##### 





UNITED
    STATES SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C.
    20549
  Form 10-K
  ANNUAL REPORT PURSUANT TO
    SECTION 13 OR 15(d)
 OF THE SECURITIES EXCHANGE ACT
    OF 1934
  For the fiscal year ended December 31, 2007
  Commission file number
    000-19297
  FIRST COMMUNITY BANCSHARES,
    INC.
 (Exact name of registrant as
    specified in its charter)
  Nevada(State or other jurisdiction
    of incorporation)

55-0694814(IRS Employer Identification
    No.)P.O. Box 989 
    Bluefield, Virginia(Address of principal
    executive offices)

24605-0989(Zip Code)   (276) 326-9000
 Registrants telephone
    number, including area code:
  Securities registered pursuant to Section 12(b) of the
    Act:
  Title of each class

Name of exchange on which registeredCommon Stock, $1.00 par value

NASDAQ Global Select   Securities registered pursuant to Section 12(g) of the
    Act:
 None
  o þ
  o þ
  þ o
  Regulation S-K Form 10-K Form 10-K. o
    Large accelerated
    filer o

Accelerated
    filer þ

Non-accelerated
    filer o
    (Do not check if a smaller reporting company)

Smaller reporting
    company o   Rule 12b-2 o þ
          DOCUMENTS
    INCORPORATED BY REFERENCE
  Form 10-K.




---



##### 





TABLE OF
    CONTENTS
  PagePART IItem 1


Business


3Item 1A.


Risk Factors


9Item 1B.


Unresolved Staff Comments


12Item 2.


Properties


12Item 3.


Legal Proceedings


12Item 4.


Submission of Matters to a Vote of Security Holders


13PART IIItem 5.


Market for Registrants Common Equity, Related Stockholder
    Matters and Issuer Purchases of Equity Securities


13Item 6.


Selected Financial Data


15Item 7.


Managements Discussion and Analysis of Financial Condition
    and Results of Operation


16Item 7A.


Quantitative and Qualitative Disclosures About Market Risk


38Item 8.


Financial Statements and Supplementary Data


40Item 9.


Changes in and Disagreements with Accountants on Accounting and
    Financial Disclosure


83Item 9A.


Controls and Procedures


83Item 9B.


Other Information


83PART IIIItem 10.


Directors, Executive Officers and Corporate Governance


83Item 11.


Executive Compensation


85Item 12.


Security Ownership of Certain Beneficial Owners and Management
    and Related Stockholder Matters


85Item 13


Certain Relationships and Related Transactions, and Director
    Independence


86Item 14.


Principal Accounting Fees and Services


86PART IVItem 15.


Exhibits, Financial Statement Schedules


86Signatures


89  2




---



##### 



PART I  ITEM 1.
    BUSINESS.  General
      Employees
    Regulation
    and Supervision
  General
      The
    Company
    Regulatory Restrictions on Dividends; Source of
    Strength.
 3




---



##### 



Scope of Permissible Activities.
      Safe and Sound Banking Practices.
  Anti-Tying Restrictions.
  Stock Repurchases.
  Capital Adequacy Requirements.
   4




---



##### 



plus minus
      Acquisitions by Bank Holding Companies.
  The
    Bank
   5




---



##### 



Restrictions on Transactions with Affiliates and
    Insiders. and/or
      Restrictions on Distribution of Subsidiary Bank Dividends and
    Assets.
      Examinations. on-site
  Capital Adequacy Requirements.
   6




---



##### 



Corrective Measures for Capital
    Deficiencies.
        Deposit Insurance Assessments.
    Enforcement Powers.
 7




---



##### 



Consumer Laws and Regulations.
    USA PATRIOT Act of 2001.
  Website
    Access to Company Reports
  Form 10-K, Form 10-Q Form 8-K, Form 10-K. Form 10-K,
  Forward-Looking
    Statements
  Form 10-K
 8




---



##### 



and/or
  Form 10-K.
    ITEM 1A.
    RISK
    FACTORS.  The
    Company and its subsidiary business are subject to interest rate
    risk and variations in interest rates may negatively affect its
    financial performance.
    The
    Banks ability to pay dividends is subject to regulatory
    limitations which, to the extent the Company requires such
    dividends in the future, may affect the Companys ability
    to pay its obligations and pay dividends.
   9




---



##### 



The
    Banks allowance for loan losses may not be adequate to
    cover actual losses.
    The
    Companys business is subject to various lending and other
    economic risks that could adversely impact the Companys
    results of operations and financial condition.
    
    loan delinquencies may increase;
    problem assets and foreclosures may increase;
    demand for the Companys products and services may
    decline; and
    collateral for loans made by the Company may decline in value,
    in turn reducing a clients borrowing power, and reducing
    the value of assets and collateral associated with the
    Companys loans held for investment.  The
    declining real estate market could impact the Companys
    business.
    The
    Companys level of credit risk is increasing due to its
    focus on commercial lending, and the concentration on small
    businesses and middle market customers with heightened
    vulnerability to economic conditions.
   10




---



##### 



The
    Bank may suffer losses in its loan portfolio despite its
    underwriting practices.
    The
    Company and its subsidiaries are subject to extensive regulation
    which could adversely affect them.
  and/or and/or
  The
    Company faces strong competition from other financial
    institutions, financial service companies and other
    organizations offering services similar to those offered by the
    Company and its subsidiaries, which could hurt the
    Companys business.
     11




---



##### 



Potential
    Acquisitions May Disrupt the Companys Business and Dilute
    Stockholder Value
    
    Potential exposure to unknown or contingent liabilities of the
    target company.
    Exposure to potential asset quality issues of the target company.
    Difficulty and expense of integrating the operations and
    personnel of the target company.
    Potential disruption to the Companys business.
    Potential diversion of the Companys managements time
    and attention.
    The possible loss of key employees and customers of the target
    company.
    Difficulty in estimating the value of the target company.
    Potential changes in banking or tax laws or regulations that may
    affect the target company.  and/or
    ITEM 1B.
    UNRESOLVED
    STAFF COMMENTS.  Form 10-K.
  ITEM 2.
    PROPERTIES.  Form 10-K.
  ITEM 3.
    LEGAL
    PROCEEDINGS.   12




---



##### 



ITEM 4.
    SUBMISSION
    OF MATTERS TO A VOTE OF SECURITY HOLDERS.    PART II  ITEM 5.
    MARKET
    FOR REGISTRANTS COMMON EQUITY, RELATED STOCKHOLDER MATTERS
    AND ISSUER PURCHASES OF EQUITY SECURITIES.            First


Second


Third


FourthQuarter


Quarter


Quarter


Quarter2007Dividends Paid

$
0.27


$
0.27


$
0.27


$
0.27High


42.30



39.21



37.45



38.85Low


35.19



28.89



25.40



30.072006Dividends Paid

$
0.26


$
0.26


$
0.26


$
0.26High


35.27



33.00



34.44



41.17Low


30.16



29.50



30.04



31.67     MaximumTotal Number


Number ofTotal





of Shares


Shares ThatNumber of


Average


Purchased as


May Yet BeShares


Price Paid


Part of Publicly


PurchasedPurchased


per Share


Announced Plan


Under the PlanOctober 1-31, 2007


9,000



33.46



9,000



218,032November 1-30, 2007


81,200



33.41



81,200



141,027December 1-31, 2007


33,800



33.15



33,800



120,634Total


124,000


$
33.35



124,000    13




---



##### 



Total
    Return Analysis
    Total
    Return Performance
  
 Period EndingIndex

12/31/02


12/31/03


12/31/04


12/31/05


12/31/06


12/31/07First Community Bancshares, Inc.


100.00



122.13



137.10



122.41



160.36



133.59S&P 500


100.00



128.68



142.69



149.70



173.34



182.86NASDAQ Composite


100.00



150.01



162.89



165.13



180.85



198.60Asset Size & Regional Peer Group


100.00



134.94



159.26



164.27



182.54



131.50  14




---



##### 



ITEM 6.
    SELECTED
    FINANCIAL DATA.  At or for the Year Ended December 31,Five-Year Selected Financial Data

2007


2006


2005


2004


2003(Amounts in thousands, except per share data)Balance Sheet Summary
    (at end of period)Securities(a)

$
676,195


$
528,389


$
428,554


$
410,218


$
473,177Loans held for sale


811



781



1,274



1,194



424Loans, net of unearned income


1,225,502



1,284,863



1,331,039



1,238,756



1,026,191Allowance for loan losses


12,833



14,549



14,736



16,339



14,624Assets related to discontinued operations


















22,372Total assets


2,149,838



2,033,698



1,952,483



1,830,822



1,672,727Deposits


1,393,443



1,394,771



1,403,220



1,356,719



1,223,376Borrowings


517,843



406,556



335,885



274,212



242,267Liabilities related to discontinued operations


















17,992Total liabilities


1,932,740



1,820,968



1,757,982



1,647,589



1,497,692Stockholders equity


217,098



212,730



194,501



183,233



175,035Summary of EarningsTotal interest income

$
127,591


$
120,026


$
109,508


$
96,136


$
90,641Total interest expense


59,276



48,381



35,880



26,953



26,397Provision for loan losses


717



2,706



3,706



2,671



3,419Non-interest income


24,831



21,323



22,305



17,329



14,542Non-interest expense


50,463



49,837



55,591



48,035



37,590Income from continuing operations beforeincome taxes


41,966



40,425



36,636



35,806



37,777Income tax expense


12,334



11,477



10,191



9,786



11,058Income from continuing operations


29,632



28,948



26,445



26,020



26,719(Loss) income from discontinued operationsbefore income taxes










(233
)


(5,746
)


(2,174
)Income tax (benefit) expense










(91
)


(2,090
)


(693
)(Loss) income from discontinued operations










(142
)


(3,656
)


(1,481
)Net income


29,632



28,948



26,303



22,364



25,238     (a)
    
    Reflects the reclassification during
    2003-2004
    periods of Federal Reserve Bank and Federal Home Loan Bank stock
    from Securities Available for Sale to Other Assets, consistent
    with the
    2005-2007
    presentation.  15




---



##### 



At or for the Year Ended December 31,Five-Year Selected Financial Data-continued

2007


2006


2005


2004


2003Per Share DataBasic earnings per share

$
2.64


$
2.58


$
2.33


$
1.99


$
2.27Basic earnings per common share-continuing operations


2.64



2.58



2.35



2.32



2.41Basic (loss) earnings per common share-discontinued operations










(0.02
)


(0.33
)


(0.14
)Diluted earnings per common share

$
2.62


$
2.57


$
2.32


$
1.97


$
2.25Diluted earnings per common share-continuing operations


2.62



2.57



2.33



2.29



2.39Diluted (loss) earnings per common share-discontinued operations










(0.01
)


(0.32
)


(0.14
)Cash dividends

$
1.08


$
1.04


$
1.02


$
1.00


$
0.98Book value at year-end

$
19.61


$
18.92


$
17.29


$
16.29


$
15.57Selected RatiosReturn on average assets


1.39
%


1.46
%


1.37
%


1.24
%


1.56
%Return on average assets-continuing


1.39
%


1.46
%


1.38
%


1.45
%


1.70
%Return on average equity


13.54
%


14.32
%


13.79
%


12.53
%


15.13
%Return on average equity-continuing


13.54
%


14.32
%


13.87
%


14.58
%


16.02
%Average equity to average assets


10.30
%


10.21
%


9.91
%


9.88
%


10.32
%Average equity to average assets-continuing


10.30
%


10.21
%


9.91
%


9.96
%


10.64
%Dividend payout


40.91
%


40.31
%


43.78
%


50.25
%


43.17
%Risk based capital to risk adjusted assets


12.34
%


12.69
%


11.65
%


12.09
%


14.55
%Leverage ratio


8.09
%


8.50
%


7.77
%


7.62
%


8.83
%   ITEM 7.
    MANAGEMENTS
    DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
    OPERATIONS.    Executive
    Overview
   16




---



##### 



Economy
      Competitive
    Focus
    Application
    of Critical Accounting Policies
       17




---



##### 



Allowance
    for Loan Losses
          Acquisitions
    and Intangible Assets
       18




---



##### 



Income
    Taxes
    Recent
    Acquisitions and Branching Activity
           19




---



##### 



RESULTS
    OF OPERATIONS
  2007
    COMPARED TO 2006
      Net
    Interest Income
          available-for-sale
 20




---



##### 



3-month 3-month
 21




---



##### 



Average
    Balance Sheets and Net Interest Income Analysis
  2007


2006


2005Average





Yield/


Average





Yield/


Average





Yield/Balance


Interest(1)


Rate(1)


Balance


Interest(1)


Rate(1)


Balance


Interest(1)


Rate(1)(Dollars in thousands)Earning Assets:Loans Held for Investment:(2)


1,251,028



93,561



7.48
%


1,316,475



97,500



7.41
%


1,302,020



89,965



6.91
%Available-for-Sale
    Securities:Taxable


444,413



24,702



5.56
%


276,142



13,929



5.04
%


262,715



11,062



4.21
%Tax-exempt


181,000



11,411



6.30
%


152,437



9,655



6.33
%


144,242



9,193



6.37
%Total


625,413



36,113



5.77
%


428,579



23,584



5.50
%


406,957



20,255



4.98
%Held-to-Maturity
    Securities:Taxable


378



23



6.08
%


386



22



5.70
%


399



15



3.76
%Tax-exempt


14,842



1,189



8.01
%


20,912



1,686



8.06
%


28,336



2,269



8.01
%Total


15,220



1,212



7.96
%


21,298



1,708



8.02
%


28,735



2,284



7.95
%Interest-bearingdeposits with banks


24,662



1,175



4.76
%


27,289



1,244



4.56
%


32,100



1,077



3.36
%Total earning assets


1,916,323


$
132,061



6.89
%


1,793,641


$
124,036



6.92
%


1,769,812


$
113,581



6.42
%Other assets


208,916











186,639











153,410Total

$
2,125,239










$
1,980,280










$
1,923,222Interest-bearing liabilities:Demand deposits

$
147,856


$
456



0.31
%

$
146,248


$
462



0.32
%

$
152,774


$
401



0.26
%Savings deposits


330,969



7,327



2.21
%


343,854



6,857



1.99
%


368,339



4,309



1.17
%Time deposits


697,996



30,974



4.44
%


680,380



26,549



3.90
%


658,915



19,321



2.93
%Federal funds purchased andrepurchase agreements


223,132



8,302



3.72
%


150,839



5,079



3.37
%


128,551



2,782



2.16
%FHLB borrowings andother long-term debt


258,644



12,217



4.72
%


200,570



9,434



4.70
%


177,832



9,068



5.10
%Total interest-bearing liabilities


1,658,597



59,276



3.57
%


1,521,891



48,381



3.18
%


1,486,411



35,881



2.41
%Demand deposits


228,583











237,714











228,781Other liabilities


19,210











18,551











17,355Stockholders equity


218,849











202,124











190,675Total

$
2,125,239










$
1,980,280










$
1,923,222Net Interest Income





$
72,785










$
75,655










$
77,700Net Interest Rate Spread(3)










3.32
%










3.74
%










4.01
%Net Interest Margin(4)










3.80
%










4.22
%










4.39
%     (1)
    
    Fully taxable equivalent at the rate of 35%.(2)
    
    Non-accrual loans are included in average balances outstanding
    but with no related interest income during the period of
    non-accrual.(3)
    
    Represents the difference between the tax equivalent yield on
    earning assets and cost of funds.(4)
    
    Represents tax equivalent net interest income divided by average
    interest-earning assets. 22




---



##### 



Rate and
    Volume Analysis of Interest
    2007 Compared to 2006


2006 Compared to 2005$ Increase/(Decrease) due to


$ Increase/(Decrease) due toVolume


Rate


Total


Volume


Rate


Total(Amounts in thousands)Interest Earned On(1):Loans

$
(4,845
)

$
906


$
(3,939
)

$
1,003


$
6,532


$
7,535Securities available for sale


10,297



2,232



12,529



1,088



2,241



3,329Securities held to maturity


(490
)


(6
)


(496
)


(595
)


19



(576
)Interest-bearing deposits with other banks


(120
)


51



(69
)


(161
)


328



167Total interest-earning assets


4,842



3,183



8,025



1,335



9,120



10,455Interest Paid On:Demand deposits


5



(11
)


(6
)


(18
)


79



61Savings deposits


(257
)


727



470



(286
)


2,834



2,548Time deposits


687



3,738



4,425



629



6,599



7,228Federal funds purchased and repurchase agreements


2,434



789



3,223



482



1,815



2,297FHLB borrowings and other long-term debt


2,732



51



2,783



1,159



(793
)


366Total interest-bearing liabilities


5,601



5,294



10,895



1,966



10,534



12,500Change in net interest income

$
(759
)

$
(2,111
)

$
(2,870
)

$
(631
)

$
(1,414
)

$
(2,045
)     (1)
    
    Fully taxable equivalent using a rate of 35%.  Provision
    for Loan Losses
    Noninterest
    Income
     23




---



##### 



Noninterest
    Expense
        period-to-period
   24




---



##### 



GAAP-based
    and Our Efficiency Ratios
  2007


2006


2005(Dollars in thousands)GAAP-based efficiency ratioNoninterest expenses

$
50,463


$
49,837


$
55,591Net interest income plus noninterest income


93,146



92,968



95,933GAAP-based efficiency ratio


54.18
%


53.61
%


57.95
%Our efficiency ratioNoninterest expenses  GAAP-based

$
50,463


$
49,837


$
55,591Less non-GAAP adjustments:Foreclosed property expense


(185
)


(248
)


(288
)Amortization of intangibles


(467
)


(410
)


(435
)Prepayment penalties on FHLB advances










(3,794
)Other non-core, non-recurring expense items


(100
)


(581
)


Adjusted non-interest expenses


49,711



48,598



51,074Net interest income plus noninterest income 
    GAAP-based


93,146



92,968



95,933Plus non-GAAP adjustment:Tax-equivalency


4,470



4,010



4,072Less non-GAAP adjustments:Security gains


(411
)


(75
)


(753
)Branch sale gains






(1,035
)


(4,366
)Other non-core, non-recurring income items


(104
)


(676
)


Adjusted net interest income plus noninterest income


97,101



95,192



94,886Our efficiency ratio


51.20
%


51.05
%


53.83
%   Equity-Based
    Compensation
    Income
    Tax Expense
   25




---



##### 



2006
    COMPARED TO 2005
    Net
    Interest Income
            available-for-sale
     26




---



##### 



3-month 3-month
  Noninterest
    Income
        Noninterest
    Expense
        Income
    Tax Expense
     27




---



##### 



FINANCIAL
    POSITION
  Available-for-Sale
    Securities
  Available-for-sale
    Available-for-sale held-to-maturity other-than-temporary other-than-temporary other-than-temporary
    available-for-sale
  December 31,2007


2006


2005Amortized


Fair


Amortized


Fair


Amortized


FairCost


Value


Cost


Value


Cost


Value(Amounts in thousands)U.S. Government agency securities

$
136,791


$
139,237


$
117,777


$
116,061


$
92,739


$
91,424States and political subdivisions


186,834



188,536



152,189



154,047



151,118



152,168Corporate Notes


164,731



150,625



85,080



85,033



61,466



61,274Mortgage-backed securities


177,984



176,727



146,444



144,754



94,954



92,994Equities


8,597



8,995



6,933



8,475



5,390



6,521Total

$
674,937


$
664,120


$
508,423


$
508,370


$
405,667


$
404,381   Held-to-Maturity
    Securities
  held-to-maturity
 28




---



##### 



held-to-maturity
  held-to-maturity
  held-to-maturity
  December 31,2007


2006


2005Amortized


Fair


Amortized


Fair


Amortized


FairCost


Value


Cost


Value


Cost


Value(Amounts in thousands)States and political subdivisions

$
11,699


$
11,922


$
19,638


$
19,970


$
23,781


$
24,486Corporate Notes


375



375



375



374



375



374Mortgage-backed securities


1



1



6



6



17



17Total

$
12,075


$
12,298


$
20,019


$
20,350


$
24,173


$
24,877   Loans
    Held for Sale
    Loans
    Held for Investment
   29




---



##### 



Loan
    Portfolio Summary
  December 31,2007


2006


2005


2004


2003(Amounts in thousands)Commercial, financial and agricultural$
96,261


$
106,645


$
110,211


$
99,302


$
69,395Real estate  commercial


386,112



421,067



464,510



453,899



317,421Real estate  construction


163,310



158,566



143,976



112,705



98,510Real estate  residential


498,345



506,370



504,387



457,417



421,299Consumer


75,450



88,679



106,206



113,639



119,195Other


6,027



3,549



1,808



2,012



992Total


1,225,505



1,284,876



1,331,098



1,238,974



1,026,812Less unearned income


3



13



59



218



6211,225,502



1,284,863



1,331,039



1,238,756



1,026,191Less allowance for loan losses


12,833



14,549



14,736



16,339



14,624Net loans

$
1,212,669


$
1,270,314


$
1,316,303


$
1,222,417


$
1,011,567       Remaining MaturitiesOverOne Year


One to


Overand Less


Five Years


Five Years


Total


Percent(Amounts in thousands)Commercial, financial and agricultural

$
44,647


$
42,473


$
9,141


$
96,261



7.85
%Real estate  commercial


67,303



241,549



77,260



386,112



31.51
%Real estate  construction


100,515



60,234



2,561



163,310



13.33
%Real estate  mortgage


48,588



147,901



301,856



498,345



40.66
%Consumer


16,248



54,891



4,308



75,447



6.16
%Other


3,398



2,005



624



6,027



0.49
%$
280,699


$
549,053


$
395,750


$
1,225,502



100.00
%Rate Sensitivity:Pre-determined rate

$
138,417


$
426,221


$
107,322


$
671,960



54.83
%Floating- or adjustable-rate


142,282



122,832



288,428



553,542



45.17
%$
280,699


$
549,053


$
395,750


$
1,225,502



100.00
%   Allowance
    for Loan Losses
   30




---



##### 



Years Ended December 31,2007


2006


2005


2004


2003(Amounts in thousands)Allowance for loan losses at beginning of period

$
14,549


$
14,736


$
16,339


$
14,624


$
14,410Acquisition balances














1,786



1,583Charge-offs:Commercial, financial, agricultural and commercial real estate


2,245



1,953



5,017



1,925



3,302Real estate-residential


824



1,234



385



723



686Installment


1,226



1,356



1,534



1,526



2,133Total charge-offs


4,295



4,543



6,936



4,174



6,121Recoveries:Commercial, financial and agricultural


879



1,032



1,413



727



711Real estate-residential


535



125



188



90



58Installment


448



493



418



615



564Total recoveries


1,862



1,650



2,019



1,432



1,333Net charge-offs


2,433



2,893



4,917



2,742



4,788Provision charged to operations


717



2,706



3,706



2,671



3,419Reclassification of allowance forlending-related commitments(1)










(392
)






Allowance for loan losses at end of period

$
12,833


$
14,549


$
14,736


$
16,339


$
14,624Ratio of net charge-offs to average loans outstanding


0.19
%


0.22
%


0.38
%


0.24
%


0.49
%Ratio of allowance for loan losses tototal loans outstanding


1.05
%


1.13
%


1.11
%


1.32
%


1.43
%     (1)
    
    At June 30, 2005, the Company reclassified $392 thousand of
    its allowance for loan losses to a separate allowance for
    lending-related liabilities. Net income and prior period
    balances were not affected by this reclassification. The
    allowance for lending-related liabilities is included in other
    liabilities. 31




---



##### 



December 31,2007


2006


2005


2004


2003(Dollars in thousands)Commercial, financial andagricultural

$
7,441



53
%

$
8,418



53
%

$
9,993



58
%

$
11,700



57
%

$
9,414



47
%Real estate  mortgage


3,699



41
%


3,858



39
%


2,462



34
%


2,084



34
%


2,207



41
%Consumer


1,693



6
%


2,273



8
%


2,281



8
%


2,555



9
%


3,003



12
%Total

$
12,833



100
%

$
14,549



100
%

$
14,736



100
%

$
16,339



100
%

$
14,624



100
%   Risk
    Elements
    December 31,2007


2006


2005


2004


2003(Dollars in thousands)Non-accrual loans

$
2,923


$
3,813


$
3,383


$
5,168


$
2,993Loans 90 days or more past due and still accruing interest










11







Total non-performing loans


2,923



3,813



3,394



5,168



2,993Other real estate owned


545



258



1,400



1,419



2,091Total non-performing assets

$
3,468


$
4,071


$
4,794


$
6,587


$
5,084Non-performing loans as a percentage of total loans


0.24
%


0.30
%


0.25
%


0.42
%


0.29
%Non-performing assets as a percentage of total loans and other
    real estate owned


0.28
%


0.32
%


0.36
%


0.53
%


0.49
%Allowance for loan losses as a percentage of non-performing loans


439.0
%


381.6
%


434.2
%


316.2
%


488.6
%Allowance for loan losses as a percentage of non-performing
    assets


370.0
%


357.4
%


307.4
%


248.0
%


287.6
%        32




---



##### 



December 31,2007


2006


2005


2004


2003(Amounts in thousands)Non-accruing loans

$
2,923


$
3,813


$
3,383


$
5,168


$
2,993Loans past due over 90 days and still accruing interest










11







Restructured loans performingin accordance with modified terms


245



272



302



354



356Gross interest income which would havebeen recorded under original terms ofnon-accruing and restructured loans


301



397



380



439



282Actual interest income during the period


179



286



161



293



194     Deposits
      Average
    Deposits and Average Rates
  2007


2006


2005Average





Average


Average





Average


Average





AverageBalance


Interest


Rate


Balance


Interest


Rate


Balance


Interest


Rate(Dollars in thousands)Demand deposits

$
147,856


$
456



0.31
%

$
146,248


$
462



0.32
%

$
152,774


$
401



0.26
%Savings deposits


330,969



7,327



2.21
%


343,854



6,857



1.99
%


368,339



4,309



1.17
%Time deposits


697,996



30,974



4.44
%


680,380



26,549



3.90
%


658,915



19,321



2.93
%Total interest-bearing deposits

$
1,176,821


$
38,757



3.29
%

$
1,170,482


$
33,868



2.89
%

$
1,180,028


$
24,031



2.04
%Non-interest bearing demand deposits

$
228,583










$
237,714










$
228,781   Borrowings
     33




---



##### 



2007


2006


2005Amount


Rate


Amount


Rate


Amount


Rate(Dollars in thousands)At year-end

$
225,927



4.32
%

$
208,885



3.70
%

$
206,654



2.79
%Average during the year


223,132



3.72
%


150,839



3.37
%


128,551



2.16
%Maximum month-end balance


273,920







208,885







206,654       Liquidity
    and Capital Resources
    available-for-sale held-to-maturity
     34




---



##### 



Total Payments Due by PeriodLess Than


Two to


Four to


AfterTotal


1 Year


Three Years


Five Years


5 Years(Amounts in thousands)Deposits without a stated maturity(1)

$
705,348


$
705,348


$



$



$
Federal funds borrowed and overnight security repurchase
    agreements


126,591



126,591











Certificates of Deposit(2)(3)


711,598



543,829



115,331



38,980



13,458Term security repurchase agreements


119,526



50,737



5,296



5,121



58,372FHLB advances(2)(3)


343,527



11,855



47,026



70,228



214,418Trust preferred indebtedness


49,932



1,266



2,533



3,097



43,036Leases


3,998



879



1,140



1,014



965Total

$
2,060,520


$
1,440,505


$
171,326


$
118,440


$
330,249     (1)
    
    Excludes interest.(2)
    
    Includes interest on both fixed and variable-rate obligations.
    The interest associated with variable-rate obligations is based
    upon interest rates in effect at December 31, 2007. The
    interest to be paid on variable-rate obligations is affected by
    changes in market interest rates, which materially affect the
    contractual obligation amounts to be paid.(3)
    
    Excludes carrying value adjustments such as unamortized premiums
    or discounts.    Amount of Commitment Expiration Per PeriodLess Than


Two to


Four to


AfterTotal


One Year(1)


Three Years


Five Years


Five Years(Amounts in thousands)Commitments to extend credit Commercial, financial and
    agricultural

$
33,902


$
31,958


$
1,787


$
136


$
21Real estate  commercial


23,575



17,691



3,357



1,400



1,127Real estate  residential


66,696



6,615



3,255



5,318



51,508Real estate  construction


58,087



39,307



4,416



8,086



6,278Consumer lines of credit


43,157



41,825



155



28



1,149Total unused commitments

$
225,417


$
137,396


$
12,970


$
14,968


$
60,083Financial letters of credit

$
1,763


$
1,746


$



$
7


$
10Performance letters of credit


1,832



1,531



229



8



64Total letters of credit

$
3,595


$
3,277


$
229


$
15


$
74     (1)
    
    Lines of credit with no stated maturity date are included in
    commitments for less than one year.   35




---



##### 



Stockholders
    Equity
    capital-to-asset
  Wealth
    Management Services
       36




---



##### 



ITEM 7A.
    QUANTITATIVE
    AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.         37




---



##### 



Rate
    Sensitivity Analysis
  2007Increase (Decrease)

Change in





Change inin Interest Rates

Net Interest


%


Market Value


%(Basis
    Points)

Income


Change


of Equity


Change(Dollars in thousands)200

$
(3,124
)


(4.2
)

$
(30,894
)


(10.7
)100


(327
)


(0.4
)


(5,315
)


(1.8
)(100)


(449
)


(0.6
)


(11,128
)


(3.9
)(200)


(1,657
)


(2.2
)


(32,008
)


(11.1
)   2006Increase (Decrease)

Change in





Change inin Interest Rates

Net Interest


%


Market Value


%(Basis
    Points)

Income


Change


of Equity


Change200

$
(2,006
)


(2.8
)

$
(16,229
)


(5.4
)100


(958
)


(1.3
)


(7,453
)


(2.5
)(100)


(1,024
)


(1.4
)


(4,301
)


(1.4
)(200)


(1,614
)


(2.3
)


(18,278
)


(6.1
)  38




---



##### 



ITEM 8.
    FINANCIAL
    STATEMENTS AND SUPPLEMENTARY DATA.  Consolidated Financial StatementsConsolidated Balance Sheets


40Consolidated Statements of Income


41Consolidated Statements of Cash Flows


42Consolidated Statements of Changes in Stockholders Equity


43Notes to Consolidated Financial Statements


44Reports of Independent Registered Public Accounting Firms on
    Consolidated Financial Statements


78Managements Assessment of Internal Control Over Financial
    Reporting


80Report of Independent Registered Public Accounting Firm on
    Managements Assessment of Internal Control Over Financial
    Reporting


81  39




---



##### 



FIRST
    COMMUNITY BANCSHARES, INC.
  CONSOLIDATED
    BALANCE SHEETS
  December 31,2007


2006(Amounts in thousands, except share and per share data)ASSETSCash and due from banks

$
50,051


$
47,909Interest-bearing balances with banks


2,695



9,850Total cash and cash equivalents


52,746



57,759Securities available for sale (amortized cost of $674,937, 2007;
    $508,423, 2006)


664,120



508,370Securities held to maturity (fair value of $12,298, 2007;
    $20,350, 2006)


12,075



20,019Loans held for sale


811



781Loans held for investment, net of unearned income


1,225,502



1,284,863Less allowance for loan losses


12,833



14,549Net loans held for investment


1,212,669



1,270,314Premises and equipment, net


48,383



36,889Other real estate owned


545



258Interest receivable


12,465



12,141Goodwill


66,310



60,135Other intangible assets


3,746



2,061Other assets


75,968



64,971Total Assets

$
2,149,838


$
2,033,698LIABILITIESDeposits:Noninterest-bearing

$
224,087


$
244,771Interest-bearing


1,169,356



1,150,000Total Deposits


1,393,443



1,394,771Interest, taxes and other liabilities


21,454



19,641Federal funds purchased


18,500



7,700Securities sold under agreements to repurchase


207,427



201,185FHLB borrowings and other indebtedness


291,916



197,671Total Liabilities


1,932,740



1,820,968Stockholders EquityPreferred stock, par value undesignated; 1,000,000 shares
    authorized; no shares issued and outstanding in 2007 and 2006






Common stock, $1 par value; shares authorized: 25,000,000;
    shares issued: 11,499,018 in 2007 and 2006; shares outstanding:
    11,069,646 in 2007 and 11,245,742 in 2006


11,499



11,499Additional paid-in capital


108,825



108,806Retained earnings


117,670



100,117Treasury stock, at cost


(13,613
)


(7,924
)Accumulated other comprehensive (loss) income


(7,283
)


232Total Stockholders Equity


217,098



212,730Total Liabilities and Stockholders Equity

$
2,149,838


$
2,033,698    40




---



##### 



FIRST
    COMMUNITY BANCSHARES, INC.
  CONSOLIDATED
    STATEMENTS OF INCOME
  Years Ended December 31,2007


2006


2005(Amounts in thousands,except share and per share data)Interest Income:Interest and fees on loans

$
93,501


$
97,460


$
89,903Interest on securities-taxable


24,725



13,951



11,077Interest on securities-nontaxable


8,190



7,371



7,451Interest on federal funds sold and deposits in banks


1,175



1,244



1,077Total interest income


127,591



120,026



109,508Interest Expense:Interest on deposits


38,757



33,868



24,030Interest on short-term borrowings


9,760



6,977



9,721Interest on long-term debt


10,759



7,536



2,129Total interest expense


59,276



48,381



35,880Net interest income


68,315



71,645



73,628Provision for loan losses


717



2,706



3,706Net interest income after provision for loan losses


67,598



68,939



69,922Noninterest Income:Wealth management income


3,880



2,811



2,956Service charges on deposit accounts


11,387



10,242



10,095Other service charges, commissions and fees


3,600



2,992



2,785Insurance commissions


1,142







Net gains on sale of securities


411



75



753Other operating income


4,411



5,203



5,716Total noninterest income


24,831



21,323



22,305Noninterest Expense:Salaries and employee benefits


25,848



26,867



29,481Occupancy expense of bank premises


4,180



4,068



3,903Furniture and equipment expense


3,370



3,466



3,319Amortization of intangible assets


467



410



435Prepayment penalties on FHLB advances










3,794Other operating expense


16,598



15,026



14,659Total noninterest expense


50,463



49,837



55,591Income from continuing operations before income taxes


41,966



40,425



36,636Income tax expense


12,334



11,477



10,191Income from continuing operations


29,632



28,948



26,445Loss from discontinued operations before income tax










(233
)Income tax benefit










(91
)Loss from discontinued operations










(142
)Net income

$
29,632


$
28,948


$
26,303Basic earnings per common share

$
2.64


$
2.58


$
2.33Diluted earnings per common share

$
2.62


$
2.57


$
2.32Basic earnings per common share from continuing operations

$
2.64


$
2.58


$
2.35Diluted earnings per common share from continuing operations

$
2.62


$
2.57


$
2.33Dividends declared per common share

$
1.08


$
1.04


$
1.02Weighted average basic shares outstanding


11,204,676



11,204,875



11,269,258Weighted average diluted shares outstanding


11,292,871



11,279,480



11,341,804    41




---



##### 



FIRST
    COMMUNITY BANCSHARES, INC.
  CONSOLIDATED
    STATEMENTS OF CASH FLOWS
  Years Ended December 31,2007


2006


2005(Amounts in thousands)Cash flows from operating activities  continuing
    operations:Income from continuing operations

$
29,632


$
28,948


$
26,445Adjustments to reconcile net income to net cash provided by
    operating activities:Provision for loan losses


717



2,706



3,706Depreciation and amortization of premises and equipment


3,276



3,366



3,339Intangible amortization


467



410



436Net investment amortization and accretion


534



699



1,049Gains on the sale of assets


(357
)


(1,329
)


(4,845
)Mortgage loans originated for sale


(42,598
)


(33,565
)


(37,593
)Proceeds from sale of mortgage loans


42,568



34,058



37,513Equity-based compensation expense


271



427



Deferred income tax expense


216



465



1,864Increase in interest receivable


(324
)


(1,928
)


(1,707
)Excess tax benefit from stock-based compensation


(327
)


(201
)


(Increase) decrease in other assets


(3,407
)


215



(6,549
)Increase in other liabilities


1,781



769



1,516Net cash provided by operating activities  continuing
    operations


32,449



35,040



25,174Cash flows from investing activities  continuing
    operations:Proceeds from sales of securities available for sale


12,010



14,185



33,159Proceeds from maturities and calls of securities available for
    sale


28,635



23,515



44,115Proceeds from maturities and calls of held to maturity securities


7,907



4,221



10,097Purchase of securities available for sale


(211,321
)


(139,624
)


(111,223
)Purchase of bank-owned life insurance






(25,000
)


Net decrease (increase) in loans made to customers


56,623



40,610



(104,307
)Cash used in divestitures and acquisitions, net


(5,364
)


(22,046
)


(32,630
)Purchase of premises and equipment


(15,160
)


(5,709
)


(3,215
)Proceeds from sale of equipment


526



402



1,018Net cash used in investing activities  continuing
    operations


(126,144
)


(109,446
)


(162,986
)Cash flows from financing activities  continuing
    operations:Net (decrease) increase in demand and savings deposits


2,158



(17,215
)


(6,362
)Net increase (decrease) in time deposits


(3,649
)


35,551



95,751Net increase (decrease) in FHLB and other borrowings


93,272



68,440



(3,088
)Net increase (decrease) in federal funds purchased


10,800



(74,800
)


50,000Net increase in securities sold under agreement to repurchase


6,242



77,369



16,721Proceeds from the exercise of stock options


781



1,305



522Excess tax benefit from stock-based compensation


327



201



Acquisition of treasury stock


(9,170
)


(4,566
)


(1,303
)Dividends paid


(12,079
)


(11,659
)


(11,494
)Net cash provided by financing activities  continuing
    operations


88,682



74,626



140,747Net increase (decrease) in cash and cash equivalents 
    continuing operations

$
(5,013
)

$
220


$
2,935Cash flows from discontinued operations:Net cash used in operating activities

$



$



$
(142
)Net cash used in investing activities










Net cash used in financing activities










Net cash used in discontinued operations

$



$



$
(142
)Cash and cash equivalents at beginning of year 
    continuing operations

$
57,759


$
57,539


$
54,746Cash and cash equivalents at beginning of year 
    discontinued operations










Cash and cash equivalents at beginning of year

$
57,759


$
57,539


$
54,746Cash and cash equivalents at end of year  continuing
    operations

$
52,746


$
57,759


$
57,539Cash and cash equivalents at end of year 
    discontinued operations










Cash and cash equivalents at end of year

$
52,746


$
57,759


$
57,539Supplemental information  Noncash
    items Transfers of loans to other real estate

$
1,342


$
1,281


$
1,263      42




---



##### 



FIRST
    COMMUNITY BANCSHARES, INC.
  CONSOLIDATED
    STATEMENTS OF CHANGES IN STOCKHOLDERS EQUITY
  AccumulatedAdditional








OtherCommon


Paid-in


Retained


Treasury


ComprehensiveStock


Capital


Earnings


Stock


(Loss) Income


Total(Amounts in thousands, except share and per share
    information)Balance December 31, 2004

$
11,472


$
108,263


$
68,019


$
(6,881
)

$
2,360


$
183,233Comprehensive income:Net income










26,303











26,303Other comprehensive incomeUnrealized loss on securities available for sale of $5,647, net
    of $2,259 tax benefit


















(3,388
)


(3,388
)Less reclassification adjustment for gains realized in net
    income of $428, net of $171 tax benefit


















257



257Comprehensive income (loss)










26,303







(3,131
)


23,172Common dividends declared ($1.02 per share)










(11,494
)










(11,494
)Purchase of 41,534 treasury shares at $31.38 per share














(1,303
)






(1,303
)Acquisition of Stone Capital Management 
    2,541 shares issued


2



85















87Tax benefit from exercise of non-qualified stock options






102















102Equity-based compensation


2



17







8







27Exercise of 38,146 options under stock option plans


20



106







551







677Balance December 31, 2005


11,496



108,573



82,828



(7,625
)


(771
)


194,501Comprehensive income:Net income










28,948











28,948Other comprehensive incomeUnrealized gain on securities available for sale of $1,242, net
    of $497 tax expense


















745



745Less reclassification adjustment for losses realized in net
    income of $10, net of $4 tax benefit


















(6
)


(6
)Unrealized gain on derivative securities of $441, net of $177
    tax expense


















264



264Comprehensive income










28,948







1,003



29,951Common dividends declared ($1.04 per share)










(11,659
)










(11,659
)Purchase of 145,161 treasury shares at $31.46 per share














(4,566
)






(4,566
)Acquisition of Stone Capital Management 
    2,706 shares issued


3



85















88Acquisition of Investment Planning Consultants 
    39,874 shares issued






217







1,248







1,465ESOP allocation 27,733 shares






16







867







883Equity-based compensation






267







160







427Tax benefit from exercise of stock options






335















335Exercise of 63,655 options under stock option plans






(687
)






1,992







1,305Balance December 31, 2006


11,499



108,806



100,117



(7,924
)


232



212,730Comprehensive income:Net income










29,632











29,632Other comprehensive incomeUnrealized loss on securities available for sale of $11,028, net
    of $4,411 tax benefit


















(6,617
)


(6,617
)Less reclassification adjustment for gains realized innet income of $263, net of $105 tax expense


















158



158Unrealized loss on derivative securities of $1,760, net of $704
    tax benefit


















(1,056
)


(1,056
)Comprehensive income










29,632







(7,515
)


22,117Common dividends declared ($1.08 per share)










(12,079
)










(12,079
)Purchase of 287,500 treasury shares at $31.89 per share














(9,170
)






(9,170
)Acquisition of GreenPoint Insurance Group 
    49,088 shares issued






133







1,524







1,657Acquisition of Investment Planning Consultants 
    13,401 shares issued






30







425







455Equity-based compensation






169







102







271Tax benefit from exercise of stock options






336















336Exercise of 45,665 options under stock option plans






(649
)






1,430







781Balance December 31, 2007

$
11,499


$
108,825


$
117,670


$
(13,613
)

$
(7,283
)

$
217,098    43




---



##### 



FIRST
    COMMUNITY BANCSHARES, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
  Note 1.
    Summary
    of Significant Accounting Policies  Basis
    of Presentation
    Principles
    of Consolidation
      Use of
    Estimates
    Cash
    and Cash Equivalents
    2007

2006

2005(Amounts in thousands)Interest

$
58,797


$
46,241


$
35,880Income Taxes


12,097



9,717



8,962     Trading
    Securities
   44




---



##### 



FIRST
    COMMUNITY BANCSHARES, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Available-for-Sale
    Securities
    Held-to-Maturity
    Securities
    Loans
    Held for Sale
      Loans
    Held for Investment
    Allowance
    for Loan Losses
   45




---



##### 



FIRST
    COMMUNITY BANCSHARES, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
          Long-term
    Investments
    Premises
    and Equipment
   46




---



##### 



FIRST
    COMMUNITY BANCSHARES, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Other
    Real Estate Owned
    Goodwill
    and Other Intangible Assets
     47




---



##### 



FIRST
    COMMUNITY BANCSHARES, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    OtherGoodwill


Intangibles(Amounts in thousands)Balance at December 31, 2004

$
58,828


$
2,482Dispositions






(109
)Tax Benefits, Exercise of Stock Options and Other Adjustments


354



Amortization






(436
)Balance at December 31, 2005


59,182



1,937Acquisitions and dispositions, net


953



472Tax Benefits, Exercise of Stock Options and Other Adjustments






Amortization






(348
)Balance at December 31, 2006


60,135



2,061Acquisitions


6,175



2,152Tax Benefits, Exercise of Stock Options and Other Adjustments






Amortization






(467
)Balance at December 31, 2007

$
66,310


$
3,746   Securities
    Sold Under Agreements to Repurchase
    Loan
    Interest Income Recognition
    Loan
    Fee Income
   48




---



##### 



FIRST
    COMMUNITY BANCSHARES, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Advertising
    Expenses
    Equity-Based
    Compensation
      Income
    Taxes
         49




---



##### 



FIRST
    COMMUNITY BANCSHARES, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Earnings
    Per Share
    For the Year Ended December 31,2007


2006


2005(Amounts in thousands, except shareand per share data)Basic:Income from continuing operations

$
29,632


$
28,948


$
26,445Loss from discontinued operations










(142
)Net income

$
29,632


$
28,948


$
26,303Weighted average shares outstanding


11,204,676



11,204,875



11,269,258Dilutive shares for stock options


65,320



74,605



72,546Contingently issuable shares


22,875







Weighted average dilutive shares outstanding


11,292,871



11,279,480



11,341,804Basic:Earnings per share continuing operations

$
2.64


$
2.58


$
2.35Loss per share discontined operations










(0.02
)Earnings per share


2.64



2.58



2.33Diluted:Diluted earnings per share continuing operations

$
2.62


$
2.57


$
2.33Diluted loss per share discontined operations










(0.01
)Diluted earnings per share


2.62



2.57



2.32   Variable
    Interest Entities
    Derivative
    Instruments
       50




---



##### 



FIRST
    COMMUNITY BANCSHARES, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Reclassifications
    Other
    Recent Accounting Developments
         51




---



##### 



FIRST
    COMMUNITY BANCSHARES, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    157-2. FSP 157-2
  EITF 06-4 EITF 06-4 EITF 06-4
  Note 2.  Merger,
    Acquisitions and Branching Activity
       52




---



##### 



FIRST
    COMMUNITY BANCSHARES, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
        2007


2006


2005(Amounts in thousands)Fair value of assets acquired

$
382


$
232


$
Fair value of liabilities assumed


(1,167
)


(17
)


Purchase price in excess of net assets acquired


7,838



1,488



Total purchase price


7,053



1,703



Less non-cash purchase price


1,658



1,465



Less cash acquired


32



18



Net cash paid for acquisition

$
5,363


$
220


$
Book value of assets sold

$



$
(4,678
)

$
(7,803
)Book value of liabilities sold






27,164



45,363Sales price in excess of net liabilities assumed






(1,035
)


(4,570
)Total sales price






21,451



32,990Add cash on hand sold






395



166Less amount due remaining on books






20



526Net cash paid for divestiture

$



$
21,826


$
32,630   Note 3.
    Investment
    Securities    December 31, 2007Amortized


Unrealized


Unrealized


FairCost


Gains


Losses


Value(Amounts in thousands)U.S. Government agency securities

$
136,791


$
2,446


$



$
139,237States and political subdivisions


186,834



2,667



(965
)


188,536Corporate Notes


164,731







(14,106
)


150,625Mortgage-backed securities


177,984



816



(2,073
)


176,727Equities


8,597



814



(416
)


8,995Total

$
674,937


$
6,743


$
(17,560
)

$
664,120   53




---



##### 



FIRST
    COMMUNITY BANCSHARES, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  December 31, 2006Amortized


Unrealized


Unrealized


FairCost


Gains


Losses


Value(Amounts in thousands)U.S. Government agency securities

$
117,777


$



$
(1,716
)

$
116,061States and political subdivisions


152,189



2,379



(521
)


154,047Corporate Notes


85,080



350



(397
)


85,033Mortgage-backed securities


146,444



206



(1,896
)


144,754Equities


6,933



1,615



(73
)


8,475Total

$
508,423


$
4,550


$
(4,603
)

$
508,370     U.S.


States








TaxGovernment


and








EquivalentAgencies &


Political


Corporate





PurchaseAvailable For Sale

Corporations


Subdivisions


Notes


Total


Yield(Dollars in thousands)Amortized Cost Maturity:Within one year

$



$
1,285


$



$
1,285



7.28
%After one year through five years


25,000



5,353







30,353



5.19
%After five years through ten years


41,370



82,166



70,909



194,445



5.73
%After ten years


70,421



98,030



93,822



262,273



6.15
%Amortized cost

$
136,791


$
186,834


$
164,731



488,356Mortgage-backed securities














177,984



5.32
%Equity securities














8,597



2.67
%Total Amortized cost













$
674,937Tax equivalent purchase yield


5.46
%


6.36
%


5.83
%


5.93
%Average contractual maturity (in years)


9.35



11.21



17.34



12.75Fair Value Maturity:Within one year

$



$
1,288


$



$
1,288After one year through five years


25,009



5,412







30,421After five years through ten years


42,409



82,985



64,964



190,358After ten years


71,819



98,851



85,661



256,331Fair Value

$
139,237


$
188,536


$
150,625



478,398Mortgage-backed securities














176,727Equity securities














8,995Total Fair Value













$
664,120  54




---



##### 



FIRST
    COMMUNITY BANCSHARES, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      December 31, 2007Amortized


Unrealized


Unrealized


FairCost


Gains


Losses


Value(Amounts in thousands)States and political subdivisions

$
11,699


$
223


$



$
11,922Other securities


375











375Mortgage-backed securities


1











1Total

$
12,075


$
223


$



$
12,298   December 31, 2006Amortized


Unrealized


Unrealized


FairCost


Gains


Losses


Value(Amounts in thousands)States and political subdivisions

$
19,638


$
334


$
(2
)

$
19,970Other securities


375







(1
)


374Mortgage-backed securities


6











6Total

$
20,019


$
334


$
(3
)

$
20,350     55




---



##### 



FIRST
    COMMUNITY BANCSHARES, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  States








Taxand








EquivalentPolitical


Other





PurchaseHeld-to-Maturity

Subdivisions


Securities


Total


Yield(Dollars in thousands)Amortized Cost Maturity:Within one year

$



$
375


$
375



6.08
%After one year through five years


5,847







5,847



7.87
%After five years through ten years


5,852







5,852



8.12
%After ten years














0.00
%Amortized cost

$
11,699


$
375



12,074Mortgage-backed securities










1



6.90
%Total Amortized cost









$
12,075Tax equivalent purchase yield


8.00
%


6.08
%


7.94
%Average contractual maturity (in years)


5.62



0.75



5.47Fair Value Maturity:Within one year

$



$
375


$
375After one year through five years


5,928







5,928After five years through ten years


5,994







5,994After ten years










Fair Value

$
11,922


$
375



12,297Mortgage-backed securities










1Total Fair Value









$
12,298          56




---



##### 



FIRST
    COMMUNITY BANCSHARES, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    December 31, 2007Less than 12 Months


12 Months or Longer


TotalFair


Unrealized


Fair


Unrealized


Fair


UnrealizedDescription of Securities

Value


Losses


Value


Losses


Value


Losses(Amounts in thousands)U. S. Government agency securities

$



$



$
1,999


$



$
1,999


$
States and political subdivisions


40,461



(900
)


12,287



(65
)


52,748



(965
)Corporate Notes


129,006



(12,431
)


21,994



(1,675
)


151,000



(14,106
)Mortgage-backed securities


7,991



(108
)


63,393



(1,965
)


71,384



(2,073
)Equity securities


2,269



(345
)


1,759



(71
)


4,028



(416
)Total

$
179,727


$
(13,784
)

$
101,432


$
(3,776
)

$
281,159


$
(17,560
)   December 31, 2006Less than 12 Months


12 Months or Longer


TotalFair


Unrealized


Fair


Unrealized


Fair


UnrealizedDescription of Securities

Value


Losses


Value


Losses


Value


Losses(Amounts in thousands)U. S. Government agency securities

$
60,416


$
(517
)

$
55,645


$
(1,199
)

$
116,061


$
(1,716
)States and political subdivisions


10,732



(34
)


36,797



(489
)


47,529



(523
)Corporate Notes


28,339



(213
)


27,698



(185
)


56,037



(398
)Mortgage-backed securities


50,093



(223
)


66,620



(1,673
)


116,713



(1,896
)Equity securities


2,186



(70
)


32



(3
)


2,218



(73
)Total

$
151,766


$
(1,057
)

$
186,792


$
(3,549
)

$
338,558


$
(4,606
)    57




---



##### 



FIRST
    COMMUNITY BANCSHARES, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Note 4.
    Loans    2007


2006(Amounts in thousands)Real estate-commercial

$
386,112


$
421,067Real estate-construction


163,310



158,566Real estate-residential


498,345



506,370Commercial, financial and agricultural


96,261



106,645Loans to individuals for household and other consumer
    expenditures


75,447



88,666All other loans


6,027



3,549Total loans

$
1,225,502


$
1,284,863       Note 5.
    Allowance
    for Loan Losses    2007


2006


2005(Amounts in thousands)Balance at January 1

$
14,549


$
14,736


$
16,339Provision for loan losses


717



2,706



3,706Loans charged off


(4,295
)


(4,543
)


(6,936
)Recoveries credited to allowance


1,862



1,650



2,019Net charge-offs


(2,433
)


(2,893
)


(4,917
)Reclassification of allowance for lending-related commitments(1)










(392
)Balance at December 31

$
12,833


$
14,549


$
14,736     (1)
    
    At June 30, 2005, the Company reclassified $392 thousand of
    its allowance for loan losses to a separate allowance for
    lending-related liabilities. Net income and prior period
    balances were not affected by this reclassification. The
    allowance for lending-related liabilities is included in other
    liabilities.   58




---



##### 



FIRST
    COMMUNITY BANCSHARES, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
        2007


2006


2005(Amounts in thousands)Recorded investment in loans considered to be impaired

$
4,325


$
5,786


$
4,645Loans considered to be impaired that were on a non-accrual basis


2,923



3,813



3,383Recorded investment in impaired loans with related allowance


3,129



4,070



3,555Allowance for loan losses related to loans considered to be
    impaired


880



1,531



1,528Average recorded investment in impaired loans


4,762



6,410



5,687Total interest income recognized on impaired loans


237



390



338Recorded investment in impaired loans with no related allowance


1,196



1,716



1,090   Note 6.  Premises
    and Equipment
    2007


2006(Amounts in thousands)Land

$
14,841


$
13,131Bank premises


42,608



33,022Equipment


28,087



24,95685,536



71,109Less: accumulated depreciation and amortization


37,153



34,220Total

$
48,383


$
36,889        59




---



##### 



FIRST
    COMMUNITY BANCSHARES, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Year Ended December 31:(Amounts inthousands)2008

$
8792009


6272010


5132011


4402012


573Later years


965Total

$
3,997     (Amounts inYear Ended December 31:

thousands)2008

$
192009


192010


192011


202012


21Later years


294Total

$
392   Note 7.
    Deposits    2007


2006(Amounts in thousands)Interest-bearing demand deposits

$
153,570


$
140,578Money market accounts


167,296



146,052Savings deposits


160,395



171,626Certificates of deposit


608,470



614,126Individual Retirement Accounts


79,625



77,618Total

$
1,169,356


$
1,150,000  60




---



##### 



FIRST
    COMMUNITY BANCSHARES, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    (Amounts inthousands)2008

$
529,6992009


61,6972010


45,9782011


21,5822012 and thereafter


29,139$
688,095       (Amounts inthousands)Three months or less

$
75,423Over three to six months


76,014Over six to twelve months


42,917Over twelve months


52,273Total

$
246,627     Note 8.
    Borrowings    2007


2006(Amounts in thousands)Federal funds purchased

$
18,500


$
7,700Securities sold under agreements to repurchase


207,427



201,185FHLB borrowings


275,888



182,207Subordinated debt


15,464



15,464Other debt


564



Total

$
517,843


$
406,556      61




---



##### 



FIRST
    COMMUNITY BANCSHARES, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      (Amounts inthousands)2008

$
2009


2010


25,0002011


2012


50,0002013 and thereafter


200,888$
275,888        62




---



##### 



FIRST
    COMMUNITY BANCSHARES, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Note 9.
    Income
    Taxes, Continuing Operations    Years Ended December 31,2007


2006


2005(Amounts in thousands)Current tax expenseFederal

$
11,776


$
9,883


$
7,673State


342



1,129



65412,118



11,012



8,327Deferred tax expenseFederal


194



418



1,673State


22



47



191216



465



1,864Total income tax expense

$
12,334


$
11,477


$
10,191     2007


2006(Amounts in thousands)Deferred tax assets:Allowance for loan losses

$
5,311


$
5,940Unrealized losses on AFS securities


4,327



21Unrealized losses on assets


500



465Unrealized loss on derivative security


528



Deferred compensation


2,741



2,554Other


688



850Total deferred tax assets

$
14,095


$
9,830Deferred tax liabilities:Intangible assets

$
3,263


$
3,214Odd days interest deferral


2,023



2,548Fixed assets


1,196



1,336Accrued discounts


845



755Other


913



1,088Total deferred tax liabilities


8,240



8,941Net deferred tax assets

$
5,855


$
889    63




---



##### 



FIRST
    COMMUNITY BANCSHARES, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Years Ended December 31,2007


2006


2005Tax at statutory rate


35.00
%


35.00
%


35.00
%(Reduction) increase resulting from:Tax-exempt interest, net of nondeductible expense


(5.95
)


(5.79
)


(6.70
)State income taxes, net of federal benefit


2.12



1.89



2.19Other, net


(1.78
)


(2.71
)


(2.67
)Effective tax rate


29.39
%


28.39
%


27.82
%   Note 10.
    Employee
    Benefits  Employee
    Stock Ownership and Savings Plan
    Employer Stock Fund:
  Employee Savings Plan:
  Employee
    Welfare Plan
   64




---



##### 



FIRST
    COMMUNITY BANCSHARES, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Deferred
    Compensation Plan
      Executive
    Retention Plan
          Directors
    Supplemental Retirement Plan
   65




---



##### 



FIRST
    COMMUNITY BANCSHARES, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
          Note 11.
    Equity-Based
    Compensation  Stock
    Options
           66




---



##### 



FIRST
    COMMUNITY BANCSHARES, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
        2005(Dollars in thousands,except per share data)Net income as reported

$
26,303Less: Total stock-based employee compensation expense determined
    under fair value based method for all awards, net of related tax
    effects


(258
)Pro forma net income

$
26,045Earnings per share:Basic as reported

$
2.33Basic pro forma

$
2.31Diluted as reported

$
2.32Diluted pro forma

$
2.30      67




---



##### 



FIRST
    COMMUNITY BANCSHARES, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
        WeightedWeighted


AverageAverage


Remaining


AggregateOption


Exercise


Contractual


IntrinsicShares


Price


Term (Years)


Value(In thousands)Outstanding at January 1, 2007


326,640


$
22.72Granted


9,500



33.05Exercised


45,665



16.47Forfeited


18,361



27.62Outstanding at December 31, 2007


272,114


$
23.81



11.1


$
2,416Exercisable at December 31, 2007


228,812


$
22.66



11.0


$
2,279       2007


2006


2005Volatility


28.33
%


28.95
%


28.26
%Expected dividend yield


3.28
%


3.00
%


3.54
%Expected term (in years)


6.00



6.23



5.53Risk-free rate


4.74
%


4.80
%


4.10
%     Stock
    Awards
   68




---



##### 



FIRST
    COMMUNITY BANCSHARES, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      2007WeightedAverageGrant-DateShares


Fair ValueNonvested at January 1


4,800


$
30.04Granted


1,050



37.91Vested


3,150



30.55Forfeited


1,000



26.24Nonvested at December 31


1,700


$
36.20     Note 12.
    Litigation,
    Commitments and Contingencies      case-by-case
   69




---



##### 



FIRST
    COMMUNITY BANCSHARES, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
        Note 13.
    Derivative
    Instruments and Hedging Activities      Note 14.
    Regulatory
    Capital Requirements and Restrictions     70




---



##### 



FIRST
    COMMUNITY BANCSHARES, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      December 31, 2007To Be WellFor Capital


Capitalized UnderAdequacy


Prompt CorrectiveActual


Purposes


Action ProvisionsAmount


Ratio


Amount


Ratio


Amount


Ratio(Dollars in thousands)Total Capital to Risk-Weighted AssetsFirst Community Bancshares, Inc.

$
182,476



12.34
%

$
118,276



8.00
%


N/A



N/AFirst Community Bank, N. A.


167,865



11.44
%


117,398



8.00
%

$
146,748



10.00
%Tier 1 Capital to Risk-Weighted AssetsFirst Community Bancshares, Inc.

$
169,258



11.45
%

$
59,138



4.00
%


N/A



N/AFirst Community Bank, N. A.


154,826



10.55
%


58,699



4.00
%

$
88,049



6.00
%Tier 1 Capital to Average Assets (Leverage)First Community Bancshares, Inc.

$
169,258



8.09
%

$
83,639



4.00
%


N/A



N/AFirst Community Bank, N. A.


154,826



7.44
%


83,233



4.00
%

$
104,041



5.00
%   December 31, 2006To Be WellFor Capital


Capitalized UnderAdequacy


Prompt CorrectiveActual


Purposes


Action ProvisionsAmount


Ratio


Amount


Ratio


Amount


Ratio(Dollars in thousands)Total Capital to Risk-Weighted AssetsFirst Community Bancshares, Inc.

$
180,758



12.69
%

$
113,961



8.00
%


N/A



N/AFirst Community Bank, N. A.


166,802



11.77
%


113,328



8.00
%

$
141,660



10.00
%Tier 1 Capital to Risk-Weighted AssetsFirst Community Bancshares, Inc.

$
165,302



11.60
%

$
56,981



4.00
%


N/A



N/AFirst Community Bank, N. A.


152,040



10.73
%


56,664



4.00
%

$
84,996



6.00
%Tier 1 Capital to Average Assets (Leverage)First Community Bancshares, Inc.

$
165,302



8.50
%

$
77,763



4.00
%


N/A



N/AFirst Community Bank, N. A.


152,040



7.85
%


77,424



4.00
%

$
96,780



5.00
%    71




---



##### 



FIRST
    COMMUNITY BANCSHARES, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Note 15.
    Other
    Operating Expenses    Years Ended December 31,2007


2006


2005(Amounts in thousands)Advertising and public relations

$
1,616


$
1,265


$
1,158Service fees


1,716



1,096



829Telephone and data communications


1,372



1,403



1,488   Note 16.
    Fair
    Value of Financial Instruments      December 31, 2007


December 31, 2006Carrying


Fair


Carrying


FairAmount


Value


Amount


Value(Amounts in thousands)AssetsCash and cash equivalents

$
52,746


$
52,746


$
57,759


$
57,759Investment Securities


676,195



676,418



528,389



528,720Loans held for sale


811



813



781



787Loans held for investment


1,212,669



1,202,396



1,270,314



1,248,960Derivative financial assets










441



441LiabilitiesDemand deposits


224,087



224,087



244,771



244,771Interest-bearing demand deposits


153,570



153,570



140,578



140,578Savings deposits


327,691



327,691



317,678



317,678Time deposits


688,095



688,503



691,744



688,178Federal funds purchased


18,500



18,500



7,700



7,700Securities sold under agreements to repurchase


207,427



207,427



201,185



201,185FHLB and other indebtedness


291,916



286,087



197,671



196,233Derivative financial liabilities


1,320



1,320







  72




---



##### 



FIRST
    COMMUNITY BANCSHARES, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Financial
    Instruments with Book Value Equal to Fair Value:
    Investment
    Securities:
    Loans:
    Derivative
    Financial Instruments:
    Deposits
    and Securities Sold Under Agreements to
    Repurchase:
    Other
    Indebtedness:
    Commitments
    to Extend Credit, Standby Letters of Credit, and Financial
    Guarantees:
    Note 17.
    Accumulated
    Other Comprehensive Income    UnrealizedUnrealized

Gain (Loss)

Accumulated(Loss)

on Cash Flow

Comprehensiveon Securities

Hedge Derivative

Income (Loss)(Amounts in thousands)December 31, 2006

$
(32
)

$
264


$
232December 31, 2007

$
(6,491
)

$
(792
)

$
(7,283
)  73




---



##### 



FIRST
    COMMUNITY BANCSHARES, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Note 18.
    Parent
    Company Financial Information    December 31,Condensed Balance Sheets

2007


2006(Amounts in thousands)AssetsCash

$
2,880


$
4,511Securities available for sale


6,877



9,066Investment in subsidiary


217,307



214,030Other assets


6,108



1,328Total assets

$
233,172


$
228,935LiabilitiesOther liabilities

$
610


$
741Long-term debt


15,464



15,464Total liabilities


16,074



16,205Stockholders EquityCommon stock


11,499



11,499Additional paid-in capital


108,795



108,806Retained earnings


117,670



100,117Treasury stock


(13,583
)


(7,924
)Accumulated other comprehensive (loss) income


(7,283
)


232Total stockholders equity


217,098



212,730Total liabilities and stockholders equity

$
233,172


$
228,935   Years Ended December 31,Condensed Statements of Income

2007


2006


2005(Amounts in thousands)Cash dividends received from subsidiary bank

$
26,408


$
15,775


$
11,600Other income


2,853



354



823Operating expense


(2,106
)


(2,049
)


(1,808
)27,155



14,080



10,615Income tax (expense) benefit


(545
)


1,237



662Equity in undistributed earnings of subsidiary 
    continuing operations


3,022



13,631



15,026Net income

$
29,632


$
28,948


$
26,303   74




---



##### 



FIRST
    COMMUNITY BANCSHARES, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Years Ended December 31,Condensed Statements of Cash Flows

2007


2006


2005(Amounts in thousands)Cash flows from operating activitiesNet income

$
29,632


$
28,948


$
26,303Adjustments to reconcile net income to net cash provided by
    operating activities:Equity in undistributed earnings of subsidiary 
    continuing operations


(3,022
)


(13,631
)


(15,026
)Gain on sale of securities


(447
)


(62
)


(513
)Decrease in other assets


(2,678
)


63



312Increase (decrease) in other liabilities


996



455



(666
)Other, net






(3
)


379Net cash provided by operating activities


24,481



15,770



10,789Cash flows from investing activitiesPurchase of securities available for sale


(3,217
)


(1,881
)


(3,819
)Proceeds from sale of securities available for sale


4,671



2,210



1,568Investment in subsidiary


(5,397
)






Other, net


(2,390
)


3



Net cash provided by (used in) investing activities


(6,333
)


332



(2,251
)Cash flows from financing activitiesIssuance of common stock


1,117



1,518



522Acquisition of treasury stock


(9,170
)


(4,566
)


(1,303
)Dividends paid


(12,079
)


(11,659
)


(11,494
)Other, net


353



1,772



Net cash used in financing activities


(19,779
)


(12,935
)


(12,275
)Net increase (decrease) in cash and cash equivalents


(1,631
)


3,167



(3,737
)Cash and cash equivalents at beginning of year


4,511



1,344



5,081Cash and cash equivalents at end of year

$
2,880


$
4,511


$
1,344   Note 19.
    Discontinued
    Operations   75




---



##### 



FIRST
    COMMUNITY BANCSHARES, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Year Ended December 31,2007


2006


2005(Amounts in thousands)Interest income

$



$



$
Interest expense










Other income










Other expenses










233Loss before income taxes










(233
)Applicable income tax benefit










(91
)Net loss

$



$



$
(142
)     Note 20.
    Supplemental
    Financial Data (Unaudited)    2007Quarter EndedMarch 31


June 30


Sept 30


Dec 31(Amounts in thousands, except per share data)Interest income

$
30,686


$
31,979


$
32,732


$
32,194Interest expense


13,671



14,965



15,589



15,051Net interest income


17,015



17,014



17,143



17,143Provision for loan losses














717Net interest income after provision for loan losses


17,015



17,014



17,143



16,426Other income


5,086



5,517



5,970



7,847Net securities gains


129



30



50



202Other expenses


12,158



12,075



12,836



13,394Income before income taxes


10,072



10,486



10,327



11,081Income taxes


2,948



3,047



3,011



3,328Net income

$
7,124


$
7,439


$
7,316


$
7,753Per share:Basic earnings

$
0.63


$
0.66


$
0.65


$
0.70Diluted earnings

$
0.63


$
0.66


$
0.65


$
0.69Dividends

$
0.27


$
0.27


$
0.27


$
0.27Weighted average basic shares outstanding


11,259



11,261



11,179



11,121Weighted average diluted shares outstanding


11,347



11,320



11,230



11,206   76




---



##### 



FIRST
    COMMUNITY BANCSHARES, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  2006Quarter EndedMarch 31


June 30


Sept 30


Dec 31(Amounts in thousands, except per share data)Interest income

$
28,923


$
30,025


$
30,240


$
30,838Interest expense


10,858



11,852



12,484



13,187Net interest income


18,065



18,173



17,756



17,651Provision for loan losses


408



811



579



908Net interest income after provision for loan losses


17,657



17,362



17,177



16,743Other income


4,989



5,614



5,104



5,542Net securities gains


159



(94
)


(6
)


15Other expenses


13,333



12,588



12,213



11,703Income before income taxes


9,472



10,294



10,062



10,597Income taxes


2,628



3,002



2,877



2,970Net income

$
6,844


$
7,292


$
7,185


$
7,627Per share:Basic earnings

$
0.61


$
0.65


$
0.64


$
0.68Diluted earnings

$
0.61


$
0.65


$
0.64


$
0.68Dividends

$
0.26


$
0.26


$
0.26


$
0.26Weighted average basic shares outstanding


11,233



11,201



11,174



11,212Weighted average diluted shares outstanding


11,312



11,259



11,245



11,298  77




---



##### 



- REPORT
    OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM -             
    78




---



##### 



REPORT OF
    INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
            
    79




---



##### 



MANAGEMENTS
    ASSESSMENT OF INTERNAL CONTROL OVER FINANCIAL
    REPORTING
   Form 10-K. Form 10-K
    Internal Control-Integrated Framework
  Form 10-K.
 80




---



##### 



- REPORT
    OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM -                 
    81




---



##### 



ITEM 9.
    CHANGES
    IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
    FINANCIAL DISCLOSURE.    ITEM 9A.
    CONTROLS
    AND PROCEDURES.  Rule 13a-15(b).
    Form 10-K.
  ITEM 9B.
    OTHER
    INFORMATION.   PART III  ITEM 10.
    DIRECTORS,
    EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE.         82




---



##### 



BOARD OF
    DIRECTORS, FIRST COMMUNITY BANCSHARES, INC.
  Franklin P. HallBusinessman; Senior Partner, Hall & Family Law Firm

A. A. ModenaPast Executive Vice President and Secretary, First
    Community Bancshares, Inc.; Past President and
    Chief Executive Officer, The Flat Top National Bank of BluefieldAllen T. Hamner, Ph.D.Retired Professor of Chemistry, West Virginia Wesleyan
    College

Robert E. Perkinson, Jr.Past Vice President-Operations, MAPCO Coal, Inc. 
    Virginia RegionI. Norris KantorOf Counsel, Katz, Kantor & Perkins, Attorneys-at-Law

William P. StaffordPresident, Princeton Machinery Service, Inc.John M. MendezPresident and Chief Executive Officer, First Community
    Bancshares, Inc.; Chief Executive Officer, First Community Bank,
    N. A.

William P. Stafford, IIAttorney at Law, Brewster, Morhous, Cameron, Mullins,
    Caruth, Moore, Kersey & Stafford, PLLC   EXECUTIVE
    OFFICERS, FIRST COMMUNITY BANCSHARES, INC.
  John M. MendezPresident and Chief Executive Officer

David D. BrownChief Financial OfficerE. Stephen LillyChief Operating Officer

Robert L. BuzzoVice President and Secretary  83




---



##### 



BOARD OF
    DIRECTORS, FIRST COMMUNITY BANK, N. A.
  Gregory J. BeierPresident and Chief Executive Officer, Novant
    Health  Triad Region

John M. MendezPresident and Chief Executive Officer, First Community
    Bancshares, Inc.; Executive Vice President, First Community
    Bank, N. AW. C. Blankenship, Jr.Agent, State Farm Insurance

A. A. ModenaPast Executive Vice President and Secretary, First Community
    Bancshares, Inc.; Past President and Chief Executive Officer,
    The Flat Top National Bank of BluefieldD. L. Bowling, Jr.President, True Energy, Inc.

Robert E. Perkinson, Jr.Past Vice President-Operations, MAPCO Coal, Inc. 
    Virginia RegionJuanita G. Bryan 
    Homemaker

Clyde B. RatliffPresident, Gasco Drilling, Inc.Robert L. Buzzo 
    Vice President and Secretary, First Community Bancshares, Inc.;
    President, First Community Bank, N. A.

William P. Stafford 
    President, Princeton Machinery Service, Inc.C. William Davis 
    Attorney-at-Law, Richardson & Davis

William P. Stafford, IIAttorney at Law, Brewster, Morhous, Cameron, Mullins,
    Caruth, Moore, Kersey & Stafford, PLLCFranklin P. Hall 
    Businessman; Senior Partner, Hall & Family Law Firm

Frank C. TinderPresident, Tinder Enterprises, Inc. and Tinco Leasing
    CorporationAllen T. Hamner, Ph.D. 
    Retired Professor of Chemistry, West Virginia Wesleyan College

Dale F. WoodyPresident, Woody Lumber CompanyI. Norris KantorOf Counsel, Katz, Kantor & Perkins, Attorneys-at-Law   ITEM 11.
    EXECUTIVE
    COMPENSATION.    ITEM 12.
    SECURITY
    OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
    RELATED STOCKHOLDER MATTERS.   84




---



##### 



Number of





Number of SecuritiesSecurities to be





Remaining AvailableIssued Upon


Weighted-Average


for Future IssuanceExercise of


Exercise price of


Under EquityOutstanding


Outstanding


Compensation PlansOptions, Warrants


Options, Warrants


(Excluding SecuritiesPlan Category

and Rights


and Rights


Reflected in Column (a))(a)


(b)


(c)Equity compensation plans approved by security holders


49,250


$
29.93



92,993Equity compensation plans not approved by security holders


222,864



22.45



42,711Total


272,114







135,704   ITEM 13.
    CERTAIN
    RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR
    INDEPENDENCE.    ITEM 14.
    PRINCIPAL
    ACCOUNTING FEES AND SERVICES.   PART IV  ITEM 15.
    EXHIBITS,
    FINANCIAL STATEMENT SCHEDULES.  Documents Filed as Part of this Report
  Financial Statements
    Financial Statement Schedules
    Exhibits
  Exhibit No.



Exhibit3
(i)



Articles of Incorporation of First Community Bancshares, Inc.,
    as amended.(1)3
(ii)



Bylaws of First Community Bancshares, Inc., as amended.(17)4
.1



Specimen stock certificate of First Community Bancshares, Inc.(3)4
.2



Indenture Agreement dated September 25, 2003.(11)4
.3



Amended and Restated Declaration of Trust of FCBI Capital Trust
    dated September 25, 2003.(11)4
.4



Preferred Securities Guarantee Agreement dated
    September 25, 2003.(11)10
.1



First Community Bancshares, Inc. 1999 Stock Option
    Contracts(2) and Plan.(4)10
.1.1



Amendment to First Community Bancshares, Inc. 1999 Stock Option
    Plan.(11) 85




---



##### 



Exhibit No.



Exhibit10
.2



First Community Bancshares, Inc. 2001 Non-Qualified Directors
    Stock Option Plan.(5)10
.3



Employment Agreement dated January 1, 2000 and amended
    October 17, 2000, between First Community Bancshares, Inc.
    and John M. Mendez.(2)(6)10
.4



First Community Bancshares, Inc. 2000 Executive Retention Plan,
    as amended.(2)10
.5



First Community Bancshares, Inc. Split Dollar Plan and
    Agreement.(2)10
.6



First Community Bancshares, Inc. 2001 Directors
    Supplemental Retirement Plan.(2)10
.6.1



First Community Bancshares, Inc. 2001 Directors
    Supplemental Retirement Plan. Second Amendment (B.W. Harvey,
    Sr.  October 19, 2004).(14)10
.7



First Community Bancshares, Inc. Wrap Plan.(7)10
.8



Reserved.10
.9



Form of Indemnification Agreement between First Community
    Bancshares, its Directors and Certain Executive Officers.(9)10
.10



Form of Indemnification Agreement between First Community Bank,
    N. A, its Directors and Certain Executive Officers.(9)10
.11



Reserved.10
.12



First Community Bancshares, Inc. 2004 Omnibus Stock Option Plan
    (10) and Award Agreement.(13)10
.13



Reserved.10
.14



First Community Bancshares, Inc. Directors Deferred Compensation
    Plan.(7)10
.15



First Community Bancshares, Inc. Deferred Compensation and
    Supplemental Bonus Plan For Key Employees.(15)10
.16



Employment Agreement dated November 30, 2006, between First
    Community Bank, N. A. and Ronald L. Campbell(19)10
.17*



Employment Agreement dated September 28, 2007, between
    Green Point Insurance Group, Inc. and Shawn C. Cummings11




Statement regarding computation of earnings per share.(16)12
*



Computation of Ratios.21




Subsidiaries of Registrant  Reference is made to
    Item 1. Business for the required information.23
.1*



Consent of Dixon Hughes PLLC, Independent Registered Public
    Accounting Firm for First Community Bancshares, Inc.23
.2*



Consent of Ernst & Young, LLP, former Independent
    Registered Public Accounting Firm for First Community
    Bancshares, Inc.31
.1*



Rule 13a-14(a)/a5d-14(a)
    Certification of Chief Executive Officer31
.2*



Rule 13a-14(a)/a5d-14(a)
    Certification of Chief Financial Officer32
*



Certification of Chief Executive Officer and Chief Financial
    Officer Section 1350.     *
    
    Furnished herewith.(1)
    
    Incorporated by reference from the Quarterly Report on
    Form 10-Q
    for the period ended June 30, 2005, filed on August 5,
    2005.(2)
    
    Incorporated by reference from the Quarterly Report on
    Form 10-Q
    for the period ended June 30, 2002, filed on
    August 14, 2002.(3)
    
    Incorporated by reference from the Annual Report on
    Form 10-K
    for the period ended December 31, 2002, filed on
    March 25, 2003, as amended on March 31, 2003.(4)
    
    Incorporated by reference from the Annual Report on
    Form 10-K
    for the period ended December 31, 1999, filed on
    March 30, 2000, as amended April 13, 2000.(5)
    
    The option agreements entered into pursuant to the 1999 Stock
    Option Plan and the 2001 Non-Qualified Directors Stock Option
    Plan are incorporated by reference from the Quarterly Report on
    Form 10-Q
    for the period ended June 30, 2002, filed on
    August 14, 2002.(6)
    
    First Community Bancshares, Inc. has entered into substantially
    identical agreements with Robert L. Buzzo and E. Stephen Lilly,
    with the only differences being with respect to title, salary
    and the use of a vehicle. 86




---



##### 



(7)
    
    Incorporated by reference from Item 1.01 of the Current
    Report on Form
    8-K dated
    August 22, 2006, and filed August 23, 2006.(8)
    
    Reserved.(9)
    
    Form of indemnification agreement entered into by the
    Corporation and by First Community Bank, N. A. with their
    respective directors and certain officers of each including, for
    the Registrant and Bank: John M. Mendez, Robert L. Schumacher,
    Robert L. Buzzo, E. Stephen Lilly, David D. Brown, and Gary R.
    Mills. Incorporated by reference from the Annual Report on
    Form 10-K
    for the period ended December 31, 2003, filed on
    March 15, 2004, and amended on May 19, 2004.(10)
    
    Incorporated by reference from the 2004 First Community
    Bancshares, Inc. Definitive Proxy filed on March 19, 2004.(11)
    
    Incorporated by reference from the Quarterly Report on
    Form 10-Q
    for the period ended September 30, 2003, filed on
    November 10, 2003.(12)
    
    Incorporated by reference from the Quarterly Report on
    Form 10-Q
    for the period ended March 31, 2004, filed on May 7,
    2004.(13)
    
    Incorporated by reference from the Quarterly Report on
    Form 10-Q
    for the period ended June 30, 2004, filed on August 6,
    2004.(14)
    
    Incorporated by reference from the Annual Report on
    Form 10-K
    for the period ended December 31, 2004, and filed on
    March 16, 2005. Amendments in substantially similar form
    were executed for Directors Clark, Kantor, Hamner, Modena,
    Perkinson, Stafford, and Stafford II.(15)
    
    Incorporated by reference from Item 1.01 of the Current
    Report on Form
    8-K dated
    October 24, 2006, and filed October 25, 2006.(16)
    
    Incorporated by reference from Footnote 1 of the Notes to
    Consolidated Financial Statements included herein.(17)
    
    Incorporated by reference from Item 5.03 of the Current
    Report on Form
    8-K dated
    February 14, 2008, filed on February 20, 2008.(18)
    
    Reserved(19)
    
    Incorporated by reference from Exhibit 2.1 of the
    Form S-3
    registration statement filed May 2, 2007. 87




---



##### 



SIGNATURES
       By:
    /s/  John
    M. Mendez     By:
    /s/  David
    D. Brown        Signature

Title

Date/s/  John
    M. MendezJohn
    M. Mendez

Director, President and
    Chief Executive Officer

March 13, 2008/s/  David
    D. BrownDavid
    D. Brown

Chief Financial Officer

March 13, 2008/s/  Franklin
    P. HallFranklin
    P. Hall

Director

March 13, 2008/s/  Allen
    T. HamnerAllen
    T. Hamner

Director

March 13, 2008/s/  I.
    Norris KantorI.
    Norris Kantor

Director

March 13, 2008/s/  A.
    A. ModenaA.
    A. Modena

Director

March 13, 2008/s/  Robert
    E. Perkinson, Jr.Robert
    E. Perkinson, Jr.

Director

March 13, 2008/s/  William
    P. StaffordWilliam
    P. Stafford

Chairman of the Board of Directors

March 13, 2008/s/  William
    P. Stafford, IIWilliam
    P. Stafford, II

Director

March 13, 2008  88