SecProbe.io

September 23, 2025
William P. Stafford, II
Chief Executive Officer
First Community Bankshares, Inc.
P.O. Box 989
Bluefield, VA 26405-0989
Re:First Community Bankshares, Inc.
Registration Statement on Form S-4
Filed September 11, 2024
File No. 333-290201
Dear William P. Stafford, II:
            This is to advise you that we have not reviewed and will not review your registration
statement.
            Please refer to Rules 460 and 461 regarding requests for acceleration. We remind you
that the company and its management are responsible for the accuracy and adequacy of their
disclosures, notwithstanding any review, comments, action or absence of action by the staff.
            Please contact Madeleine Joy Mateo at 202-551-3465 with any questions.
Sincerely,
Division of Corporation Finance
Office of Finance
cc:Sandra M. Murphy, Esq.

<DOCUMENT>
<TYPE>TEXT-EXTRACT
<SEQUENCE>2
<FILENAME>filename2.txt
<TEXT>
 July 11, 2025

David D. Brown
Chief Financial Officer
First Community Bankshares, Inc.
P.O. Box 989
Bluefield, VA 24605

 Re: First Community Bankshares, Inc.
 Form 10-K for the Fiscal Year Ended December 31, 2024
 File No. 000-19297
Dear David D. Brown:

 We have completed our review of your filing. We remind you that the
company and
its management are responsible for the accuracy and adequacy of their
disclosures,
notwithstanding any review, comments, action or absence of action by the staff.

 Sincerely,

 Division of Corporation
Finance
 Office of Finance
</TEXT>
</DOCUMENT>

CORRESP
 1
 filename1.htm

 fcbc20250708_corresp.htm

 July 8, 2025

 Via EDGAR

 Ms. Jee Yeon Ahn

 Division of Corporation Finance

 U.S. Securities and Exchange Commission

 100 F Street, NW

 Washington, D.C. 20549

 Re:

 First Community Bancshares, Inc.

 Form 10-K for the Fiscal Year Ended December 31, 2024

 File No. 000-19297

 Dear Ms. Ahn:

 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 10, 2025, regarding the Company’s Annual Report on Form 10-K for the year ended December 31, 2024. The comment is duplicated below and is followed immediately by the Company’s response.

 Form 10-K for the Fiscal Year Ended December 31, 2024

 Note 17. Earnings per Share, page 82

 1.

 We note that you present Diluted earnings per common share of $2.72 for the year ended December 31, 2023, which is higher than your Basic earnings per common share of $2.67. We note a similar relationship has occurred in other historical periods, such as the quarterly period ended March 31, 2024. We also note your disclosure on page 50 that the calculation of diluted earnings per common share excludes potential common shares that are antidilutive. Please clarify how your presentation of diluted earnings per common share complies with ASC 260 and is consistent with your policy described on page 50. Specifically, tell us why diluted earnings per share exceeds your basic earnings per share for certain reporting periods if the calculation excludes items that are antidilutive. Revise your disclosures to clarify accordingly.

 Background and determination of misapplication of GAAP

 Beginning in 2022, we began to use restricted stock units as part of our equity compensation program for directors, executives, and employees. Our conclusion was to account for the awards as liabilities since the award can be settled in cash at the awardees’ discretion. Based on our initial interpretation of ASC 260, we effectively “reversed” the portion of expense associated with the market value change from original grant value in calculating diluted earnings per share (“DEPS”). In the third quarter of 2024, we determined that we had been erroneously adjusting net income for DEPS as this was causing an outsized increase in the numerator. In evaluating ASC 260-10-45-30 and ASC 260-10-55-33, as the awards are classified as liability per ASC 718, the numerator adjustments were not appropriate. The application of the awards to the denominator for all periods were determined to be in compliance with applicable U.S. GAAP. We evaluated the differences in prior periods and determined to correct the error prospectively.

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

 Ms. Ahn

 July 8, 2025

 Page 2

 The following tables detail the quarterly and annual differences between reported and correct amounts.

 For the quarter ended

 Year ended

 March 31,

 June 30,

 September 30,

 December 31,

 December 31,

 2024

 2024

 2024

 2024

 2024

 Net Income, as reported

 $
 12,845

 $
 12,686

 $
 13,033

 $
 13,040

 $
 51,604

 Net Income, corrected

 n/a

 n/a

 n/a

 n/a

 n/a

 Basic EPS, as reported

 $
 0.70

 $
 0.69

 $
 0.71

 $
 0.71

 $
 2.81

 Basic EPS, corrected

 n/a

 n/a

 n/a

 n/a

 n/a

 Diluted EPS, as reported

 $
 0.71

 $
 0.71

 $
 0.71

 $
 0.71

 $
 2.80

 Diluted EPS, corrected

 0.69

 0.69

 n/a

 n/a

 n/a

 Difference, $

 (0.02
 )

 (0.02
 )

 n/a

 n/a

 n/a

 Difference, %

 -2.8
 %

 -2.8
 %

 n/a

 n/a

 n/a

 n/a not applicable

 For the quarter ended

 Year ended

 March 31,

 June 30,

 September 30,

 December 31,

 December 31,

 2023

 2023

 2023

 2023

 2023

 Net Income, as reported

 $
 11,782

 $
 9,814

 $
 14,640

 $
 11,784

 $
 48,020

 Net Income, corrected

 n/a

 n/a

 n/a

 n/a

 n/a

 Basic EPS, as reported

 $
 0.73

 $
 0.53

 $
 0.78

 $
 0.64

 $
 2.67

 Basic EPS, corrected

 n/a

 n/a

 n/a

 n/a

 n/a

 Diluted EPS, as reported

 $
 0.72

 $
 0.55

 $
 0.79

 $
 0.66

 $
 2.72

 Diluted EPS, corrected

 0.72

 0.53

 0.78

 0.63

 2.66

 Difference, $

 -

 (0.02
 )

 (0.01
 )

 (0.03
 )

 (0.06
 )

 Difference, %

 0.0
 %

 -3.6
 %

 -1.3
 %

 -4.5
 %

 -2.2
 %

 n/a not applicable

 There was no impact in 2022 and the impact to the first quarter of 2023 was minimal.

 Analysis of the Impact on Financial Statements

 Quantitatively, we believe the impact of the error on the financial statements to be immaterial. We analyzed quantitative differences in net income, earnings per share, and diluted earnings per share. This error did not impact net income or basic earnings per share. The impact for the full year 2023 on DEPS was an overstatement of six cents, or 2.2%. We also believe users of the financial statements would not find this material, as it is a very small difference at less than 3%. Additionally, the error did not impact reported net income or any other important financial ratios such as return on assets or return on equity.

 Ms. Ahn

 July 8, 2025

 Page 3

 We also believe the impact to be immaterial using the qualitative factors from SAB 99 regarding an error in the application of GAAP.

 Italicized print indicates a statement from SAB 99.

 Does the misstatement arise from an item capable of precise measurement or does it arise from an estimate and, if so, what is the degree of imprecision inherent in the estimate? Yes. The calculations used in determining the number of diluted shares can be relatively precise.

 Does the misstatement mask a change in earnings or other trends? No. Our earnings have been consistently strong for many years. Additionally, EPS and DEPS trended down in 2023 compared to 2022 and trended up in 2024 compared to 2023. When adjusted for non-core income and expense items, such as merger expenses and litigation costs, EPS and DEPS trended up in 2023 compared to 2022 and trended down in 2024 compared to 2023. Correction of the error would not have altered those trends or the mix of total information made available to a reasonable investor.

 Does the misstatement hide a failure to meet analyst consensus estimates? No. The only analyst estimate for 2023 was for approximately $49.8 million in net income and DEPS of $2.74, which was highly influenced by stock buyback estimates. Our 2023 reported DEPS missed and our corrected DEPS would have missed the analyst expectation. Additionally, the Company does not provide external guidance regarding revenue or DEPS.

 Does the misstatement change income to a loss? No. The misstatement is only related to DEPS. Net income and cash flows both remain unchanged.

 Does the misstatement concern a segment of the registrant ’ s business that has been identified as playing a significant role in the registrant ’ s operations or profitability? No. The misstatement only impacts the calculation of DEPS and does not concern our underlying profitability.

 Whether the misstatement affects the registrant ’ s compliance with regulatory requirements? The misstatement does not have any effect on compliance with regulatory requirements as they are focused more on net income and capital levels.

 Does the misstatement affect compliance with loan covenants or other contractual requirements? No. We have no loan covenants or other contractual requirements that consider DEPS.

 Does the misstatement have the effect of increasing management ’ s compensation? No. Incentive compensation is guided by return on equity, return on tangible common equity, return on assets, net income, and efficiency ratio. DEPS is not a factor in calculating incentive compensation.

 Does the misstatement conceal an unlawful transaction? No.

 Evaluation of Severity and Possibility of Material Misstatement

 In assessing the control deficiency, management considered whether the deficiency was limited to the application of U.S. GAAP guidance to our RSU dilution calculations or whether the deficiency was more pervasive in our analysis and calculations of DEPS. Having completed a thorough review of all DEPS-related processes, management has confirmed that all other aspects of the control provide reasonable assurance that a material misstatement would be timely prevented or detected. As a result, the potential magnitude of misstatement that could have resulted from the identified deficiency in question is limited to the specific error identified and quantified above. For the reasons described below, we do not consider the control deficiency relating to the RSU dilution calculation to be a material weakness.

 A material weakness is defined under Auditing Standard (AS) 2201 as a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the company’s annual or interim financial statements will not be prevented or detected on a timely basis.

 Ms. Ahn

 July 8, 2025

 Page 4

 In evaluating the severity of the deficiency, we considered:

 •whether there is a reasonable possibility that the Company’s controls will fail to prevent or detect a material misstatement of account balance or disclosure; and

 •the magnitude of the potential misstatement resulting from the deficiency.

 Our conclusion that the error resulted in immaterial differences to DEPS indicated no change or modification to the Consolidated Statements of Income was necessary for any period of 2023 or 2024. The error and the identified control deficiency are limited to the Company’s DEPS calculation only as it relates to the impact of RSU’s.

 Our review of the financial statements in the third quarter noted the calculated “reversal” related to excess RSU expense was going to be greater than $900 thousand. It was this significant increase that caused increased scrutiny and thought related to the accounting surrounding the RSU’s. The increased scrutiny, a control in and of itself, resulted in the error detection and change in accounting practice.

 For these reasons, the Company has concluded that there is no reasonable possibility that the quantitative significance of the error could have become greater than the amounts identified.

 Based on our assessment of materiality, considering quantitative and qualitative factors, we have concluded that the impact of the error in calculating DEPS is not material to our financial statements or to users of our financial statements for the applicable periods.

 We also considered other indicators of material weaknesses as outlined in AS 2201:

 Identification of fraud, whether or not material, on the part of senior management

 The error and deficiency were not the result of fraud.

 Restatement of previously issued financial statements to reflect the correction of a material misstatement

 Management determined that restatement of its previously issued financial statements was not required as the error is clearly immaterial for all periods presented.

 Identification by the auditor of a material misstatement of financial statements in the current period in circumstances that indicate that the misstatement would not have been detected by the company ’ s internal control over financial reporting

 As detailed above, the error was clearly immaterial and our controls evaluated it prior to becoming material.

 Ineffective oversight of the company ’ s external financial reporting and internal control over financial reporting by the company ’ s audit committee

 Management has evaluated the Company’s existing financial reporting oversight controls and has concluded that they are designed and operate effectively to detect material misstatements in our calculation of DEPS. As a result, the Company respectfully submits that its internal control over financial reporting is performing as designed in order to detect and prevent material misstatements. The Company reviews its DEPS calculation on a quarterly basis and shares its findings with senior management. Senior management of the Company reviews the quarterly and annual financial statements within the Form 10-Qs and Form 10-Ks and provides these to the Audit, Compliance, and Enterprise Risk Committee of our Board of Directors for review and approval prior to filing. The Company’s DEPS control was functioning effectively for the calculation of DEPS and identified the issue with the effect of anti-dilutive RSU’s before the immaterial error could have grown to be a material error. Therefore, management has concluded that the immaterial error identified is not indicative of ineffective oversight of the Company’s financial reporting and internal control over financial reporting.

 Ms. Ahn

 July 8, 2025

 Page 5

 Management evaluates, at least annually, whether our internal control over financial reporting is designed and operating effectively to prevent and detect material misstatement. Control deficiencies or exceptions identified through management’s evaluation and testing activities are analyzed, remediated as needed and reported to the Audit, Compliance, and Enterprise Risk Committee of our Board of Directors. Based on the results of these regular evaluations, along with the detailed deficiency analysis described above, management has concluded the Company’s internal control over financial reporting remains effective.

 Based on our assessment of materiality, considering quantitative and qualitative factors, we concluded that the impact of the error in calculating DEPS is not material to our financial statements or to users of our financial statements for the full year of 2023 and the first two quarters of 2024.

 Thank you for your consideration of our responses to your comments. We are happy to provide any further information or assistance you may require.

 Sincerely,

 /s/ David D. Brown

 David D. Brown

 Chief Financial Officer

<DOCUMENT>
<TYPE>TEXT-EXTRACT
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<FILENAME>filename2.txt
<TEXT>
 June 10, 2025

David D. Brown
Chief Financial Officer
First Community Bankshares, Inc.
P.O. Box 989
Bluefield, VA 24605

 Re: First Community Bankshares, Inc.
 Form 10-K for the Fiscal Year Ended December 31, 2024
 File No. 000-19297
Dear David D. Brown:

 We have limited our review of your filing to the financial statements
and related
disclosures and have the following comment.

 Please respond to this letter within ten business days by providing the
requested
information or advise us as soon as possible when you will respond. If you do
not believe a
comment applies to your facts and circumstances, please tell us why in your
response.

 After reviewing your response to this letter, we may have additional
comments.

Form 10-K for the Fiscal Year Ended December 31, 2024
Note 17. Earnings per Share, page 82

1. We note that you present Diluted earnings per common share of $2.72 for
the year
 ended December 31, 2023, which is higher than your Basic earnings per
common
 share of $2.67. We note a similar relationship has occurred in other
historical periods,
 such as the quarterly period ended March 31, 2024. We also note your
disclosure on
 page 50 that the calculation of diluted earnings per common share
excludes potential
 common shares that are antidilutive. Please clarify how your
presentation of diluted
 earnings per common share complies with ASC 260 and is consistent with
your policy
 described on page 50. Specifically, tell us why diluted earnings per
share exceeds
 your basic earnings per share for certain reporting periods if the
calculation excludes
 items that are antidilutive. Revise your disclosures to clarify
accordingly.
 In closing, we remind you that the company and its management are
responsible for
the accuracy and adequacy of their disclosures, notwithstanding any review,
comments,
action or absence of action by the staff.
 June 10, 2025
Page 2

 Please contact Jee Yeon Ahn at 202-551-3673 or Robert Klein at
202-551-3847 with
any questions.

 Sincerely,

 Division of Corporation
Finance
 Office of Finance
</TEXT>
</DOCUMENT>

CORRESP
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	fcbc20230221_corresp.htm

February 22, 2023

Division of Corporation Finance                                                                                                                                                                VIA EDGAR

U.S. Securities and Exchange Commission

100 F Street, N.E.

Washington, D.C. 20549

			Re:

			First Community Bankshares, Inc.

			Registration Statement on Form S-4 (as amended)

			File No. 333-269294

Ladies and Gentlemen:

Pursuant to Rule 461 promulgated under the Securities Act of 1933, as amended, First Community Bankshares, Inc. (the “Company”) hereby requests that the effective date of the above-referenced Registration Statement on Form S-4 under the Securities Act of 1933, as amended (the “Registration Statement”), be accelerated so that it will become effective at 4:00 p.m., Eastern time, on Friday, February 24, 2023, or as soon thereafter as practicable.

The Company hereby authorizes Sandra M. Murphy of Bowles Rice LLP, the Company’s counsel, to orally modify or withdraw this request for acceleration. We request that we be notified of such effectiveness by a telephone call to Ms. Murphy at (304) 347-1131 and that such effectiveness also be confirmed in writing.

Thank you for your assistance.

FIRST COMMUNITY BANKSHARES, INC.

By: /s/ William P. Stafford, II

William P. Stafford, II

Chairman of the Board and

Chief Executive Officer

cc:         Sandra M. Murphy, Esq.

United States securities and exchange commission logo
January 24, 2023
William Stafford, II
Chairman of the Board and Chief Executive Officer
First Community Bankshares, Inc.
29 College Drive
Bluefield, Virginia 26405
Re:First Community Bankshares, Inc.
Registration Statement on Form S-4
Filed January 18, 2023
File No. 333-269294
Dear William Stafford:
            This is to advise you that we have not reviewed and will not review your registration
statement.
            Please refer to Rules 460 and 461 regarding requests for acceleration.  We remind you
that the company and its management are responsible for the accuracy and adequacy of their
disclosures, notwithstanding any review, comments, action or absence of action by the staff.
            Please contact Madeleine Mateo at 202-551-3465 with any questions.
Sincerely,
Division of Corporation Finance
Office of Finance
cc:       Sandra M. Murphy, Esq

CORRESP
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	fcbc20191031_corresp.htm

October 31, 2019

			Division of Corporation Finance

			U.S. Securities and Exchange Commission

			100 F Street, N.E.

			Washington, D.C. 20549

			Attention: Eric Envall

			VIA EDGAR

			Re:
			First Community Bankshares, Inc.

			Registration Statement on Form S-4

			File No. 333-234195

Ladies and Gentlemen:

Pursuant to Rule 461 promulgated under the Securities Act of 1933, as amended, First Community Bankshares, Inc. (the “Company”) hereby respectuflly requests that the effective date of the above-referenced Registration Statement on Form S-4 under the Securities Act of 1933, as amended (the “Registration Statement”), be accelerated so that it will become effective at 4:00 p.m., New York City time, on Friday, November 1, 2019, or as soon thereafter as practicable.

The Company hereby authorizes Sandra M. Murphy of Bowles Rice LLP, the Company’s counsel, to orally modify or withdraw this request for acceleration. We request that we be notified of such effectiveness by a telephone call to Ms. Murphy at (304) 347-1131 and that such effectiveness also be confirmed in writing.

Thank you for your assistance.

			FIRST COMMUNITY BANKSHARES, INC.

			/s/ William P. Stafford, II

			William P. Stafford, II

			Chairman of the Board and

			Chief Executive Officer

cc:         Sandra M. Murphy, Esq.

CORRESP
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	fcbc20191029_corresp.htm

			101 South Queen Street

			Martinsburg, West Virginia 25401

			125 Granville Square

			Suite 400

			Morgantown, West Virginia 26501

			501 Avery Street

			Parkersburg, West Virginia 26101

			600 Quarrier Street

			Charleston, West Virginia 25301

			Post Office Box 1386

			Charleston, West Virginia  25325-1386

			  (304) 347-1100

			www.bowlesrice.com

			1217 Chapline Street

			Wheeling, West Virginia 26003

			Southpointe Town Center

			1800 Main Street, Suite 200

			Canonsburg, Pennsylvania 15317

			480 West Jubal Early Drive, Suite 130

			Winchester, Virginia 22601

			Sandra M. Murphy

			Telephone — (304) 347-1131

			Facsimile — (304) 343-3058

			October 30, 2019

			E-Mail Address:

			smurphy@bowlesrice.com

			Mr. Eric Envall

			United States Securities and Exchange Commission

			Division of Corporation Finance

			100 F Street, N.E.

			Washington, D.C. 20549

			VIA ELECTRONIC MAIL AND EDGAR

Re:     First Community Bankshares, Inc.

Registration Statement on Form S-4

Filed October 15, 2019

File No. 333-234195

Dear Mr. Envall:

On behalf of First Community Bankshares, Inc. (the “Company”), and in response to the comment of the staff (the “Staff”) of the Securities and Exchange Commission (the “Commission”) to the Company’s Registration Statement on Form S-4 filed with the Commission on October 15, 2019 (the “Registration Statement”) contained in your letter dated October 28, 2019 (the “Comment Letter”), we submit this letter containing the Company’s response to the Comment Letter. This letter and an amendment to the Registration Statement (“Amendment No. 1”) are being filed electronically via the EDGAR system today. In addition to the EDGAR filing, we are furnishing to the Staff supplementally a black-lined copy of Amendment No. 1 marked to show the changes made to the Registration Statement.

The response set forth in this letter is numbered to correspond to the numbered comment in the Staff’s letter. The responses are on behalf of the Company and Highlands Bankshares, Inc. (“Highlands”). For your convenience, we have set out the text of the comment from the Comment Letter followed by our response. Page numbers referenced in the responses refer to page numbers in Amendment No. 1.

October 30, 2019

Page 2

Form S-4 filed on October 15, 2019

General

			1.

			It does not appear that Highlands Bankshares satisfies the requirements of General Instruction C.1.a of Form S-4 and General Instruction 1.B.1 of Form S-4 which would allow you to incorporate certain required information by reference. Please advise us why Highlands Bankshares is eligible to incorporate by reference or revise your filing to include the required information in accordance with Item 17 of Form S-4.

RESPONSE: We agree that Highlands does not satisfy the requirements of General Instruction C.1.a of Form S-4 and General Instruction 1.B.1 of Form S-4 which would allow Highlands to incorporate certain required information of Highlands by reference. Amendment No. 1 includes the following information of Highlands required by Item 14 of Form S-4 in accordance with Item 17(a) of Form S-4:

			●

			Page 89 of Amendment No. 1 contains the information requested by Item 101 of Regulation S-K, description of business;

			●

			Page 90 of Amendment No. 1 contains the information requested by Item 102 of Regulation S-K, description of property;

			●

			Page 90 of Amendment No. 1 contains the information requested by Item 103 of Regulation S-K, legal proceedings;

			●

			Pages 27 and 90 of Amendment No. 1 contains the information requested by Item 201 of Regulation S-K, market price of and dividends on the common equity and related stockholder matters;

			●

			The financial statements meeting the requirements of Regulation S-X are included in the financial statements exhibits F-1 through F-62 of Amendment No. 1. The index to the financial statements is set forth on page 119 of Amendment No. 1.

			●

			Pages 91 through 108 of Amendment No. 1 contain the information requested by Item 303 of Regulation S-K, management’s discussion and analysis of financial condition and results of operations; and

			●

			Page 108 of Amendment No. 1 contains the information requested by Item 304 of Regulation S-K, changes in and disagreements with accountants on accounting and financial disclosure.

Items 301, 302 and 305 of Regulation S-K are inapplicable to Highlands as it is a smaller reporting company.

We hope that the foregoing, and the revisions to the Registration Statement, have been responsive to the Staff’s comments. If you have any questions or comments regarding the foregoing, please do not hesitate to contact me at (304) 347-1131 or by email at smurphy@bowlesrice.com.

			Very truly yours,

			/s/ Sandra M. Murphy

			Sandra M. Murphy

Enclosure

October 28, 2019
William P. Stafford, II
Chairman of the Board and Chief Executive Officer
First Community Bankshares, Inc.
29 College Drive
Bluefield, VA 26405
Re:First Community Bankshares, Inc.
Registration Statement on Form S-4
Filed October 15, 2019
File No. 333-234195
Dear Mr. Stafford:
            We have limited our review of your registration statement to those issues we have
addressed in our comments.  In some of our comments, we may ask you to provide us with
information so we may better understand your disclosure.
            Please respond to this letter by amending your registration statement and providing the
requested information.  If you do not believe our comments apply to your facts and
circumstances or do not believe an amendment is appropriate, please tell us why in your
response.
            After reviewing any amendment to your registration statement and the information you
provide in response to these comments, we may have additional comments.
Form S-4 filed October 15, 2019
General
1.It does not appear that Highlands Bankshares satisfies the requirements of General
Instruction C.1.a of Form S-4 and General Instruction 1.B.1 of Form S-3 which would
allow you to incorporate certain required information by reference.  Please advise us why
Highlands Bankshares is eligible to incorporate by reference or revise your filing to
include the required information in accordance with Item 17 of Form S-4.

            We remind you that the company and its management are responsible for the accuracy
and adequacy of their disclosures, notwithstanding any review, comments, action or absence of
action by the staff.

 FirstName LastNameWilliam P. Stafford, II
 Comapany NameFirst Community Bankshares, Inc.
 October 28, 2019 Page 2
 FirstName LastName
William P. Stafford, II
First Community Bankshares, Inc.
October 28, 2019
Page 2
            Refer to Rules 460 and 461 regarding requests for acceleration.  Please allow adequate
time for us to review any amendment prior to the requested effective date of the registration
statement.
            Please contact Eric Envall at (202) 551-3234 or Michael Clampitt at (202) 551-3434 with
any questions.
Sincerely,
Division of Corporation Finance
Office of Finance

August 17, 2010   Mr. David D. Brown Chief Financial Officer First Community Bancshares, Inc. P.O. Box 989 Bluefield, Virginia 24605-0989
Re: First Community Bancshares, Inc.  Item 4.02 Form 8-K Filed July 27, 2010
File No.  000-19297

Dear Mr. Brown:

We have completed our review of your  filing and do not have any further
comments at this time.         S i n c e r e l y ,
       C h r i s  H a r l e y
       Reviewing Accountant

CORRESP
1
filename1.htm

    Unassociated Document

    August 6,
2010

    Via
EDGAR

    Ms.
Christina Harley

    Reviewing
Accountant

    Division
of Corporation Finance

    U.S.
Securities and Exchange Commission

    100 F
Street, NW

    Washington,
D.C. 20549

              Re:

              First
      Community Bancshares, Inc.

    Item
4.02 Form 8-K Filed July 27, 2010

    File
No. 000-19297

    Dear Ms.
Harley:

    This
letter is provided on behalf of First Community Bancshares, Inc. (“First
Community,” the “Company,” “we,” or “our”) in response to your letter of July
30, 2010, regarding the Company’s 8-K filed on July 27, 2010.

    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 Securities and Exchange Commission (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.

    We intend
to file our Quarterly Report on Form 10-Q for the quarter ended June 30, 2010,
along with the amended Forms 10-K for 2009 and 2008 and the Forms 10-Q for the
quarterly periods in 2009 and the first quarter of 2010, on or about August 9,
2010.  In those reports, we expect to amend Management’s Assessment of
Internal Control Over Financial Reporting in the 2009 and 2008 10-K filings to
reflect the restatement.  More specifically, we expect to conclude
that disclosure controls were not effective for the periods solely for the
restatement.

    Additionally,
in Item 9A of the Form 10-K filings and Item 9 of the Form 10-Q filings in
question, we expect to report that the Company did not maintain effective
controls to ensure the appropriate calculation of the allowance for loan losses
and that material weakness leads to the conclusion that disclosure controls and
procedures were not effective.

    If I can
provide any further information or assistance, please feel free to telephone at
276-326-9000.

    Sincerely,

    /s/ David
D. Brown

    David D.
Brown

    Chief
Financial Officer

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

DIVISION OF
  CORPORATION FINANCE

July 30, 2010

By U.S. Mail and Facsimile to ( 304 ) 323-6492
Mr. David D. Brown Chief Financial Officer First Community Bancshares, Inc. P.O. Box 989 Bluefield, Virginia 24605-0989
Re: First Community Bancshares, Inc.
  Item 4.02 Form 8-K Filed July 27, 2010
  File No. 000-19297

Dear Mr. Brown:

We have reviewed your filing and have the following comment.
  Please respond to this letter within five business days by providing the requested information, or by advising us when you will provide the requested response.  If you do not believe our comment applies to your facts and circumstances please tell us why in your response.   After reviewing the information you provide in response to this comment, we may have additional comments.   Form 8-K Filed July 27, 2010

 Item 4.02  Non-Reliance on Previously Issued Financial Statements or a Related Audit
Report or Completed Interim Review
 In your amended periodic reports to file your restated financial statements describe the effect of the restatement on the officers’ conclusions regarding the effectiveness of the company’s disclosure controls and procedures.  See Item 307 of Regulation S-K.  If the officers’ conclude that the disclosure controls and procedures were effective, despite the restatement, describe the basis for the officers’ conclusions.

David D. Brown
First Community Bancshares, Inc. July 27, 2010 Page 2

  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 the information the Securities Exchange Act of 1934 and all applicable Exchange Act rules require. Since the company and its management are in possession of all facts relating 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 comment, please provide a written 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.

You may contact Chris Harley at (202) 551-3695 if you have any questions
regarding this comment.

        S i n c e r e l y ,           C h r i s  H a r l e y         Reviewing Accountant

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

DIVISION OF
  CORPORATION FINANCE

Mail Stop 4720

      March 3, 2010

 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
Forms 10-Q for Fiscal Quarters Ended March 31, 2009, June 30, 2009, and September 30, 2009
File No. 000-19297

Dear Mr. Mendez:

We have completed our review of your Form 10-K and related filings and have no
further comments at this time.
        S i n c e r e l y ,           Angela Connell       Reviewing Accountant

CORRESP
1
filename1.htm

    Unassociated Document

    November
13, 2009

    Via
EDGAR

    Ms.
Angela Connell

    Reviewing
Accountant

    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-Q for the Fiscal Quarter Ended June 30, 2009

    File
No. 000-19297

    Dear Ms.
Connell:

    This
letter is provided on behalf of First Community Bancshares, Inc. (“First
Community,” the “Company,” “we,” or “our”) in response to your letter of October
7, 2009, regarding the Company’s Quarterly Report on Form 10-Q for the fiscal
quarter ended June 30, 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 Securities and Exchange Commission (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, each of the comments in
your letter; our responses follow.

    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.

    Beginning
with the Quarterly Report on Form 10-Q for the quarter ended September 30, 2009,
we have provided the disclosures required by paragraph 20(a) of SFAS
114.  The following disclosure was included in the Company’s Quarterly
Report on Form 10-Q for the quarter ended September 30, 2009.

    The
following table presents the Company’s investment in loans considered to be
impaired and related information on those impaired loans for the periods ended
September 30, 2009 and December 31, 2008.

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

    Ms.
Angela Connell

    November
13, 2009

    Page
2

                    September
      30,

                    December
      31,

                    (In
      Thousands)

                    2009

                    2008

                    Recorded
      investment in loans considered to be impaired:

                     Impaired
      loans with reserves

                  $
                  4,231

                  $
                  4,796

                     Impaired
      loans without reserves

                  10,559

                  8,504

                     Total
      impaired loans

                  14,790

                  13,300

                    Allowance
      for loan losses related to loans considered to be impaired

                  1,221

                  678

                    Interest
      income recognized on impaired loans, year to date

                  397

                  793

    Impaired
loans without reserves at September 30, 2009, include $4.24 million of acquired
loans with credit deterioration.  Interest income realized on impaired
loans is recognized upon receipt if the impaired loan is on a non-accrual
basis.

    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 disclosure in your
      June 30, 2009 Form 10-Q. Accordingly, please revise your future filings to
      include this disclosure as required by paragraph 19 of SFAS 115 as amended
      by FSP FAS 115-2 and 124-2.

    We
included the amount of OTTI recognized in AOCI, as required by paragraph 19 of
SFAS 115, as amended, in our Quarterly Report on Form 10-Q for the quarter ended
September 30, 2009.  The following disclosure was included in the
Company’s Quarterly Report on Form 10-Q for the quarter ended September 30,
2009.

    Ms.
Angela Connell

    November
13, 2009

    Page
3

    As of
September 30, 2009 and December 31, 2008, the amortized cost and estimated fair
value of available-for-sale securities were as follows:

                      September
      30, 2009

                      Amortized

                      Unrealized

                      Unrealized

                      Fair

                      OTTI
      in

                      Cost

                      Gains

                      Losses

                      Value

                      AOCI

                      (In
      Thousands)

                      U.S.
      Government agency securities

                    $
                    66,191

                    $
                    697

                    $
                    -

                    $
                    66,888

                    $
                    -

                      States
      and political subdivisions

                    134,885

                    4,092

                    (481
                    )

                    138,496

                    -

                      Trust
      preferred securities:

                      Single
      issue

                    55,586

                    -

                    (18,132
                    )

                    37,454

                    -

                      Pooled

                    60,116

                    -

                    (37,014
                    )

                    23,102

                    (31,862
                    )

                      Total
      trust preferred securities

                    115,702

                    -

                    (55,146
                    )

                    60,556

                    (31,862
                    )

                      Mortgage-backed
      securities:

                      Agency

                    284,092

                    6,875

                    (361
                    )

                    290,606

                    -

                      Non-Agency
      prime residential

                    6,166

                    -

                    (627
                    )

                    5,539

                    -

                      Non-Agency
      Alt-A residential

                    20,968

                    -

                    (9,437
                    )

                    11,531

                    (9,437
                    )

                      Total
      mortgage-backed securities

                    311,226

                    6,875

                    (10,425
                    )

                    307,676

                    (9,437
                    )

                      Equities

                    2,312

                    208

                    (336
                    )

                    2,184

                    -

                      Total

                    $
                    630,316

                    $
                    11,872

                    $
                    (66,388
                    )

                    $
                    575,800

                    $
                    (41,299
                    )

                      December
      31, 2008

                      Amortized

                      Unrealized

                      Unrealized

                      Fair

                      OTTI
      in

                      Cost

                      Gains

                      Losses

                      Value

                      AOCI

                      (In
      Thousands)

                      U.S.
      Government agency securities

                    $
                    53,425

                    $
                    1,393

                    $
                    -

                    $
                    54,818

                    $
                    -

                      States
      and political subdivisions

                    163,042

                    864

                    (4,487
                    )

                    159,419

                    -

                      Trust
      preferred securities:

                      Single
      Issue

                    55,491

                    -

                    (21,950
                    )

                    33,541

                    -

                      Pooled

                    93,269

                    -

                    (60,757
                    )

                    32,512

                    -

                      Total
      trust preferred securities

                    148,760

                    -

                    (82,707
                    )

                    66,053

                    -

                      Mortgage-backed
      securities:

                      Agency

                    212,315

                    4,649

                    (2
                    )

                    216,962

                    -

                      Non-Agency
      prime residential

                    7,423

                    -

                    (1,657
                    )

                    5,766

                    -

                      Non-Agency
      Alt-A residential

                    10,750

                    -

                    -

                    10,750

                    -

                      Total
      mortgage-backed securities

                    230,488

                    4,649

                    (1,659
                    )

                    233,478

                    -

                      Equities

                    7,979

                    357

                    (1,381
                    )

                    6,955

                    -

                      Total

                    $
                    603,694

                    $
                    7,263

                    $
                    (90,234
                    )

                    $
                    520,723

                    $
                    -

              3.

              Refer
      to comment 10 in our letter dated June 23, 2009. Regarding the cumulative
      effect adjustment related to the $15.5 million 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 adverse 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 projections 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 beginning of
      the period in which you adopt the standard and therefore your calculations
      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.

    Ms.
Angela Connell

    November
13, 2009

    Page
4

    At
December 31, 2008, GAAP at that time, as prescribed by EITF 99-20 paragraph
12.b., was to determine if an adverse change in cash flows had
occurred.  Our initial cash flow projections for the SOLOSO 2007
security were based upon actual and projected specific defaults and deferrals
for the underlying collateral, but no assumption for default of banks that were
not specifically identified.  This analysis indicated that a break in
yield was present, and under then-current GAAP, further analysis or
consideration of further projected defaults was unnecessary and was not
performed at that time, as any adverse change in cash flow resulted in an
immediate recognition of the entire unrealized loss as an
other-than-temporary-impairment charge.  Under the GAAP in effect as
of the filing date of our Form 10-K, we appropriately recognized
other-than-temporary impairment of $15.46 million, reducing the carrying value
to approximately $2.94 million.

    Upon the
adoption of FSP 115-2 and 124-2, we reviewed our cash flow projections for the
security as of December 31, 2008.  We determined that we had an
adverse change in cash flows at December 31, 2008, before we completed the full
expected cash flow analysis that was consistent with our analysis for all of our
other pooled trust preferred securities. At that time additional, consistent
analysis would not have provided a different result, as any adverse change in
cash flows would result in the same amount of impairment charge to be taken
through the income statement.  Our process at that time for all of our
other pooled trust preferred securities was to add a continuing element of
default of 75 basis points as a FAS 5 component to overlay the specifically
known and projected defaults and deferrals.  This represents our
enhancement to the original cash flow analysis performed as of December 31,
2008, which we felt was prudent in order to determine whether or not there was
reasonable justification for recording a cost basis in this security that was
above fair value.  We view it not as an enhancement, but a consistent
application of our approach as of December 31, 2008.

    In
accordance with paragraph 25 of FSP 115-2, we considered other factors besides
the discounted cash flow analysis that had an impact on our assessment of
whether the recorded loss was credit related.  As noted in paragraph
25.d., this security has certain structural issues that are different from our
other holdings and that we believe add a greater degree of risk to the
realization of projected cash flows.  For example, this security has a
collateral manager that can swap collateral within the structure without the
approval of the rated security holders.  The collateral manager is
able to replace unrated trust preferred and subordinate debt collateral within
the deal with other more highly rated collateral.  The replacement
collateral, in all likelihood, will pay a lesser amount of periodic interest,
thus decreasing the overall cash flows coming into the deal.  This
introduces an added element of risk and uncertainty to the realization of future
cash flows.

    Additionally,
Like most other pooled trust preferred deals, the SLOSO has the ability to
direct cash flow to the highest rated tranches and decrease the outstanding
principal balance when certain overcollateralization tests are not
met.  Generally, the lower tranches receive a “payment-in-kind” when
this occurs and the interest payment due is effectively capitalized into the
principal amount of the tranche.  This security was deferring interest
payments, which remained contractually due, but the principal balance of t

CORRESP
1
filename1.htm

    Unassociated Document

    October
19, 2009

    Via
EDGAR

    Angela
Connell

    Reviewing
Accountant

    Division
of Corporate 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-Q for the Fiscal Quarter Ended June 30, 2009

              File
      No. 000-19297

    Dear Ms.
Connell:

    This
letter is provided on behalf of First Community Bancshares, Inc. (“First
Community,” the “Company,” “we,” or “our”) in response to your letter of October
7, 2009, regarding the Company’s Quarterly Report on Form 10-Q for the fiscal
quarter ended June 30, 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.

    This is
to confirm our October 16 and 19, 2009, telephone conversations with Commission
staff.  We appreciate your extension of the timeframe for responding
to the most recent letter to November 13, 2009.  This will enable us
complete and file the Quarterly Report on Form 10-Q for the quarter ended
September 30, 2009.  We anticipate accelerating the inclusion of many
of the additional disclosure and discussion items requested in your comment
letters.

    If I can
be assistance in the meantime, please do not hesitate to call or
email.

    Sincerely,

    /s/ David
D. Brown

    David D.
Brown

    Chief
Financial Officer

    CC:           Chris
Harley

     Staff
Accountant

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

CORRESP
1
filename1.htm

    August
21, 2009

    Via
EDGAR

    Ms.
Angela Connell

    Reviewing
Accountant

    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 Ms.
Connell:

    This
letter is provided on behalf of First Community Bancshares, Inc. (“First
Community,” the “Company,” “we,” or “our”) in response to your letter of July
27, 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 Securities and Exchange Commission (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 your response to comment 1 of our letter dated June 23,
      2009.  Please confirm that you will revise your future filings
      to disclose your accounting and impairment policy related to your
      investment in FHLB stock.

    We
confirm that we will revise future Annual Report on Form 10-K filings to
disclose our accounting and impairment policy related to our investment in
Federal Home Loan Bank of Atlanta stock.

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

    Ms.
Angela Connell

      August
21, 2009

      Page
2

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

    Management’s Analysis of
Financial Condition and Results of Operations

    Financial Condition –
Securities, page 29

              2.

              We
      note your response to comment 15 of our letter dated June 23,
      2009.  Considering the significant judgment required to
      determine if a security is other than temporarily impaired and the focus
      users of financial statements have placed on this area, we believe
      comprehensive and detailed disclosure is required to meet the disclosure
      requirements in paragraph 38 of FSP FAS 115-2 and FAS 124-2 and Item 303
      of Regulation S-K.  Therefore, for each individual and pooled
      trust preferred security with at least one rating below investment grade,
      please revise your future filings to disclose the following information
      (some of which you provided in response to our initial comment) as of the
      most recent period end:

              ·

              deal
  name

              ·

              single issuer or
      pooled

              ·

              class/tranche

              ·

              book
    value

              ·

              fair
    value

              ·

              unrealized
      gain/loss

              ·

              lowest credit rating
      assigned

              ·

              number of banks currently
      performing

              ·

              actual deferrals and defaults
      as a percentage of original
collateral

              ·

              expected deferrals and defaults
      as a percentage of remaining performing
  collateral

              ·

              excess subordination as a
      percentage of remaining performing
  collateral

    Additionally,
please clearly disclose how you calculate excess subordination and discuss what
the excess subordination percentage signifies to allow an investor to understand
why this information is relevant and meaningful.

    We
propose making the following enhanced disclosure in future periodic
filings:

      Ms.
Angela Connell

        August
21, 2009

        Page
3

    The
following table presents in more detail the single-issue and pooled trust
preferred security holdings as of March 31, 2009.

                (In
      Thousands)

                Current

                Excess

                Current

                Credit

                Deferrals/Defaults

                Subordination

                Lowest

                Rating

                Currently

                Unrealized

                Percent

                Percent

                Class/

                Credit

                at

                Original

                Performing

                Book

                Fair

                Gain/

                of

                of

                Deal
      Name

                Tranche

                Rating

                Purchase

                Issuers

                Issuers

                Value

                Value

                (Loss)

                Amount

                Deal

                Amount

                Deal

                Single-issuer

                BankAmerica
      Cap

                n/a

                BB

                A

              1

              1

              $
              2,344

              $
              1,039

              $
              (1,305
              )

                None

              n/a

              n/a

              n/a

                BankBoston
      Cap

                n/a

                BB

                A

              1

              1

              4,129

              2,736

              (1,393
              )

                None

              n/a

              n/a

              n/a

                Chase
      Captial II

                n/a

                AA

                A

              1

              1

              3,615

              1,507

              (2,108
              )

                None

              n/a

              n/a

              n/a

                CoreStates
      Capital I

                n/a

                A

                A

              1

              1

              2,933

              1,518

              (1,415
              )

                None

              n/a

              n/a

              n/a

                First
      Chicago NDB CA

                n/a

                AA

                A

              1

              1

              1,434

              643

              (791
              )

                None

              n/a

              n/a

              n/a

                JPMorgan
      Chase Cap X

                n/a

                AA

                A

              1

              1

              5,014

              2,020

              (2,994
              )

                None

              n/a

              n/a

              n/a

                NB-Global

                n/a

                BB

                A

              1

              1

              19,382

              7,123

              (12,259
              )

                None

              n/a

              n/a

              n/a

                NTC
      Capital I Float

                n/a

                A

                A

              1

              1

              4,004

              2,146

              (1,858
              )

                None

              n/a

              n/a

              n/a

                SunTrust
      Banks

                n/a

                A

                A

              1

              1

              4,939

              2,655

              (2,284
              )

                None

              n/a

              n/a

              n/a

                Wachovia
      Cap II

                n/a

                A

                A

              1

              1

              4,875

              2,535

              (2,340
              )

                None

              n/a

              n/a

              n/a

                Pooled

                PreTSL
      X

                B1

                CC

                A

              61

              50

              $
              10,000

              $
              3,796

              $
              (6,204
              )

              $
              91,800

              21.8
              %

              $
              40,500

              10.0
              %

                PreTSL
      XII

                B1

                CC

                A

              83

              73

              20,000

              10,282

              (9,718
              )

              70,000

              10.0
              %

              113,000

              16.0
              %

                PreTSL
      XIV

                B1

                CC

                A

              65

              57

              9,016

              4,056

              (4,960
              )

              43,000

              9.9
              %

              75,000

              17.0
              %

                PreTSL
      XVI

                C

                CC

                A

              58

              52

              4,001

              516

              (3,485
              )

              84,230

              16.1
              %

              82,000

              16.0
              %

                PreTSL
      XXII

                C1

                CC

                A

              103

              87

              12,566

              408

              (12,158
              )

              210,000

              17.9
              %

              190,500

              16.0
              %

                PreTSL
      XXIII

                C1

                CCC

                A

              137

              117

              7,894

              1,335

              (6,559
              )

              112,500

              8.8
              %

              313,500

              25.0
              %

                PreTSL
      XXVI

                C1

                CC

                A

              78

              65

              6,946

              133

              (6,813
              )

              124,000

              14.8
              %

              151,500

              18.0
              %

                SLOSO
      2007 1A

                A3L

                CC

                A

              56

              55

              2,944

              1,243

              (1,701
              )

              47,500

              9.9
              %

              487

              0.1
              %

                Trapeza
      Ser 13A

                D

                A

                A

              63

              59

              20,000

              936

              (19,064
              )

              46,500

              6.6
              %

              2,434

              0.4
              %

    The
amount of immediate default a security can withstand before an expected loss of
principal is commonly referred to as “excess subordination.”  It is a
good tool for determining the ability of a specific deal to absorb future
defaults and deferrals before principal loss can be expected within a certain
tranche.  Excess subordination is generally calculated by modeling
increasing levels of current default until a projected loss of principal
occurs.

              3.

              Please
      provide us with your calculation of the present value of cash flows
      expected to be collected from the following debt securities – PreTSL XII
      and TRAPEZA SER 13A – as of March 31, 2009 and confirm that you use the
      same methodology for all of your trust preferred
      securities.  Identify the key assumptions used in your analysis
      and explain how you determined the assumptions were appropriate and
      consistent with FSP FAS 115-2 and FAS 124-2 and related
      guidance.  Specifically address the following with respect to
      the assumptions used in your
calculation:

              ·

              Discount rate – specify the
      discount rate and how it was
determined.

              ·

              Deferrals and defaults
      –

              a)

              Explain
      in detail how you developed your estimates of future deferrals and
      defaults.  Specifically tell us if and how you considered
      specific collateral underlying each individual security and tell us
      whether you had different estimates of deferrals and defaults for each
      security;

              b)

              Provide
      us with the actual amount and percentage of deferrals and defaults
      experienced by the trust by
quarter;

        Ms.
Angela Connell

          August
21, 2009

          Page
4

              c)

              Provide
      us with your estimate for future deferrals and defaults and compare your
      estimate to the actual amounts experienced to
  date;

              d)

              Explain
      how you treat deferrals (e.g. – do you treat deferrals the same as
      defaults); and

              e)

              Specify
      the recovery rate used and how it was
  determined.

    We use
the same methodology for determining other-than-temporary impairment (“OTTI”)
for all of our pooled trust preferred securities.  FSP FAS 115-2 and
FAS 124-2 guides preparers to EITF 99-20, as amended, when securities with a
fair value less than book value are beneficial interests and rated lower than AA
by a credit rating agency.  Cash flow projections for the purpose of
determining if an adverse change in cash flows has occurred and the resulting
present value computation to determine credit impairment are derived from an
analysis provided by INTEX and are used as the base for these
analyses.  Paragraph 12(b) of EITF 99-20, as amended, requires the
future cash flows to be discounted at a rate equal to that used to accrete
beneficial interest.  Accordingly, we discounted the projected cash
flows at the current coupon rate for the security being analyzed.  At
March 31, 2009, those rates were 2.94% and 4.43% for PreTSL XII and Trapeza Ser
13A, respectively.  Both of these securities are floating rate based
off of 3-month LIBOR plus a spread, and thus the coupon of the securities and
the discount rate used in the present value calculation will
change.

    INTEX
cash flow models quantify the effects of current known defaults and
deferrals.  In addition to known defaults and deferrals within each
security, we applied a constant default rate of 0.75% to all securities
analyzed.  The projected default rate was derived from the FDIC
listing of the number of bank failures from 1934-2008.  Comparing bank
failures to the number of FDIC institutions produces an annual average default
rate of 36 basis points.  A qualitative adjustment was made to that
absolute failure rate was qualitatively adjusted to 75 basis points trying to
take into account potentially higher levels of default, on average, over the
course of the next 30 years than previously experienced.  The
projected default rate was applied consistently to all securities
analyzed.

    The
discounted projected cash flo

CORRESP
1
filename1.htm

    Unassociated Document

    July 30,
2009

    Via
EDGAR

    Ms.
Angela Connell

    Reviewing
Accountant

    Division
of Enforcement

    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 Ms.
Connell:

    This
letter is provided on behalf of First Community Bancshares, Inc. (“First
Community,” the “Company,” “we,” or “our”) in response to your letter of July
27, 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.

    This is
to confirm our July 30, 2009, telephone conversation with Chris
Harley.  We appreciate your extension of the timeframe for responding
to your July 27, 2009 letter to August 21, 2009.  This will
enable us complete and file the Quarterly Report on Form 10-Q for the quarter
ended June 30, 2009.  We anticipate accelerating the inclusion of many
of the additional disclosure and discussion items requested in your letters
dated June 23, 2009 and July 27, 2009.

    If I can
be assistance in the meantime, please do not hesitate to call or
email.

    Sincerely,

    /s/ David
D. Brown

    David D.
Brown

    Chief
Financial Officer

    CC: Chris Harley, Staff Accountant

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

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

   Mail Stop 4720           July 27, 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 response letter dated July 8, 2009 and have the following
additional comments.

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

Note 1. Summary of Significant Accounting Policies

Long-term Investments, page 53

1. We note your response to comment 1 of our letter dated June 23, 2009.  Please
confirm that you will revise your future filings to disclose your accounting and
impairment policy related to your investment in FHLB stock.

John M. Mendez
First Community Bancshares, Inc.
July 27, 2009 Page 2    Form 10-Q for the Fiscal Quarter Ended March 31, 2009:

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

 Financial Condition – Securities, page 29

 2. We note your response to comment 15 of our letter dated June 23, 2009.
Considering the significant j udgment required to determin e if a security is other
than temporarily impaired and the focus users of financial statements have placed on this area, we believe comp rehensive and detailed disclo sure is required to meet
the disclosure requirements in paragr aph 38 of FSP FAS 115-2 and FAS 124-2
and Item 303 of Regulation S-K.  Therefore, for each individual and pooled trust preferred security with at least one rati ng below investment grade, please revise
your future filings to disclose the fo llowing information (some of which you
provided in response to our initial comment ) as of the most recent period end:

• deal name
• single issuer or pooled
• class/tranche
• book value
• fair value
• unrealized gain/loss
• lowest credit rating assigned
• number of banks currently performing
• actual deferrals and defaults as a pe rcentage of original collateral
• expected deferrals and defaults as a percentage of remaining performing
collateral
• excess subordination as a percentage of remaining performing collateral

Additionally, please clearly disclose how  you calculate excess subordination and
discuss what the excess subordi nation percentage si gnifies to allow an investor to
understand why this information is relevant and meaningful.

3. Please provide us with y our calculation of the present value of cash flows
expected to be collected from the fo llowing debt securitie s – PreTSL XII and
TRAPEZA SER 13A – as of March 31, 2009 and confirm that you use the same
methodology for all of your trust prefe rred securities.  Identify the key
assumptions used in your analysis and explain how you determined the
assumptions were appropriate and cons istent with FSP FAS 115-2 and FAS 124-2
and related guidance.  Specifically addr ess the following with respect to the
assumptions used in your calculation:

John M. Mendez
First Community Bancshares, Inc. July 27, 2009 Page 3

• Discount rate – Specify the discount ra te used and how it was determined.

• Deferrals and defaults –

a. Explain in detail how you developed your estimate of future deferrals
and defaults.  Specifically tell us if and how you considered the specific collateral underlying each
 individual security and tell us
whether you had different estimates of deferrals and defaults for each
security;
 b. Provide us with the actual amount and percentage of deferrals and
defaults experienced by the trust by quarter;

c. Provide us with your estimate of fu ture deferrals and defaults and
compare your estimate to the actu al amounts experienced to date;

d. Explain how you treat deferrals (e.g. – do you treat deferrals the same
as defaults); and

e. Specify the recovery rate used and how it was determined.

4. Please tell us how you considered inform ation received after the balance sheet
date but before you issued your financial statements in your other-than-temporary
impairment analysis at December 31, 2008 and March 31, 2009.  Specifically tell
us if you received information regarding in terest deferrals or defaults or credit
rating downgrades and how this information affected your analysis at each period
end.

 Please respond to these comments within 10 business days or tell us when you
will provide us with a response. You may c ontact Chris Harley, Staff Accountant, at
(202) 551-3695 or me, at (202) 551-3426 if you have questions regarding comments.

Sincerely,

Angela Connell  Reviewing Accountant

CORRESP
1
filename1.htm

    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

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

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

       DIVISION OF
CORPORATION FINANCE

Mail Stop 4561

September 7, 2007

David D. Brown
Chief Financial Officer
First Community Bancshares, Inc.
P.O. Box 989
Bluefield, Virginia  24605-0989

 Re:  First Community Bancshares, Inc.
Form 10-K for the Fiscal Year Ended December 31, 2006
Form 10-Q for the Fiscal Quarters Ended March 31, 2007 and June
30, 2007
  File No.  0-19297

Dear Mr. Brown:

We have completed our review of your Form 10-K and related filings and have no
further comments at this time.

Sincerely,

Sharon Blume
Reviewing Accountant

CORRESP
1
filename1.htm

First Community Bancshares, Inc.   Corresp

August 28, 2007

Via EDGAR

Ms. Sharon Blume

Reviewing Accountant

Division of Corporation Finance

U.S. Securities and Exchange Commission

100 F Street, NW

Washington, D.C. 20549

Mail Stop 4561

    Re:

    First Community Bancshares, Inc.

Form 10-K for the Fiscal Year Ended December 31, 2006

Form 10-Q for the Fiscal Quarters Ended March 31, 2007 and June 30, 2007

File No. 0-19297

Dear Ms. Blume:

This letter is provided on behalf of First Community Bancshares, Inc. (“First Community” or the
“Company”) in response to your letter of August 17, 2007, regarding the Company’s Annual Report on
Form 10-K for the fiscal year ended December 31, 2006, and its Quarterly Reports on Form 10-Q for
the fiscal quarters ended March 31 and June 30, 2007.

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 thereto follow.

Item 8. Financial Statements and Supplementary Data

Consolidated Statements of Cash Flows, page 42

    1.

    We note you recorded “cash used in divestitures and acquisitions, net” as a cash outflow,
rather than a cash inflow, in the investing section of your Statements of Cash Flows. Please
tell us whether you received or paid cash when you sold the Rowlesburg, West Virginia, Drakes
Branch, Virginia and Clifton Forge, Virginia branch locations during 2006 and 2005,
respectively. If you did not receive cash for the branch sales, please tell us the type(s) of
consideration received.

The Company paid cash in the net settlement of all three of the branch sales. In all three cases,
the dollar amount of customer deposits assumed by the buyer exceeded the dollar amount of loans
sold by the Company. In all the transactions, the Company sold the loans at par to the buyers and
transferred the

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

Ms. Sharon Blume

August 28, 2007

Page 2

deposits net of a deposit premium paid by the buyer. In the cases of Drakes Branch and Clifton
Forge, Virginia, the Company also sold the branch real estate as part of the transactions.

Notes to Consolidated Financial Statements

Note 13 — Derivative Instruments and Hedging Activities, page 70

    2.

    We note you entered into an interest rate swap in January 2006 to effectively fix the
interest rate on a portion of FHLB borrowings and that you account for this hedging
relationship as a cash flow hedge under the shortcut provisions of SFAS 133. Please tell us
the following so that we may better understand your accounting treatment:

    •

    the specific terms of the FHLB borrowings, including any upfront fees, conversion,
call, or deferral features;

    •

    the specific terms of the interest rate swap and how those match the terms of the
FHLB borrowings;

    •

    the specific documented risk being hedged; and

    •

    how you determined this hedging relationship meets each of the conditions in
paragraph 68 of SFAS 133 to qualify for use of the shortcut method.

The Company borrowed $50 million in the form of a FHLB advance that settled January 6, 2006. This
advance has a final fifteen-year maturity. For the first five years of the advance, the rate
adjusts quarterly based on USD-BBA 3-month LIBOR with a two-day look-back period and a New York
holiday schedule. The initial rate of the advance was 4.10% and interest payments are due
quarterly beginning April 6, 2006, and are calculated on an actual/360 basis. After the initial
five years, the FHLB has a one-time option to convert, or “flip”, the advance to a fixed-rate of
4.00%. If the FHLB does not exercise this option, the advance moves to a standard adjustable-rate
credit structure. Additionally, if the FHLB does not exercise its conversion option, the Company
may prepay the obligation with no penalty only at that date. There were no upfront fees associated
with the advance, and it contains no interest deferral provisions.

In order to hedge against the interest rate risk and the associated changes in cash flow resulting
from this advance being indexed to 3-month LIBOR, the Company decided to effectively fix the
interest rate during the first five years of this advance through the use of a 5-year interest rate
swap. The swap is between the Company and SunTrust beginning January 6, 2006, with a notional
amount of $50 million. The swap obligates the Company to pay a fixed interest rate of 4.335% and
receive interest equal to 3-month LIBOR less 45 basis points on a $50 million notional amount. The
variable leg of the contract resets quarterly, based on USD-BBA 3-month LIBOR with a two-day
look-back period and a New York holiday schedule, and is settled quarterly beginning April 6, 2006,
and ending January 6, 2011. Each settlement entails paying fixed and receiving variable interest
on an actual/360 basis.

At the inception of the interest rate swap, the Company concluded the advance is a permissible item
to hedge. The associated variability of interest payments present a permissible risk exposure that
could affect reported earnings and cash flows. The Company documented its conclusions
contemporaneously with the execution of the hedge.

The notional amount of the interest rate swap matches the advance. The interest rate swap had a
fair value of zero at the inception of the contract. The formula for computing net settlements
under the swap is the same for each of the twenty quarterly settlements. At any time other than
the FHLB not exercising its conversion option, the Company may terminate the advance prior to
maturity by paying a make-whole

Ms. Sharon Blume

August 28, 2007

Page 2

payment to the FHLB. The hedging relationship involves a recognized interest-bearing liability and
an interest rate swap based on LIBOR, an acceptable benchmark interest rate.

Additionally, the Company designated all interest payments due during the life of the swap as
hedged, and did not designate any interest payments beyond the life of the swap as hedged based on
this transaction. The life of the interest rate swap ends before the FHLB has the option to
convert to a fixed interest rate. The scheduled repricing dates for the FHLB advance and the
interest rate swap were the same. There is no floor or cap on the interest rate of the swap.

Based on the above information, the Company determined at inception that it would account for
the cash flow hedge under the shortcut accounting method allowed in paragraph 68 of SFAS 133.

Thank you for your consideration of our responses to your comments. If you have any questions, or
we can be of further assistance you in the review process, please call me at (276) 326-9000.

Sincerely,

/s/ David D. Brown

David D. Brown

Chief Financial Officer

    cc:

    Mr. David Irving

Staff Accountant

Division of Corporation Finance

U.S. Securities and Exchange Commission

100 F Street, NW

Washington, D.C. 20549