First Community Bancshares (FCBC) Risk Analysis

Stock price volatility may make it more difficult for our stockholders to resell their common stock when desired. Our common stock price may fluctuate significantly due to a variety of factors that include the following: - actual or expected variations in quarterly results of operations;- recommendations by securities analysts;- operating and stock price performance of comparable companies, as deemed by investors;- news reports relating to trends, concerns, and other issues in the financial services industry;- perceptions in the marketplace about our Company or competitors;- new technology used, or services offered, by competitors;- significant acquisitions or business combinations, strategic partnerships, joint ventures, or capital commitments by, or involving, our Company or competitors;- failure to integrate acquisitions or realize expected benefits from acquisitions;- changes in government regulations; and - geopolitical conditions, such as acts or threats of terrorism or military action. General market fluctuations; industry factors; political conditions; and general economic conditions and events, such as economic slowdowns, changes in trade policy, recessions, interest rate changes, or credit loss trends, could also cause our common stock price to decrease regardless of operating results.

We may seek merger or acquisition partners that are culturally similar, have experienced management, and possess either significant market presence or the potential for improved profitability through financial management, economies of scale, or expanded services. Risks inherent in acquiring other banks, businesses, and banking branches may include the following: - potential exposure to unknown or contingent liabilities of the target company;- exposure to potential asset quality issues of the target company;- difficulty, expense, and delays of integrating the operations and personnel of the target company;- potential disruption to our business;- potential diversion of management's time and attention;- 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;- unexpected costs and delays;- the target company's performance does not meet our growth and profitability expectations;- limited experience in new markets or product areas;- increased time, expenses, and personnel as a result of strain on our infrastructure, staff, internal controls, and management; and - potential short-term decreases in profitability. We regularly evaluate merger and acquisition opportunities and conduct due diligence activities related to possible transactions with other financial institutions and financial services companies. As a result, merger or acquisition discussions and, in some cases, negotiations may take place and future mergers or acquisitions involving the payment of cash or the issuance of debt or equity securities may occur at any time. Acquisitions typically involve goodwill, a purchase premium over the acquired company's book and market values; therefore, dilution of our tangible book value and net income per common share may occur. If we are unable to realize revenue increases, cost savings, geographic or product presence growth, or other projected benefits from acquisitions, our financial condition and results of operations may be adversely affected.