First Community Bankshares (FCBC) 8-K First Community Bancshares, Inc. Announces 2008 Results

Exhibit 99.1

NEWS RELEASE

FOR IMMEDIATE RELEASE:	FOR MORE INFORMATION,
January 28, 2009	CONTACT: David D. Brown
	(276) 326-9000

First Community Bancshares, Inc. Announces 2008 Results

Bluefield, Virginia – First Community Bancshares, Inc. (NASDAQ: FCBC) (www.fcbinc.com) today reported net income available to common shareholders for the year ended December 31, 2008, of $2.53 million, or $0.23 per diluted common share. For the fourth quarter of 2008, the net loss to common shareholders was $14.57 million, or $1.29 per diluted common share. During the fourth quarter, the Company recognized total non-cash pre-tax other-than-temporary impairment charges of $29.92 million in its investment portfolio. Pre-tax earnings, exclusive of the non-cash impairment charges, were $5.86 million and $29.71 million for the fourth quarter and full year, respectively.

According to Chief Executive Officer John M. Mendez, “We remain very proud of our loan quality and our core earnings, both of which compare favorably with our peers within the industry. The non-cash impairment charges are unfortunate, but represent the state of our recessionary economy. The charges also illustrate a level of disruption in the market for securitized assets and collateralized debt obligations, with pricing reflecting the distressed sales and fund redemptions which are ongoing in the industry. Our loan portfolio remains strong relative to our peers and the industry as a whole, and we remain in a very good posture to take advantage of new opportunities within our markets.”

Net Interest Income

Tax-equivalent net interest margin for the fourth quarter of 2008 was 3.83%. Interest income was $26.75 million, a decrease of $5.44 million, or 16.90%, from fourth quarter 2007. The decrease was due primarily to decreases in loan yields and average balances, a result of slower demand and enhanced underwriting. The yield on loans dropped to 6.24% from 7.40% and average loans decreased $3.60 million to $1.24 billion from fourth quarter 2007. Yields on loans have dropped as a direct result of the precipitous declines in market rates of interest.

Fourth quarter interest expense decreased $4.34 million, or 28.86%, from 2007. Fourth quarter deposit costs decreased $2.38 million compared to the fourth quarter of 2007, while the average rate paid on interest-bearing deposits decreased 90 basis points to 2.34%. Compared to the fourth quarter of 2007, interest costs on borrowings decreased $1.97 million to $3.46 million, while the average balance decreased $116.24 million due to the redemption of various wholesale debt issues and the Company’s relatively liquid balance sheet. The fourth quarter cost of interest-bearing liabilities decreased 91 basis points compared to last year. Average interest bearing liabilities decreased $64.53 million, or 3.81%, compared with fourth quarter 2007, including a decrease of $70.12 million in FHLB borrowings. Net interest income was down $1.10 million, or 6.41%, from the fourth quarter of 2007.

Non-interest Income

Despite significant declines in managed portfolio market values, wealth management revenues increased $197 thousand, or 20.76%, as investment advisory revenue increased $125 thousand. At December 31, 2008, the Wealth Management Division reported $848 million in assets under management.

Service charges on deposit accounts were $3.70 million for the fourth quarter of 2008, an increase of $387 thousand, or 11.69%, from the fourth quarter of 2007. Insurance commissions were $1.26 million for the fourth quarter of 2008, an increase of $116 thousand, or 10.16%, from the same period in 2007. In December 2008, GreenPoint completed its largest acquisition to date, Carr & Hyde Insurance, in Warrenton, Virginia.

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Non-interest Expenses

Total non-interest expenses for the fourth quarter of 2008 increased $1.64 million, or 12.24%, from the fourth quarter of 2007. Salaries and employee benefits increased $407 thousand, or 6.05%, from the fourth quarter of 2007. The acquisition of Coddle Creek Financial, which closed on November 14, 2008, accounted for approximately $120 thousand of the increase and GreenPoint acquisitions accounted for approximately $199 thousand of the increase. Occupancy and furniture and equipment expenses increased due to the Coddle Creek acquisition, the new branches, and the addition of operating expenses at GreenPoint, as it acquired new agencies throughout 2008. Other non-interest expenses increased $947 thousand, or 21.43%, compared to the fourth quarter of 2007 and included $148 thousand of expenses related to Coddle Creek, $238 thousand in increased consulting fee expenses, and $145 thousand in increased legal expenses. The fourth quarter efficiency ratio was 59.10% compared to 51.22% in 2007.

Credit Quality

The Company’s loan quality measures at December 31, 2008, continue to compare favorably to the Company’s peers. Total loan delinquencies as a percent of total loans were 1.97% at December 31, 2008, compared with 1.25% at September 30, 2008. The ratio of allowance for loan losses as a percent of loans held for investment was 1.23% at December 31, 2008, compared with 1.24% at September 30, 2008. The addition of Coddle Creek’s seasoned residential real estate loan portfolio moderated the percentage of reserves needed on the combined portfolio. Non-performing assets increased to $14.09 million at December 31, 2008, from $7.89 million at September 30, 2008. Non-performing loans as a percentage of loans held for investment were 0.98% compared with 0.60% at September 30, 2008. The increase from third quarter was due largely to the acquisition of Coddle Creek and the addition of a $2.92 million North Carolina hotel loan to nonaccrual loans at December 31, 2008. This loan was already on the Company’s watch list and loss expectations were not changed by the move to nonaccrual.

Mr. Mendez added, “We are very proactive in identifying and working through problem credits. Borrowers are engaged early in the process and we have had good success in establishing a collaborative approach to problem credit resolution. We also have a good track record in terms of establishing specific loss reserves and follow-up on recovery opportunities. Our current level of non-performing assets is quite manageable and we are working to return to our historic credit quality levels. We have also established a strong modification program for residential mortgages. While this has not been a significant source of historic delinquency or loss, we stand ready to assist homeowners, in any way possible.”

Net charge-offs for the fourth quarter of 2008 were $2.40 million. Charge-offs for the quarter were driven primarily by three loans from the Richmond area. The Company made a provision for loan losses of $2.70 million in the fourth quarter of 2008 compared with $717 thousand in the fourth quarter of 2007. Of the $2.40 million of loans charged off in the fourth quarter, $1.56 million had been specifically reserved for in previous periods.

Balance Sheet

Since year-end 2007, consolidated assets have decreased $15.62 million to $2.13 billion at December 31, 2008. Included in that decrease is the acquisition of Coddle Creek, the prepayment of a $25.00 million FHLB advance, the call of a $50.00 million FHLB advance, and a net decrease of $145.98 million in the Company’s investment portfolio. Total stockholders’ equity for the Company was $220.54 million, resulting in a book value per common share outstanding of $15.48 at December 31, 2008, compared to $217.10 million and $19.61 per common share at December 31, 2007. The change in total equity reflects the Coddle Creek acquisition, the issue of preferred stock and warrants to the U. S. Treasury, and the increase in accumulated other comprehensive loss as a result of lower valuations on the Company’s investment portfolio and interest rate swap.

During the fourth quarter, the Company recognized a non-cash impairment charge of $14.47 million which stems from a 2006 vintage collateralized mortgage obligation. The Company’s analysis of the bond showed probable losses of $1.69 million, or 6.76%, of the $25.00 million par value of the security. U.S. GAAP requires banks to write down securities with probable losses to estimated market values, even if very little of the loss in value can be attributed to credit quality.

The Company performed extensive cash flow analyses of each of its pooled trust preferred investment securities. As of December 31, 2008, one of the securities showed an adverse change in cash flow, resulting in a pre-tax other-than-temporary

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impairment charge of $15.46 million. Total pre-tax, non-cash impairment charges of $29.92 million are reflected in non-interest income.

During the fourth quarter, the Company issued preferred stock to the U.S. Treasury under the Capital Purchase Program for $41.50 million. In connection with the investment, the Company issued warrants for 176,546 shares of its common stock. In furtherance of the Company’s operating objectives, the Company originated $26.88 million of new loans during the month of December 2008, traditionally one of the slowest months of the year.

Cash dividends to shareholders were $1.12 for the year, making 2008 the 17^th consecutive year of dividend increases to shareholders and the 23^rd consecutive year of cash dividends to shareholders.

The Company will host an investor and media teleconference and webcast on Thursday, January 29, 2009, at 11:00 a.m. To access the teleconference, the toll-free number to call 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 2008 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 $2.13 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 group managed assets with a market value of $848 million at December 31, 2008. 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 atwww.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 onForm 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.
Consolidated Statements of Income
(In Thousands, Except Share and Per Share Data)(Unaudited)

		Three Months Ended						Year Ended
		December 31,						December 31,
		2008			2007			2008			2007
Interest Income
	Interest and fees on loans held for investment	$	19,347		$	23,100		$	79,741		$	93,501
	Interest on securities-taxable		5,613			6,942			22,714			24,725
	Interest on securities-nontaxable		1,746			2,050			7,521			8,190
	Interest on federal funds sold and deposits		46			102			306			1,175
	Total interest income		26,752			32,194			110,282			127,591
Interest Expense
	Interest on deposits		7,249			9,626			29,792			38,757
	Interest on borrowings		3,459			5,425			15,138			20,519
	Total interest expense		10,708			15,051			44,930			59,276
	Net interest income		16,044			17,143			65,352			68,315
	Provision for loan losses		2,701			717			7,422			717
	Net interest income after provision for loan losses		13,343			16,426			57,930			67,598
Non-Interest Income
	Wealth management income		1,146			949			4,100			3,880
	Service charges on deposit accounts		3,697			3,310			14,067			11,387
	Other service charges and fees		1,023			991			4,248			3,600
	Insurance commissions		1,258			1,142			4,988			1,142
	Impairment on investment securities		(29,923	)		—			(29,923	)		—
	Security (losses) gains		(234	)		202			1,899			411
	Other operating income		659			1,455			2,995			4,411
	Total non-interest income		(22,374	)		8,049			2,374			24,831
Non-Interest Expense
	Salaries and employee benefits		7,135			6,728			29,876			25,848
	Occupancy expense of bank premises		1,385			1,170			5,102			4,180
	Furniture and equipment expense		942			923			3,740			3,370
	Amortization of intangible assets		205			154			689			467
	Prepayment penalty		—			—			1,647			—
	Other operating expense		5,366			4,419			19,462			16,598
	Total non-interest expense		15,033			13,394			60,516			50,463
	(Loss) income before income taxes		(24,064	)		11,081			(212	)		41,966
	Income tax (benefit) expense		(9,748	)		3,328			(2,997	)		12,334
	Net (loss) income		(14,316	)		7,753			2,785			29,632
	Dividends on preferred stock		255			—			255			—
	Net (loss) income available to common shareholders	$	(14,571	)	$	7,753		$	2,530		$	29,632
	Basic earnings per common share (EPS)	$	(1.29	)	$	0.70		$	0.23		$	2.64
	Diluted earnings per common share (DEPS)	$	(1.29	)	$	0.69		$	0.23		$	2.62
	Weighted Average Shares Outstanding:
	Basic		11,252,183			11,120,938			11,058,076			11,204,676
	Diluted		11,320,138			11,205,292			11,134,025			11,292,871
	For the period:
	Return on average assets		-0.71	%		1.43	%		0.12	%		1.39	%
	Return on average stated equity		-7.70	%		13.95	%		1.25	%		13.54	%
	Return on average common equity		-8.54	%		13.95	%		1.28	%		13.54	%
	Cash dividends per share	$	0.28		$	0.27		$	1.12		$	1.08

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First Community Bancshares, Inc.
Quarterly Performance Summary
Income Statements
(In Thousands, Except Share and Per Share Data)(Unaudited)

		As of and for the Quarter Ended
		December 31,			September 30,		June 30,		March 31,		December 31,
		2008			2008		2008		2008		2007
Interest Income
	Interest and fees on loans held for investment	$	19,347		$	19,266	$	19,891	$	21,237	$	23,100
	Interest on securities-taxable		5,613			5,567		5,467		6,067		6,942
	Interest on securities-nontaxable		1,746			1,708		2,004		2,063		2,050
	Interest on federal funds sold and deposits		46			9		71		180		102
	Total interest income		26,752			26,550		27,433		29,547		32,194
Interest Expense
	Interest on deposits		7,249			6,684		7,118		8,741		9,626
	Interest on borrowings		3,459			3,543		3,690		4,446		5,425
	Total interest expense		10,708			10,227		10,808		13,187		15,051
	Net interest income		16,044			16,323		16,625		16,360		17,143
	Provision for loan losses		2,701			3,461		937		323		717
	Net interest income after provision for loan losses		13,343			12,862		15,688		16,037		16,426
Non-Int Income
	Wealth management income		1,146			957		1,098		899		949
	Service charges on deposit accounts		3,697			3,808		3,463		3,099		3,310
	Other service charges and fees		1,023			1,040		1,064		1,121		991
	Insurance commissions		1,258			1,240		1,146		1,344		1,142
	Impairment on investment securities		(29,923	)		—		—		—		—
	Securities (losses) gains		(234	)		163		150		1,820		202
	Other operating income		659			675		803		858		1,455
	Total non-interest income		(22,374	)		7,883		7,724		9,141		8,049
Non-Int Expense
	Salaries and employee benefits		7,135			7,371		7,580		7,790		6,728
	Occupancy expense of bank premises		1,385			1,297		1,256		1,164		1,170
	Furniture and equipment expense		942			924		973		901		923
	Amortization of intangible assets		205			166		158		160		154
	Prepayment penalty		—			—		—		1,647		—
	Other operating expense		5,366			4,683		4,792		4,621		4,419
	Total non-interest expense		15,033			14,441		14,759		16,283		13,394
	(Loss) income before income taxes		(24,064	)		6,304		8,653		8,895		11,081
	Income tax (benefit) expense		(9,748	)		1,753		2,415		2,583		3,328
	Net (loss) income		(14,316	)		4,551		6,238		6,312		7,753
	Preferred dividends		255			—		—		—		—
	Net (loss) income available to common shareholders	$	(14,571	)	$	4,551	$	6,238	$	6,312	$	7,753
Per Share
	Basic EPS	$	(1.29	)	$	0.42	$	0.57	$	0.57	$	0.70
	Diluted EPS	$	(1.29	)	$	0.41	$	0.56	$	0.57	$	0.69
	Cash dividends per share	$	0.28		$	0.28	$	0.28	$	0.28	$	0.27
	Weighted Average Shares Outstanding:
	Basic		11,252,183			10,956,867		10,992,301		11,029,931		11,120,938
	Diluted		11,320,138			11,034,059		11,073,440		11,107,610		11,205,292
	Actual shares outstanding at period end		11,567,449			10,967,597		10,954,078		11,012,574		11,069,646
	Book value per common share at period end	$	15.48		$	15.57	$	17.95	$	18.98	$	19.61
	Market value per share at period end	$	34.87		$	37.52	$	28.20	$	36.42	$	31.89

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First Community Bancshares, Inc.
Quarterly Balance Sheets
(Unaudited)

	December 31,			September 30,			June 30,			March 31,			December 31,
	2008			2008			2008			2008			2007
(In Thousands)
Cash and due from banks	$	39,310		$	53,238		$	44,672		$	44,004		$	50,051
Interest-bearing deposits with banks		7,129			664			10,745			33,111			2,695
Securities available for sale		521,545			513,001			598,438			598,853			664,120
Securities held to maturity		8,670			9,043			10,511			12,075			12,075
Loans held for sale		1,024			140			1,522			2,116			811
Loans held for investment, net of unearned income		1,298,159			1,168,286			1,181,107			1,179,504			1,225,502
Less allowance for loan losses		15,978			14,510			13,433			12,862			12,833
Net loans		1,282,181			1,153,776			1,167,674			1,166,642			1,212,669
Premises and equipment		55,024			50,504			50,075			49,444			48,383
Other real estate owned		1,326			896			500			400			545
Interest receivable		10,117			9,156			9,992			9,742			12,465
Intangible assets		89,612			72,222			71,181			71,239			70,056
Other assets		118,283			104,817			88,377			77,487			75,968
Total Assets	$	2,134,221		$	1,967,457		$	2,053,687		$	2,065,113		$	2,149,838
Deposits:
Demand	$	199,712		$	214,582		$	224,716		$	224,097		$	224,087
Interest-bearing demand		185,117			186,403			172,623			172,864			153,570
Savings		309,577			312,451			312,148			305,725			327,691
Time		809,352			636,108			629,920			656,267			688,095
Total Deposits		1,503,758			1,349,544			1,339,407			1,358,953			1,393,443
Interest, taxes and other liabilities		28,133			20,494			18,695			22,293			21,454
Federal funds purchased		—			29,500			66,500			—			18,500
Securities sold under agreements to repurchase		165,914			180,388			215,610			208,000			207,427
FHLB and other indebtedness		215,877			216,720			216,862			266,889			291,916
Total Liabilities		1,913,682			1,796,646			1,857,074			1,856,135			1,932,740
Preferred stock		40,419			—			—			—			—
Common stock		12,051			11,499			11,499			11,499			11,499
Additional paid-in capital		128,525			108,862			108,926			108,896			108,825
Retained earnings		106,935			124,731			123,253			120,087			117,670
Treasury stock, at cost		(15,368	)		(16,882	)		(17,328	)		(15,457	)		(13,613	)
Accumulated other comprehensive loss		(52,023	)		(57,399	)		(29,737	)		(16,047	)		(7,283	)
Total Stockholders’ Equity		220,539			170,811			196,613			208,978			217,098
Total Liabilities and Stockholders’ Equity	$	2,134,221		$	1,967,457		$	2,053,687		$	2,065,113		$	2,149,838

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First Community Bancshares, Inc.
Selected Financial Information
(Unaudited)

	As of and for the Quarter Ended
	December 31,			September 30,			June 30,			March 31,			December 31,
	2008			2008			2008			2008			2007
	(Dollars in Thousands)
Summary of Loan Loss Experience
Allowance for loan losses:
Beginning balance	$	14,510		$	13,433		$	12,862		$	12,833		$	13,190
Balance acquired		1,169			—			—			—			—
Provision for loan losses		2,701			3,461			937			323			717
Charge-offs		(2,606	)		(2,601	)		(1,198	)		(966	)		(1,482	)
Recoveries		204			217			832			672			408
Net charge-offs		(2,402	)		(2,384	)		(366	)		(294	)		(1,074	)
Ending balance	$	15,978		$	14,510		$	13,433		$	12,862		$	12,833
Summary of Asset Quality
Nonaccrual loans	$	12,763		$	6,997		$	4,126		$	3,137		$	2,923
Loans 90 days or more past due and still accruing		—			—			—			—			—
Total non-performing loans		12,763			6,997			4,126			3,137			2,923
Other real estate owned		1,326			896			500			400			545
Total non-performing assets	$	14,089		$	7,893		$	4,626		$	3,537		$	3,468
Asset Quality Ratios
Non-performing loans as a percentage of loans held for investment		0.98	%		0.60	%		0.35	%		0.27	%		0.24	%
Non-performing assets as a percentage of:
Total assets		0.66	%		0.40	%		0.23	%		0.17	%		0.16	%
Loans held for investment plus other real estate owned		1.08	%		0.68	%		0.39	%		0.30	%		0.28	%
Annualized net charge-offs as a percentage of average loans held for investment		0.77	%		0.81	%		0.12	%		0.10	%		0.34	%
Allowance for loan losses as a percentage of loans held for investment		1.23	%		1.24	%		1.14	%		1.09	%		1.05	%
Ratio of allowance for loan losses to nonaccrual loans		1.25			2.07			3.26			4.10			4.39

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First Community Bancshares, Inc.
Selected Financial Information
(Unaudited)

	As of and for the Quarter Ended
	December 31,			September 30,			June 30,			March 31,			December 31,
	2008			2008			2008			2008			2007
	(Dollars in Thousands)
Ratios
Return on average assets		-0.71	%		0.90	%		1.23	%		1.21	%		1.43	%
Return on average stated equity		-7.71	%		9.39	%		12.08	%		11.66	%		13.95	%
Return on average common equity		-8.54	%		9.39	%		12.08	%		11.66	%		13.95	%
Net interest margin		3.83	%		3.90	%		3.92	%		3.78	%		3.75	%
Efficiency ratio for the quarter (a)		59.10	%		56.62	%		57.55	%		58.00	%		51.22	%
Efficiency ratio year-to-date (a)		57.81	%		57.39	%		57.78	%		58.00	%		51.20	%
Equity as a percent of total assets at end of period		10.33	%		8.68	%		9.57	%		10.12	%		10.10	%
Average earning assets as a percentage of average total assets		86.38	%		87.89	%		88.83	%		89.10	%		89.61	%
Average loans as a percentage of average deposits		86.01	%		88.25	%		88.10	%		87.68	%		88.49	%
Average Balances
Investments	$	508,289		$	582,605		$	623,338		$	635,350		$	684,227
Loans		1,235,023			1,174,855			1,180,813			1,205,481			1,238,620
Earning assets		1,768,113			1,758,895			1,817,322			1,863,433			1,932,481
Total assets		2,046,879			2,001,191			2,045,773			2,091,397			2,156,484
Deposits		1,435,956			1,331,293			1,340,384			1,374,853			1,399,690
Interest-bearing deposits		1,230,547			1,120,138			1,122,680			1,161,881			1,178,833
Borrowings		400,393			459,475			478,361			477,903			516,635
Interest-bearing liabilities		1,630,940			1,579,613			1,601,041			1,639,784			1,695,468
Equity		189,122			192,743			207,660			217,679			220,520
Tax equivalent net interest income		17,003			17,264			17,726			17,491			18,265

(a) Excludes securities gains/losses, intangible amortization, foreclosed property expenses, non-recurring income and expense items, and includes tax equivalency adjustment.

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First Community Bancshares, Inc.
Investment Securities Portfolio
December 31, 2008
(Unaudited)

							Unrealized
							Gains/(Losses)
	Par		Fair		Amortized		Recognized			Cumulative
	Value		Value		Cost		in OCI			OTTI
	(Dollars in Thousands)
Available for sale
Agency	$	53,435	$	54,817	$	53,424	$	1,393		$	—
Agency mortgage-backed		211,203		216,341		212,314		4,027			—
Non-Agency MBS
AAA		7,475		7,204		7,423		(219	)		—
B		25,000		10,750		10,750		—			14,467
Total		32,475		17,954		18,173		(219	)		14,467
Municipals
AAA		6,738		6,716		6,729		(13	)		—
AA		62,885		62,056		62,926		(870	)		—
A		55,932		54,051		55,158		(1,107	)		—
BBB		31,610		30,280		31,500		(1,220	)		—
NR		6,720		6,316		6,730		(414	)		—
Total		163,885		159,419		163,043		(3,624	)		—
Single issuer bank trust preferred
A		56,555		33,542		55,491		(21,949	)		—
Pooled TruPS
A		50,223		9,117		34,853		(25,736	)		15,456
BBB		19,286		3,831		19,377		(15,546	)		—
BB		9,000		5,163		9,038		(3,875	)		—
B		30,000		14,401		30,000		(15,599	)		—
Total		108,509		32,512		93,268		(60,756	)		15,456
Equity securities				6,960		8,029		(1,069	)		—
Total	$	626,062	$	521,545	$	603,742	$	(82,197	)	$	29,923
Held to maturity
Municipals
AA		3,680		3,724		3,664		60			—
A		4,050		3,859		3,792		67			—
BBB		1,215		1,218		1,214		4			—
Total		8,945		8,801		8,670		131			—

In cases where investment securities were not identically rated by two or more securities rating agencies, the lowest rating was used.

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First Community Bancshares, Inc.
Consolidated Average Balance Sheets, Yields, and Rates
(Unaudited)

	Three Months Ended December 31,
	2008							2007
					Yield/							Yield/
	Average		Interest		Rate			Average		Interest		Rate
	Balance		(1)		(1)			Balance		(1)		(1)
	(Dollars in Thousands)
Earning assets
Loans held for investment (2)	$	1,235,023	$	19,365		6.24	%	$	1,238,620	$	23,118		7.40	%
Securities available for sale		499,617		8,127		6.47	%		671,828		9,847		5.82	%
Held to maturity securities		8,672		173		7.94	%		12,399		249		7.97	%
Interest-bearing deposits with banks		24,801		46		0.74	%		9,634		102		4.20	%
Total earning assets		1,768,113	$	27,711		6.23	%		1,932,481	$	33,316		6.84	%
Other assets		278,766							224,003
Total	$	2,046,879						$	2,156,484
Interest-bearing liabilities
Interest-bearing demand deposits	$	184,184	$	79		0.17	%	$	152,525	$	107		0.28	%
Savings deposits		304,800		846		1.10	%		334,277		1,789		2.12	%
Time deposits		741,563		6,324		3.39	%		692,031		7,730		4.43	%
Fed funds purchased		9,097		32		1.40	%		6,743		83		4.88	%
Retail repurchase agreements		119,485		489		1.63	%		167,966		1,367		3.23	%
Wholesale repurchase agreements		50,000		552		4.39	%		50,000		530		4.21	%
FHLB borrowings & other long-term debt		221,811		2,386		4.28	%		291,926		3,445		4.68	%
Total interest-bearing liabilities		1,630,940		10,708		2.61	%		1,695,468		15,051		3.52	%
Noninterest-bearing demand deposits		205,409							220,857
Other liabilities		21,408							19,639
Stockholders’ equity		189,122							220,520
Total	$	2,046,879						$	2,156,484
Net interest income			$	17,003						$	18,265
Net interest rate spread (3)						3.62	%						3.32	%
Net interest margin (4)						3.83	%						3.75	%

(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.

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First Community Bancshares, Inc.
Consolidated Average Balance Sheets, Yields, and Rates
(Unaudited)

	Year Ended December 31,
	2008							2007
					Yield/							Yield/
	Average		Interest		Rate			Average		Interest		Rate
	Balance		(1)		(1)			Balance		(1)		(1)
	(Dollars in Thousands)
Earning Assets
Loans held for investment (2)	$	1,199,076	$	79,822		6.66	%	$	1,251,028	$	93,561		7.48	%
Securities available for sale		576,864		33,438		5.80	%		625,413		36,113		5.77	%
Held to maturity securities		10,302		849		8.24	%		15,220		1,212		7.96	%
Interest-bearing deposits with banks		15,489		306		1.98	%		24,662		1,175		4.76	%
Total Earning Assets		1,801,731	$	114,415		6.35	%		1,916,323	$	132,061		6.89	%
Other assets		244,455							208,916
Total	$	2,046,186						$	2,125,239
Interest-bearing liabilities
Interest-bearing demand deposits	$	174,809	$	292		0.17	%	$	147,856	$	456		0.31	%
Savings deposits		312,363		4,693		1.50	%		330,969		7,327		2.21	%
Time deposits		671,729		24,807		3.69	%		697,996		30,974		4.44	%
Fed funds purchased		15,942		362		2.27	%		5,773		312		5.40	%
Retail repurchase agreements		143,159		3,029		2.12	%		167,359		5,809		3.47	%
Wholesale repurchase agreements		50,000		1,630		3.26	%		50,000		2,181		4.36	%
FHLB borrowings & other long-term debt		244,801		10,117		4.13	%		258,644		12,217		4.72	%
Total Interest-bearing Liabilities		1,612,803		44,930		2.79	%		1,658,597		59,276		3.57	%
Noninterest-bearing demand deposits		211,791							228,583
Other liabilities		19,850							19,210
Stockholders’ equity		201,742							218,849
Total	$	2,046,186						$	2,125,239
Net interest income			$	69,485						$	72,785
Net interest rate spread (3)						3.56	%						3.32	%
Net interest margin (4)						3.86	%						3.80	%

(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.

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