SecProbe.io

UNITED STATES
SECURITIES  AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
DIVISION OF
CORPORATION FINANCE

Mail Stop 4720         June 23, 2009   John M. Mendez Chief Executive Officer First Community Bancshares, Inc. P.O. Box 989 Bluefield, VA 24605-0989

Re: First Community Bancshares, Inc.
 Form 10-K for Fiscal Year Ended December 31, 2008  Form 10-Q for Fiscal Quarter Ended March 31, 2009  File No. 000-19297

Dear Mr. Mendez:

We have reviewed your filing and have the following comments.  Where
indicated, we think you should re vise your document in response to these comments.  If
you disagree, we will consider your explanation as to why our comments are inapplicable
or a revision is unnecessary.  Please be as detailed as necessary in your explanation.  In some of our comments, we may ask you to provi de us with information so we may better
understand your disclosure.  After reviewing th is information, we may raise additional
comments.   Please understand that the purpose of our re view process is to assist you in your
compliance with the applicable disclosure  requirements and to  enhance the overall
disclosure in your filing.  We look forward to  working with you in these respects.  We
welcome any questions you may have about our comments or any other aspect of our review.  Feel free to call us at the telephone numbers listed at the end of this letter.

Form 10-K for Fiscal Year Ended December 31, 2008

Note 1. Summary of Significant Accounting Policies

Long-term Investments, page 53

1. We note that the company is a member of the Federal Home Loan Bank of
Atlanta and at December 31, 2008 holds approximately $13.17 million in FHLB
stock.  Please tell us and revise futu re filings to more clearly discuss your
accounting for these securities, includi ng your impairment policy.  In addition,

John M. Mendez
First Community Bancshares, Inc.
June 23, 2009 Page 2
present a balanced discussion to stat e why, if true, you believe that your
investment in FHLB Atlanta stock is not  other-than-temporarily impaired.  For
example, please discuss how you consid ered the FHLB’s recent financial
condition; changes made to their excess activity-based stock repurchase program
and the fact that no dividends  were declared for the fourth quarter of 2008 or the
first quarter of 2009.
 Item 5. Market for Registrant’s Common Equ ity, Related Stockholder Matters and Issuer
Purchases of Equity Securities
 2. Please identify the component companie s of the Asset Size & Regional Peer
Group used in the performance graph in all future reports.  Refer to Instruction 5 to Item 201(e) of Regulation S-K.
 Item 11. Executive Compensation

 Compensation Discussion and Analysis, page 10 of Definitive Proxy Statement on
Schedule 14A
 3. Please tell the staff why you have not disclo sed the performance ta rgets utilized in
determining the CEO’s base salary for the 2008 fiscal year.  To the extent you
believe that disclosure of the historic al performance targets is not required
because it would result in competitive ha rm such that the targets could be
excluded under Instruction 4 to Item 402( b) of Regulation S-K, please provide a
detailed supplemental analysis supporting your conclusion.  In particular, your competitive harm analysis should clearly ex plain the nexus between disclosure of
the performance objectives and the competitiv e harm that is likely to result from
disclosure.  Refer to Item 402(b)(2)(v)  of Regulation S-K and Regulation S-K
Compliance & Disclosure Interpretation 118.04.
 Item 13. Certain Relationships and Related Transactions, and Di rector Independence

 Transactions with Directors and Officers,  page 8 of Definitive Proxy Statement on
Schedule 14A
 4. Please confirm, and revise future filings to disclose, if accurate, that loans to
related persons were made on substantia lly the same terms, including interest
rates and collateral, as those prevailing at the time for comparable loans with
persons not related to the lender .  Refer to Instruction 4.c. to Item 404(a) of
Regulation S-K.

5. Please provide to the staff supplementa lly the information required by Item
404(b) of Regulation S-K.  Please also re vise future filings to include this
information.

John M. Mendez
First Community Bancshares, Inc.
June 23, 2009 Page 3  Signature Page

 6. The Form 10-K must be signed by the c ontroller or principa l accounting officer.
Please advise the staff supplementally as to whether this individual signed the Form 10-K, and revise future filings to id entify this individual.  Refer to General
Instruction D(2)(a) of Form 10-K.
 Exhibits

 7. We note that certain employment agreemen ts have not been filed with the
Form 10-K, or incorporated by reference th ereto.  For example, it appears that the
amended and restated employment agreem ents with Robert L. Buzzo and E.
Stephen Lilly have not been filed or inco rporated by reference to the Form 10-K.
We note that these agreements were referenced in the Form 8-K filed December 16, 2008, but were not filed therewith.  Pleas e file all employment agreements.
Refer to Item 601(b)(10)(ii)(A).
 Form 10-Q for Fiscal Quarter Ended March 31, 2009

 Consolidated Statements of Changes in Stockholders’ Equity, page 6

8. We note that you recorded an adjustment to Retained Earnings to recognize the
cumulative effect of adopting FSP FAS 115-2 and 124-2.  Paragraph 45 of the
FSP indicates that a corresponding adjustme nt should be made to Accumulated
Other Comprehensive Income.  It is not cl ear to us how this offsetting adjustment
was recognized in your Statement of Ch anges in Stockholders’ Equity.  Please
revise your Statement accordingly in future filings.
 Note 3. Investment Securities, pages 9-11

9. We refer to your investment securities tables on pages 9, 10 and 30.  Paragraph 39
of FSP 115-2 and 124-2 provides that the disclosures required by the FSP be
provided by major security type.  Although paragraph 39 provides a list of
security types to be presented by financia l institutions, it states that additional
security types may be necessary and that a company should consider certain characteristics (e.g., business sector, vint age, geographic concentration, credit
quality, economic characteristics) in determining whether it is necessary to separate further a particular security t ype in greater detail. Accordingly, please
revise your future filings to disclose your major security types in greater detail as
follows:

• Separately disclose residential mortgage-backed securities, commercial
mortgage-backed securities and collateralized debt obligations as these
major security types are specifically re quired for financial institutions based
on the guidance in paragraph 39 of FSP 115-2 and 124-2;

John M. Mendez
First Community Bancshares, Inc.
June 23, 2009 Page 4

• Consider further segregating your mort gage-backed securities by vintage,
credit quality (e.g., prime, subprime) or  other loan characteristics (e.g., Alt-
A, interest-only) based on the nature  and risks of the securities; and

• Consider further segregating your po oled trust preferred securities by
class/tranche held (e.g., senior, mezzanine).
 10. We note that you recognized a pre-tax OTTI charge of $15.46 million on one of
your pooled trust preferred securities as  of December 31, 2008.  We also note that
you did not
 reclassify a portion of this im pairment to accumulated other
comprehensive income upon the adoption of FSP FAS 115-2 and 124-2.  Please tell us and revise your disclosure in futu re filings to clarify whether you intend to
sell this security or have determined that it is more likely than not that you will be required to sell the security before recovery  of its amortized cost basis.  If not,
please clarify how you determined that 100% of the OTTI was credit-related.
 11. Please revise future filings to provide the disclosure required by paragraph 42 of FSP FAS 115-2 and 124-2 with respect to the OTTI recognized as of December 31, 2008 that you determined to be attribut able to credit losses.  Although these
impairments were recognized in prior periods, we believe this disclosure will provide meaningful information as it rela tes to how you determined the portion of
the OTTI that was credit-related.

12. We note that your AFS securities are reported at fair value utilizing Level 1,
Level 2 and Level 3 inputs.  You disclose that U.S. Treasury securities are valued
using Level 1 inputs and that  certain pooled trust prefe rred securities are valued
using Level 3 inputs.  However, it is uncle ar what level inputs are used to value
your other investment securities.  Please te ll us and revise your future filings to
more clearly indicate at wh at level in the fair value hierarchy valuation inputs are
used to determine the fair value for each of your major security types.

13. As a related matter, please tell us and re vise your future filings to more clearly
explain the types of valuation models us ed (e.g., discounted cash flow models) in
estimating the fair value of your AFS securities.
 14. With respect to your non-agency mortgage -backed securities and trust preferred
securities (both single issuer  and pooled) with significan t unrealized lo sses as of
the end of the period, please  identify the key differences  between the cash flow
analysis (or other valuation model) used to  determine the fair value of the security
and the cash flow analysis used to support your OTTI assessment and provide
objective evidence that reconciles the signi ficant difference in the results between
these two measures.

John M. Mendez
First Community Bancshares, Inc.
June 23, 2009 Page 5

Management’s Analysis of Financia l Condition and Results of Operations

Financial Condition – Securities, page 29

15. Please provide us with the following inform ation related to your single issuer and
pooled trust preferred securities and consid er revising the table on page 30 in your
future filings to include this additional information:

• deal name
• class/tranche
• credit rating for each class/tranche
• number of banks in issuance
• deferrals and defaults – dollar amount  and as a percentage of collateral
• excess subordination – dollar amount a nd as a percentage of collateral

16. Please provide us with a detailed expl anation of how you determined that an
OTTI existed on your A-rated pooled trust preferred securities but not on those
rated CCC.  Please identify all availa ble evidence, explain the relative
significance of each piece of evidence a nd identify the primary evidence on which
you relied in making your assessments.
 17. We refer to the “Cumulative OTTI” column in the table on page 30.  This column
appears to represent the cumulative O TTI that has been recognized in earnings .
Paragraph 19 of SFAS 115 (as amende d by paragraph A2(c) of FSP FAS 115-2
and 124-2) requires disclosure of  the total OTTI  recognized in accumulated other
comprehensive income .  Please revise you future filings to comply with this
requirement.
 18. As a related matter, please revise future filings to provide the disclosure required by paragraph 43 of FSP FAS 115-2 and 124-2 as  it relates to the amount of OTTI
related to credit losses recognized in earnings.
   *  *  *  *  *
 Please respond to these comments within 10 business days or tell us when you
will provide us with a response.  Please furnish a cover letter that keys your responses to
our comments and provides any requested in formation.  Detailed cover letters greatly
facilitate our review.  Please understand th at we may have additional comments after
reviewing your responses to our comments.   We urge all persons who are responsible for the accuracy and adequacy of the disclosure in the filing to be certain that the filing includes all in formation required under
the Securities Exchange Act of 1934 and th at they have provided all information

John M. Mendez
First Community Bancshares, Inc. June 23, 2009 Page 6  investors require for an informed invest ment decision.  Since the company and its
management are in possession of all facts re lating to a company’s disclosure, they are
responsible for the accuracy and adequacy of the disclosures they have made.
  In connection with responding to our comments, please provide, in writing, a statement from the company acknowledging that:  ‚ the company is responsible for the adequacy  and accuracy of the disclosure in the
filing;
‚ staff comments or changes to disclosure  in response to staff comments do not
foreclose the Commission from taking any action with respect to the filing; and
‚ the company may not assert staff comments as a defense in any proceeding initiated
by the Commission or any person under the federal securities laws of the United States.

In addition, please be advise d that the Division of Enfo rcement has access to all
information you provide to the staff of the Divi sion of Corporation Fi nance in our review
of your filing or in response to our comments on your filing.
 You may contact Chris Harley, Staf f Accountant, at (202) 551-3695 or
Angela Connell, Staff Accountant, at (202) 551-3426 if you have questions regarding
comments on the financial statements and related matters.  Please contact Matt McNair, Attorney-Adviser, at (202) 551-3583 or me at (202) 551-3418 with any other questions.

Sincerely,

William C-L Friar Senior Financial Analyst