SecProbe.io

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

Mail Stop 4720         October 7, 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-Q for Fiscal Quarter Ended June 30, 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.

Form 10-Q for Fiscal Quarter Ended June 30, 2009

Notes to Consolidated Financial Statements
 General

1. Please revise your future quarterly filings  to provide the disclosures required by
paragraph 20(a) of SFAS 114.  Please note that  such disclosures are required as of
each balance sheet date, including quarterly periods.

Note 3. Investment Securities, pages 14-15

2. In your response to comment 17 of our letter dated June 23, 2009 you stated that
you would add a column to your investment tables disclosing the amount of OTTI recognized in accumulated other comprehensive income.  It does not appear that you have included this required disclosu re in your June 30, 2009 Form 10-Q.

John M. Mendez
First Community Bancshares, Inc.
October 7, 2009 Page 2
Accordingly, please revise your future filings to include this disclosure as required by paragraph 19 of SFAS 1 15 as amended by FSP FAS 115-2 and 124-2.

3. Refer to comment 10 in our letter date d June 23, 2009.  Regarding the cumulative
effect adjustment related to the $15.5 m illion in other-than-temporary impairment
(“OTTI”) charges recorded in 2008 on your  pooled trust preferred securities, you
state that you determined the entire amount  of the impairment to be credit-related
based on a review of the cash flow projections you used in your determination of
whether or not there had been an adve rse change in cash flow at December 31,
2008 and that you enhanced your assumptions  to include a continuing element of
defaults in addition to those projected.  Please provide us additional specific details regarding how you enhanced your assumptions to include a continuing
element of defaults in addition to those projected, tell us why you believe it was
appropriate to revise your cash flow proj ections and provide us  the authoritative
guidance which you believe supports your methodology.  It appears that
paragraph 45 of FSP FAS 115-2 and 124-2 requires you to calculate the cumulative adjustment as of the beginni ng of the period in which you adopt the
standard and therefore your calculatio n would be based on the unadjusted cash
flows expected to be collected used in your adverse change in cash flow
assessment at December 31, 2008.

4. You disclose that you made a cumulativ e effect adjustment of $6.1 million to
recognize the portion of non-cr edit losses associat ed with a non-agency mortgage-
backed security and that the amount due to probable credit losses was determined
using customized default a nd prepayment scenarios.

• Please tell us in detail how you cal culated the cumulative effective
adjustment for your security.

• Please provide us a schedule that de tails the amortized cost and the
amount of OTTI recognized in 2008 pr ior to your adoption of FSP FAS
115-2 and FAS 124-2.

• Please tell us if there were any diffe rences between your calculation of the
cumulative effect adjustment and yo ur discounted cash flows calculation
used to determine whether there was an  adverse change in estimated cash
flows at the period end prior to your adoption of FSP FAS 115-2 and 124-
2.  If there were differences, please identify them, explain why you believe
the differences were appropriate a nd identify and accounting guidance that
supports your position.

5. We note your response to comment 2 of our letter dated July 27, 2009 and the
table included on page 14 of your June 30, 2009 Form 10-Q.  In the interest of
transparency, please revise this table in future filings to include a column that

John M. Mendez
First Community Bancshares, Inc.
October 7, 2009 Page 3
displays the amount of cumulative O TTI recognized on each of your trust
preferred securities.  Please provide us with a draft of this disclosure.

6. We note your response to comment 3 of our letter dated July 27, 2009.  We note
that your pooled trust prefe rred securities have differe nt actual deferral rates,
credit ratings, and fair values.  Presumab ly, this is because each security has
different and distinct credit characteristic s represented by the individual banks in
each trust and based on the specific tr anche in which you have invested.
Consistent with the guidance in paragraphs 10 and 12 of FSP EITF 99-20-1, we
believe you must look at the specific collateral underlying each individual
security to develop the credit deferral/def ault assumptions for your estimated cash
flows and that simply using the same credit default assumption based on the average long term performance of FDIC  regulated banks or average defaults
experienced during the Savings and Loan Cris is for all of your securities is not a
reasonable methodology consistent with the guidance.  Therefore, please revise
your OTTI methodology for your pooled trus t preferred securities to use the
specific collateral underlying each secu rity as the basis for your credit
deferral/default assumptions.

7. We note your response to comment number  4 of our letter da ted July 27, 2009.
Tell us how you determined that the defa ults and deferrals announced after the
balance sheet date were able to be abso rbed by the level of prospective default
and structure within the sp ecific deal.  Specifically tell us how you determined
that the subsequent deferrals and defaults were incorporated in your calculation of
cash flows expected to be collected at period end.

Note 12 – Fair Value Disclosures, pages 20-25

 8. We note your disclosures on page 21 that th e fair value of certain impaired loans
is determined based on the fair value of  the underlying collatera l if repayment is
expected solely from the collateral.  Please tell us and revise your future filings to
provide the following enhanced disclosures with respect to your impairment
measurements for collateral-dependent loans:
• The approximate amount or percentage  of impaired loans for which you
relied on current third party appraisals  of the collateral to assist in
measuring impairment versus those for which current appraisals were not available;

• The typical timing surrounding the rec ognition of a collateral dependent
lending relationship and respectiv e loans as nonperforming, when you
order and receive an appraisal, and the subsequent recognition of any
provision or related charge-off. In this regard, tell us if there have been
any significant time lapses during this process;

John M. Mendez
First Community Bancshares, Inc.
October 7, 2009 Page 4
• In more detail, the procedures you pe rform to monitor th ese loans between
the receipt of an original appr aisal and the updated appraisal;

• Whether you have charged-off an amount different from what was
determined to be the fair value of  the collateral as presented in the
appraisal for any period presented.  If so, please tell us the amount of the
difference and corresponding reasons for the difference, as applicable;

• How you account for any partially charged-off loans subsequent to receiving an updated appraisal. In th is regard, specifically tell us your
policies regarding whether or not these loans return to performing or remain non-performing status, in add ition to whether or not any of the
terms of the original lo ans have been modified  (e.g. loan extension,
changes to interest rates, etc);

• In the event that you do not use extern al appraisals to fair value the
underlying collateral for impaired loans or in cases where the appraisal has
not been updated to reflect current market conditions, please provide us
with a comprehensive response wh ich discusses your process and
procedures for estimating the fair valu e of the collateral for these loans;
and

• For those loans you determined that no specific valuation allowance was
necessary, the substantive reasons  to support this conclusion.
 Management’s Discussion and Analysis of Fi nancial Condition and Results of Operations

 Results of Operations

Provision and Allowance for Loan Losses, pages 35-36

9. We note the continued deterioration in the credit quality of your loan portfolio as
evidenced by the significan t increase in nonperforming assets over recent periods.
Please revise your disclosure in future filings to more clearly bridge the gap
between the significant changes in your re cent credit experience and evidence of
changes in your overall credit environm ent with the increase in your allowance
for loan losses.  For example, discuss in general the relationship between your
nonperforming and impaired loans and the al lowance for loan losses, discuss in
detail how you measure impairment on your impaired loans and link this
information to the level of the allowance for loan losses. Further, provide a more
robust discussion explaining the causal fact ors that you attribute to the increase in
nonperforming loans.

John M. Mendez
First Community Bancshares, Inc. October 7, 2009 Page 5    *  *  *  *  *
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.    Please contact Chris Harley, Staff Acc ountant, at (202) 551- 3695 or me at
(202) 551-3426 if you have any questions.
Sincerely,

Angela Connell Reviewing Accountant