SCHEDULE 14A INFORMATION

Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )

Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]

Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12

FIRST COMMUNITY BANCSHARES, INC.
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(Name of Registrant as Specified In Its Charter)

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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

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[X] No fee required.
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FIRST COMMUNITY BANCSHARES, INC.
136 East Harriman
Bargersville, IN 46106
(317) 422-5171

NOTICE OF
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD
May 30, 2001

The Annual Meeting of Shareholders of FIRST COMMUNITY BANCSHARES, INC., (the
"Company"), will be held at the Franklin Recreation and Cultural Arts Center,
Beeson Hall, 396 South State Street, Franklin, Indiana, 46131 on May 30, 2001,
at 10:00 a.m., local time, for the following purposes:

1. To elect one director to serve a three year term expiring in 2004 or
until a successor is elected and qualified.

2. To transact such other business as may properly come before the
meeting or any adjournment thereof. Shareholders of record at the
close of business on March 30, 2001 will be entitled to vote at the
meeting.

By Order of the Board of Directors

----------------------------------
Frank D. Neese, Secretary
Bargersville, Indiana
April 26, 2001

Your Vote is Important! Please mail your Proxy Promptly
************************************************
In order that there may be proper representation at the meeting, you are
urged to sign, date and return the enclosed proxy in the envelope provided.

No postage required if mailed in the United States.

PROXY STATEMENT

General

The accompanying proxy is solicited by the Board of Directors of
First Community Bancshares, Inc., an Indiana corporation (the "Company"), for
use at the Annual Meeting of Shareholders to be held on May 30, 2001, at 10:00
a.m., local time, or at any adjournment thereof. The meeting will be held at the
Franklin Recreation and Cultural Arts Center, Beeson Hall, 396 South State
Street, Franklin, Indiana 46131. At the meeting, only shareholders of record at
the close of business on March 30, 2001 (the "Record Date") will be entitled to
vote. On that date, the Company's outstanding capital stock consisted of
1,040,926 shares of no par value Common Stock.

The Company is a one bank holding company which owns First
Community Bank & Trust ("First Community") and First Community Real Estate
Management, Inc. ("FCREM").

This Proxy Statement and form of proxy are first being mailed or
given to shareholders on or about April 26, 2001, together with the Company's
2000 Annual Report to Shareholders and the Form 10-K for the fiscal year ended
December 31, 2000.

Voting and Solicitation

Each shareholder is entitled to one vote for each share of Common
Stock held on the Record Date on all matters presented at the meeting.

The cost of soliciting of proxies will be borne by the Company. The
Company may also reimburse brokerage houses and other custodians, nominees and
fiduciaries for their expenses incurred in forwarding solicitation materials to
the beneficial owners of shares held of record by such persons. It is
contemplated that proxies will be solicited principally through the mail, but
directors, officers and employees of the Company may, without additional
compensation, solicit proxies personally or by telephone, telegraph or special
letter.

Revocability of Proxies

Any proxy given pursuant to this solicitation may be revoked by the
person giving it at any time before its use by delivering to Albert R. Jackson,
III, Assistant Secretary of the Company, a written notice of revocation or a
duly executed proxy bearing a later date, or by attending the meeting and voting
in person.

Quorum

The required quorum for the transaction of business at the Annual
Meeting is a majority of the votes eligible to be cast by holders of shares of
Common Stock issued and outstanding on the Record Date. Shares that are voted
"FOR," "AGAINST" or "WITHHELD FROM" a matter are treated as being present at the
meeting for purposes of establishing a quorum.

Shares Held in Trust

The Trust department of First Community held 105,433 shares of the
Company's common stock in regular, nominee and street name accounts on March 30,
2001 constituting approximately 10.13% of the Company's outstanding shares.
These shares

of common stock are held by First Community in a fiduciary capacity for the
beneficial owners of the accounts, which beneficial owners have the right to
vote the shares held in the accounts. However, where authorized by law or the
governing instrument, those shares will be voted FOR the election of the
Director set forth herein.

Persons Making the Solicitation

This proxy solicitation is made by the Company. All costs associated
with this solicitation will be borne by the Company.

Stock Ownership
of Certain Beneficial Owners
and Management

The following table sets forth certain information regarding the
Company's Common Stock beneficially owned as of March 30, 2001 by (i) each
person known by the Company to beneficially own more than 5% of the Company's
Common Stock; (ii) each director or director nominee of the Company; (iii) each
of the executive officers of the Company named in the Summary Compensation Table
and (iv) all directors and executive officers of the Company as a group:

Shares Beneficially Owned
Name and Address Number Percent
---------------- ------ -------
Albert R. Jackson, III 26,929(1) 2.6%
5675 N. CO RD 200W
North Vernon, Indiana 47265

Albert R. Jackson, Jr. 27,643(2) 2.6%
5745 N CO RD 200W
North Vernon, Indiana
47265
Eugene W. Morris 28,666(3) 2.7%
5471 W RD 350N
Bargersville, Indiana 46106

Merrill M. Wesemann, M.D. 100,846(4) 9.6%
251 E Jefferson Street
Franklin, Indiana 46131

Roy Martin Umbarger 47,371(5) 4.5%
5180 W CO RD 300N
Bargersville, Indiana 46106

Frank D. Neese 123,835(6) 11.4%
320 North Meridian Street
Indianapolis, Indiana 46204

All Officers, Nominees and Directors
as a group (6 persons) 351,928 31.1%

- --------------------------------------

(1) Includes 3,362 shares held jointly with his father, brother and sister as
to which he disclaims voting and dispositive power, currently exercisable
options for 7,500 shares granted under the 1996 Stock Option Plan and a
Convertible Note currently convertible into 909 shares. Mr. Jackson, III is
the son of Mr. Jackson, Jr.

(2) Includes 3,362 shares held jointly with two sons and a daughter, 2,135
shares owned by Mr. Jackson's spouse, curently exercisable options for
3,050 shares granted under the 1996 Stock Option Plan, Convertible Notes
currently convertible into 5,454 shares, and a Convertible Note owned by
his spouse currently convertible into 909 shares. Mr. Jackson, Jr. is the
father of Mr. Jackson, III.

(3) Includes currently exercisable options for 4,050 shares granted under the
1996 Stock Option Plan and a Convertible Note currently convertible into
909 shares.

(4) Includes 8,087 shares owned by Dr. Wesemann's spouse, currently exercisable
options for 4,050 shares granted under the 1996 Stock Option Plan,
Convertible Notes currently convertible into 3,636 shares, and a
Convertible Note owned by his spouse currently convertible into 909 shares.

(5) Includes 1,465 shares owned by Mr. Umbarger's spouse, 721 shares owned as a
joint-tenant with a minor son, 1,356 shares owned by his minor son, 139
shares owned by his spouse jointly with her daughters, currently
exercisable options for 4,050 shares granted under the 1996 Stock Option
Plan and Convertible Notes currently convertible into 4,545 shares.

(6) Includes 3,000 shares owned by Mr. Neese's spouse, 13,169 shares owned by
Mr. Neese's spouse in an IRA account, curently exercisable options for
4,050 shares granted under the 1996 Stock Option Plan and Convertible Notes
currently convertible into 45,454 shares. Mr. Neese disclaims beneficial
ownership of the shares owned by or for the benefit of his spouse.

SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

Section 16(a) of the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), requires the Company's directors, executive officers and
beneficial owners of more than 10% of the Company's Common Stock to file with
the Securities and Exchange Commission (the "SEC") initial reports of ownership
and reports of changes in ownership of Common Stock and other equity securities
of the Company. A copy of such reports must be sent to the Company.

Based solely on its review of the copies of such reports received by
it, or written representations from reporting persons, the Company believes that
during the year ended December 31, 2000, its executive officers, directors and
holders of more than 10% of the Company's Common Stock complied with all Section
16(a) filing requirements.

Election of Directors

The Board of Directors currently consists of six (6) members who are
elected to staggered three (3) year terms by the shareholders. Mr. Eugene W.
Morris has decided not to stand for re-election at the 2001 annual meeting and
the Board has reduced the size of the Board of Directors to five (5) members
effective as of the 2001 annual meeting. Albert R. Jackson, Jr., has been
nominated as a director of the Company for a three year term expiring at the
annual meeting to be held in 2004. The proxy holders named in the accompanying
proxy intend, unless otherwise directed or authorization to do so is withheld,
to vote FOR the election of Mr. Jackson. In the event Mr. Jackson is unavailable
for election, which is not currently anticipated, the Proxy holders may vote in
accordance with their judgment for the election of a substitute nominee
designated by the Board.

To be elected as a director, the nominee must receive the favorable
vote of a plurality of the shares represented and voting at the Annual Meeting.
That is to say, a nominee must receive more favorable than unfavorable votes.
Abstentions and broker non-votes are counted for purposes of determining whether
a quorum is present but will have no effect on the election of a director. The
persons named in the enclosed form of Proxy, unless otherwise directed therein,
intend to vote such Proxy FOR the election of the nominee named below as a
director for the specified term. If the nominee becomes unavailable for any
reason, the persons named in the form of Proxy are expected to consult with
management of the Company in voting the shares represented by them. Management
has no reason to doubt the availability of the nominee to serve and no reason to
believe that the nominee will be unavailable or unwilling to serve if elected to
office. To the best of management's knowledge, the nominee intends to serve the
term for which election is sought. Cumulative voting is not permitted by the
Articles of Incorporation of the Company.

Nominated Directors

The Board of Directors recommends that the shareholders vote "FOR"
the election of Albert R. Jackson, Jr. as a director of the Company.

The following table sets forth certain information concerning the nominee for
director.

Current
Director Term To
Name Age Principal Occupation Since Expire
- ---- --- -------------------- ----- ------
Albert R. Jackson, Jr 66 Retired Bank President 1997 2001

Albert R. Jackson, Jr. was the President of First National Bank of
North Vernon, Indiana from 1971 to 1989 and a Senior Executive Vice President of
The Seymour National Bank of Seymour, Indiana from 1989 to his retirement in
1994. Mr. Jackson was appointed as a director of the Company in May 1997 and
elected to a full three (3) year term in May 1998. Mr. Jackson's current term as
a Director of the Company expires at the 2001 Annual Meeting. Mr. Jackson is
also a Director of First Community and FCREM. He is the father of Albert R.
Jackson, III.

Continuing Directors

Continuing Directors whose terms are not expiring are:

Director Term To
Name Age Principal Occupation Since Expire
- ---- --- -------------------- ----- ------

Merrill M. Wesemann 66 Chairman of Board 1991 2003
Physician

Albert R. Jackson, III 40 President, & CEO of 1997 2003
First Community Bank &
Trust

Frank D. Neese 63 President, Indiana 1996 2002
Securities, LLC

Roy Martin Umbarger 54 President, Roy Umbarger 1996 2002
& Sons, Inc.

Merrill M. Wesemann, M.D. was a Director of Bargersville Federal
Savings Bank ("Bargersville") from January 1979 until the acquisition of
Bargersville by the Company in August 1991. Dr. Wesemann is also a Director of
First Community and FCREM and has been a Director of the Company since August
1991. Dr. Wesemann has practiced medicine since 1961 and is a past Treasurer of
the Indiana State Medical Association. Dr. Wesemann's current term as a Director
of the Company expires at the 2003 Annual Meeting.

Albert R. Jackson, III has been President of First Community since
1994 and CEO for both First Community and the Company since 1996. Before joining
First Community he was Senior Vice president of National City Bank. Mr. Jackson
has also served as Senior Vice President and cashier of the Seymour National
Bank & Trust

Company and as Vice President for First National Bank of North Vernon, Indiana
and as Treasurer and Chief Financial Officer of that bank's holding company,
North Vernon 1st Financial Corporation. Mr. Jackson's current term as a Director
of the Company expires at the 2003 Annual Meeting. Mr. Jackson is also a
Director of First Community and FCREM. He is the son of Albert R. Jackson, Jr.

Frank D. Neese has been President of Indiana Securities, LLC, a
registered broker-dealer and an investment banking firm, since January 1, 1998.
Mr. Neese served as Senior Vice President of Traub and Company, a registered
broker-dealer, from 1979 until December 31, 1997. Mr. Neese has served as a
financial advisor to First Community since 1991. Mr. Neese's current term as a
Director of the Company expires at the 2002 Annual Meeting. Mr. Neese is
secretary and a director of First Community and a Director of FCREM. Mr. Neese
also serves as President of the Pines of Deerfield, a privately held real estate
development company.

Roy Martin Umbarger has been the President and co-owner of Roy
Umbarger & Sons, Inc., a feed mill, grain elevator and fertilizer distributor
located in Bargersville, Indiana, since 1986. Mr. Umbarger received a degree in
Business Marketing from the University of Evansville and is a lifetime resident
of Johnson County. Mr. Umbarger is a 32 year member of the Indiana Army National
Guard and is currently Deputy Commanding General of the 38th Infantry Division.
He holds the rank of Brigadier General. Mr. Umbarger's current term as a
Director of the Company expires at the 2002 Annual Meeting. Mr. Umbarger is a
Director of First Community and a Director of FCREM.

Meetings and Committees of the Board of Directors

For the calendar year 2000, the Board of Directors of the Company
met ten (10) times and all Directors attended all of the meetings. The Board of
Directors of FCREM met 11 times and the Board of Directors of First Community
and committees thereof met a total of 68 times during 2000.

The Board of Directors of the Company has the authority to appoint
various committees. The Company does not currently have standing committees of
the Board of Directors other than the Audit Committee as referenced below.
However, First Community maintains several committees including a compensation
committee. All employees are compensated by First Community rather than the
Company.

Audit Committee Report

The Company's Audit Committee is composed of the five members of the
Company's Board of Directors who are not otherwise employed by the Company. The
Audit Committee operates under a written charter adopted by the Board of
Directors that is attached as Appendix A to this Proxy Statement.

Although the Company's stock is not listed on the American Stock
Exchange ("AMEX") or the New York Stock Exchange, and is not quoted on the
Nasdaq, the Board of Directors has elected to apply the standards for
independence set forth by the AMEX to determine the independence of its Audit
Committee members. Under these standards, four of the five members of the Audit
Committee are "independent." The fifth member, Albert R. Jackson, Jr. ("Mr.
Jackson, Jr."), is not "independent" under the AMEX standards by virtue of his
relationship to Albert R. Jackson, III ("Mr. Jackson, III), the President and
Chief Executive Officer of the Company. However, the Board of Directors has
determined to appoint Mr. Jackson, Jr., to the Audit Committee based upon its
belief that it is in the best interests of the Company and its shareholders for
Mr. Jackson, Jr., to serve on the Audit Committee and that Mr. Jackson, Jr.'s
relationship with Mr. Jackson, III, will not interfere with his exercise of
independent judgment as a member of the Audit Committee.

The Audit Committee of the Board of Directors is responsible for
providing independent, objective oversight of the Company's accounting functions
and internal controls. It oversees the financial reporting process on behalf of
the Board of Directors, reviews the financial disclosures, and meets privately,
outside the presence of management, with the Company's independent auditors to
discuss internal accounting control policies and procedures. The Audit Committee
provides an open avenue of communication between the independent accountants,
the Company's financial and executive management, its internal auditors and the
Board of Directors. The Audit Committee also considers and recommends the
selection of independent auditors, reviews the performance of the independent
auditors in the annual audit and in assignments unrelated to the audit, and
reviews the independent auditor's fees.

In the year preceding March 30, 2001, the Audit Committee met two
(2) times. During these meetings, the Audit Committee reviewed and discussed the
audited financial statements with management and with the Company's independent
auditor, Olive LLP, including those matters required to be discussed under
generally accepted auditing standards. The Board also discussed with the
independent auditor the matters required to be discussed by the Codification of
Statements on Auditing Standards, Standard No. 61, as necessary. Additionally,
the Board of Directors has received from its independent auditors the
disclosures and the letter regarding the auditors' independence required by
independence Standards Board Standard No. 1, "Independence Discussions with
Audit Committees," as may be modified or supplemented. Based upon the
Committee's review and discussions, the Committee has determined that the
audited financial statements be included in the Company's Annual Report on Form
10-K for fiscal year 2000.

As reported by the Audit Committee:

Merrill M. Wesemann, M.D., Chairman

Frank D. Neese, Secretary

Albert R. Jackson, Jr.

Eugene W. Morris

Roy Martin Umbarger

Other Information

See also "Stock Ownership of Certain Beneficial Owners and
Management."

Director Compensation

A. Cash Compensation. None of the Directors of the Company were
compensated for service as members of the Board of Directors or any committee of
the Board. However, all Directors of the Company were also Directors of First
Community for the fiscal year ended December 31, 2000, and cash compensation for
non-employee Directors of First Community was $1,050 per month. The Chairman's
compensation was $1,207.50 per month for 2000. First Community also provides
each of First Community's Directors with Directors' and Officers' liability
insurance.

Directors are also reimbursed for reasonable expenses incurred in
attending Board and committee meetings. Directors otherwise employed by the
Company or First Community are not separately compensated for serving as a
director.

B. Options. The 1992 Stock Option Plan (the "1992 Plan") was adopted
by the Board of Directors on January 1, 1992 and amended and restated by the
Board on February 15, 1993 and May 15, 1995. The shareholders approved an
amendment to the 1992 Plan on May 15, 1996. Options for all of the 66,770 shares
allocated for issuance pursuant to the Plan have been granted and exercised;
options for 20,510 shares were exercised in 1996, options for 15,420 shares were
exercised in 1998, and options for 30,840 shares were exercised in 2000 at an
exercise price of $5.54 per share.

On May 15, 1996, the shareholders approved the creation of the 1996
Stock Option Plan (the "1996 Plan") for the issuance of 105,000 shares of Common
Stock. The 1996 Plan provides, among other things, that nonstatutory options
shall be automatically granted to outside directors on a yearly basis in order
to provide an incentive to outside Directors of the Company, which grants
generally have a term of ten years from the date of grant and are exercisable
only during the time the optionee remains a director or within one year
thereafter (but not beyond expiration of the option term).

The 1996 Plan provides for adjustment of the number of shares and
exercise price of options in certain events.

The Company is not entitled to a deduction for amounts taxed as
ordinary income or capital gain to a participant holding an incentive stock plan
but is entitled to a deduction for amounts taxed as income to holders of
nonstatutory stock options.

The Company has granted options under the 1996 Plan to purchase
1,050 shares, 1,000 shares, 1,000 shares and 1,000 shares of common stock each
to Dr. Wesemann, Eugene Morris, Frank Neese, Albert R. Jackson, Jr., and Roy
Martin Umbarger with an exercise price of $11.43, $11.00, $8.00 and $6.875 per
share, respectively. In February

1998 and 1999, the Board granted an option to purchase 5,000 shares and 2,500
shares of common stock to Albert R. Jackson, III with an exercise price of
$11.50 and $9.125 per share, respectively, and an aggregate of 6,000 shares and
3,000 shares to three (3) other officers with an exercise price of $11.50 and
$9.125 per share, respectively. During 1998, an option to purchase 2,000 shares
with an exercise price of $11.50 per share expired. During 1999, an option to
purchase 1,000 shares with an exercise price of $9.125 per share expired. All
options vest at the time of grant and expire in ten years. Options may expire
earlier due to termination or relinquishment of services to the Company.

C. Retirement Plans. In September, 2000, First Community adopted a
Supplemental Executive Retirement Plan (the "SERP"). The Board of Directors is
solely responsible for the selection of employees and members of the Board of
Directors who are eligible to become participants in the SERP. An eligible
individual becomes a participant in the SERP upon execution and delivery of a
SERP agreement. Current participants include all of the Directors except Mr.
Morris, and four senior officers of First Community.

Under the SERP, a participant who has obtained 72 years of age, is
serving as a director or employee at that time, and has completed at least three
years of participation in the SERP is entitled to received annual payments equal
to 100% of the average of the director fees such person received or would have
received had such person been a director each year for the most recent
three-year period. Such payments shall be made in equal monthly installments for
the remainder of the participant's life. If a retired participant receiving
payments should die prior to the receipt of 120 monthly payments, such monthly
payments shall continue to be paid to the participant's beneficiary until the
completion of an aggregate of 120 monthly payments.

A participant who has completed at least ten years of employment
with First Community or service as a director may elect early retirement on or
after attaining age 65. A participant electing early retirement is entitled to
receive the actuarial equivalent (present value) of the normal retirement
benefit described above.

The SERP also provides that in the event a participant dies while
employed by or serving on the Board of Directors of First Community, that
participant's beneficiary shall be paid a monthly benefit for 120 months in an
amount equivalent to the amount the participant would have received had the
participant reached normal retirement age.

Management

Name Age Position
- ---- --- --------

Albert R. Jackson, III 40 CEO & President of First
Community

Albert R. Jackson, III is also a director of the Company and information
concerning Mr. Jackson is at page 7.

Executive Compensation

The following Summary Compensation Table below shows the
compensation for the last three years, ending December 31, 2000, of the only
person who served as the Chief Executive Officer of the Company for services in
all capacities to the Company and its subsidiaries. No executive officers
received compensation above the reportable threshold of $100,000 during the
years covered by this table.

Summary Compensation Table

Long Term Compensation
----------------------
Annual Compensation Awards Payouts
------------------- ------ -------
(a) (b) (c) (d) (e) (f) (g) (h) (i)
Other Securities All
Name and Annual Restricted Underlying Other
Principal Compen- Stock Options/ LTIP Compen-
Position Year Salary($) Bonus($) sation($)(1) Award(s)($) SARs (#) Payout ($) sation(3)
- --------- ---- --------- -------- ------------ ----------- ---------- ---------- ---------

Albert R. Jackson, III(3) 2000 86,000 -0- 211 2,252
CEO

Albert R. Jackson, III 1999 85,623 -0- 2,500 2,494
CEO

Albert R. Jackson, III 1998 83,825 -0- 5,000 1,417

- ---------------------

(1) Taxable benefit on life insurance coverage above $50,000.

(2) Contribution by the Company to the executive's 401 (k) plan.

(3) In 1994, Mr. Jackson became the President of First Community. In March
1996, Mr. Jackson also became the Chief Executive Officer and Chief
Financial Officer of the Company. In 1998 Mr. Jackson also become President
and CEO of FCREM, and ceased to be CFO of the Company. In 1999 Mr. Jackson
assumed the Chief Financial Officer Title.

Life Insurance Plan

First Community pays the premiums on a group term life insurance
policy for all regular full-time employees who have worked for First Community
for 90 days. The amount of coverage under this plan is three times each
employee's annual salary.

Option/Sar Grants In Last Fiscal Year
Individual Grants

There were no Option/SAR grants during the last fiscal year.

Aggregated Option/SAR Exercises in Last Fiscal Year
and FY-End Option/SAR Values

(a) (b) (c) (d) (e)

Number of
Securities Value of
Underlying Unexercised
Unexercised In-the-Money
Options/SAR's Options/SARs
At FY-End (#) at FY-End ($)

Shares
Acquired on Value Exercisable/ Exercisable/
Name Exercise (#) Realized ($) Unexercisable Unexercisable
- ---- ------------ ------------ ------------- -------------

Albert R. Jackson, III -0- -0- 7,500/-0-

Shareholder Proposals to Be Presented At
the Next Annual Meeting

Proposals of shareholders intended to be presented at the next
Annual Meeting of Shareholders of the Company (i) must be received by the
Company at 136 East Harriman Bargersville, IN 46106, (317) 882-5277 no later
than December 31, 2001 and (ii) must satisfy the conditions established by the
Securities and Exchange Commission for shareholder proposals to be included in
the Company's Proxy Statement for that meeting.

Relationship With Independent Auditors and Auditors Fees

Appointment

Olive LLP ("Olive"), an independent certified public accounting
firm, has audited the accounts of the Company since 1993 and has provided the
Company with other services. The Company has chosen Olive as auditor for the
current year. Representatives of Olive will attend the Annual Meeting and have
the opportunity to make a statement if they desire, and will also be available
to respond to appropriate questions.

Audit Fees

Fees aggregating $38,500 were billed for professional services
rendered for the audit of the Company's annual financial statements as of and
for the year ended December 31, 2000, and for the reviews of the quarterly
financial statements included in the Company's Forms 10-Q for the year.

Financial Information Systems Design and Implementation Fees

No fees were billed for professional services rendered for financial
information systems services, including such services as operating or
supervising the operation of the Company's information system, or designing or
implementing a hardware or software

system for use in aggregating or generating information underlying the Company's
financial statements.

All Other Fees

Fees aggregating $72,711 were billed for all other professional
services rendered during 2000 by the Company's independent auditors, which
services principally relate to tax compliance and tax consulting services.

The Board of Directors of the Company has considered whether Olive's
provision of services to the Company in addition to audit services has affected
Olive's independence, and has discussed with Olive its role as independent
auditor, and has determined that its provision of such additional services is
compatible with Olive's status as an independent auditor.

Other Business

At this time management knows of no other matters that may be
brought before the meeting. However, if any other matters are properly brought
before the meeting, the proxy holders named in the accompanying proxy intend to
vote the proxies on such matters in accordance with their best judgment.

Form 10-K

The Company has forwarded to all shareholders a copy of the Annual
Report of the Company on Form 10-K for the fiscal year ended December 31, 2000,
as filed with the Securities and Exchange Commission, including the financial
statements and schedules which is also the annual report to shareholders. Such
report was filed with the Securities and Exchange Commission on March 30, 2001.
An additional copy may be obtained free of charge by contacting Albert R.
Jackson, III, First Community Bancshares, Inc., P.O. Box 970, Franklin, IN
46131, Telephone 317-736-4200.

Please date, sign and return the enclosed Proxy at your earliest convenience in
the enclosed envelope. No postage is required for mailing in the United States.
A prompt return of your Proxy will be appreciated, as it will save the expense
of further mailings.

By Order of the Board of Directors
April 26, 2001

Appendix A

First Community

Audit Committee of the Board of Directors

Charter

II. PURPOSE

The Audit Committee is a committee of the Board of Directors. The primary
function of the Audit Committee is to assist the Board of Directors in
fulfilling its oversight responsibilities by reviewing:

1. the financial information which will be provided to shareholders,
governmental or regulatory bodies, the public, and others;

2. the Corporation's auditing, accounting, and financial reporting process;

3. the systems of internal controls related to finance, accounting, legal
compliance, regulatory compliance and ethics that management and the Board
of Directors have established, and

4. the audit process.

Consistent with this function, the Audit Committee should encourage continuous
improvement of, and foster adherence to, the corporation's policies, procedures,
and practices at all levels.

The Audit Committee's primary duties and responsibilities are to:

1. Serve as an independent and objective party to monitor the Corporation's
financial reporting process and internal control system

2. Review and appraise the audit efforts of the Corporation's independent
accountants and the internal auditors

3. Provide an open avenue of communication among the independent accountants,
financial and senior management, internal auditors, and the Board of
Directors.

The Audit Committee will primarily fulfill these responsibilities by carrying
out the activities enumerated in Section IV of this Charter.

II. COMPOSITION

The Audit Committee should be comprised of three or more directors as determined
by the Board. Each member will be independent of the management of the
Corporation and

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free of any relationship that, in the opinion of the Board of Directors, would
interfere with their exercise of independent judgement as a Committee member.

All members of the Committee shall have a working familiarity with basic finance
and accounting practices, and at least one member of the Committee shall have
accounting or related financial management expertise. Committee members may
enhance their familiarity with finance and accounting by participating in
educational programs conducted by the Corporation or an outside consultant.

The members of the Committee shall be elected by the Board at the annual
organizational meeting of the Board or until their successors shall be duly
elected and qualified. Unless a Chair is elected by the full Board, the members
of the Committee may designate a Chair by majority vote of the full Committee
membership.

The duties and responsibilities of a member of the Audit Committee are in
addition to those duties set out for a member of the Board of Directors.

III. MEETINGS

The Committee shall meet at least four times annually, or more frequently as
circumstances dictate. As part of its job to foster open communication, the
Committee should meet at least annually with management, the internal auditors,
and the independent accountants in separate executive sessions to discuss any
matters that the Committee or each of these groups believe should be discussed
separately. The Committee may ask members of management or others to attend
meetings and provide pertinent information as necessary.

In addition, the Committee or at least the Chair of the Committee should meet
with the independent accountants and management, either in person or by phone,
quarterly to review the Corporation's financial statements. This review should
be done prior to the Corporation's 10Q or 10K filing and its public release of
earnings. This discussion should include a discussion of significant
adjustments, management judgements and accounting estimates, significant new
accounting policies, and disagreements with management.

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IV. RESPONSIBILITIES AND DUTIES

In meeting its responsibilities, the audit committee is expected to:

1. Provide an open avenue of communication between the internal auditors, the
independent accountant, and the Board of Directors.

2. Confirm and assure the objectivity of the internal auditor.

3. Confirm and assure the independence of the independent accountant,
including a review of management consulting services provided by the
independent accountant and related fees.

4. Review and update the Committee's charter annually.

5. Recommend to the Board of Directors the independent accountants to be
nominated, approve the compensation of the independent accountant, and
review and approve, if applicable, the discharge of the independent
accountants.

6. Review and concur in the appointment, replacement, reassignment, or
dismissal of the internal auditor.

7. Review the qualifications of the internal auditor to specific areas within
the audit plan.

8. Review with the independent auditor and internal auditor the coordination
of audit efforts to assure completeness of coverage, reduction of redundant
efforts, and the effective use of audit resources.

9. Inquire of management, the internal auditor, and the independent accountant
about significant risks or exposures and assess the steps management has
taken to minimize such risk to the Company.

10. Consider, in consultation with the independent accountant and the internal
auditor, the audit scope and plan of the internal auditors and the
independent accountant. Determine if the internal auditor and independent
accountants are utilizing a risk-based approach.

11. Consider and review with the independent accountant and the director of
internal auditing:

(a) the adequacy of the Company's internal controls including computerized
information system controls and security.

(b) any related significant findings and recommendations of the
independent accountant and internal auditing together with management
responses thereto; and

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12. Review with management and the independent accountant at the completion of
the annual audit:

(a) the Company's annual financial statements and related footnotes;

(b) the independent accountant's audit of the financial statements and his
or her report thereon;

(d) any serious difficulties or disputes with management encountered
during the course of the audit; and

(e) other matters related to the conduct of the audit which are to be
communicated to the committee under generally accepted auditing
standards.

13. Review with management and the internal auditor:

(a) Regular internal audit reports to management prepared by the internal
auditor, including significant findings and management's responses to
those findings. A summary of findings from completed internal audits
should be reviewed prior to the meeting.

(b) Any difficulties encountered in the course of their audits, including
any restrictions on the scope of their work or access to required
information.

(d) The internal audit department budget and staffing.

(e) The internal audit department charter.

(f) Internal auditing's compliance with the IIA's Standards for the
Professional Practice of Internal Auditing ("Standards").

14. Review filings with the SEC and other published documents containing the
Company's financial statements and consider whether the information
contained in these documents is consistent with the information contained
in the financial statements.

15. Review with management and the independent accountant the interim financial
report before it is filed with the SEC and other regulators.

16. Review with management, and if necessary, with the Company's counsel, any
legal matter that could have a significant impact on the Company's
financial statements.

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17. Review management's monitoring of the Company's compliance with its ethical
code of conduct.

18. Review legal and regulatory matters that may have a material impact on the
financial statements, related company compliance policies, and programs and
reports received from regulators.

19. Meet with the internal auditor, the independent accountant, and management
in separate executive sessions to discuss any matters that the committee or
these groups believe should be discussed privately with the Audit
Committee.

20. Meet with the Company's regulatory bodies to discuss the results of their
examinations.

21. Report committee actions to the Board of Directors with such
recommendations as the committee may deem appropriate.

22. Prepare a letter for inclusion in the annual report that describes the
Committee's composition and responsibilities, and how they were discharged.

23. Conduct or authorize, if necessary, investigations into any matters within
the committee's scope of responsibilities. The committee shall be empowered
to retain independent counsel, accountants, or others to assist in the
conduct of any investigation.

24. Perform such other functions as assigned by law, the Company's charter or
bylaws, or the Board of Directors.

25. Advise financial management and the independent auditor that they are
expected to provide a timely analysis of significant current financial
reporting issues and practices.

26. Provide that financial management and the independent auditor discuss with
the audit committee their qualitative judgments about the appropriateness,
not just the acceptability, of accounting principles and financial
disclosure practices used or proposed to be adopted by the Company and,
particularly, about the degree of aggressiveness or conservatism of its
accounting principles and underlying estimates.

27. Determine as regards to new transactions or events, the auditor's reasoning
for the appropriateness of the accounting principles and disclosure
practices adopted by the Company.

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Appendix - Form of Proxy

FIRST COMMUNITY BANCSHARES, INC.
Bargersville, Indiana
REVOCABLE PROXY FOR ANNUAL MEETING OF SHAREHOLDERS
May 30, 2001
SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS

The undersigned hereby appoints as proxies, Merrill M. Wesemann, M.D. and
Eugene W. Morris, or either of them, with full power of substitution to vote all
shares of common stock which the undersigned is entitled to vote at the Annual
Meeting of Shareholders of First Community Bancshares, Inc., to be held at
Franklin Recreation and Cultural Arts Center, Beeson Hall, 396 South State
Street, Franklin, Indiana, at 10:00 A.M., local time, on May 30, 2001, and
adjournments thereof, upon the following matter:

Authority to Vote

For Against Withhold
--- ------- --------

1. Election of One Director
Nominee:

Albert R. Jackson, Jr. [ ] [ ] [ ]

THIS PROXY WILL BE VOTED FOR THE ABOVE PROPOSAL UNLESS A CONTRARY DIRECTION IS
GIVEN.

Should the undersigned be present and elect to vote at the Meeting or any
adjournment thereof, upon notification to the Secretary of First Community
Bancshares, Inc. at the Meeting of the shareholder's decision to terminate this
Proxy, the power of said attorneys-in fact or agents shall be deemed terminated
and of no further force and effect.

Please sign below exactly as your name appears on your stock certificate.
When signing as attorney, corporate officer or fiduciary, please give full title
as such. The undersigned hereby acknowledges receipt of the Notice of Annual
Meeting and the Proxy Statement dated April 26, 2001, prior to the execution of
this Proxy.

PLEASE DATE, SIGN AND RETURN THIS PROXY PROMPTLY

Number of Shares -

_______________________________
DATE

_______________________________
SIGNATURE

Your signature must be exactly as your name appears in your stock
certificate(s). When signing as attorney-in-fact, executor, administrator,
trustee, guardian or corporate officer, please give full title as such.