts. Service charges on deposit accounts

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increased $188,000, or 9.6%, $117,000 of which was attributable to the PCB acquisition. All other service charges, commissions and fees increased $251,000, or 44.9%, compared to the first quarter of 2004, of which $57,000 can be attributed to the PCB acquisition, while ATM service charges increased $98,000. Also included in other service charges commissions and fees were additional fees of $66,000 generated by Stone Capital, the Company’s investment advisory service, which has added investment representatives and expanded its offices.

     Total non-interest expense increased $1.6 million for the first quarter of 2005 compared to the same period in 2004, due in large part to a $1.2 million increase in salaries and benefits. Of this $1.2 million increase, $590,000 was attributable to PCB while the remainder was the result of the Company’s continued expansion through branching and loan production offices, increases in supporting infrastructure, and increased healthcare costs. All other operating expenses for the first quarter of 2005 increased $381,000 compared to the first quarter 2004, $278,000 of was related to PCB.

     The provision for loan losses for the first quarter of 2005 increased by $159,000 from the first quarter of 2004. Changes in the provision are the result of the Company’s quarterly analysis of the adequacy of the allowance for loan losses, and reflect the growth in the loan portfolio. Net charge-offs were down by $133,000 from the first quarter of 2004, and down 29% from 2004 on an annualized basis. Total delinquencies as a percent of total loans were 0.76% at March 31, 2005, down slightly from 0.83% at December 31, 2004 and showed greater improvement when compared to 1.04% at March 31, 2004. The ratio of allowance for loan losses as a percent of loans held for investment of 1.29% is comparable with 1.32% at December 31, 2004.

     Consolidated assets at March 31, 2005 increased to $1.89 billion compared to $1.69 billion at the end of first quarter 2004. Asset growth across the period includes People’s Community Bank, which had total assets of $171 million at the time of acquisition. Total stockholders’ equity for the Company was $184.3 million at March 31, 2005, resulting in book value per common share outstanding of $16.35 compared to $178.0 million and $15.83 per common share at March 31, 2004.

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     First Community Bancshares, Inc., headquartered in Bluefield, Virginia, is a $1.89 billion bank holding company and is the parent company of First Community Bank, N. A. First Community Bank, N. A. operates through fifty-three full-service banking locations, six loan production offices, and two trust and investment management offices in the four states of Virginia, West Virginia, North Carolina and Tennessee. First Community Bank, N.A. is also the parent of Stone Capital Management, Inc., a SEC registered investment advisory firm, which offers wealth management and investment advice. First Community Bancshares, Inc.’s common stock is 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: 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.

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First Community Bancshares, Inc.		Three Months Ended
Consolidated Statements of Income		March 31,
(Dollars in Thousands, Except Per Share Data)(Unaudited)		2005			2004
Interest	Interest and fees on loans held for investment	$	20,728		$	17,130
	Interest on securities-taxable		2,296			3,266
	Interest on securities-nontaxable		1,949			1,636
	Interest on federal funds sold and deposits		215			197
	Total interest income		25,188			22,229
Interest Expense	Interest on deposits		4,962			4,315
	Interest on borrowings		2,473			1,930
	Total interest expense		7,435			6,245
	Net interest income		17,753			15,984
	Provision for loan losses		691			532
	Net interest income after provision for loan losses		17,062			15,452
Non-Interest Income	Fiduciary income		538			418
	Service charges on deposit accounts		2,148			1,960
	Other service charges, commissions and fees		810			559
	Other operating income		204			295
	Gain on sale of securities		22			11
	Total non-interest income		3,722			3,243
Non-Interest Expense	Salaries and employee benefits		7,318			6,113
	Occupancy expense of bank premises		943			852
	Furniture and equipment expense		784			626
	Amortization of intangible assets		110			64
	Other operating expense		3,341			3,255
	Total non-interest expense		12,496			10,910
	Income from continuing operations before income taxes		8,288			7,785
	Income tax expense continuing operations		2,237			2,183
	Income from continuing operations	$	6,051		$	5,602
	Loss from discontinued operations before tax	$	(131	)	$	(1,891	)
	Income tax benefit from discontinued operations	$	(51	)	$	(450	)
	Loss from discontinued operations	$	(80	)	$	(1,441	)
	Net income	$	5,971		$	4,161
	Basic earnings per common share (EPS)	$	0.53		$	0.37
	Diluted earnings per common share (DEPS)	$	0.53		$	0.37
	Basic earnings per common share-continuing operations	$	0.54		$	0.50
	Diluted earnings per common share-continuing operations	$	0.53		$	0.49
	Weighted Average Shares Outstanding:
	Basic		11,259,494			11,245,465
	Diluted		11,339,136			11,347,748
	For the period:
	Return on average equity		13.00	%		9.40	%
	Return on average equity-continuing operations		13.17	%		12.66	%
	Return on average assets		1.30	%		1.00	%
	Return on average assets-continuing operations		1.32	%		1.36	%
	Cash dividends per share	$	0.255		$	0.25
	At period end:
	Book value per share	$	16.35		$	15.83
	Market value	$	28.07		$	30.54

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First Community Bancshares, Inc.
Consolidated Balance Sheets
(Dollars in Thousands, Except Per Share Data)(Unaudited)
		March 31,			December 31,
		2005			2004
Assets	Cash and due from banks	$	34,328		$37,294
	Interest-bearing deposits with banks		48,942		17,452
	Securities available for sale (amortized cost of $372,760 March 31, 2005; $384,746, December 31, 2004)		372,585		388,678
	Securities held to maturity (fair value of $33,132 March 31, 2005; $35,610, December 31, 2004)		32,009		34,221
	Loans held for sale		1,182		1,194
	Loans held for investment, net of unearned income		1,282,546		1,238,756
	Less allowance for loan losses		16,543		16,339
	Net loans		1,266,003		1,222,417
	Premises and equipment		35,869		37,360
	Other real estate owned		1,389		1,419
	Interest receivable		9,124		8,554
	Other assets		23,895		20,923
	Intangible assets		61,510		61,310
	Total Assets	$	1,886,836		$1,830,822
Liabilities	Deposits:
	Demand	$	220,741		$221,499
	Interest-bearing demand		154,316		150,127
	Savings		364,933		385,134
	Time		661,882		602,304
	Total Deposits		1,401,872		1,359,064
	Interest, taxes and other liabilities		15,625		14,313
	Federal funds purchased		—		32,500
	Securities sold under agreements to repurchase		128,244		109,857
	FHLB and other indebtedness		156,822		131,855
	Total Liabilities		1,702,563		1,647,589
Stockholders’ Equity	Preferred stock, par value undesignated; 1,000,000 shares authorized; no shares issued and outstanding in 2005 and 2004		—		—
	Common stock, $1 par value; 15,000,000 shares authorized in 2005 and 2004, respectively; 11,490,835 issued in 2005 and 11,472,311 issued in 2004; and 11,271,835 and 11,250,927 outstanding in 2005 and 2004, respectively		11,491		11,472
	Additional paid-in capital		108,576		108,263
	Retained earnings		71,116		68,019
	Treasury stock, at cost		(6,804	)	(6,881)
	Accumulated other comprehensive income		(106	)	2,360
	Total Stockholders’ Equity		184,273		183,233
	Total Liabilities andStockholders’ Equity	$	1,886,836		$1,830,822

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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)		2005			2004			2004			2004			2004
Interest	Interest and fees on loans held for investment	$	20,728		$	20,518		$	19,953		$	19,112		$	17,130
	Interest on securities-taxable		2,296			2,460			2,960			3,433			3,266
	Interest on securities-nontaxable		1,949			1,727			1,642			1,707			1,636
	Interest on federal funds sold and deposits		215			197			94			104			197
	Total interest income		25,188			24,902			24,649			24,356			22,229
Interest Expense	Interest on deposits		4,962			4,648			4,702			4,813			4,315
	Interest on borrowings		2,473			2,383			2,246			1,916			1,930
	Total interest expense		7,435			7,031			6,948			6,729			6,245
	Net interest income		17,753			17,871			17,701			17,627			15,984
	Provision for loan losses		691			264			1,152			723			532
	Net interest income after provision for loan losses		17,062			17,607			16,549			16,904			15,452
Non-Int Income	Fiduciary income		538			529			499			512			418
	Service charges on deposit accounts		2,148			2,400			2,461			2,301			1,960
	Other service charges, commissions and fees		810			770			728			713			559
	Other operating income		204			440			530			610			295
	Gain (loss) on Securities		22			95			60			1,438			11
	Total non-interest income		3,722			4,234			4,278			5,574			3,243
Non-Int Expense	Salaries and employee benefits		7,318			7,064			6,807			6,662			6,113
	Occupancy expense of bank premises		943			900			913			894			852
	Furniture and equipment expense		784			764			735			747			626
	Amortization of intangible assets		110			112			112			111			64
	Other operating expense		3,341			3,822			3,670			3,812			3,255
	Total non-interest expense		12,496			12,662			12,237			12,226			10,910
	Income before income taxes-continuing operations		8,288			9,179			8,590			10,252			7,785
	Income tax expense-continuing operations		2,237			2,969			1,968			2,666			2,183
	Income from continuing operations		6,051			6,210			6,622			7,586			5,602
	Loss before tax-discontinued operations		(131	)		(215	)		(1,266	)		(2,374	)		(1,891	)
	Income tax benefit -discontinued operations		(51	)		(84	)		(1,054	)		(502	)		(450	)
	Loss from discontinued operations		(80	)		(131	)		(212	)		(1,872	)		(1,441	)
	Net income		5,971			6,079			6,410			5,714			4,161
Per Share	Basic EPS	$	0.53		$	0.54		$	0.57		$	0.51		$	0.37
	Diluted EPS	$	0.53		$	0.54		$	0.57		$	0.50		$	0.37
	Basic EPS from continuing operations	$	0.54		$	0.55		$	0.59		$	0.67		$	0.50
	Diluted EPS from continuing operations	$	0.53		$	0.55		$	0.58		$	0.67		$	0.49
Data	Cash dividends per share	$	0.255		$	0.25		$	0.25		$	0.25		$	0.25
	Weighted Average Shares Outstanding:
	Basic		11,259,494			11,248,137			11,231,973			11,228,956			11,245,465
	Diluted		11,339,136			11,355,202			11,326,999			11,320,415			11,347,748
	Actual shares outstanding at period end		11,271,835			11,250,927			11,243,991			11,215,473			11,244,894
	Book Value per share at period end	$	16.35		$	16.29		$	16.08		$	15.28		$	15.83
	Market Value per share at period end	$	28.07		$	36.08		$	32.85		$	33.50		$	30.54

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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)	2005			2004			2004			2004			2004
Ratios:
Return on average assets		1.30	%		1.32	%		1.39	%		1.22	%		1.00	%
Return on average assets-continuing operations		1.32	%		1.35	%		1.44	%		1.65	%		1.36	%
Return on average equity		13.00	%		13.20	%		14.46	%		13.06	%		9.40	%
Return on average equity-continuing operations		13.17	%		13.48	%		14.94	%		17.33	%		12.66	%
Net yield on earning assets		4.47	%		4.45	%		4.33	%		4.35	%		4.37	%
Net yield on earning assets-continuing operations		4.47	%		4.45	%		4.33	%		4.40	%		4.40	%
Efficiency Ratio at end of period		55.52	%		58.65	%		59.73	%		59.97	%		61.71	%
Efficiency Ratio at end of period-continuing operations		54.94	%		53.19	%		52.67	%		52.39	%		53.51	%
Equity as a percent of total assets at end of period		9.77	%		10.01	%		9.90	%		9.27	%		10.51	%
Equity as a percent of continuing assets at end of period		9.77	%		10.01	%		9.90	%		9.38	%		10.71	%
Average earning assets as a percentage of average total assets		91.93	%		91.92	%		91.78	%		91.83	%		93.09	%
Average earning assets-continuing as a percentage of average total assets continuing operations		91.93	%		91.92	%		91.78	%		92.01	%		93.26	%
Average loans (not including loans held for sale) as a percentage of average deposits		91.21	%		90.31	%		88.63	%		83.38	%		83.10	%
QTD :
Average Loans	$	1,260,521		$	1,234,932		$	1,222,204		$	1,171,562		$	1,016,309
Average Earning Assets	$	1,707,710		$	1,684,058		$	1,689,565		$	1,724,516		$	1,557,885
Average Earning Assets-continuing operations	$	1,707,710		$	1,684,058		$	1,680,982		$	1,699,218		$	1,542,660
Average Total Assets	$	1,857,645		$	1,832,023		$	1,840,911		$	1,878,000		$	1,673,585
Average Total Assets-continuing operations	$	1,857,645		$	1,832,023		$	1,831,596		$	1,846,772		$	1,654,119
Average Deposits	$	1,381,929		$	1,367,365		$	1,379,000		$	1,405,121		$	1,223,032
Average Deposits-continuing operations	$	1,381,929		$	1,367,365		$	1,378,953		$	1,405,070		$	1,222,971
Average Equity	$	186,332		$	183,258		$	176,369		$	176,034		$	178,037
Taxable Equivalent Net Interest Income	$	18,833		$	18,824		$	18,374		$	18,948		$	16,937
Taxable Equivalent Net Interest Income-continuing operations	$	18,833		$	18,824		$	18,314		$	18,873		$	16,889
Average Interest-bearing deposits	$	1,162,230		$	1,143,060		$	1,160,880		$	1,182,311		$	1,036,976
Average Interest-bearing deposits-continuing operations	$	1,162,230		$	1,143,060		$	1,160,880		$	1,182,311		$	1,036,976

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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,
	2005			2004			2004			2004			2004
Cash and due from banks	$	34,328		$	37,294		$	37,400		$	41,533		$	36,389
Interest-bearing deposits with banks		48,942			17,452			17,678			14,799			40,157
Securities available for sale		372,585			388,678			391,623			429,478			443,657
Securities held to maturity		32,009			34,221			34,719			36,209			37,425
Loans held for sale		1,182			1,194			1,163			774			257
Loans held for investment, net of unearned income		1,282,546			1,238,756			1,229,270			1,186,954			1,019,829
Less allowance for loan losses		16,543			16,339			16,233			16,160			14,536
Net loans		1,266,003			1,222,417			1,213,037			1,170,794			1,005,293
Premises and equipment		35,869			37,360			36,499			35,071			30,507
Other real estate owned		1,389			1,419			1,636			2,166			2,571
Interest receivable		9,124			8,554			8,770			8,653			8,434
Other assets		23,895			20,923			22,302			25,566			18,269
Intangible assets		61,510			61,310			61,715			62,003			39,226
Assets related to discontinued operations		—			—			—			22,192			32,275
Total Assets	$	1,886,836		$	1,830,822		$	1,826,542		$	1,849,238		$	1,694,460
Deposits:
Demand	$	220,741		$	221,499		$	218,818		$	225,241		$	197,282
Interest-bearing demand		154,316			150,127			152,191			150,993			138,855
Savings		364,933			385,134			382,468			392,645			299,093
Time		661,882			602,304			609,076			626,150			607,426
Total Deposits		1,401,872			1,359,064			1,362,553			1,395,029			1,242,656
Interest, taxes and other liabilities		15,625			14,313			14,616			11,501			12,619
Federal funds purchased		—			32,500
Securities sold under agreements to repurchase		128,244			109,857			111,481			109,252			98,035
FHLB and other indebtedness		156,822			131,855			157,060			140,941			133,774
Liabilities related to discontinued operations		—			—			—			21,130			29,342
Total Liabilities		1,702,563			1,647,589			1,645,710			1,677,853			1,516,426
Preferred Stock		—			—			—			—			—
Common stock, $1 par value		11,491			11,472			11,470			11,451			11,450
Additional paid-in capital		108,576			108,263			108,280			108,078			108,243
Retained earnings		71,116			68,019			64,752			61,153			58,241
Treasury stock, at cost		(6,804	)		(6,881	)		(7,029	)		(7,321	)		(6,566	)
Accumulated other comprehensive income (loss)		(106	)		2,360			3,359			(1,976	)		6,666
Total Stockholders’ Equity		184,273			183,233			180,832			171,385			178,034
Total Liabilities and Stockholders’ Equity	$	1,886,836		$	1,830,822		$	1,826,542		$	1,849,238		$	1,694,460

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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,
	2005			2004			2004			2004			2004
Asset Quality Analysis:
Allowance for Loan Losses:
Beginning balance	$	16,339		$	16,233		$	16,160		$	14,536		$	14,624
Provision		691			264			1,152			723			532
Acquisition balance		—			—			—			1,786			—
Charge-offs		(844	)		(718	)		(1,312	)		(1,233	)		(911	)
Recoveries		357			560			233			348			291
Net charge-offs		(487	)		(158	)		(1,079	)		(885	)		(620	)
Ending balance	$	16,543		$	16,339		$	16,233		$	16,160		$	14,536
Nonperforming Assets:
Nonaccrual loans	$	6,419		$	5,168		$	3,679		$	2,630		$	3,588
Foreclosed real estate		1,389			1,419			1,636			2,166			2,571
Repossessions		26			1			40			92			60
Loans 90 days or more past due & still accruing		—			—			—			—			—
Nonperforming assets	$	7,834		$	6,588		$	5,355		$	4,888		$	6,219
Loans 90 days or more past due & still accruing as a percentage of loans held for investment		0.00	%		0.00	%		0.00	%		0.00	%		0.00	%
Asset Quality Ratios:
Nonaccrual loans and leases as a percentage of loans held for investment		0.50	%		0.42	%		0.30	%		0.22	%		0.35	%
Nonperforming assets as a percentage of:
Total assets		0.42	%		0.36	%		0.29	%		0.26	%		0.37	%
Total assets-continuing		0.42	%		0.36	%		0.29	%		0.27	%		0.37	%
Loans held for investment plus foreclosed property		0.61	%		0.53	%		0.44	%		0.41	%		0.61	%
Net charge-offs as a % of average loans held for investment		0.04	%		0.01	%		0.09	%		0.08	%		0.06	%
Allowance for loan & lease losses as a percentage of loans held for investment		1.29	%		1.32	%		1.32	%		1.36	%		1.43	%
Ratio of allowance for loans losses to:
Nonaccrual loans		2.58			3.16			4.41			6.14			4.05
Restructured loans performing according to modified terms	$	344		$	354		$	368		$	392		$	392

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