UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-K
[X] Annual Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934

For the Fiscal Year Ended December 31, 1999
or
[ ] Transition Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934

For the transition period from ------------------ Commission File Number 0-19297

First Community Bancshares, Inc.
(Exact name of Registrant as specified in its charter)

Nevada 55-0694814
(State or other jurisdiction (IRS Employer Identification No.)
of incorporation or organization)

One Community Place, Bluefield, Virginia 24605-0989
(Address of principal executive offices) (Zip Code)

Registrant's telephone number, including area code: (540) 326-9000

Securities registered pursuant to Section 12(b) of the Act:
Title of each class Name of each exchange on which registered
NONE NONE

Securities registered pursuant to Section 12(g) of the Act:
Common stock, par value $1 per share
(Title of Class)

Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the Registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes X No __

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein and will not be contained, to the best
of Registrant's knowledge, in definitive proxy or information statement
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. ____

State the aggregate market value of the voting stock held by non-affiliates of
the Registrant as of March 13, 2000.

$125,609,748 based on the closing sales price at that date
Common Stock, $1 par value

Indicate the number of shares outstanding of each of the issuer's classes of
common stock as of March 13, 2000.

Common Stock, $1 par value- 8,725,596

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the First Community Bancshares, Inc. 1999 Annual Report to Security
Holders are incorporated by reference in Part I and II hereof.

Portions of the Proxy Statement for the annual meeting of shareholders to be
held April 11, 2000 is incorporated by reference in Part III of this Form 10-K.

Form 10-K Information

Table of Contents
1999 Form 10-K Annual Report

Part Page

Item 1. Business...................................................................... 3
Item 2. Properties.................................................................... 16
Item 3. Legal Proceedings............................................................. 16
Item 4. Submission of Matters to a Vote of Security Holders........................... 17

Part II

Item 5. Market for Registrant's Common Equity and Related Stockholder Matters......... 18
Item 6. Selected Financial Data....................................................... 18
Item 7. Management's Discussion and Analysis of Financial Condition and Results
of Operations................................................................. 18
Item 7A. Quantitative and Qualitative Disclosures About Market Risk.................... 19
Item 8. Financial Statements and Supplementary Data................................... 19
Item 9. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure.......................................................... 19

Part III

Item 10. Directors and Executive Officers of the Registrant............................ 19
Item 11. Executive Compensation........................................................ 19
Item 12. Security Ownership of Certain Beneficial Owners and Management................ 19
Item 13. Certain Relationships and Related Transactions................................ 19

Part IV.

Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K............... 19
Signatures.................................................................... 21

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PART I

ITEM 1. BUSINESS

GENERAL

First Community Bancshares, Inc. (FCBI or Company, Corporation or Registrant)
was incorporated in September 1997 in the State of Nevada and serves as the
holding company for first Community Bank, N. A., a national association which
conducts commercial banking operations within the states of Virginia, West
Virginia and North Carolina. Prior to December 1997, the holding company
operated under the title FCFT, Inc. In order to facilitate a change in name to
First Community Bancshares, Inc. and to change the Company's state of domicile
from Delaware to Nevada, First Community Bancshares, Inc. was formed to serve as
the successor in merger to FCFT, Inc. thus facilitating the changes of name and
state of domicile. As a result of this merger and a series of acquisitions and
corporate reorganizations which are discussed in more detail in the following
paragraphs, First Community Bancshares, Inc. now operates as a one-bank holding
company through First Community Bank, N. A. First Community Bancshares, Inc. now
operates as a one-bank holding company through First Community Bank, N. A. First
Community Bancshares, Inc. and its wholly-owned subsidiary have total assets of
approximately $1.09 billion at December 31, 1999 and conduct commercial banking
business throughout the three-state area of Virginia, West Virginia and North
Carolina through 31 full-service banking operations and 11 mortgage offices
which are located throughout the state of Virginia.

On December 29, 1995, FCBI reorganized its then existing bank subsidiary, First
Community Bank, Inc., Princeton, West Virginia, by splitting it into two
separate banks. This was accomplished by chartering a second, affiliated,
Federal Deposit Insurance Corporation (FDIC) insured state commercial bank
formed through the acquisition of assets and assumption of the liabilities of
six of First Community Bank, Inc.'s operating divisions and branches located
within Mercer County, West Virginia. This new bank, First Community Bank of
Mercer County, Inc., headquartered in Princeton, West Virginia, consisted of
five divisions with offices in Princeton, Bluefield, and Bluewell, Trust
Division, and Corporate/Administrative Division. The main office of the
reorganized First Community Bank, Inc., was relocated to Buckhannon, West
Virginia.

At the close of business on July 3, 1996, FCBI acquired Citizens Bank of
Tazewell (Citizens), headquartered in Tazewell, Virginia. Pursuant to the
Agreement and Plan of merger, FCBI exchanged 3.51 shares of its common stock for
each share of Citizen's common stock. Accordingly, 263,159 shares of FCFT, Inc.
common stock were issued to holders of Citizens common stock. The merger was
accounted for under the pooling of interests method. Accordingly, all financial
reporting periods presented have been restated to reflect this business
combination. Subsequent to the merger, Citizens operates as a wholly owned
subsidiary of FCBI. On June 2, 1997, the corporate name of Citizens was changed
to First Community Bank of Southwest Virginia, Inc. (FCB SWV, Inc.).

At the close of business on September 26, 1996, First Community Bank, Inc.
acquired the Grafton and Rowlesburg, West Virginia branches of Huntington
National Bank West Virginia. The acquisition of these branches added
approximately $21 million in deposits. The intangible value of this transaction
totaled approximately $1 million that is being amortized over a 15-year period.
This acquisition was accounted for under the purchase method of accounting.
Accordingly, the consolidated results in periods after September 26, 1996
include the operations of the Grafton and Rowlesburg branches only from the date
of acquisition.

On April 9, 1997, FCBI acquired 100% of the common stock of Blue Ridge Bank
(Blue Ridge), headquartered in Sparta, North Carolina. Blue Ridge, a $105
million state-chartered bank, with offices located in Sparta, Elkin, Hays and
Taylorsville, North Carolina. Pursuant to the Agreement and Plan of merger, FCBI
exchanged cash of $19.50 for each of Blue Ridge's 1,212,148 common shares. In
conjunction with the acquisition, Blue Ridge canceled outstanding stock options
through the payment of $727,948 representing the difference between $19.50 and
the respective option prices. Total consideration including the payment for
cancellation of the options was $24.7 million and resulted in an intangible
asset of approximately $13.2 million, which is being amortized over a 15-year
period. The acquisition was accounted for under the purchase method of
accounting. Accordingly, results of operations of Blue Ridge are included in
consolidated results of FCBI from the date of acquisition. Subsequent to the
merger, Blue Ridge operates as a wholly owned subsidiary of FCBI.

First Community Bank of Southwest Virginia, the Virginia subsidiary of First
Community Bancshares, Inc., opened a de novo branch in Wytheville, Virginia,
located at 910 E. Main Street on August 1, 1997.

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In September 1997, FCB-SWV, Inc. acquired three branches from First Virginia
Bank and Premier Bankshares. The branches located in Fort Chiswell, Pound and
Clintwood, Virginia had total deposits of $43,864,000 at the date of the branch
acquisition. The intangible value of this transaction was approximately $4.6
million and is being amortized over a 15-year period.

Effective with the close of business on April 30, 1999, First Community Bank,
Inc. was converted to a National Association entitled First Community Bank, N.A.
(FCBNA). Concurrent with this conversion, FCBNA acquired the outstanding stock
of Blue Ridge Bank from First Community Bancshares, Inc. and the operations of
First Community Bank of Mercer County, Inc. and First Community Bank of
Southwest Virginia, Inc. were merged with and into FCBNA. Additionally, the
Corporate headquarters of FCBI and FCBNA were relocated to the new Corporate
center located in Bluefield, Virginia.

In September 1999, the Company's wholly owned banking subsidiary, FCBNA,
acquired United First Mortgage, Inc. (UFM). UFM is a mortgage brokerage business
organized under the laws of the State of Virginia. UFM conducts operations
through eleven facilities situated in eastern Virginia.

Currently, the Registrant is a bank holding company and the banking operations
are expected to remain the principal business and major source of revenue. The
Registrant provides a mechanism for ownership of the subsidiary banking
operations, provides capital funds as required and serves as a conduit for
distribution of dividends to stockholders. The Registrant also considers and
evaluates options for growth and expansion of the existing subsidiary banking
operations.

The Registrant currently derives substantially all of its revenues from
dividends paid by its subsidiary bank. Dividend payments by the bank are
determined in relation to earnings, asset growth and capital position and are
subject to certain restrictions by regulatory agencies as described more fully
under Supervision and Regulation of this item.

First Community Bank, N.A. (A National Association)

FCBNA is a nationally chartered bank organized under the banking laws of the
United States. FCBNA engages in general commercial and retail banking business
in West Virginia, Virginia and North Carolina through 31 full service banking
facilities. It provides safe deposit services and makes all types of loans,
including commercial, mortgage and personal loans. FCBNA also provides trust
services and its deposits are insured by the FDIC. FCBNA is a member of the
Federal Reserve System and is a member of the Federal Home Loan Bank (FHLB) of
Atlanta. Regulatory oversight of the banking subsidiary is conducted by the
Office of the Comptroller of the Currency (OCC).

LENDING ACTIVITIES

The Company's banking subsidiary generates revenues primarily through the
investment of borrowed and deposited funds in earning assets. These assets are
comprised of securities available for sale, investment securities, short-term
investment vehicles and loans to businesses and individuals. Average loans
represent approximately 67.3% of average earning assets and present a higher
level of credit risk to the Company when contrasted with investment securities.

The principal lending activities of the bank are concentrated primarily within
its market areas in West Virginia, Virginia, North Carolina and the surrounding
mid-Atlantic area. These are areas with which bank personnel are most acquainted
and are within reasonable distances of the bank which allows for timely
communications with customers as well as periodic inspections of collateral.

Loan portfolios total $704.1 million at December 31, 1999 and are comprised of
commercial, real estate and consumer loans including home equity loans.
Commercial and commercial real estate loans comprise 42.7% of the total loan
portfolio. Commercial loans include loans to small to mid-size industrial,
commercial and service companies that include but are not limited to, coal
mining companies, manufacturers, automobile dealers, and retail and wholesale
merchants. Collateral securing these loans includes equipment, machinery,
inventory, receivables, vehicles and commercial real estate. Commercial loans
are considered to contain a higher level of risk than other loan types although
care is taken to minimize these risks. Underwriting standards require a
comprehensive review and independent evaluation of virtually all commercial
loans by Credit Administration and Loan Committees prior to approval with
updates to these credit reviews performed periodically on a quarterly or annual
basis depending on the size of the loan relationship.

Real estate mortgage loans comprise 35.7% of the total loan portfolio. Mortgage
loans to consumers are secured primarily by first lien deeds of trust. These
loans generally do not exceed an 80% loan to value ratio at the loan

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origination date and are considered to contain normal risk. Loans in the real
estate mortgage category have historically yielded the lowest loss ratio of all
loan types.

Consumer loans comprise 18.1% of the total loan portfolio. Collateral for these
loans include automobiles, boats, recreational vehicles, and other personal
property. Personal loans and home equity loans are also included as consumer
loans. Historically, losses on these types of loans have been minimal; however,
indirect lending through various automobile dealerships in 1996 and 1997, which
was substantially curtailed in 1998, led to a significant increase in consumer
loan charge-offs in 1997 and 1998. During 1998, the Company sold $14 million in
credit card revolving loan accounts and terminated its credit card operations
due to strong competition for this form of business, rising consumer
delinquencies and higher loss ratios.

The average yield on a tax equivalent basis on all loans in 1999 was 9.17% and
average loans expressed as a percentage of average deposits were 75% in 1999.
This percentage is consistent with the prior year level of 74% in 1998, however,
this represents a lower level of outstanding loans when compared with the loan
to deposit ratio of 81% in 1997.

EMPLOYEES

The Registrant and its subsidiaries had 489 employees at December 31, 1999.
Management considers employee relations to be excellent.

COMPETITION

The Corporation's subsidiaries face substantial competition in their operations
from banking and nonbanking institutions, including savings and loan
associations, credit unions, money market funds and other investment vehicles,
mutual fund advisory companies, brokerage firms, insurance companies, leasing
companies, credit card issuers, mortgage banking companies, investment banking
companies, finance companies and other types of financial services providers.

The Company's subsidiary has been able to compete effectively with other
financial institutions in its respective market areas. The subsidiary emphasizes
customer service in an effort to establish long-term customer relationships and
build customer loyalty. The subsidiary of the Company has consolidated services
such as data processing, accounting, loan review and compliance, and internal
audit services to enhance its ability to compete effectively in its respective
markets.

SUPERVISION AND REGULATION

GENERAL

The Registrant is a bank holding company within the meaning of the Bank Holding
Act of 1956 (Act), as amended, and is registered as such with the Board of
Governors of the Federal Reserve System. The Registrant is required to file with
the Board of Governors quarterly reports of the Registrant and the subsidiary
and such other information as the Board of Governors may require. The Federal
Reserve makes periodic examinations of the Registrant typically on an annual
basis. The Act requires every bank holding company to obtain prior approval of
the Board of Governors before acquiring substantially all the assets or direct
or indirect ownership or control of more than 5% of the voting shares of any
bank which is not already majority-owned. The Act also prohibits a bank holding
company, with certain exceptions, from engaging in, or acquiring direct or
indirect control of more than 5% of the voting shares of any company engaged in
non-banking activities.

Bank holding companies and their subsidiary banks are also subject to the
provisions of the Community Reinvestment Act of 1977 ("CRA"). Under the CRA, the
Federal Reserve Board is required, in connection with its examination of a bank,
to assess such bank's record in meeting the credit needs of the communities
served by that bank, including low and moderate-income neighborhoods. Further,
such assessment is also required of any bank holding company which has applied
to (i) charter a National bank, (ii) obtain deposit insurance coverage for a
newly chartered institution, (iii) establish a new branch office that will
accept deposits, (iv) relocate an office, or (v) merge or consolidate with, or
acquire the assets or assume the liabilities of a federally-regulated financial
institution. In the case of a bank holding company applying for approval to
acquire a bank or other bank holding company, the Federal Reserve Board will
assess the record of each subsidiary of the applicant bank holding company, and
such records may be the basis for denying the application or imposing conditions
in connection with approval of the application. On July 1, 1995, the federal
bank regulators amended the CRA regulations to simplify enforcement of the CRA
by substituting the prior

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twelve assessment categories with three performance categories for use in
calculating CRA ratings. The federal bank regulators will evaluate banks under
the lending, investment, and service tests. Additional data collection and
reporting requirements under the Home Mortgage Disclosure Act are imposed on
institutions which accept mortgage loan applications within metropolitan
statistical areas.

The Financial Institutions Reform, Recovery, and Enforcement Act of 1989
("FIRREA") was enacted by Congress on August 9, 1989. Among the more significant
consequences of FIRREA with respect to bank holding companies is the impact of
the "cross-guarantee" provision and the significantly expanded enforcement
powers of bank regulatory agencies. Under the cross-guarantee provision, if one
depository institution subsidiary of a multi-unit holding company fails or
requires FDIC assistance, the FDIC may assess a commonly controlled depository
institution for the estimated losses suffered by the FDIC. While the FDIC's
claim is junior to the claims of non-affiliated depositors, holders of secured
liabilities, general creditors, and subordinated creditors, it is superior to
the claims of shareholders. Among the significantly expanded enforcement powers
of the bank regulatory agencies are the powers to (i) obtain cease and desist
orders, (ii) remove officers and directors, (iii) approve new directors and
senior executive officers of certain depository institutions, and (iv) assess
criminal and civil money penalties for violations of law, regulations. or
conditions imposed by, or agreements with, regulatory agencies.

The earnings of the Corporation's subsidiary, and therefore the earnings of the
Corporation, are affected by general economic conditions, management policies
and the legislative and governmental actions of various regulatory authorities,
including the Federal Reserve Board, the OCC and the FDIC. In addition, there
are numerous governmental requirements and regulations which affect the
activities of the Corporation and its subsidiary.

PAYMENT OF DIVIDENDS

The Corporation is a legal entity separate and distinct from its banking
subsidiary. A major portion of the revenues of the Corporation result from
amounts paid as dividends to the Corporation by its national bank subsidiary.
The prior approval of the Comptroller is required if the total of all dividends
declared by a national bank in any calendar year will exceed the sum of such
bank's net profits for that year and its retained net profits for the preceding
two calendar years, less any required transfers to surplus. Federal law also
prohibits national banks from paying dividends which would be greater than the
bank's undivided profits after deducting statutory bad debts in excess of the
bank's allowance for loan losses.

In addition, the Corporation and its banking subsidiary are subject to various
general regulatory policies and requirements relating to the payment of
dividends, including requirements to maintain adequate capital above regulatory
minimums. The appropriate federal regulatory authority is authorized to
determine under certain circumstances relating to the financial condition of a
bank or bank holding company that the payment of dividends would be an unsafe or
unsound practice and to prohibit payment thereof. The appropriate federal
regulatory authorities have indicated that paying dividends that deplete a
bank's capital base to an inadequate level would be an unsound and unsafe
banking practice and that banking organizations should generally pay dividends
only out of current operating earnings.

CAPITAL ADEQUACY

Under the risk-based capital requirements for bank holding companies, the
minimum requirement for the ratio of capital to risk-weighted assets (including
certain off-balance-sheet activities, such as standby letters of credit) is
eight percent. At least half of the total capital is to be composed of common
stockholders' equity, retained earnings, a limited amount of qualifying
perpetual preferred stock and minority interests in the equity accounts of
consolidated subsidiaries, less goodwill and certain intangibles ("tier 1
capital" and together with tier 2 capital "total capital"). The remainder of
total capital may consist of mandatory convertible debt securities and a limited
amount of subordinated debt, qualifying preferred stock and loan loss allowance
("tier 2 capital"). At December 31, 1999, the Corporation's tier 1 capital and
total capital ratios were 11.96 percent and 13.22 percent, respectively.

In addition, the Federal Reserve Board has established minimum leverage ratio
guidelines for bank holding companies. These requirements provide for a minimum
leverage ratio of tier 1 capital to adjusted average quarterly assets less
certain amounts ("leverage ratio") equal to three percent for bank holding
companies that meet certain specified criteria, including having the highest
regulatory rating. All other bank holding companies will generally be required
to maintain a leverage ratio of from at least four to five percent. The
Corporation's leverage ratio at December 31, 1999, was 8.25 percent. The
guidelines also provide that bank holding companies experiencing internal growth
or making acquisitions will be expected to maintain strong capital positions
substantially above the minimum supervisory levels without significant reliance
on intangible assets. Furthermore, the guidelines indicate that the Federal
Reserve Board

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will continue to consider a "tangible tier 1 leverage ratio" (deducting all
intangibles) in evaluating proposals for expansion or new activity.

The Corporation's subsidiary bank is subject to similar capital requirements
adopted by the Comptroller of the Currency. The capital ratios of the bank
subsidiary of the Corporation are set forth on page 43 in the Annual Report and
are incorporated herein by reference.

SUPPORT OF SUBSIDIARY BANK

The Federal Deposit Insurance Corporation Improvement Act, as amended
("FDICIA"), among other things, imposes liability on an institution the deposits
of which are insured by the FDIC, such as the Corporation's subsidiary bank, for
certain potential obligations to the FDIC incurred in connection with other
FDIC-insured institutions under common control with such institution.

Under the National Bank Act, if the capital stock of a national bank is impaired
by losses or otherwise, the Comptroller is authorized to require payment of the
deficiency by assessment upon the bank's stockholders, pro rata, and to the
extent necessary, if any such assessment is not paid by any stockholder after
three months notice, to sell the stock of such stockholder to make good the
deficiency. Under Federal Reserve Board policy, the Corporation is expected to
act as a source of financial strength to its subsidiary bank and to commit
resources to support the subsidiary. This support may be required at times when,
absent such Federal Reserve Board policy, the Corporation may not find itself
able to provide it.

Any capital loans by a bank holding company to its subsidiary bank are
subordinate in right of payment to deposits and to certain other indebtedness of
such subsidiary bank. In the event of a bank holding company's bankruptcy, any
commitment by the bank holding company to a federal bank regulatory agency to
maintain the capital of a subsidiary bank will be assumed by the bankruptcy
trustee and entitled to a priority of payment.

DEPOSITOR PREFERENCE STATUTE

Under federal law, deposits and certain claims for administrative expenses and
employee compensation against an insured depository institution would be
afforded a priority over other general unsecured claims against such an
institution, including federal funds and letters of credit, in the "liquidation
or other resolution" of such an institution by any receiver.

BORROWINGS BY THE CORPORATION

The banking subsidiary of the Registrant is subject to certain restrictions by
regulatory bodies which limit the amounts and the manner in which it may loan
funds to the Registrant. The bank is further subject to restrictions on the
amount of dividends that can be paid to the Registrant in any one calendar year
without prior approval by primary regulators. Payment of dividends by the
subsidiary bank to the Registrant cannot exceed net profits, as defined, for the
current year combined with net profits for the two preceding years. In addition,
any distribution that might reduce the bank's equity capital to unsafe levels or
which, in the opinion of regulatory agencies, or is not in the best interests of
the public, could be prohibited. (For additional information concerning these
restrictions, see Note 14 of the Notes to the 1999 Consolidated Financial
Statements incorporated herein by reference.)

PROMPT CORRECTIVE ACTION

The FDICIA, among other things, requires the federal banking agencies to take
"prompt corrective action" in respect of depository institutions that do not
meet minimum capital requirements. FDICIA establishes five capital tiers: "well
capitalized", "adequately capitalized", "undercapitalized", "significantly
undercapitalized" and "critically undercapitalized". A depository institution's
capital tier will depend upon where its capital levels compare to various
relevant capital measures and certain other factors, as established by
regulation.

Federal regulatory authorities have adopted regulations establishing relevant
capital measures and relevant capital levels applicable to FDIC-insured banks.
The relevant capital measures are the total capital ratio, the tier 1 capital
ratio and the leverage ratio. Under the regulations, an FDIC-insured bank will
be: (i) "well capitalized" if it has a total capital ratio of ten percent or
greater, a tier 1 capital ratio of six percent or greater and a leverage ratio
of five percent or greater and is not subject to any order or written directive
by any such regulatory authority to meet and maintain a specific capital level
for any capital measure; (ii) "adequately capitalized" if it has a total capital
ratio of eight percent or greater, a tier 1 capital ratio of four percent or
greater and a leverage ratio of four percent or greater (three percent in
certain circumstances) and is not "well capitalized"; (iii) "undercapitalized"
if it has a total capital ratio of less than

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eight percent, a tier 1 capital ratio of less than four percent or a leverage
ratio of less than four percent (three percent in certain circumstances); (iv)
"significantly undercapitalized" if it has a total capital ratio of less than
six percent, a tier 1 capital ratio of less than three percent or a leverage
ratio of less than three percent; and (v) "critically undercapitalized" if its
tangible equity is equal to or less than two percent of average quarterly
tangible assets. An institution may be downgraded to, or deemed to be in, a
capital category that is lower than is indicated by its capital ratios if it is
determined to be in an unsafe or unsound condition or if it receives an
unsatisfactory examination rating with respect to certain matters. As of
December 31, 1999, the Corporation's deposit-taking subsidiary bank had capital
levels that qualify it as being "well capitalized" under such regulations.

The FDICIA generally prohibits an FDIC-insured depository institution from
making any capital distribution (including payment of a dividend) or paying any
management fee to its holding company if the depository institution would
thereafter be "undercapitalized". "Undercapitalized" depository institutions are
subject to growth limitations and are required to submit a capital restoration
plan. The federal banking agencies may not accept a capital plan without
determining, among other things, that the plan is based on realistic assumptions
and is likely to succeed in restoring the depository institution's capital. In
addition, for a capital restoration plan to be acceptable, the depository
institution's parent holding company must guarantee that the institution will
comply with such capital restoration plan. The aggregate liability of the parent
holding company is limited to the lesser of (i) an amount equal to five percent
of the depository institution's total assets at the time it became
"undercapitalized", and (ii) the amount which is necessary (or would have been
necessary) to bring the institution into compliance with all capital standards
applicable with respect to such institution as of the time it fails to comply
with the plan. If a depository institution fails to submit an acceptable plan,
it is treated as if it is "significantly undercapitalized".

"Significantly undercapitalized" depository institutions may be subject to a
number of requirements and restrictions, including orders to sell sufficient
voting stock to become "adequately capitalized", requirements to reduce total
assets and cessation of receipt of deposits from correspondent banks.
"Critically undercapitalized" institutions are subject to the appointment of a
receiver or conservator. A bank that is not "well capitalized" is subject to
certain limitations relating to so-called "brokered" deposits.

INTERSTATE BANKING AND BRANCH LEGISLATION

The Reigle-Neal Interstate Banking and Branching Efficiency Act of 1994 (the
"IBBEA"), authorized interstate acquisitions of banks and bank holding companies
without geographic limitation beginning one year after enactment. In addition,
it authorized, beginning June 1, 1997, a bank to merge with a bank in another
state as long as neither of the states opted out of interstate branching between
the date of enactment of the IBBEA and May 31, 1997. In addition, a bank may
establish and operate a de novo branch in a state in which the bank does not
maintain a branch if that state expressly permits de novo branching.

RECENT LEGISLATION

Effective March 11, 2000, pursuant to authority granted under the
Gramm-Leach-Bliley Act, a bank holding company may elect to become a financial
holding company and thereby to engage in a broader range of financial and other
activities than are permissible for traditional bank holding companies. In order
to qualify for the election, all of the depository institution subsidiaries of
the bank holding company must be well capitalized and well managed, as defined
by regulation, and all of its insured depository institution subsidiaries have
achieved a rating of "satisfactory" or better with respect to meeting community
credit needs. Pursuant to the Gramm-Leach-Bliley Act, financial holding
companies will be permitted to engage in activities that are "financial in
nature" or incidental or complementary thereto, as determined by the Federal
Reserve Board. The Gramm-Leach-Bliley Act identifies several activities as
"financial in nature," including, among others, insurance underwriting and
agency, investment advisory services, merchant banking and underwriting, and
dealing or making a market in securities. FCBI has not, at this time, made any
decisions with respect to the extent to which it will become a financial holding
company under the Act.

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GOVERNMENTAL MONETARY POLICIES AND ECONOMIC CONTROLS

The earnings of the Registrant and its subsidiary are affected by the monetary
policies of the Federal Reserve System.

An important function of the Federal Reserve System is to regulate the National
supply of credit in order to deal with economic conditions. The instruments
employed by the Federal Reserve are open market operations of U.S. Government
securities, changes in the discount rate on member bank borrowings, changes in
Federal Funds rates and changes in reserve requirements. These policies
influence, in various ways, the level of the company's investments, loans and
deposits and rates earned on its earning assets and interest rates paid on
liabilities.

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I. DISTRIBUTION OF ASSETS, LIABILITIES AND STOCKHOLDERS' EQUITY, INTEREST RATES
AND INTEREST DIFFERENTIAL

A. & B. AVERAGE BALANCE SHEETS--NET INTEREST INCOME ANALYSIS

(Amounts in Thousands, except %)
1999 1998 1997
-------- -------- --------
AVERAGE INTEREST YIELD/RATE AVERAGE INTEREST YIELD/RATE AVERAGE INTEREST YIELD/RATE
BALANCE (1) (1) BALANCE (1) (1) BALANCE (1) (1)
---------- -------- ---------- ---------- -------- ---------- ---------- -------- ----------

Earning Assets:
Loans (2)
Taxable $ 626,868 $57,346 9.15% $ 634,342 $61,355 9.67% $601,492 $58,676 9.76%
Tax-Exempt 10,043 1,062 10.58% 13,425 1,490 11.10% 15,993 1,657 10.36%
---------- ------- ----- ---------- ------- ----- -------- ------- -----
Total 636,911 58,408 9.17% 647,767 62,845 9.70% 617,485 60,333 9.77%
Reserve for Loan
Losses (11,239) (11,731) (9,770)
---------- ------- ----- ---------- ------- ----- -------- ------- -----
Net Total 625,672 58,408 9.34% 636,036 62,845 9.88% 607,715 60,333 9.93%
Securities Available For
Sale:
Taxable 186,379 11,417 6.13% 121,704 7,750 6.37% 122,326 8,226 6.72%
Tax-Exempt 35,627 2,769 7.77% 26,056 2,015 7.73% 17,162 1,388 8.09%
---------- ------- ----- ---------- ------- ----- -------- ------- -----
Total 222,006 14,186 6.39% 147,760 9,765 6.61% 139,488 9,614 6.89%
Investment Securities:
Taxable 6,782 465 6.86% 20,221 1,307 6.46% 45,581 2,820 6.19%
Tax-Exempt 73,938 5,983 8.09% 74,766 6,036 8.07% 59,547 4,830 8.11%
---------- ------- ----- ---------- ------- ----- -------- ------- -----
Total 80,720 6,448 7.99% 94,987 7,343 7.73% 105,128 7,650 7.28%
Interest-Bearing
Deposits 9,866 482 4.89% 56,136 3,007 5.36% 418 44 10.53%
Federal Funds Sold 8,800 403 4.58% 29,628 1,593 5.38% 17,127 949 5.54%
---------- ------- ----- ---------- ------- ----- -------- ------- -----
Total Earning Assets 947,064 79,927 8.44% 964,547 84,553 8.77% 869,876 78,590 9.03%
------- ----- ------- ----- ------- -----
Other Assets 95,119 93,984 79,604
---------- ---------- --------
Total $1,042,183 $1,058,531 $949,480
========== ========== ========

Interest-Bearing
Liabilities:
Demand Deposits $ 137,816 2,974 2.16% $134,195 3,732 2.78% $111,177 3,064 2.76%
Savings Deposits 145,526 3,257 2.24% 150,749 4,452 2.95% 141,827 4,350 3.07%
Time Deposits 451,079 22,913 5.08% 474,263 26,196 5.52% 406,208 21,359 5.26%
Short-Term Borrowings 58,365 2,326 3.99% 51,457 2,288 4.45% 59,462 2,623 4.41%
Long-Term Borrowings 12,905 781 6.05% 23,468 1,459 6.22% 22,654 1,494 6.59%
---------- ------- ----- ---------- ------- ----- -------- ------- -----
Total Interest-Bearing
Liabilities 805,691 32,251 4.00% 834,132 38,127 4.57% 741,328 32,890 4.43%
------- ----- ------- ----- ------- -----

Demand Deposits 119,576 111,565 100,158
Other Liabilities 13,070 12,236 13,955
Stockholders' Equity 103,846 100,598 94,039
---------- ---------- --------
Total $1,042,183 $1,058,531 $949,480
========== ========== ========

Net Interest Income $47,676 $46,426 $45,700
======= ======= ======

Net Interest Rate Spread (3) 4.44% 4.20% 4.60%
===== ===== =====

Net Interest Margin (4) 5.03% 4.81% 5.25%
===== ===== =====

(1) Fully Taxable Equivalent-Using the Federal statutory rate of 35%.
(2) Non-accrual loans are included in average balances outstanding but with no
related interest income.
(3) Represents the difference between the yield on earning assets and cost of
funds.
(4) Represents tax equivalent net interest income divided by average interest
earning assets.

10
11

C. RATE AND VOLUME ANALYSIS OF INTEREST (1)

(Amounts in Thousands)

1999 Compared to 1998 1998 Compared to 1997
Increase/(Decrease) due to Increase/(Decrease) due to
-------------------------- --------------------------

Volume Rate Total Volume Rate Total
------- ------- ------- ------- ------- -------

Interest Earned On:
Loans $(1,076) $(3,361) $(4,437) $ 2,902 $ (390) $ 2,512
Investment securities available
for sale 4,716 (295) 4,421 649 (498) 151
Investment securities
held to maturity (984) 89 (895) (405) 98 (307)
Interest bearing deposits
with other banks (2,282) (243) (2,525) 2,995 (32) 2,963
Federal funds sold (983) (207) (1,190) 673 29 644
------- ------- ------- ------- ------- -------

Total interest earning
assets (609) (4,017) (4,626) 6,814 (851) 5,963
------- ------- ------- ------- ------- -------

Interest Paid On:
Demand deposits 98 (856) (758) 640 28 668
Savings deposits (150) (1,045) (1,195) 267 (165) 102
Time deposits (1,242) (2,041) (3,283) 3,718 1,119 4,837
Short-term borrowings 289 (251) 38 (356) 31 (325)
Long-term debt (640) (38) (678) 53 (98) (45)
------- ------- ------- ------- ------- -------

Total interest bearing
liabilities (1,645) (4,231) (5,876) 4,322 915 5,237
------- ------- ------- ------- ------- -------

Change in net interest
income $ 1,036 $ 214 $ 1,250 $ 2,492 $(1,766) $ 726
======= ======= ======= ======= ======= =======

(1) Fully Taxable Equivalent-using the federal statutory rate of 35%.

The preceding table sets forth a summary of the changes in interest earned and
paid resulting from changes in volume of earning assets and paying liabilities
and changes in rates thereon. For purposes of this analysis, the change in
interest due to both rate and volume has been allocated to volume and rate
changes in proportion to the relationship of the absolute dollar amounts.

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12

II. INVESTMENT PORTFOLIO

A. Amortized Cost of Investment Securities Held to Maturity:

December 31
-----------
(Amounts in Thousands) 1999 1998 1997
------- -------- --------

U.S. Treasury securities $ 100 $ 100 $ 4,098
U.S. Government agencies and corporations 3,663 7,546 26,377
States and political subdivisions 73,640 75,009 77,641
Other securities 1,365 1,361 1,058
------- -------- --------
$78,768 $ 84,016 $109,174
======= ======== ========

Market Value of Securities Available for Sale:

December 31
-----------
(Amounts in Thousands) 1999 1998 1997
------- -------- --------

U.S. Government agencies and corporations $143,636 $119,508 $132,746
States and political subdivisions 33,355 37,343 22,576
Other securities 35,114 36,343 6,473
-------- -------- --------
$212,105 $193,194 $161,795
======== ======== ========

B. Maturity and Yields

The required information is incorporated by reference to pages 32 through 34 of
the 1999 Annual Report.

C. There are no issues included in obligations of states and political
subdivisions or other securities that exceed ten percent of
stockholders' equity.

III. LOAN PORTFOLIO

A. Loan Summary

December 31
-----------
Amounts in Thousands) 1999 1998 1997 1996 1995
-------- ------- -------- -------- --------

Commercial, Financial and
Agricultural $ 92,379 $ 77,233 $ 82,445 $ 79,278 $ 71,441
Real Estate - Commercial 208,228 170,683 202,625 166,787 152,579
Real Estate - Construction 24,684 8,988 9,612 10,589 5,608
Real Estate - Residential 251,332 228,540 227,465 171,455 155,282
Consumer 128,541 127,169 151,429 120,720 100,843
Other 62 894 1,185 552 519
-------- ------- -------- -------- --------
Total 705,586 613,507 674,761 549,381 486,272
Less : Unearned Income 1,490 2,014 2,944 1,678 1,121
-------- ------- -------- -------- --------
704,096 611,493 671,817 547,703 485,151
Less: Reserve for Loan Losses 11,900 11,404 11,406 8,987 8,321
-------- ------- -------- -------- --------
Net Loans $692,196 $600,089 $660,411 $538,716 $476,830
======== ======== ======== ======== ========

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13

B. Maturities and Rate Sensitivity of Loan Portfolio at December 31, 1999:

Remaining Maturities
--------------------
(Amounts in Thousands)
Over One Over
One Year Year to Five
and Less Five Years Years Total Percent
------------ ---------- -------- ------- -------

Commercial, Financial and
Agricultural $ 42,515 $ 30,928 $ 19,296 $ 92,739 13.17%

Real Estate - Commercial 60,905 67,030 80,292 208,227 29.57%

Real Estate - Construction 10,972 10,473 3,239 24,684 3.51%

Real Estate - Mortgage 27,005 95,496 128,656 251,157 35.67%

Consumer 19,321 96,813 11,093 127,227 18.07%

Other -0- 49 13 62 0.01%
-------- -------- -------- ------- ------
$160,718 $300,789 $242,589 $704,096 100.00%
======== ======== ======== ======== ======

Rate Sensitivity:
Pre-determined Rate $ 82,660 $270,180 $189,275 $542,115 76.99%
Floating or Adjustable Rate 78,058 30,609 53,314 161,981 23.01%
-------- -------- -------- ------- ------
$160,718 $300,789 $242,589 $704,096 100.00%
======== ======== ======== ======== ======

22.83% 42.72% 34.45% 100.00%
======== ======== ======== ========

C. Risk Elements. The required information for risk elements is included
below and incorporated by reference to pages 16 and 17 of the 1999
Annual Report.

Nonperforming Assets:

December 31
-----------
(Amounts in Thousands) 1999 1998 1997 1996 1995
------ ------ ------ ------ ------

Non-accruing Loans $7,889 $7,763 $9,988 $5,476 $4,371
Loans Past Due Over 90
Days 1,259 377 4,391 780 673
Restructured Loans Per-
forming in Accordance
With Modified Terms 505 509 534 401 440
Gross Interest Income Which
Would Have Been Recorded
Under Original Terms of
Non-Accruing and Re-
Structured Loans 436
Actual Interest Income During
the Period 78
Commitments to Lend
Additional Funds on Non-
Performing Assets --

Management believes that the extent of problem loans at December 31, 1999 is
disclosed as non-performing assets or delinquent loans in the preceding charts.
However, there can be no assurance that future circumstances, such as further
erosion of economic conditions and the related potential effect that such
erosion may have on certain borrowers' ability to continue to meet payment
obligations, will not lead to an increase in problem loan totals. Management
believes that the non-performing asset carrying values will be substantially
recoverable, taking into consideration the

13
14

adequacy of the applicable collateral and, in certain cases, partial write-downs
which have been taken and allowances that have been established.

It is the Registrant's policy to discontinue the accrual of interest on loans
based on their payment status and evaluation of the related collateral and the
financial strength of the borrower. The accrual of interest is normally
discontinued when a loan becomes 90 days past due as to principal or interest.

At December 31, 1999 and at the date of this report, the Company does not have
any concentrations of loans to borrowers engaged in similar activities exceeding
10% of total loans, net of unearned income.

The Company has no significant concentrations of credit risk other than
geographic concentrations. Most loans in the current portfolio are made and
collateralized in West Virginia, Virginia and North Carolina and the surrounding
mid-Atlantic area. Although portions of the Company's market area economy are
closely related to coal and timber, they are supplemented by service industries.
The current economies of the Company's markets are relatively stable and are not
seen as highly subject to volatile economic change.

The following table presents the Company's investment in loans considered to be
impaired:

December 31
-----------
(Amounts in Thousands) 1999 1998
------ ------

Commercial, financial and agricultural $5,585 $5,112
Real estate-mortgage 266 154
------ ------
Total investment in loans considered to be impaired $5,851 $5,266
====== ======

Under SFAS No. 114, the allowance for loan losses related to loans that are
identified for evaluation in accordance with SFAS No. 114 is based on discounted
cash flows using the loan's initial effective interest rate or the fair value of
the collateral for certain collateral dependent loans.

IV. SUMMARY OF LOAN LOSS EXPERIENCE

A. 1. Summary of Loan Loss Experience:

Years Ended December 31
-----------------------
(Amounts in Thousands, Except Percent Data) 1999 1998 1997 1996 1995
------- ------- ------- ------ ------

Balance of reserve at beginning of period ............... $11,404 $11,406 $ 8,987 $8,321 $8,479
Reserve of subsidiaries at date of acquisition........... -- -- 1,981 -- --
Charge-offs:
Commercial, financial and agricultural .............. 562 3,602 2,052 369 1,875
Real estate- residential ............................ 268 367 385 275 109
Installment ......................................... 2,178 3,019 2,761 1,537 899
------- ------- ------- ------ ------
Total Charge-offs ............................... 3,008 6,988 5,198 2,181 2,883
------- ------- ------- ------ ------
Recoveries:
Commercial, financial and agricultural .............. 74 190 130 249 126
Real estate-residential ............................. 60 31 31 26 35
Installment ......................................... 477 515 512 299 329
------- ------- ------- ------ ------
Total Recoveries ................................ 611 736 673 574 490
------- ------- ------- ------ ------
Net charge-offs ......................................... 2,397 6,252 4,525 1,607 2,393
Provision charged to operations ......................... 2,893 6,250 4,963 2,273 2,235
------- ------- ------- ------ ------
Balance of reserve at end of period ..................... $11,900 $11,404 $11,406 $8,987 $8,321
======= ======= ======= ====== ======

Ratio of net charge-offs to average loans
outstanding ......................................... .38% .97% .73% .31% .54%
======= ======= ======= ====== ======

Ratio of reserve to total loans outstanding ............. 1.69% 1.86% 1.70% 1.64% 1.72%
======= ======= ======= ====== ======

14
15

A. 2. The required information is incorporated by reference to pages 16 and
17 of the 1999 Annual Report.

B. Allocation of Reserve for Loan Losses:

(Amounts in Thousands, Except Percent Data) December 31
-----------
1999 1998 1997 1996 1995
-------------- -------------- -------------- ------------- -------------

Commercial, Financial
and Agricultural $ 4,919 43% $ 4,054 40% $ 4,795 42% $3,167 45% $3,465 46%

Real Estate - Mortgage 2,578 39% 2,297 39% 2,819 35% 1,956 33% 1,751 33%

Consumer 1,413 18% 1,378 21% 1,979 23% 1,567 22% 1,280 21%

Unallocated 2,990 N/A 3,675 N/A 1,813 N/A 2,297 N/A 1,825 N/A
------- --- ------- --- ------- --- ------ --- ------ ---
Total $11,900 100% $11,404 100% $11,406 100% $8,987 100% $8,321 100%
======= === ======= === ======= === ====== === ====== ===

The percentages in the table above represent the percent of loans in each
category of total loans.

V. DEPOSITS

A. The required information for average deposits and rates paid by type is
included on page 9 of this report.

B. Not applicable.

C. Not applicable.

D. The required information is incorporated by reference to page 38 of the
1999 Annual Report and as follows:

Maturities of Time Deposits of $100,000 or more

(Amounts in Thousands)
1999
--------

Three months or less................... $ 34,958

Over Three to Six Months............... 24,644

Over Six to Twelve Months.............. 29,738

Over Twelve Months..................... 21,487
--------
Total............. $110,827
========

E. Not applicable.

VI. RETURN ON EQUITY AND ASSETS

A. The required information is incorporated by reference to page 10 of the
1999 Annual Report.

15
16

VII. SHORT-TERM BORROWINGS

A. Securities Sold Under Agreements to Repurchase and Other Short-Term
Borrowings:

The Company uses various short-term funding sources including term repurchase
agreements, customer repurchase agreements and Federal funds purchased. The
Company's short-term borrowings and rates paid are summarized as follows
(Amounts in Thousands, Except Percent Data):

1999 1998 1997
------------------- ------------------ ------------------
Amount Rate Amount Rate Amount Rate
-------- ---- -------- ---- -------- ----

At year-end $127,762 3.99% $47,680 3.97% $55,056 4.28%
Average during year 58,365 3.26% 51,457 4.45% 59,462 4.41%
Maximum month-end
balance 127,762 55,755 63,782

B. Long-Term Advances From the FHLB and Long-Term Debt

The Company's banking subsidiary is a member of the FHLB and as such has the
ability to obtain advances from the FHLB. The Company had long-term advances
from the FHLB (original maturities in excess of one year) of $10 million with a
weighted average rate of 6.01% at December 31, 1999 and December 31, 1998. The
advances from the FHLB are secured by certain qualifying first mortgage loans,
stock in the FHLB, mortgage-backed securities and certain other investment
securities.

ITEM 2. PROPERTIES

FIRST COMMUNITY BANK, N. A.

The principal offices of the Corporation and FCBNA are located at One Community
Place, Bluefield, Virginia, where the Company owns and occupies approximately
36,000 square feet of office space. Additional details regarding the physical
location and number of banking offices is located on pages 54 - 55 in the 1999
Annual Report and incorporated herein by reference. The Corporation's banking
subsidiary owns in fee 30 offices while others are leased or are located on
leased land. United First Mortgage, Inc., a wholly-owned subsidiary of FCBNA,
maintains ten leased office facilities in eastern Virginia throughout a
geographic area ranging from Virginia Beach, Virginia to Harrisonburg, Virginia.

ITEM 3. LEGAL PROCEEDINGS

The Registrant and its subsidiary (the Company) are plaintiffs and defendants in
lawsuits arising out of the normal course of business, in which claims for
monetary damages are asserted. Management, after consulting with legal counsel
handling the respective matters, is of the opinion that the ultimate outcome of
such pending actions will not have a material effect on the consolidated results
of operations or financial condition of the Registrant. Following is a summary
of significant proceedings along with recent developments, where applicable.

In August 1997, the Company was named as a defendant in a suit styled Ann
Tierney Smith, as Executrix of the Estate of Katharine B. Tierney, Ann Barclay
Smith and Laurence E. Tierney Smith, Plaintiffs vs. FCFT, Inc., First Community
Bank, Inc., Gentry, Locke, Rakes & Moore, and W. William Gust, Defendants, Civil
Action No. 97-CV-408-K, seeking to overturn the establishment of a private
foundation for which the Company's Trust and Financial Services Division serves
as Trustee. The suit filed by heirs of the Foundation donor, seeks a total of $6
million in compensatory and punitive damages as well as the termination of the
Foundation. The Company and Trustee believe the creation and the operation of
the Foundation represent the intent and will of the donor, accordingly, the
Company has entered a vigorous defense of this suit for the protection and
continuation of the foundation's purpose. On October 15, 1998, the plaintiffs in
the matter filed a motion for summary judgment. In a hearing on this motion, the
Court requested that the Company, as defendant, file a motion for summary
dismissal. The motion for summary dismissal was filed with the Court on January
14, 1999, and in a subsequent ruling, the Court partially granted the bank's
motion for summary judgment finding no wrongdoing by the bank in its
discretionary use of principal funds held in a marital trust. The plaintiffs
subsequently filed a motion requesting that the court's order dismissing a
portion of the case be amended to allow the plaintiff to immediately appeal the
decision to the State Supreme Court. No ruling on this motion has been made as
of the date of this report. Depositions and discovery in this matter are
continuing and a court

16
17

ordered mediation is scheduled for May 2, 2000. A trial date is also set for
October 2, 2000. Management and the Company's legal counsel are both of the
opinion that the remainder of this suit is without merit and will be
successfully defended with no material adverse impact on the Company's financial
condition or results of operations.

Civil suit number CAN-97-C-171 styled James A. Sill d/b/a Sill Trucking vs.
First Community Bank, Inc. and Carla Elder and Robert Williams was filed on
October 15, 1998 alleging the Company aided a customer in converting checks
payable to the company for payment on loan accounts of the co-defendants. The
plaintiff claimed to have purchased rolling stock from co-defendants pursuant to
an oral contract. The suit sought $150,000 in compensatory and punitive damages.
The Company had no knowledge of arrangements between the two plaintiffs and was
not a party to the oral contract. This civil suit was dismissed by Agreed Order
on October 20, 1999.

Civil Action No. 82-C-610, styled Rhondal L. Toler, et al, vs. Castle Rock Bank
of Pineville, filed on December 2, 1982 in the Circuit Court of Wyoming County,
West Virginia, was reported in the 1998 Annual Report on Form 10-K. In this
action, Rhondal L. and Annette Toler and Vern and Henrietta Ellison, Plaintiffs,
claimed that former representatives of a subsidiary of the Registrant
misrepresented the condition of a company at the time the Plaintiffs borrowed
money to purchase the company. The Company filed an answer denying all pertinent
allegations made by the Plaintiffs and additionally filed a counterclaim seeking
$322,000 plus costs. This case was dismissed in 1996 due to its prolonged
existence on the Court docket and the Plaintiff's failure to prosecute. The
Plaintiff has filed a motion to reinstate this matter. Ruling on this motion has
not been made as of the date of this report.

On February 9, 2000, the Company was named as the defendant in Civil Action No.
100-0105 styled Allegheny Wesleyan Methodist Stewardship Foundation, Inc. vs.
First Community Bank, N. A. The suit alleges the defendant, as Trustee, failed
to execute certain investment transactions requested by plaintiff in a timely
manner resulting in an approximate $475,000 loss in value of a trust for the
benefit of plaintiff. The complaint further alleges the Trustee assessed account
management fees beyond the value of services to the trust account. The suit
seeks recovery of the aforementioned alleged losses, loss of income of $33,000,
removal of the defendant as Trustee, and unspecified punitive damages. The
Company, as defendant, is currently assessing this matter and is preparing for
defense of this suit. While the ultimate outcome of this matter cannot be
determined, both the Company and legal counsel believe the Bank has strong
defenses to the allegations and believe that it is unlikely that an adverse
outcome in this suit would result in a material adverse effect on the financial
condition or results of operation of the Company.

Additionally, the Company is also subject to certain asserted and unasserted
potential claims encountered in the normal course of business. In the opinion of
management, the resolution of these claims and unasserted potential claims will
not have a material adverse affect on the Company's financial position or
results of operations and, due to the relative smaller amounts of claims where
damages are sought and/or based upon the Company's evaluation, these matters
have not been included in this report.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

No matters were submitted to a vote of security holders during the fourth
quarter of 1999.

17
18

PART II.

ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED MATTERS

Market Price of Common Stock

The common stock of First Community Bancshares, Inc. is traded over-the-counter
and is quoted on the NASDAQ (Level III) Electronic Billboard. The following
table shows the approximate high and low bids as known to the Company or
reported by local brokers for each quarter in 1998 and 1999. Also, presented
below are the book value and cash dividends paid per share as of and for each
quarter of 1998 and 1999. The number of common stockholders of record on
December 31, 1999 was 2,182 and outstanding shares totaled 8,726,836.

Bid Book Value Cash Dividends
1998 High Low Per Share Per Share
- - ---- ---- --- --------- ---------

First Quarter $23.68 $19.58 $11.34 $.20
Second Quarter 34.40 28.80 11.21 .20
Third Quarter 34.20 24.80 11.48 .20
Fourth Quarter 27.00 21.20 11.60 .24
----
$.84
====

1999
- - ----
First Quarter $23.20 $20.70 $11.75 $.20
Second Quarter 22.90 18.50 11.60 .21
Third Quarter 23.50 18.88 11.74 .22
Fourth Quarter 21.38 18.00 11.86 .25
----
$.88
====

The Company has historically paid dividends on a quarterly basis and currently
intends to continue to pay such dividends in the foreseeable future. However,
there can be no assurance that dividends will be paid in the future. The
declaration and payment of future dividends will depend upon, among other
things, the Company's earnings and financial condition, and the general economic
and regulatory climate.

The Company's ability to pay dividends to its shareholders depends to a large
extent upon the dividends the Company receives from its subsidiaries. Dividends
paid by its banking subsidiary are subject to restrictions under various Federal
banking laws. In addition, the banking subsidiaries must maintain certain
capital levels which may restrict their ability to pay dividends to the Company.
As of December 31, 1999, the net profits available for distribution to the
shareholders as dividends without regulatory approval were approximately $8.4
million; however the regulators of the banking subsidiaries could
administratively impose stricter limits on the ability of the banking
subsidiaries to distribute net profits to the Company.

ITEM 6. SELECTED FINANCIAL DATA

The required information is incorporated by reference to page 10 of the 1999
Annual Report.

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS

The required information is incorporated by reference to pages 8 through 22 of
the 1999 Annual Report.

18
19

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The required information is incorporated by reference to pages 19 and 20 of the
1999 Annual Report.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

The required information is incorporated by reference to pages 24 through 50 of
the 1999 Annual Report.

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE

A Form 8-K was previously filed on February 28, 2000 and is incorporated herein
by reference.

PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

The required information concerning directors has been omitted in accordance
with General Instruction G. Such information regarding directors appears on
pages 3, 4, 5, and 6 of the Proxy Statement relating to the 2000 Annual Meeting
of Stockholders and is incorporated herein by reference.

A portion of the information relating to executive officers has been omitted in
accordance with General Instruction G. Such information regarding executive
officers appears on pages 6 through 9 of the Proxy Statement relating to the
2000 Annual Meeting of Stockholders and is incorporated herein by reference.

ITEM 11. EXECUTIVE COMPENSATION

The required information concerning management remuneration has been omitted in
accordance with General Instruction G. Such information appearing on pages 7
through 11 of the Proxy Statement relating to the 2000 Annual Meeting of
Stockholders is incorporated herein by reference.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The required information concerning security ownership of certain beneficial
owners and management has been omitted in accordance with General Instruction G.
Such information appearing on page 6 of the Proxy Statement relating to the 2000
Annual Meeting of Stockholders is incorporated herein by reference.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

The required information concerning certain relationships and related
transactions have been omitted in accordance with General Instruction G. Such
information appearing on pages 5 and 6 of the Proxy Statement relating to the
2000 Annual Meeting of Stockholders is incorporated herein by reference.

PART IV

ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K

(a)(1) Financial Statements

The Consolidated Financial Statements of First Community Bancshares,
Inc. and subsidiaries together with the independent Auditors' Report
dated January 28, 2000 are incorporated by reference to pages 24
through 50 of the 1999 Annual Report which is included herein as
Exhibit 13.

(2) Financial Statement Schedules

All applicable financial statement schedules required by Regulation S-X
are included in the Notes to 1999 Consolidated Financial Statements.

(b) No reports on Form 8-K were filed during the last quarter of the period
covered by this report.

19
20

(3) Articles of Incorporation and Bylaws

The Registrant's Articles of Incorporation and By-laws were previously
filed as exhibits (3)(i) and (3)(ii), respectively, with the Annual
Report on Form 10-K for the year ending 12/31/97 in connection with the
change of corporate domicile to a Nevada corporation.

(10) Material contracts - to be filed by amendment

(11) Statement Regarding Computation of Per Share Earnings

The statement regarding computation of per share earnings is included
as Note 10 of the Notes to Consolidated Financial Statements in the
1999 Annual Report to Stockholders and is incorporated herein by
reference.

(13) Annual Report to Security Holders

(21) Subsidiary of Registrant:

First Community Bank, N.A. ( a National Association organized under the
laws of the United States)

(23) Independent Auditors' Consent

(27) Financial Data Schedule

20
21

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the Registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.

BY: /s/ James L. Harrison, Sr.
-------------------------------------
President and Chief Executive Officer

Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of the Registrant and
in the capacities and on the dates indicated.

BY: /s/ John M. Mendez
-------------------------------------
Principal Accounting Officer

Signature Title Date

/s/ Sam Clark Director 03/29/2000
- - -------------------------------------
(Sam Clark)

/s/ Allen T. Hamner Director 03/29/2000
- - -------------------------------------
(Allen T. Hamner)

/s/ James L. Harrison, Sr. President, Chief Executive Officer 03/29/2000
- - ------------------------------------- and Director (Principal Executive
(James L. Harrison, Sr.) Officer)

/s/ B.W. Harvey Director 03/29/2000
- - -------------------------------------
(B.W. Harvey)

/s/ I. Norris Kantor Director 03/29/2000
- - -------------------------------------
(I. Norris Kantor)

/s/ John M. Mendez Vice President, Chief Financial 03/29/2000
- - ------------------------------------- Officer and Director (Principal
(John M. Mendez) Financial Officer)

/s/ A. A. Modena Director 03/29/2000
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(A. A. Modena)

/s/ Robert E. Perkinson, Jr. Director 03/29/2000
- - -------------------------------------
(Robert E. Perkinson, Jr.)

/s/ William P. Stafford Chairman of the Board and Director 03/29/2000
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(William P. Stafford)

/s/ William P. Stafford, II Director 03/29/2000
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(William P. Stafford, II)

/s/ W. W. Tinder, Jr. Director 03/29/2000
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(W. W. Tinder, Jr.)