- Quarterly Report (10-Q)

Large accelerated filer

Accelerated filer

Non-accelerated filer

¨ (Do not check if a smaller reporting company)

Smaller reporting company

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

x	Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the quarterly period ended June 30, 2010

¨	Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the transition period from to

Commission file number 000-50357

FIRST COMMUNITY BANK CORPORATION OF AMERICA

(Exact name of registrant as specified in its charter)

Florida

65-0623023

(State or other jurisdiction of

incorporation or organization)

(I.R.S. Employer

Identification No.)

9001 Belcher Road

Pinellas Park, Florida 33782

(Address of principal executive offices) (Zip Codes)

(727) 520-0987

(Registrant’s telephone number, including area code)

(Former name, former address and former fiscal year, if changed since last report)

Indicated by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days: Yes x No ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ¨ No ¨ * The registrant has not yet been phased into the interactive data requirements.

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See the definition of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act (Check one):

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ¨ No x

Indicate the number of shares outstanding of each of the registrant’s classes of common stock, as of the latest practicable date;


Common stock, par value $.05 per share		5,457,173 shares
(class)		Outstanding at July 30, 2010

FIRST COMMUNITY BANK CORPORATION OF AMERICA AND SUBSIDIARIES

INDEX


		Page
PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

Condensed Consolidated Balance Sheets - At June 30, 2010 (unaudited) and At December 31, 2009		2

Condensed Consolidated Statements of Operations - Three and Six Months Ended June 30, 2010 and 2009 (unaudited)		3

Condensed Consolidated Statements of Changes in Stockholders’ Equity - Six Months Ended June 30, 2010 and 2009 (unaudited)		4-5

Condensed Consolidated Statements of Cash Flows - Six Months Ended June 30, 2010 and 2009 (unaudited)		6-7

Notes to Condensed Consolidated Financial Statements (unaudited)		8-16

Review by Independent Registered Public Accounting Firm		17

Report of Independent Registered Public Accounting Firm		18

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations		19-32

Item 3. Quantitative and Qualitative Disclosures About Market Risk		33

Item 4T. Controls and Procedures		33

PART II. OTHER INFORMATION

Item 1. Legal Proceedings		33

Item 1A. Risk Factors		33

Item 4. Submission of Matters to a Vote of Security Holders		34

Item 6. Exhibits		35

SIGNATURES		36

FIRST COMMUNITY BANK CORPORATION OF AMERICA AND SUBSIDIARIES

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

Condensed Consolidated Balance Sheets

(In thousands, except share amounts)


	June 30, 2010			December 31, 2009
	(Unaudited)
Assets

Cash and due from banks	$	5,060		5,623
Interest-bearing deposits with banks		59,328		45,074


Cash and cash equivalents		64,388		50,697

Other interest-bearing deposits with banks		1,765		491
Securities available for sale		49,586		50,850
Securities held to maturity (market value of $0 and $7,554)		—		7,583
Loans, net of allowance for loan losses of $7,393 in 2010 and $7,830 in 2009		361,647		399,265
Federal Home Loan Bank stock, at cost		2,549		2,549
Premises and equipment, net		12,582		12,834
Foreclosed real estate		7,690		2,892
Accrued interest receivable		1,626		2,016
Deferred income taxes		—		4,912
Bank-owned life insurance		8,036		7,940
Prepaid FDIC assessment		4,113		4,661
Other assets		2,411		1,228


	$	516,393		547,918


Liabilities and Stockholders’ Equity

Liabilities:
Noninterest-bearing demand deposits		35,497		36,293
Savings, NOW and money-market deposits		225,866		205,553
Time deposits		172,992		216,671


Total deposits		434,355		458,517

Federal Home Loan Bank advances		36,000		36,000
Other borrowings		3,300		2,767
Accrued expenses and other liabilities		4,650		5,133


Total liabilities		478,305		502,417


Stockholders’ equity:
Preferred stock, $0.01 par value, 2,000,000 shares authorized:
Series A, 10,685 shares designated, issued and outstanding		10,685		10,685
Series A preferred stock discount		(23	)	(27	)
Series B, 720,000 shares designated, 313,497 and 189,018 shares issued and outstanding		7,837		4,725
Common stock, $0.05 par value, 40,000,000 shares authorized, 5,457,173 and 4,938,692 shares issued and outstanding		273		247
Additional paid-in capital		32,505		32,154
Accumulated deficit		(14,167	)	(2,618	)
Accumulated other comprehensive income		978		335


Total stockholders’ equity		38,088		45,501


	$	516,393		547,918

See Accompanying Notes to Condensed Consolidated Financial Statements.

FIRST COMMUNITY BANK CORPORATION OF AMERICA AND SUBSIDIARIES

Condensed Consolidated Statements of Operations (Unaudited)

(In thousands, except per share amounts)


	Three Months Ended June 30,					Six Months Ended June 30,
	2010			2009		2010		2009
Interest income:
Loans	$	5,161		5,950		10,571		11,983
Securities		423		550		980		1,030
Other interest earning assets		37		13		68		22


Total interest income		5,621		6,513		11,619		13,035


Interest expense:
Deposits		1,722		2,583		3,724		5,209
Other borrowings		346		354		688		716


Total interest expense		2,068		2,937		4,412		5,925


Net interest income		3,553		3,576		7,207		7,110

Provision for loan losses		3,849		1,337		7,790		2,032


Net interest income after provision for loan losses		(296	)	2,239		(583	)	5,078


Noninterest income:
Service charges on deposit accounts		180		206		348		412
Other service charges and fees		69		117		117		167
Income from bank-owned life insurance		52		44		96		84
Gain on sale of loans held for sale		—		—		—		2
Net gain on sale of securities		377		42		536		42
Other		96		71		274		151


Total noninterest income		774		480		1,371		858


Noninterest expenses:
Employee compensation and benefits		1,416		1,362		3,020		3,121
Occupancy and equipment		417		450		838		870
Data processing		335		359		722		711
Professional fees		360		168		642		321
Office supplies		28		56		62		101
Insurance		333		473		647		591
Other		438		362		778		669


Total noninterest expenses		3,327		3,230		6,709		6,384


Loss before income taxes		(2,849	)	(511	)	(5,921	)	(448	)

Income taxes (benefit)		6,428		(230	)	5,228		(236	)


Net loss		(9,277	)	(281	)	(11,149	)	(212	)

Preferred stock dividend requirements and amortization of preferred discount		(135	)	(135	)	(466	)	(284	)


Net loss applicable to common stockholders	$	(9,412	)	(416	)	(11,615	)	(496	)


Loss per share:
Basic loss per share	$	(1.72	)	(.10	)	(2.16	)	(.12	)


Diluted loss per share	$	(1.72	)	(.10	)	(2.16	)	(.12	)


Common stock dividends per share	$	—		—		—		—

See Accompanying Notes to Condensed Consolidated Financial Statements.

FIRST COMMUNITY BANK CORPORATION OF AMERICA AND SUBSIDIARIES

Condensed Consolidated Statements of Changes in Stockholders’ Equity

Six Months Ended June 30, 2010 and 2009

(In thousands, except share amounts)


	Preferred Stock					Common Stock			Additional Paid-In	Retained		Accumulated Other Comprehensive
	Shares	Amount		Discount		Shares	Amount		Capital	Earnings		Income		Total

Balance at December 31, 2008	10,685	$	10,685	(33	)	4,111,121	$	205	30,388	2,843		386		44,474

Comprehensive loss:

Net loss (unaudited)	—		—	—		—		—	—	(212	)	—		(212	)

Net change in unrealized gain on securities available for sale, net of taxes of $(134) (unaudited)	—		—	—		—		—	—	—		(223	)	(223	)


Comprehensive loss (unaudited)														(435	)


Exercise of stock options (unaudited)	—		—	—		40,310		3	192	—		—		195

Share-based compensation expense (unaudited)	—		—	—		—		—	20	—		—		20

Dividend on preferred stock to U.S. Treasury (unaudited)	—		—	—		—		—	—	(281	)	—		(281	)

Amortization of common stock warrants issued to U.S. Treasury (unaudited)	—		—	3		—		—	—	(3	)	—		—


Balance at June 30, 2009 (unaudited)	10,685	$	10,685	(30	)	4,151,431	$	208	30,600	2,347		163		43,973

(continued)

FIRST COMMUNITY BANK CORPORATION OF AMERICA AND SUBSIDIARIES

Condensed Consolidated Statements of Changes in Stockholders’ Equity, Continued

Six Months Ended June 30, 2010 and 2009

(In thousands, except share amounts)


															Accumulated
	Preferred Stock											Additional			Other
	Series A					Series B			Common Stock			Paid-In	Accumulated		Comprehensive
	Shares	Amount		Discount		Shares	Amount		Shares	Amount		Capital	Deficit		Income	Total

Balance at December 31, 2009	10,685	$	10,685	(27	)	189,018	$	4,725	4,938,692	$	247	32,154	(2,618	)	335	45,501


Comprehensive loss:
Net loss (unaudited)	—		—	—		—		—	—		—	—	(11,149	)	—	(11,149	)

Net change in unrealized gain on securities available for sale (unaudited)	—		—	—		—		—	—		—	—	—		643	643


Comprehensive loss (unaudited)																(10,506	)


Issuance of convertible perpetual preferred stock, Series B, net of offering costs of $507 (unaudited)	—		—	—		124,479		3,112	—		—	253	—		—	3,365

Issuance of common stock, net of offering costs of $169 (unaudited)	—		—	—		—		—	518,481		26	83	—		—	109

Share-based compensation expense (unaudited)	—		—	—		—		—	—		—	15	—		—	15

Dividend on cumulative convertible perpetual preferred stock, Series B (unaudited)	—		—	—		—		—	—		—	—	(196	)	—	(196	)

Dividend on preferred stock to U.S. Treasury, Series A (unaudited)	—		—	—		—		—	—		—	—	(200	)	—	(200	)

Amortization of common stock warrants issued to U.S. Treasury (unaudited)	—		—	4		—		—	—		—	—	(4	)	—	—


Balance at June 30, 2010 (unaudited)	10,685	$	10,685	(23	)	313,497	$	7,837	5,457,173	$	273	32,505	(14,167	)	978	38,088

See Accompanying Notes to Condensed Consolidated Financial Statements.

FIRST COMMUNITY BANK CORPORATION OF AMERICA AND SUBSIDIARIES

Condensed Consolidated Statements of Cash Flows (Unaudited)

(In thousands)


	Six Months Ended June 30,
	2010			2009
Cash flows from operating activities:
Net loss	$	(11,149	)	(212	)
Adjustments to reconcile net loss to net cash provided by operating activities:
Provision for loan losses		7,790		2,032
Depreciation and amortization		270		308
Deferred income tax provision		5,228		—
Net amortization of premiums and discounts on securities		221		84
Share-based compensation		15		20
Net amortization of deferred loan fees and costs		(116	)	(128	)
Income from bank-owned life insurance		(96	)	(84	)
Decrease (increase) in accrued interest receivable		390		(200	)
Increase in prepaid FDIC assessment and other assets		(635	)	(456	)
Net loss (gain) on sale of foreclosed real estate		8		(53	)
Net gain on sale of securities		(536	)	—
(Decrease) increase in accrued expenses and other liabilities		(483	)	835


Net cash provided by operating activities		907		2,146


Cash flows from investing activities:
Net change in other interest-bearing deposits with banks		(1,274	)	(271	)
Purchase of securities available for sale		(42,042	)	(33,574	)
Principal payments on securities available for sale		3,510		3,556
Proceeds from calls and maturities of securities available for sale		12,270		1,500
Proceeds from sale of securities available for sale		28,198		3,500
Proceeds from maturities of securities held to maturity		—		500
Principal payments on securities held to maturity		32		93
Proceeds from the sale of securities held to maturity		7,521		—
Net decrease (increase) in loans		23,497		(14,491	)
Purchase of premises and equipment, net		(18	)	(527	)
Proceeds from the sale of foreclosed real estate		1,641		417
Redemption of Federal Home Loan Bank stock		—		6


Net cash provided by (used in) investing activities		33,335		(39,291	)


Cash flows from financing activities:
(Decrease) increase in deposits		(24,162	)	61,937
Repayment of Federal Home Loan Bank advances		—		(2,000	)
Net increase (decrease) in other borrowings		533		(6,320	)
Proceeds from exercise of stock options		—		195
Issuance of cumulative convertible preferred stock, Series B		3,365		—
Issuance of common stock		109		—
Dividend on preferred stock to U.S. Treasury, Series A		(196	)	(281	)
Dividend on cumulative convertible preferred perpetual stock, Series B		(200	)	—


Net cash (used in) provided by financing activities		(20,551	)	53,531


Net increase in cash and cash equivalents		13,691		16,386

Cash and cash equivalents at beginning of period		50,697		32,458


Cash and cash equivalents at end of period	$	64,388		48,844

(continued)

FIRST COMMUNITY BANK CORPORATION OF AMERICA AND SUBSIDIARIES

Condensed Consolidated Statements of Cash Flows (Unaudited), Continued

(In thousands)


	Six Months Ended June 30,
	2010		2009
Supplemental disclosure of cash flow information:
Cash paid during the period for:
Interest, net of capitalized interest of $0 and $181	$	4,534	5,888


Income taxes	$	—	—


Noncash transactions:
Accumulated other comprehensive income (loss), net change in unrealized gain (loss) on securities available for sale, net of income taxes	$	643	(223	)


Transfer from loans to foreclosed real estate	$	6,447	1,729


Preferred dividend requirements and amortization of preferred discount	$	66	294

See Accompanying Notes to Condensed Consolidated Financial Statements.

FIRST COMMUNITY BANK CORPORATION OF AMERICA AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Unaudited)

General. First Community Bank Corporation of America (the “Holding Company”) owns all of the outstanding common stock of First Community Bank of America (the “Bank”) and First Community Lender Services, Inc. (“FCLS”) (collectively, the “Company”). The Holding Company’s primary business activity is the operation of the Bank. The Bank is a federally-chartered stock savings bank providing a variety of banking services to small and middle market businesses and individuals through its four banking offices located in Pinellas County, two banking offices in Pasco County, three banking offices located in Charlotte County, and two offices located in Hillsborough County, Florida. FCLS had minimal activity during the six months ended June 30, 2010 and 2009.

In the opinion of the management of the Company, the accompanying condensed consolidated financial statements contain all adjustments (consisting principally of normal recurring accruals) necessary to present fairly the financial position at June 30, 2010, the results of operations for the three- and six-month periods ended June 30, 2010 and 2009 and cash flows for the six-month periods ended June 30, 2010 and 2009. The results of operations and other data for the three- and six-month periods ended June 30, 2010 are not necessarily indicative of results that may be expected for the year ending December 31, 2010.

2.	*Securities.* Securities have been classified according to management’s intent. The carrying amounts of securities and their fair value were as follows (in thousands):


			Gross	Gross
	Amortized		Unrealized	Unrealized		Fair
	Cost		Gains	Losses		Value
Available for Sale:
*At June 30, 2010:*
U.S. Government agency securities	$	12,099	57	—		12,156
Mortgage-backed securities		36,509	926	(5	)	37,430


	$	48,608	983	(5	)	49,586


*At December 31, 2009:*
U.S. Government agency securities		17,451	21	(260	)	17,212
Mortgage-backed securities		26,413	561	(38	)	26,936
Municipal securities		6,450	306	(54	)	6,702


	$	50,314	888	(352	)	50,850


Held to Maturity:
*At December 31, 2009:*
Mortgage-backed securities		568	8	—		576
Municipal securities		7,015	88	(125	)	6,978


	$	7,583	96	(125	)	7,554

(continued)

FIRST COMMUNITY BANK CORPORATION OF AMERICA AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Unaudited), Continued

2.	*Securities, Continued.* Available-for-sale securities at June 30, 2010 measured at fair value on a recurring basis are summarized below (in thousands):


			Quoted Prices
			In Active	Significant
			Markets for	Other	Significant
			Identical	Observable	Unobservable
	Fair		Assets	Inputs	Inputs
	Value		(Level 1)	(Level 2)	(Level 3)

Available-for-sale securities	$	49,586	—	49,586	—

The scheduled maturities of securities at June 30, 2010 were as follows (in thousands):


	Available for Sale
	Amortized		Fair
	Cost		Value

Five to ten years	$	2,000	2,015
After ten years		10,099	10,141
Mortgage-backed securities		36,509	37,430


	$	48,608	49,586

Securities sold are summarized as follows (in thousands):


	Six Months Ended June 30,
	2010			2009

Principal received from sales	$	35,719		3,594


Gross gains		670		42
Gross losses		(134	)	—


Net gain	$	536		42

Due to a change in the Company’s investment policy, in 2010, the Company sold securities with a book value of $7,551,000 from the held to maturity category resulting in losses of $30,000. Due to this sale, the Company is prohibited from classifying securities as held to maturity for a period of two years.

(continued)

FIRST COMMUNITY BANK CORPORATION OF AMERICA AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Unaudited), Continued

2.	*Securities, Continued.* Securities with gross unrealized losses at June 30, 2010, aggregated by investment category and length of time that individual securities have been in a continuous loss position, is as follows (in thousands):


	Less Than Twelve Months
	Gross
	Unrealized			Fair
	Losses			Value
*Securities Available for Sale-*
Mortgage-backed securities	$	(5	)	2,369

The unrealized losses on seven investment securities were caused by interest rate changes. It is expected that the securities would not be settled at a price less than the par value of the investments. Because the decline in fair value is attributable to changes in interest rates and not credit quality, and because the Company has the ability and intent to hold these investments until a market price recovery or maturity, these investments are not considered other-than-temporarily impaired.

As of June 30, 2010 and December 31, 2009, securities with a carrying value of $41,889,000 and $42,715,000, respectively, were pledged for repurchase agreements with customers and for various purposes required or permitted by law.

3.	*Loan Impairment and Loan Losses.* The activity in the allowance for loan losses is as follows (in thousands):


	Three Months Ended June 30,					Six Months Ended June 30,
	2010			2009		2010		2009

Balance at beginning of period	$	8,024		7,923		7,830		8,230
Provision for loan losses		3,849		1,337		7,790		2,032
Charge-offs		(4,507	)	(1,426	)	(8,262	)	(2,469	)
Recoveries		27		10		35		51


Balance at end of period	$	7,393		7,844		7,393		7,844

(continued)

FIRST COMMUNITY BANK CORPORATION OF AMERICA AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Unaudited), Continued

3.	*Loan Impairment and Loan Losses, Continued.* The following summarizes the amount of impaired loans (in thousands):


	June 30, 2010			December 31, 2009
Collateral dependent loans identified as impaired:
Gross loans with no related allowance for losses ⁽¹⁾	$	30,738		23,938

Gross loans with related allowance for losses		1,684		2,172
Less allowances on these loans		(974	)	(547	)


Net investment in collateral dependent impaired loans		31,448		25,563


Noncollateral dependent loans identified as impaired:
Gross loans with no related allowance for losses ⁽²⁾		1,142		3,781

Gross loans with related allowance for losses recorded ⁽³⁾		14,155		16,252
Less allowance on these loans		(246	)	(291	)


Net investment in noncollateral dependent impaired loans		15,051		19,742


Net investment in impaired loans	$	46,499		45,305

⁽¹⁾	Charge-offs related to these loans were $5,276 and $6,349, respectively.

⁽ ² ⁾

Troubled debt restructure balances with no allowance for losses were $1,125 and $3,720, respectively.

⁽ ³ ⁾

Troubled debt restructure balances with allowance for losses were $14,155 and $16,252, respectively.


	June 30, 2010		December 31, 2009

Average investment in impaired loans	$	42,882	32,963

Interest income recognized on impaired loans	$	431	665

Interest income received on impaired loans	$	614	842

(continued)

FIRST COMMUNITY BANK CORPORATION OF AMERICA AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Unaudited), Continued

Loan Impairment and Loan Losses, Continued. Impaired collateral-dependent loans carried at fair value when the current collateral value is lower than the carrying value of the loan. Those impaired collateral-dependent loans which are measured at fair value on a nonrecurring basis are as follows (in thousands):

At June 30, 2010

Losses

Recorded in

Operations

For the

Period Ended

Fair

Total

June 30,

Value

Level 1

Level 2

Level 3

Losses

2010

Impaired loans

11,145

⁽¹⁾

—

11,145

8,795

6,250

⁽¹⁾	Loans with a carrying value of $20,303 at June 30, 2010 were measured for impairment using Level 3 inputs and had a fair value in excess of carrying value.

Nonaccrual and past due loans were as follows (in thousands):


	At June 30,
	2010		2009

Nonaccrual loans	$	27,644	24,689
Past due ninety days or more, still accruing		—	—


	$	27,644	24,689

Loss Per Share. Loss per share of common stock has been computed on the basis of the weighted-average number of shares of common stock outstanding for the three and six months ended June 30, 2009. Outstanding stock options and warrants are considered dilutive securities for purposes of calculating diluted EPS which is computed using the treasury stock method. For the three and six months ended June 30, 2010, outstanding stock options and warrants are not considered dilutive securities due to the net loss applicable to common shareholders. The following table presents the calculations of loss per share (dollars in thousands, except per share amounts).


	Three Months Ended June 30,
	2010						2009
			Weighted-	Per					Weighted-	Per
			Average	Share					Average	Share
	Loss		Shares	Amount			Loss		Shares	Amount
Basic EPS:
Net loss applicable to common stockholders	$	9,412	5,457,173	$	(1.72	)	$	416	4,151,431	$	(0.10	)

Effect of dilutive securities-
Incremental shares from assumed conversion of options and warrants			—						—


Diluted EPS:
Net loss applicable to common stockholders and assumed conversions	$	9,412	5,457,173	$	(1.72	)	$	416	4,151,431	$	(0.10	)

(continued)

FIRST COMMUNITY BANK CORPORATION OF AMERICA AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Unaudited), Continued

4.	*Loss Per Share, Continued.*


	Six Months Ended June 30,
	2010						2009
			Weighted-	Per					Weighted-	Per
			Average	Share					Average	Share
	Loss		Shares	Amount			Loss		Shares	Amount
Basic EPS:
Net loss applicable to common stockholders	$	11,615	5,372,099	$	(2.16	)	$	496	4,150,801	$	(0.12	)


Effect of dilutive securities-
Incremental shares from assumed conversion of options and warrants			—						—


Diluted EPS:
Net loss applicable to common stockholders and assumed conversions	$	11,615	5,372,099	$	(2.16	)	$	496	4,150,801	$	(0.12	)

Share-Based Compensation . The Company currently has one stock option plan for employees of the Company. Under the plan, the total number of options which may be granted to purchase common stock is 516,797 (amended). At June 30, 2010, 124,895 options remain available for grant under the employees’ plan. The employees’ options vest over periods up to four years and have terms up to ten years.

The Nonemployee Director Stock Option Plan approved by shareholders in April 2000 expired in May 2009. Outstanding Director options covering 103,358 shares expired unexercised on January 1, 2010. At June 30, 2010, there are no outstanding options under the Nonemployee Director Stock Option Plan.

A summary of the activity in the Company’s stock option plans is as follows (dollars in thousands, except per share amounts):


					Weighted-
			Weighted-		Average
			Average		Remaining	Aggregate
	Number of		Exercise		Contractual	Intrinsic
	Options		Price		Term	Value

Outstanding at December 31, 2009	355,148		$	7.92
Options exercised	—			—
Options forfeited and expired	(153,591	)		5.99
Options terminated	—			—


Outstanding at June 30, 2010	201,557		$	9.40	3.3 years	$	—


Exercisable at June 30, 2010	192,357		$	9.16	3.1 years	$	—

(continued)

FIRST COMMUNITY BANK CORPORATION OF AMERICA AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Unaudited), Continued

Share-Based Compensation, Continued . At June 30, 2010, there was approximately $10,000 of total unrecognized compensation expense related to nonvested share-based compensation arrangements granted under the plans. The cost is expected to be recognized over a weighted-average period of seven months. The total fair value of shares vesting and recognized as compensation expense was approximately $15,000 and $20,000 for the six months ended June 30, 2010 and 2009, respectively. There was no associated tax benefit recognized for both the six months ended June 30, 2010 and 2009.

6.	*Regulatory Capital.* The Bank is required to maintain certain minimum regulatory capital requirements. At June 30, 2010, the Bank was in compliance with its regulatory capital requirements. Regulatory capital ratios were as follows:


	June 30, 2010	December 31, 2009

Total capital to risk weighted assets	11.20	11.24
Tier 1 capital to risk weighted assets	9.94	9.99
Tier 1 capital to total assets	6.80	7.30

7.	*Foreclosed Real Estate.* Expenses applicable to foreclosed assets follow (in thousands):


	Six Months Ended June 30,
	2010		2009

Net loss (gain) on sales of foreclosed assets	$	8	(53	)
Provision for losses		—	—
Operating expenses		129	87


Total included in other noninterest expenses	$	137	34

Foreclosed assets are recorded at fair value less estimated selling costs. At June 30, 2010, those foreclosed assets which are measured at fair value on a nonrecurring basis are as follows (in thousands):


	Total		Level 1	Level 2	Level 3	Total Losses	Losses Recorded in Operations During 2010
Foreclosed real estate	$	7,690	—	—	7,690	—	—

(continued)

FIRST COMMUNITY BANK CORPORATION OF AMERICA AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Unaudited), Continued

8.	*Fair Value of Financial Instruments.* The estimated fair values of the Company’s financial instruments were as follows (in thousands):


	At June 30, 2010			At December 31, 2009
	Carrying Amount		Fair Value	Carrying Amount	Fair Value
Financial assets:
Cash and cash equivalents	$	64,388	64,388	50,697	50,697
Other interest-bearing deposits with banks		1,765	1,765	491	491
Securities		49,586	49,586	58,433	58,404
Loans		361,647	356,157	399,265	399,723
Federal Home Loan Bank stock		2,549	2,549	2,549	2,549
Accrued interest receivable		1,626	1,626	2,016	2,016

Financial liabilities:
Deposits		434,355	430,756	458,517	452,280
Federal Home Loan Bank advances		36,000	36,901	36,000	37,828
Other borrowings		3,300	3,300	2,767	2,767
Off-balance sheet financial instruments		—	—	—	—

Deferred Tax Asset. The Company established an allowance against its deferred tax as asset of $6,828,000, as of June 30, 2010, as it became apparent that the extended detoriation of credit markets would result in the Company recording its third consecutive annual loss in 2010. The Company continues to feel that the base earnings are sufficient to recover all or part of this tax benefit when the credit conditions improve. Management believes the magnitude of these loan losses occurred because of the current economic downturn and the situation is unusual and infrequent and an aberration rather than a continuing condition.

(continued)

FIRST COMMUNITY BANK CORPORATION OF AMERICA AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Unaudited), Continued

10 .

Regulatory Matters. As a result of an examination by the Office of Thrift Supervision (the “OTS”), the Bank and the Holding Company entered into separate memorandums of understanding (the “Memorandums”) with the OTS in October 2009 with the intent to protect the interests of the Company’s depositors, customers and shareholders. The Memorandums provided, among other things, that the Boards of Directors will or will cause the Company to 1) Prepare and monitor comprehensive business plans, 2) Adopt detailed capital plans, 3) Not negotiate, purchase or commit to any land acquisition, development or construction loans until the comprehensive business plan has been approved by the OTS, 4) Take steps to identify, evaluate and reduce the level of problem assets, 5) Limit asset growth until it obtains OTS approval of the Bank’s comprehensive business plan, 6) Not pay or declare dividends without OTS approval, 7) Not continue to roll or accept brokered deposits without OTS approval and must submit plan to OTS to reduce brokered deposits, 8) Prepare and adopt a written plan detailing the Company’s obligations with receipt of funds under Troubled Asset Relief Program, and 9) Submit variance reports on the Company’s compliance with various plans required by the Memorandums.

Management plans to vigorously seek compliance with the Memorandums. At this time, the financial impact, if any, of regulatory sanctions that may result if the Company fails to comply with the Memorandums requirements described above is not known. Management feels that the terms of the agreement will not have a material impact on the strategy of the Bank. The OTS has provided a temporary extension of the Bank’s use of customer driven CDARs deposits which technically fall under the brokered deposit classification. The Bank has received approval of its plan that was submitted to the OTS and is in full compliance with the memorandum of understanding.

11 .

Equity Offering. Pursuant to a prospectus dated December 30, 2009, the Company offered to sell a maximum of 600,000 units at a price of $33.33 per unit. Each unit consisted of 4.165 shares of common stock, par value $.05 per share, and one share of 10% Cumulative Convertible Perpetual Preferred Stock, Series B, with an initial liquidation preference of $25.00. The Series B preferred stock has parity with the Series A preferred stock issued to the Treasury. Each of the shares of Series B preferred stock is currently convertible into ten shares of common stock. At December 31, 2009, the Company had issued 189,018 shares of Series B preferred stock and 787,261 shares of common stock, for net proceeds of $6,300,000. During 2010, an additional 518,481 shares of common stock and 124,479 shares of Series B preferred stock were issued, for net proceeds of $3,474,000. The offering terminated on February 12, 2010.

12 .	*Suspension of Preferred Stock Dividends.* The Board of Directors has suspended dividend payments on both the Preferred Stock Series A (TARP) and the Preferred Stock Series B shares.

The Office of Thrift Supervision, the Bank’s primary regulator, under the Memorandum of Understanding (MOU) must approve quarterly dividends. If we are unable to pay dividends on the Convertible Preferred Series B shares for four consecutive quarters, the shares will automatically convert to ten shares of Common Stock.

FIRST COMMUNITY BANK CORPORATION OF AMERICA AND SUBSIDIARIES

Review by Independent Registered Public Accounting Firm

Hacker, Johnson & Smith PA, the Company’s independent registered public accounting firm, have made a limited review of the financial data as of June 30, 2010, and for the three- and six- month periods ended June 30, 2010 and 2009 presented in this document, in accordance with standards established by the Public Company Accounting Oversight Board.

Their report furnished pursuant to Article 10 of Regulation S-X is included herein.

Report of Independent Registered Public Accounting Firm

The Board of Directors and Stockholders

First Community Bank Corporation of America

Pinellas Park, Florida:

We have reviewed the accompanying condensed consolidated balance sheet of First Community Bank Corporation of America and Subsidiaries (the “Company”) as of June 30, 2010, the related condensed consolidated statements of operations for the three- and six-month periods ended June 30, 2010 and 2009 and the related condensed consolidated statements of changes in stockholders’ equity and cash flows for the six-month periods ended June 30, 2010 and 2009. These interim financial statements are the responsibility of the Company’s management.

We conducted our reviews in accordance with the standards of the Public Company Accounting Oversight Board (United States). A review of interim financial information consists principally of applying analytical procedures and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with the standards of the Public Company Accounting Oversight Board, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion.

Based on our reviews, we are not aware of any material modifications that should be made to the accompanying condensed consolidated financial statements for them to be in conformity with U.S. generally accepted accounting principles.

We have previously audited, in accordance with the standards of the Public Company Accounting Oversight Board, the consolidated balance sheet of the Company as of December 31, 2009, and the related consolidated statements of operations, changes in stockholders’ equity and cash flow for the year then ended (not presented herein); and in our report dated March 31, 2010, we expressed an unqualified opinion on those consolidated financial statements. In our opinion, the information set forth in the accompanying condensed consolidated balance sheet as of December 31, 2009, is fairly stated, in all material respects, in relation to the consolidated balance sheet from which it has been derived.

/s/ Hacker, Johnson & Smith PA

HACKER, JOHNSON & SMITH PA

Tampa, Florida

August 12, 2010

FIRST COMMUNITY BANK CORPORATION OF AMERICA AND SUBSIDIARIES

Item 2. Management’s Discussion and Analysis of

Financial Condition and Results of Operations

Forward Looking Statements

This document contains forward-looking statements as defined by Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These forward-looking statements involve substantial risks and uncertainties. When used in this document, or in the documents incorporated by reference, the words “anticipate,” “believe,” “estimate,” “may,” “intend” and “expect” and similar expressions are some of the forward-looking statements used in these documents. Actual results, performance, or achievements could differ materially from those contemplated, expressed or implied by the forward-looking statements. Factors which may cause results to change materially include competition, inflation, general economic conditions, changes in interest rates, and changes in the value of collateral securing loans First Community Bank Corporation of America has made, among other things.

General

First Community Bank Corporation of America (the “Holding Company”) owns all of the outstanding common stock of First Community Bank of America (the “Bank”) and First Community Lender Services, Inc. (“FCLS”) (collectively, the “Company”). The Holding Company’s primary business activity is the operation of the Bank. The Bank is a federally-chartered stock savings bank providing a variety of banking services to small and middle market businesses and individuals through its four banking offices located in Pinellas County, two banking offices located in Pasco County, three banking offices located in Charlotte County and two offices located in Hillsborough County, Florida. FCLS had minimal activity during the six months ended June 30, 2010 and 2009.

Liquidity and Capital Resources

The Company’s primary source of cash during the six months ended June 30, 2010, was an increase in core deposits of $20 million. The Bank considers savings, NOW, money-market and noninterest-bearing demand deposits as core deposits. This inflow was offset by a $44 million decrease in time deposits resulting from a Bank strategy of lowering levels of brokered and high costs certificates of deposit. The Company netted $3.4 million in preferred capital and $.1 million in common capital as it completed its stock offering. The Bank maintained a $58 million balance deposited at the Federal Reserve Bank on June 30, 2010.

Off-Balance Sheet Arrangements

The Company is a party to financial instruments with off-balance-sheet risk in the normal course of business to meet the financing needs of its customers. These financial instruments include commitments to extend credit, unused lines of credit and standby letters of credit. These instruments involve, to varying degrees, elements of credit and interest-rate risk in excess of the amounts recognized in the condensed consolidated balance sheet. The contract amounts of these instruments reflect the extent of the Company’s involvement in particular classes of financial instruments.

FIRST COMMUNITY BANK CORPORATION OF AMERICA AND SUBSIDIARIES

The Company’s exposure to credit loss in the event of nonperformance by the other party to the financial instrument for commitments to extend credit, unused lines of credit and standby letters of credit is represented by the contractual amount of those instruments. The Company uses the same credit policies in making commitments as it does for on-balance-sheet instruments.

Commitments to extend credit are agreements to lend to a customer as long as there is no violation of any condition established in the contract. Commitments generally have fixed expiration dates or other termination clauses and may require payment of a fee. Since many of the commitments are expected to expire without being drawn upon, the total committed amounts do not necessarily represent future cash requirements. The Company evaluates each customer’s credit worthiness on a case-by-case basis. The amount of collateral obtained, if it is deemed necessary by the Company upon extension of credit, is based on management’s credit evaluation of the counter party.

Standby letters of credit are conditional lending commitments issued by the Company to guarantee the performance of a customer to a third party and to support public and private borrowing arrangements. Essentially all letters of credit issued have expiration dates within one year. The credit risk involved in issuing letters-of-credit is essentially the same as that involved in extending loan facilities to customers. The Company generally holds collateral supporting these commitments.

Unused lines of credit and commitments to extend credit typically result in loans with a market interest rate.

A summary of the amounts of the Company’s financial instruments, with off-balance sheet risk at June 30, 2010, follows (in thousands):


	Contract Amount

Commitments to extend credit	$	2,027


Unused lines of credit	$	26,082


Standby letters of credit	$	5,327

Management believes that the Company has adequate resources to fund all of its commitments and that substantially all its existing commitments will be funded within the next twelve months.

FIRST COMMUNITY BANK CORPORATION OF AMERICA AND SUBSIDIARIES

Selected Financial Information

The following rates are presented for the dates and periods indicated:


	Six Months Ended June 30, 2010		Year Ended December 31, 2009		Six Months Ended June 30, 2009
Average equity as a percentage of average assets	8.35	%	8.08	%	8.39	%

Equity to total assets at end of period	7.38	%	8.30	%	7.92	%

Return on average assets (1)	(4.15	)%	(.90	)%	(0.21	)%

Return on common average equity (1)	(83.26	)%	(14.70	)%	(3.35	)%

Noninterest expenses to average assets	2.50	%	2.46	%	2.46	%

Nonperforming assets as a percentage of total assets at end of period	6.84	%	5.47	%	4.96	%

(1)	Annualized for the six months ended June 30.

Local Economic Conditions

The Bank operates in two distinct geographic markets on the West Coast of Florida, the Tampa Bay region in West Central Florida and the Port Charlotte Region in southwest Florida. Three of the Bank’s markets are located around Tampa Bay (Pinellas County, Pasco County and Hillsborough County). The fourth market is located in Charlotte County. The economy in Florida has been hard hit by the decline in real estate values resulting from an over supply of residential housing units, a significant reduction in development activity and reductions in sales activity. The lack of absorption of vacant land, lots and certain single family and condominium product has continued to feed the decline in values. The Tampa Bay region is more diversified with other service and manufacturing industry than the Port Charlotte region which had been primarily dependent on residential real estate development and the retiree industry. Although the Tampa Market has shown decreased values in single family homes and condominiums it has not suffered as severely as the Port Charlotte market. Housing values have dropped approximately 40-50% from the height of activity in 2005 – 2006. Similarly vacant land and lot values have fallen 60-70%. The drop in values continues to contribute to the delinquency or default of borrowers in that market. Correspondently the Tampa market has seen a drop in values for single family of 25-35%, however condominiums and luxury homes have experienced larger decreases. Land and lot values have diminished by 30-40%. The Bank has experienced continued losses in vacant residential lot loans and single family homes. A predominant portion of these losses are in the Port Charlotte market. Unemployment in Port Charlotte is purported to be in the 10-15% range, thus many borrowers struggle to maintain a positive payment history.

FIRST COMMUNITY BANK CORPORATION OF AMERICA AND SUBSIDIARIES

The commercial real estate market in the Tampa Bay area is showing signs of weakness especially in the multifamily, office rental and retail rental market. The Bank does not have a large concentration in these areas, however, is experiencing increased delinquency trends in that market. Commercial real estate in Port Charlotte is also experiencing significant weakness, however, the Bank has minimal holdings in that product type.

In light of these real estate trends the Bank has experienced an increase in its problem assets specifically in vacant residential lots and single family which has comprised 70% of charge-off activity. Commercial related charge-off’s to date are 26% of total charge-offs. The remaining charge-offs have been consumer loans.

Determining Loan Losses

A loan is classified impaired when, based on current information and events; it is probable the Bank will be unable to collect all amounts due according to the contractual terms of the loan agreement. All amounts due according to the contractual terms means both the contractual interest payments and contractual principal payments will be collected as scheduled in the loan agreement. Once a loan is considered impaired and is collateral dependent, an analysis of the loan will be performed to determine a fair value estimate. Fair value will be determined by a current appraisal or using a reasonable discount of the appraisal using comparable data given the existing economic conditions. If the loan is collateral dependent, the loss will be determined by deducting selling costs from the fair value of the collateral. The difference between the loan balance and the fair value less selling cost is the loss. The loss will be charged-off when it has been determined. A loan that is impaired and non-collateral dependent will be treated in accordance with regulatory guidelines for retail loans. Closed end retail loans will be charged off when delinquent 120 days and open end loans will be charged off when 180 days delinquent. Commercial loans that are non-collateral dependent will be charged off between 90 and 120 days delinquent. If the loan is considered impaired as a Troubled Debt Restructure, it is treated as required under FASB 114. The discounted cash flow of revised payment stream is discounted at the original loan rate and the difference is determined to be the loss.

The Bank obtains external appraisals on commercial real estate loans considered collateral dependent and on commercial foreclosed real estate on an annual basis. Once the appraisal is in hand, the Bank will evaluate and if required will write-down the loan. The Bank obtains a brokers price opinion or other valuation service estimate every six months on any impaired collateral dependent single family, residential or vacant lot loans, and foreclosed real estate and a write-down is made as required. A formal appraisal is ordered to evaluate the fair value when the foreclosure process is completed and the property title is being transferred to the Bank as foreclosed real estate. The foreclosed real estate is initially valued at the appraised value less estimated selling costs. Once the property is in foreclosed real estate, after six months a broker’s price opinion or valuation service model will be used to evaluate the current value. An allowance is established for any additional losses. In addition, management continuously evaluates its impaired loan portfolio.

FIRST COMMUNITY BANK CORPORATION OF AMERICA AND SUBSIDIARIES

The chart below summarizes the 30+ days delinquency by loan category for the dates indicated ($ in thousands):


	$		%
*March 31, 2009:*
Residential mortgages	$	6,466	1.53
Commercial real estate		6,473	1.53
Land and lots		4,945	1.17
Commercial loans		4,293	1.01
Installments		95	0.02


Total	$	22,272


*June 30, 2009:*
Residential mortgages	$	7,961	1.88
Commercial real estate		15,081	3.56
Land and lots		8,319	1.96
Commercial loans		407	0.10
Installments		150	0.04


Total	$	31,918


*September 30, 2009:*
Residential mortgages	$	15,654	3.73
Commercial real estate		15,452	3.69
Land and lots		6,295	1.50
Commercial loans		698	0.17
Installments		412	0.10


Total	$	38,511


*December 31, 2009:*
Residential mortgages	$	12,138	2.97
Commercial real estate		17,158	4.20
Land and lots		7,989	1.96
Commercial loans		740	0.18
Installments		555	0.14


Total	$	38,580


*March 31, 2010:*
Residential mortgages	$	13,966	3.48
Commercial real estate		21,459	5.34
Land and lots		8,455	2.10
Commercial loans		1,326	0.33
Installments		605	0.15


Total	$	45,811


*June 30, 2010:*
Residential mortgages	$	13,719	3.71
Commercial real estate		17,621	4.76
Land and lots		9,024	2.44
Commercial loans		796	0.22
Installments		212	0.06


Total	$	41,372

FIRST COMMUNITY BANK CORPORATION OF AMERICA AND SUBSIDIARIES

The Bank’s nonaccrual loans and Foreclosed Real Estate (“REO”) is comprised of the following ($ in thousands):


	Nonaccrual		REO
	#	$	#	$
*March 31, 2009:*
Residential mortgages	13	2,762	10	1,784
Commercial real estate	9	6,077	1	391
Land and lots	20	4,762	9	629
Commercial loans	—	—	—	—
Installments	2	18	3	194


Total	44	13,619	23	2,998


*June 30, 2009:*
Residential mortgages	26	5,378	3	1,481
Commercial real estate	12	10,935	1	391
Land and lots	33	7,663	14	822
Commercial loans	2	700	—	—
Installments	2	12	3	194


Total	75	24,688	21	2,888


*September 30, 2009:*
Residential mortgages	32	7,724	2	1,283
Commercial real estate	17	14,193	—	—
Land and lots	29	6,926	19	877
Commercial loans	3	408	—	—
Installments	2	11	2	80


Total	83	29,262	23	2,240


*December 31, 2009:*
Residential mortgages	35	8,863	8	1,434
Commercial real estate	18	12,610	2	447
Land and lots	29	4,899	11	931
Commercial loans	5	623	—	—
Installments	3	109	2	80


Total	90	27,104	23	2,892


*March 31, 2010:*
Residential mortgages	42	9,208	7	875
Commercial real estate	20	13,599	3	535
Land and lots	29	7,653	10	942
Commercial loans	5	584	—	—
Installments	5	128	2	74


Total	101	31,172	22	2,426


*June 30, 2010:*
Residential mortgages	48	10,528	10	1,356
Commercial real estate	19	11,283	10	4,619
Land and lots	26	5,226	14	1,610
Commercial loans	5	495	—	—
Installments	5	112	3	105


Total	103	27,644	37	7,690

FIRST COMMUNITY BANK CORPORATION OF AMERICA AND SUBSIDIARIES

At fiscal year end December 2009 the loan loss provision was increased to build up the loan loss allowance. The following chart illustrates the combination of allowance and charge-off compared to related loans at June 30, 2010 (in thousands):


	Nonimpaired Loans			Impaired Loans		Total
Allowance for loan losses:
Beginning balance	$	7,283		547		7,830
Provision		1,866		5,924		7,790
Charge-offs		(3,010	)	(5,252	)	(8,262	)
Recoveries		35		—		35


Ending balance	$	6,174		1,219		7,393


Loss allowance		6,174		1,219		7,393
Partial charge-offs of loans currently in portfolio		—		7,828		7,828


Total	$	6,174		9,047		15,221


Total loans	$	323,918		45,179		369,097


Allowance for loss and charge-offs as a percentage of total loans at June 30, 2010		1.91	%	20.02	%	4.12	%


Allowance for loss and charge-offs as a percentage of total loans at December 31, 2009		2.07	%	17.03	%	3.61	%


	At June 30, 2010
*Impaired loans with partial charge-offs:*
Fair value of collateral	$	13,002
Estimated selling costs		(1,475	)

Fair value less selling costs		11,527


Gross impaired loans prior to charge-offs		19,355
Partial charge-offs of impaired loans		(7,828	)

Book value of impaired loans with partial charge-offs		11,527


Fair value less selling costs in excess of book value	$	—


*Impaired loans without partial charge-offs:*
Fair value of collateral		64,735
Estimated selling costs		(6,474	)

Fair value less selling costs		58,261


Impaired loans		35,584
Loss allowance		(1,219	)

Book value of impaired loans		34,365


Fair value less selling costs in excess of book value	$	23,896

FIRST COMMUNITY BANK CORPORATION OF AMERICA AND SUBSIDIARIES

The increase in nonperforming assets correlates with the real estate related delinquencies being experienced by the Bank in the Port Charlotte market, and the Tampa Bay market. Predominantly the nonperforming assets are vacant residential lots, single family homes, multifamily and small office properties.

Retail credit is the primary reason for the build up in impaired loans. The subsequent move to charge-off is rapid and is not reflected as a specific reserve. The Bank recognizes these losses as they become apparent.

The Bank initially will try and work with any borrower with an impaired loan. Should negotiations fail, then legal action occurs. The foreclosure process in Florida has continued to lengthen given the large number of cases in process. This delay has inhibited the Bank’s ability to get back real estate in a timely manner; the average is now between twelve and eighteen months. The Bank currently has two special assets officers, one devoted to retail and one devoted to commercial. In addition, we have a person who assists in handling other real estate owned by the Bank.

FIRST COMMUNITY BANK CORPORATION OF AMERICA AND SUBSIDIARIES

Results of Operations

The following table sets forth, for the periods indicated, information regarding (i) the total dollar amount of interest and dividend income of the Company from interest-earning assets and the resultant average yields; (ii) the total dollar amount of interest expense on interest-bearing liabilities and the resultant average cost; (iii) net interest income; (iv) interest-rate spread; and (v) net interest margin.


	Three Months Ended June 30,
	2010						2009
	Average Balance		Interest and Dividends		Average Yield/ Rate		Average Balance		Interest and Dividends		Average Yield/ Rate
	(Dollars in thousands)
Interest-earning assets:
Loans (1)	$	382,054		5,161	5.40	%	$	416,084		5,950	5.72	%
Securities		53,342		423	3.17			52,573		550	4.18
Other interest-earning assets (2)		54,977		37	0.27			27,271		13	0.19


Total interest-earning assets		490,373		5,621	4.59			495,928		6,513	5.25


Noninterest-earning assets		40,579						51,688


Total assets	$	530,952					$	547,616


Interest-bearing liabilities:
Savings, NOW, money-market deposit accounts		231,225		659	1.14			161,801		700	1.73
Time deposits		177,845		1,063	2.39			257,579		1,883	2.92


Total interest-bearing deposits		409,070		1,722	1.68			419,380		2,583	2.46

Other interest-bearing liabilities (3)		40,396		346	3.43			40,597		354	3.49


Total interest-bearing liabilities		449,466		2,068	1.84			459,977		2,937	2.55


Noninterest-bearing liabilities		38,271						42,965
Stockholders’ equity		43,215						44,674


Total liabilities and stockholders’ equity	$	530,952					$	547,616


Net interest income			$	3,553					$	3,576


Interest-rate spread (4)					2.74	%					2.70	%


Net interest margin (5)					2.90	%					2.88	%


Ratio of average interest-earning assets to average interest-bearing liabilities		1.09						1.08

(1)	Includes nonperforming loans.

(2)	Includes Federal Home Loan Bank stock and interest-bearing deposits with banks.

(3)	Includes Federal Home Loan Bank advances and other borrowings.

(4)	Interest-rate spread represents the difference between the average yield on interest-earning assets and the average rate of interest-bearing liabilities.

(5)	Net interest margin is net interest income divided by average interest-earning assets.

FIRST COMMUNITY BANK CORPORATION OF AMERICA AND SUBSIDIARIES


	Six Months Ended June 30,
	2010						2009
	Average Balance		Interest and Dividends		Average Yield/ Rate		Average Balance		Interest and Dividends		Average Yield/ Rate
	(Dollars in thousands)
Interest-earning assets:
Loans (1)	$	389,839		10,571	5.42	%	$	413,577		11,983	5.79	%
Securities		57,779		980	3.39			47,740		1,030	4.32
Other interest-earning assets (2)		50,516		68	0.27			21,835		22	0.20


Total interest-earning assets		498,134		11,619	4.67			483,152		13,035	5.40


Noninterest-earning assets		43,791						49,599


Total assets	$	541,925					$	532,751


Interest-bearing liabilities:
Savings, NOW, money-market deposit accounts		224,553		1,395	1.24			149,601		1,291	1.73
Time deposits		193,211		2,329	2.41			254,585		3,918	3.08


Total interest-bearing deposits		417,764		3,724	1.78			404,186		5,209	2.58

Other interest-bearing liabilities (3)		40,232		688	3.42			42,990		716	3.33


Total interest-bearing liabilities		457,996		4,412	1.93			447,176		5,925	2.65


Noninterest-bearing liabilities		38,698						40,856
Stockholders’ equity		45,231						44,719


Total liabilities and stockholders’ equity	$	541,925					$	532,751


Net interest income			$	7,207					$	7,110


Interest-rate spread (4)					2.74	%					2.75	%


Net interest margin (5)					2.89	%					2.94	%


Ratio of average interest-earning assets to average interest-bearing liabilities		1.09						1.08

(1)	Includes nonperforming loans.

(2)	Includes Federal Home Loan Bank stock and interest-bearing deposits with banks.

(3)	Includes Federal Home Loan Bank advances and other borrowings.

(4)	Interest-rate spread represents the difference between the average yield on interest-earning assets and the average rate of interest-bearing liabilities.

(5)	Net interest margin is net interest income divided by average interest-earning assets.

FIRST COMMUNITY BANK CORPORATION OF AMERICA AND SUBSIDIARIES

Comparison of the Three-Month Periods Ended June 30, 2010 and 2009

General. First Community Bank Corporation of America reported a net loss for the second quarter ended June 30, 2010 of $9,277,000 compared to net loss of $281,000 for the same period in 2009. The Company took a charge of $6.8 million to establish an allowance against the deferred tax asset. In addition, the decline in earnings reflected increased credit losses.

The Company recorded a net loss applicable to common stockholders, after preferred stock dividend and amortization of preferred discount, for the quarter ended June 30, 2010 of $9,345,000 or $(1.72) basic per share, compared to net loss of $416,000 or $(.10) basic per share for the same period in 2009.

The second quarter 2010 results included a $3,849,000 charge to provision for loan losses compared to $1,337,000 for the period in 2009. The increased loan loss provision was due to increased levels of delinquencies resulting from a continued weakness in the local economy.

Net Interest Income. Interest income decreased to $5.6 million during the three months ended June 30, 2010, from $6.5 million in 2009. Interest on loans for the three months ended June 30, 2010 decreased to $5.2 million from $6.0 million for the three months ended June 30, 2009. This decrease was due to a decrease in the average yield earned to 5.40% for the three months ended June 30, 2010 from 5.72% for the three months ended June 30, 2009. Interest on securities decreased to $423,000 during the three months ended June 30, 2010 from $550,000 for the three months ended June 30, 2009. This decrease in interest income was due to a decrease in the average yield earned from 4.18% in 2009 to 3.17% in 2010.

Interest expense on interest-bearing deposit accounts decreased to $1.7 million during the three months ended June 30, 2010, compared to $2.6 million during the three months ended June 30, 2009. The decrease was due to a decrease in the rate paid to 1.68% during the three months ended June 30, 2010 from 2.46% during the three months ended June 30, 2009. Interest expense on other borrowings decreased to $346,000 during the three months ended June 30, 2010, compared to $354,000 during the three months ended June 30, 2009. The decrease was due to a decrease in the average balance of other borrowings to $40.4 million in 2010 from $40.6 million in 2009. The average rate paid on other borrowings decreased to 3.43% during the three months ended June 30, 2010 compared to 3.49% during the three months ended June 30, 2009.

Provision for Loan Losses. Provisions for loan losses are based on our review of the historical loan loss experience and such factors which, in management’s judgment, deserve consideration under existing economic conditions in estimating probable credit losses. The allowance is based on ongoing assessments of the estimated losses inherent in the loan portfolio. Our methodology for assessing the appropriate allowance level consists of several key elements described below.

Our methodology incorporated the calculation of loans considered impaired and allocations for performing portfolio categories based on applying historical charge off data for loans categorized by similar risk characteristics based on our experience. The methodology includes an unallocated portion (qualitative factors) justified by current general market conditions, trends in performance (delinquency), economic and political trends.

Larger commercial loans that exhibit probable or observed credit weaknesses are subject to individual review. Where appropriate, the allowance is allocated to individual loans based on our estimate of the borrower’s ability to repay the loan given the availability of collateral, other sources of cash flows and available legal options. Included in the review of individual loans are those that are impaired. Specific allowances for impaired loans are measured based on the fair value of the underlying collateral. The collectability of both principal and interest is evaluated when assessing the allowance.

FIRST COMMUNITY BANK CORPORATION OF AMERICA AND SUBSIDIARIES

Comparison of the Three-Month Periods Ended June 30, 2010 and 2009

Provision for Loan Losses, Continued. Homogenous loans, such as installment and residential mortgage loans, are not individually reviewed by management. The allowance is established for each pool of loans based on the expected net charge-offs. Loss rates are based on the average net charge-off history by loan category.

Historical loss rates are adjusted for significant factors that, in management’s judgment, reflect the impact of any current conditions on loss recognition. Factors which management considers in the analysis include the effects of the local economy, trends in the nature and volume of loans (delinquencies, charge-offs, nonaccrual and problem loans), changes in the internal lending policies and credit standards, collection practices, and examination results from bank regulatory agencies and our internal credit review function. The allowance relating to individual loans and historical loss rates are reviewed throughout the year and adjusted as necessary based on changing borrower and collateral conditions and actual collection and charge-off experience.

The provision for loan losses was $3,849,000 for the three months ended June 30, 2010 compared to $1,337,000 for the three months ended June 30, 2009. Continued economic weakness, has resulted in increasing levels of nonperforming loans and charge-offs.

The allowance for loan losses is $7.4 million at June 30, 2010. While management believes that its allowance for loan losses is adequate as of June 30, 2010, future adjustments to the Company’s allowance for loan losses may be necessary if economic conditions differ substantially from the assumptions used in making the initial determination.

Noninterest Income. Noninterest income increased to $774,000 for the three months ended June 30, 2010 from $480,000 for the three months ended June 30, 2009. The increase was primarily due to a $377,000 gain on sale of securities.

Noninterest Expenses. Total noninterest expenses increased to $3.3 million for the three months ended June 30, 2010 from $3.2 million for the comparable period ended June 30, 2009.

Income Taxes (Benefit). Income taxes (benefit) for the three months ended June 30, 2010 were $6,428,000 compared to $(230,000) for the period ending June 30, 2009. The income tax in 2010 reflects a charge of $6.8 million to establish an allowance against the deferred tax asset.

FIRST COMMUNITY BANK CORPORATION OF AMERICA AND SUBSIDIARIES

Comparison of the Six-Month Periods Ended June 30, 2010 and 2009

General. For the six-month period ended June 30, 2010, First Community reported a net loss of $11,149,000 compared to net loss of $212,000 for the same period in 2009. The Company took a charge of $6.8 million to establish an allowance against the deferred tax asset. In addition, the decline in earnings reflected increased credit losses.

For the six month period ended June 30, 2010, the Company recorded a net loss applicable to common stockholders of $11,615,000 or $(2.16) basic per share, compared to net loss of $496,000 or $(.12) basic per share for the same period in 2009. For the first six months, provision for loan losses was $7,790,000 in 2010 compared to $2,032,000 in 2009. The increased loan loss provision was due to increased levels of delinquencies resulting from a continued weakness in the local economy.

Net Interest Income. Interest income decreased to $11.6 million during the six months ended June 30, 2010, from $13.0 million in 2009. Interest on loans for the six months ended June 30, 2010 decreased to $10.6 million from $12.0 million for the six months ended June 30, 2009. The average yield earned on loans declined to 5.42% from 5.79% for the same period in 2009. The average balance of loans was $389.8 million during the six months ended June 30, 2010 compared to $413.6 million during the six months ended June 30, 2009. Interest on securities decreased to $980,000 during the six months ended June 30, 2010, from $1.0 million for the six months ended June 30, 2009. The decrease in interest income on securities was due to a decrease in the average yield on securities earned from 4.32% in 2009 to 3.39% in 2010. The decrease was partially offset by an increase in the average balance on securities from $47.7 million in 2009 to $54.8 million in 2010.

Interest expense on interest-bearing deposit accounts decreased to $3.7 million during the six months ended June 30, 2010, compared to $5.2 million during the six months ended June 30, 2009. The decrease was due to a decrease in the rate paid to 1.78% during the six months ended June 30, 2010 from 2.58% during the six months ended June 30, 2009. The average balance of interest bearing deposits increased to $417.8 million in 2010 from $404.2 million in 2009. Interest expense on other borrowings decreased to $688,000 during the six months ended June 30, 2010, compared to $716,000 during the six months ended June 30, 2009. The decrease was due to a decrease in the average balance of other borrowings to $40.2 million in 2010 from $43.0 million in 2009.

Provision for Loan Losses. Provisions for loan losses are based on our review of the historical loan loss experience and such factors which, in management’s judgment, deserve consideration under existing economic conditions in estimating probable credit losses. The allowance is based on ongoing assessments of the estimated losses in the loan portfolio. Our methodology for assessing the appropriate allowance level consists of several key elements described below.

FIRST COMMUNITY BANK CORPORATION OF AMERICA AND SUBSIDIARIES

Comparison of the Six-Month Periods Ended June 30, 2010 and 2009

Provision for Loan Losses, Continued. Larger commercial loans that exhibit probable or observed credit weaknesses are subject to individual review. Where appropriate, the allowance is allocated to individual loans based on our estimate of the borrower’s ability to repay the loan given the availability of collateral, other sources of cash flows and available legal options. Included in the review of individual loans are those that are impaired. Specific allowance for impaired loans are measured based on the fair value of the underlying collateral less selling costs. The collectability of both principal and interest is evaluated when assessing the allowance. Historical loss rates are applied to other commercial loans not subject to specific allocations.

Homogenous loans, such as installment and residential mortgage loans, are not individually reviewed by management. The allowance is established for each pool of loans based on the expected net charge-offs. Loss rates are based on the average net charge-off history by loan category.

The provision for loan losses was $7,790,000 for the six months ended June 30, 2010 compared to $2,032,000 for the six months ended June 30, 2009. Continued economic weakness has resulted in increasing levels of nonperforming loans and charge-offs.

Noninterest Income. Noninterest income increased to $1,371,000 for the six months ended June 30, 2010 from $858,000 for the six months ended June 30, 2009. The increase was primarily due to a $536,000 gain on the sale of securities combined with a $123,000 increase in other income.

Noninterest Expenses. Total noninterest expenses increased to $6.7 million for the six months ended June 30, 2010 from $6.4 million for the comparable period ended June 30, 2009. This increase reflects increased credit related expenses and insurance costs.

Income Taxes (Benefit). Income taxes (benefit) for the six months ended June 30, 2010 was $5,228,000 compared to $(236,000) for the period ending June 30, 2009. The income tax in 2010 reflects a charge of $6.8 million to establish an allowance against the deferred tax asset.

FIRST COMMUNITY BANK CORPORATION OF AMERICA AND SUBSIDIARIES

Item 3. Quantitative and Qualitative Disclosures about Market Risk

Market risk is the risk of loss from adverse changes in market prices and rates. The Company’s market risk arises primarily from interest-rate risk inherent in its lending, investment and deposit taking activities. The Company has little or no risk related to trading accounts, commodities or foreign exchange.

Management actively monitors and manages its interest-rate risk exposure. The primary objective in managing interest-rate risk is to limit, within established guidelines, the adverse impact of changes in interest rates on the Company’s net interest income and capital, while adjusting the Company’s asset-liability structure to obtain the maximum yield-cost spread on that structure. Management relies primarily on its asset-liability structure to control interest rate risk. However, a sudden and substantial increase in interest rates could adversely impact the Company’s earnings, to the extent that the interest rates borne by assets and liabilities do not change at the same speed, to the same extent, or on the same basis. The Company is managing through the impact of recent declining interest rates and the subsequent pressure on spreads.

Item 4T. Controls and Procedures

Evaluation of disclosure controls and procedures. The Company maintains controls and procedures designed to ensure that information required to be disclosed in the reports that the Company files or submits under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the Securities and Exchange Commission. Based upon their evaluation of those controls and procedures performed within 90 days of the filing date of this report, the Chief Executive and Chief Financial officers of the Company concluded that the Company’s disclosure controls and procedures were effective to ensure that the information required to be disclosed by the Company in the reports that it files or submits under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the U.S. Securities and Exchange Commission’s rules and forms.

b.	Changes in internal controls. The Company made no significant changes in its internal controls or in other factors that could significantly affect these controls subsequent to the date of the evaluation of those controls by the Chief Executive and Chief Financial officers.

PART II. OTHER INFORMATION

Item 1. Legal Proceedings

There are no material pending legal proceeding to which First Community Bank Corporation of America and Subsidiaries, is a party or to which any of their property is subject.

Item 1A. Risk Factors

There have been no material changes to the risk factors disclosed in Item 1A “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2009.

FIRST COMMUNITY BANK CORPORATION OF AMERICA AND SUBSIDIARIES

PART II. OTHER INFORMATION, CONTINUED

Item 4. Submission of Matters to Vote a of Security Holders

The Annual Meeting of Shareholders (the “Annual Meeting”) of First Community Bank Corporation of America, was held on May 17, 2010, to consider the election of eight directors with terms expiring at the Annual Meeting in 2011, to fix the number of directors to serve on the board for the ensuing year at nine, an advisory vote to approve the executive compensation plans, programs and arrangements employed by First Community, a proposal to amend First Community’s Articles of Incorporation to increase the authorized common stock from 20,000,000 shares to 40,000,000 shares, and the adjournment of the Annual Meeting to solicit additional proxies in the event there were not sufficient votes to approve any of the foregoing items.

At the Annual Meeting shares were present in person or by proxy. Listed below are the directors that were elected at the Annual Meeting, their terms, and a summary of the votes cast for each nominee.


	Term Expiring	For	Withheld	Broker Nonvote

Brad Bishop	2011	3,456,973	11,778	1,520,070

Kenneth P. Cherven	2011	3,455,510	13,241	1,520,070

Kenneth Delarbre	2011	3,457,020	11,731	1,520,070

Kenneth F. Faliero	2011	3,456,863	11,888	1,520,070

James Macaluso	2011	3,456,879	11,872	1,520,070

David K. Meehan	2011	3,455,708	13,043	1,520,070

Robert G. Menke	2011	3,454,518	14,233	1,520,070

Robert M. Menke	2011	3,452,622	16,129	1,520,070

The shareholders voted on four other matters-


	For	Against	Abstain

Fix the number of directors to serve on the board	4,910,393	70,592	7,836


An advisory vote to approve the executive compensation plans, programs and arrangements	4,893,382	84,613	10,826


A proposal to amend First Community’s Articles of Incorporation to increase the authorized common stock from 20,000,000 shares to 40,000,000 shares	4,899,241	87,417	2,163


Solicit additional proxies if needed	4,876,868	78,529	33,424

FIRST COMMUNITY BANK CORPORATION OF AMERICA AND SUBSIDIARIES

PART II. OTHER INFORMATION, CONTINUED

Item 6. Exhibits

Exhibits. The following exhibits were filed with the Securities and Exchange Commission.


Exhibit No.		Description of Exhibit

*****	3.1	Amended and Restated Articles of Incorporation

*	3.2	Bylaws

*	4.1	Specimen Common Stock Certificate

*	4.3	Warrant Certificate

**	10.1	Employment Agreement of Kenneth P. Cherven dated June 16, 2002

*	10.2	First Amended and Restated Non-Employee Director Stock Option Plan

*	10.3	Long-Term Incentive Plan

*	10.4	Incentive Compensation Plan

***	10.5	Employment Agreement of Kenneth P. Cherven dated November 29, 2004

****	10.6	Deferred Compensation Plan of Kenneth P. Cherven dated January 1, 2005.

	31.1	Certification of Chief Executive Officer required by Rule 13a-14(a)/15d-14(a) under the Exchange Act

	31.2	Certification of Chief Financial Officer required by Rule 13a-14(a)/15d-14(a) under the Exchange Act

	32.1	Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of Sarbanes-Oxley Act of 2002

	32.2	Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of Sarbanes-Oxley Act of 2002

**	99.5	Audit Committee Charter

*	Exhibits marked with an asterisk were submitted with the Company’s original filing of Form SB-2 on April 7, 2003.

**	Exhibits marked with a double asterisk were submitted with the Company’s filing of its Amendment One to Form SB-2 on May 8, 2003.

***	Exhibits marked with triple asterisk were submitted with the Company’s filing of Form 10-QSB on May 13, 2005.

****	Exhibits marked with quadruple asterisk were submitted with the Company’s filing of Form 10-QSB on August 12, 2005.

*****

Exhibits marked with quintuple asterisk are filed with the Company’s filing Form 10-Q on August 12, 2010.

FIRST COMMUNITY BANK CORPORATION OF AMERICA AND SUBSIDIARIES

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


	FIRST COMMUNITY BANK CORPORATION OF AMERICA
	(Registrant)

Date: August 12, 2010	By:	/s/ Kenneth P. Cherven
		Kenneth P. Cherven, President and Chief Executive Officer

Date: August 12, 2010	By:	/s/ Stan B. McClelland
		Stan B. McClelland, Chief Financial Officer