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CORRESP
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    Unassociated Document

    July 8,
2009

    Via
EDGAR

    Mr.
William C-L Friar

    Senior
Financial Analyst

    Division
of Corporation Finance

    U.S.
Securities and Exchange Commission

    100 F
Street, NW

    Washington,
D.C. 20549

    Mail Stop
4720

              Re:

              First
      Community Bancshares, Inc.

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

                Form
      10-Q for the Fiscal Quarter Ended March 31, 2009

                File
      No. 000-19297

    Dear Mr.
Friar:

    This
letter is provided on behalf of First Community Bancshares, Inc. (“First
Community,” the “Company,” “we,” or “our”) in response to your letter of June
23, 2009, regarding the Company’s Annual Report on Form 10-K for the fiscal year
ended December 31, 2008, and its Quarterly Report on Form 10-Q for the fiscal
quarter ended March 31, 2009.

    The
Company acknowledges that:

              ·

              The
      Company is responsible for the adequacy and accuracy of the disclosure in
      the referenced filings;

              ·

              Staff
      comments or changes to disclosures in response to staff comments do not
      foreclose the Commission from taking any action with respect to the
      referenced filings; 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.

    For your
convenience, we have included in this letter, in bold, the number and
description of each of the comments in your letter; our responses
follow.

    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 future filings to more clearly
      discuss your accounting for these securities, including your impairment
      policy.  In addition, present a balanced discussion to state
      why, if true, you believe that your investment in FHLB Atlanta stock is
      not other-than-temporarily impaired.  For example, please
      discuss how you considered 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.

    As a
condition of membership, First Community owns shares of Federal Home Loan Bank
of Atlanta (“FHLBA”).  The Company feels this ownership position
provides access to relatively inexpensive wholesale and overnight
funding.  As per AICPA guidance, the Company accounts for FHLBA and
Federal Reserve Bank stock as a long-term investment in other
assets.

          P.O. Box
989 □ One Community Place □ Bluefield, VA 24605 □ Telephone: 276-326-9000 □ Fax:
276-326-9010 □ www.fcbinc.com

          Mr.
William C-L Friar

          July 8,
2009

          Page
2

    The
Company’s policy is to review for impairment at each reporting period, similar
to our policy for other cost method investments under SOP 01-6 and FSP FAS
115-1.  The Company believes that, as of December 31, 2008, and March
31, 2009, its FHLBA stock was not impaired.

    At
December 31, 2008, and March 31, 2009, the FHLBA was in compliance with its
regulatory capital requirements, which we feel is an indicator of no
impairment.

    Up
through and as of the filing date of the March 31, 2009, Quarterly Report on
Form 10-Q, FHLBA was repurchasing excess activity-based stock at par, which we
determined was an indicator of no impairment at December 31, 2008, and March 31,
2009.

    Although
FHLBA recently reduced and then subsequently eliminated payment of its dividend,
which we feel is consistent with FHLBA’s recently formalized policy that uses
LIBOR as a target for its dividend.  As LIBOR has declined to near
zero levels, the Company feels that the FHLBA dividend posture is congruent with
its announced target, and not a strong indicator of impairment as of December
31, 2008, or March 31, 2009.

    We will
continue to utilize all the applicable evidence to determine if
other-than-temporary impairment exists on our FHLBA stock.  This
evidence will be evaluated in the context that this is a long-term investment
and will be based upon the ultimate recoverability of the par
value.

    Item 5.  Market
for Registrant’s Common Equity Related Stockholder Matters and Issuer Purchases
of Equity Securities

              2.

              Please
      identify the component companies 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.

    For the
Staff’s information, the component companies in the Asset Size & Regional
Peer Group used in the performance graph, which we will identify in all future
filings, are comprised of the following companies.

    Ameris
Bancorp, Appalachian Bancshares, Inc., BancTrust Financial Group, Inc., Bank of
Florida Corporation, Bank of Granite Corporation, Bank of the Ozarks, Inc., BNC
Bancorp, Burke & Herbert Bank & Trust Company, Cadence Financial
Corporation, Capital Bank Corporation, Capital City Bank Group, Inc., Cardinal
Financial Corporation, Carter Bank & Trust, CenterState Banks of Florida,
Inc., City Holding Company, Colony Bankcorp, Inc., Commonwealth Bankshares,
Inc., Crescent Banking Company, Eastern Virginia Bankshares, Inc., Fidelity
Bancshares (N.C.), Inc., Fidelity Southern Corporation, First Bancorp, First
M&F Corporation, First National Bank of Shelby, First Security Group, Inc.,
FNB United Corp., Gateway Financial Holdings, Inc., Great Florida Bank, Green
Bankshares, Inc., Home BancShares, Inc., NewBridge Bancorp, Nexity Financial
Corporation, Omni Financial Services, Inc., PAB Bankshares, Inc., Palmetto
Bancshares, Inc., Pinnacle Financial Partners, Inc., Renasant Corporation, SCBT
Financial Corporation, Seacoast Banking Corporation of Florida, Security Bank
Corporation, Simmons First National Corporation, Southeastern Bank Financial
Corporation, Southern Bancshares (N.C.), Inc., Southern Community Financial
Corporation, StellarOne Corporation, Summit Financial Group, Inc., Tennessee
Commerce Bancorp, Inc., TIB Financial Corp., TowneBank, Union Bankshares
Corporation, Virginia Commerce Bancorp, Inc., Wilson Bank Holding Company, and
Yadkin Valley Financial Corporation.

    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 disclosed the performance targets utilized
      in determining the CEO’s base salary for the 2008 fiscal
      year.  To the extent you believe that disclosure of the
      historical performance targets is not required because it would result in
      competitive harm 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 explain the nexus between
      disclosure of the performance objectives and the competitive 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.

        Mr.
William C-L Friar

          July 8,
2009

          Page
3

    We
apologize that the manner in which we discussed base salaries in the 2008
Compensation Discussion and Analysis was ambiguous.  The Compensation
and Retirement Committee does not use financial performance targets in
determining the CEO’s base salary.  The CEO’s base salary is
determined each year based on a qualitative review of the executive’s overall
performance, which is based on a review of non-financial job performance
criteria.

    We will
ensure we more appropriately communicate the process in future
filings.

    Item 13. Certain
Relationships and Related Transactions and Director
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 substantially 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.

    Loans
made to related persons were made in the ordinary course of business; were made
on substantially the same terms, including interest rates and collateral, as
those prevailing at the time for comparable loans with persons not related to
the lender; and, did not involve more than the normal risk of collectability or
present other unfavorable features.

    We will
revise future filings accordingly.

              5.

              Please
      provide to the staff supplementally the information required by Item
      404(b) of Regulation S-K. Please also revise future filings to include
      this information.

    The
Company has an unwritten policy regarding review of transactions with “related
persons”, including its directors, executive officers, 5% shareholders, and
their immediate family members.   Completion of an annual
Directors and Officers Questionnaire (the “Questionnaire”), which is then
reviewed by our General Counsel, discloses transactions for potential disclosure
in the Company’s Proxy Statement.  Transactions disclosed through
completion of the Questionnaire include any financial transaction, arrangement
or relationship (loan, deposit, investment, asset purchase or sale, and
contracts for services) in which the Company or its banking subsidiary are a
participant, the related person has or will have a direct or indirect material
interest, and the aggregate amount involved will or may be expected to exceed
$120,000 in any fiscal year.  The Company also uses a “Conflicts of
Interest” form completed annually by all executive officers and
directors.  Executive officers and directors are required to
supplement or provide additional information during the year as needed to
disclose any information regarding other transactions that arise subsequent to
completion of the Questionnaire.

    The
Company also maintains a written Personnel Policy, which includes the Standards
of Conduct, that prohibits certain transactions between the Company and related
parties unless they are subjected to prior review and approval by the Board of
Directors.  The Personnel Policy deals with purchase of assets from
the Company and any business transaction involving assets or services having a
fair market value of $20 thousand or more.

    The
Company regularly reviews loans made to its executive officers and directors
through Reg O and other loan related polices.   All loans made to
executive officers and directors are reported to the Board on a regular basis to
ensure that they are made on similar terms, rates and collateral as those made
at the time for comparable loans to persons not related to the
lender.

    We will
revise future filings accordingly.

    Signature
Page

        Mr. William C-L Friar

          July 8,
2009

          Page
4

              6.

              The
      Form 10-K must be signed by the controller or principal accounting
      officer.  Please advise the staff supplementally as to whether
      this individual signed the Form 10-K, and revise future filings to
      identify this individual.  Refer to General Instruction D(2)(a)
      of Form 10-K.

    The
Company’s Chief Financial Officer is also its Principal Accounting
Officer.  We will revise future filings accordingly.

    Exhibits

              7.

              We
      note that certain employment agreements have not been filed with the Form
      10-K, or incorporated by reference thereto.  For example, it
      appears that the amended and restated employment agreements with Robert L.
      Buzzo and E. Stephen Lilly have not been filed or incorporated 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.  Please file all employment
      agreements.  Refer to Item
  601(b)(10)(ii)(A).

    We filed
an 8-K on July 6, 2009, with the remaining five employment agreements included
as exhibits.

    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 corresponding
      adjustment should be made to Accumulated Other Comprehensive
      Income.  It is not clear to us how this offsetting adjustment
      was recognized in your Statement of Changes in Stockholders’
      Equity.  Please revise your Statement accordingly in future
      filings.

    The
impact to accumulated other comprehensive income (“AOCI”) due to the cumulative
effect adjustment has been combined with other changes to AOCI arising during
the period and is part of the consolidated statement of changes in stockholder’s
equity line-item titled, “Unrealized loss on securities available for
sale.”  The amount reclassified into AOCI as a result of the
cumulative effect adjustment was $6.13 million.  We agree with the
comment and we will revise future filings to discretely present the impact of
the cumulative effect adjustment.

    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
      financial institutions, it states that additional security types may be
      necessary and that a company should consider certain characteristics
      (e.g., business sector, vintage, geographic concentration, credit quality,
      economic characteristics) in determining whether it is necessary to
      separate further a particular security type 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 required for financial institutions
      based on the guidance in paragraph 39 of FSP 115-2 and
    124-2;

              •

              Consider
      further segregating your mortgage-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 pooled trust preferred securities by
      class/tranche held (e.g., senior,
mezzanine).

        Mr. William C-L Friar

          July 8,
2009

          Page
5

    We agree
with the comment and in future filings we will segregate the mortgage-backed
securities line into Agency mortgage-backed securities, prime res