First Community Bank Corp of America (FCFL) 10-K 2005 FY Annual report

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, 2005

Commission File Number 000- 50357

FIRST COMMUNITY BANK CORPORATION OF AMERICA

A Florida Corporation

IRS Employer Identification No. 65-0623023

9001 Belcher Road

Pinellas Park, Florida 33782

(727) 520-0987

Securities Registered Pursuant to Section 12(b)

of the Securities Exchange Act of 1934: NONE

Securities Registered Pursuant to Section 12(g) of the Securities Exchange

Act of 1934: Common Stock, $0.05 par value

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.    Yes  ¨    No  x

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 159D0 of the Exchange Act.    Yes  ¨    No  x

Indicate 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 if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K  x

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

Large accelerated filer  ¨    Accelerated filer  ¨    Non-accelerated filer  x

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

The aggregate market value of the Registrant’s common stock held by non-affiliates of the Registrant, based upon the closing price of $20.75, as quoted on the NASDAQ SmallCap Market, on March 1, 2006 was approximately $44,355,740. For the purposes of this response, directors and officers of the Registrant’s common stock are considered the affiliates of the Registrant at that date.

The number of shares outstanding of the Registrant’s common stock, as of March 1, 2006: 3,796,750 shares of $.05 par value common stock.

Portions of the Proxy Statement of the Registrant for the Annual Meeting of Shareholders to be held in April 2006, are incorporated by reference into Part III of this report.

TABLE OF CONTENTS

			Page
PART I.
	Item 1.	Description of Business	1
	Item 2.	Description of Property	13
	Item 3.	Legal Proceedings	13
	Item 4.	Submission of Matters to Vote of Security Holders	13
PART II.
	Item 5.	Market for Common Equity and Related Stockholder Matters	14
	Item 6.	Selected Consolidated Financial Data	15
	Item 7.	Management’s Discussion and Analysis or Plan of Operation	16
	Item 7A.	Market Risk	29
	Item 8.	Financial Statements	F-1 –F29
	Item 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	33
	Item 9A.	Controls and Procedures	33
PART III.
	Item 10.	Directors, Executive Officers, Promoters and Control Persons; Compliance with Section 16 (a) of the Exchange Act	33
	Item 11.	Executive Compensation	33
	Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	33
	Item 13.	Certain Relationships and Related Transactions	34
	Item 14.	Principal Accountant Fees and Services	34
	Item 15.	Exhibits and Financial Statement Schedules	35
SIGNATURES			36

PART I

Item 1. Description of Business.

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 has made, among other things.

General

We are a Florida-based unitary savings and loan holding company with one bank subsidiary, First Community Bank of America (“First Community Bank”). Our bank subsidiary has six branch locations in Pinellas, Hillsborough, and Charlotte Counties. During 2006, we anticipate opening one additional office in Charlotte County.

We own all of the outstanding common stock of First Community Bank and First Community Lender Services, Inc. Our primary business activity is the operations of First Community Bank. First Community Bank is a federally-chartered stock savings bank that provides a variety of banking services to small and middle market businesses and individuals through its three banking offices located in Pinellas County, two banking offices located in Hillsborough County and one banking office located in Charlotte County, Florida. FCLS provides tax deferred 1031 exchange services for eligible transactions.

Strategy

We see tremendous opportunity to capitalize on the opportunities created by the continuing changing competitive landscape due to mergers and consolidation. These mergers include the acquisitions of:

• SouthTrust Bank by Wachovia Corporation

• First National Bankshares by Fifth Third Bancorp

We believe that the mergers and consolidation have reduced the levels of personalized services. Even though, typically, the national and regional financial institutions have more products and more locations, they lose that personal service touch that we offer. The most frequent customer complaints we hear about the national and regional institutions are the lack of personalized service and the turnover in personnel, which limits the customer’s ability to develop a relationship with his or her banker. Customers are willing to make a change in order to have that personalized service, and we believe a significant opportunity exists to attract and retain these customers who are dissatisfied with their current banking relationship.

We believe we are unique in the sense that we offer a Regional President and local Regional Board of Directors in each of the counties we serve, all under the same charter. Each Region is operated as a community bank, emphasizing local leadership and local decision-making with Regional Presidents making most major decisions. Our Regional Presidents have loan approval authority, and deposit and loan pricing authority enabling them to provide quicker service and to respond appropriately to their respective markets. Each county’s Regional Board and Regional President are drawn mainly from members of the local business community. We place emphasis on relationship banking so that each customer can identify and establish a comfort level with our bank officers and staff. While a significant portion of our lending effort is concentrated on commercial and professional businesses, we also focus on cross-marketing our deposit products to these borrowers. Many of our retail customers are the principals and employees of our small-and medium-sized business customers.

1

Market Focus

We focus our marketing efforts on attracting small and medium-sized businesses and individuals, including service companies, light manufacturing companies, commercial real estate developers, entrepreneurs and professionals, such as engineers, physicians, attorneys, certified public accountants, and architects.

We have been successful in penetrating this market through our ability to deliver:

• Tailored and flexible loan products;

• Comprehensive online banking and cash management services; and

• Competitive investment SWEEP products.

We distinguish ourselves from our competitors by providing a high level of personal service to customers who want quick, local decision making, and who appreciate and are looking for a long-term banking relationship. We believe banking is a business that requires public trust. Our senior management team has over 100 years of combined experience endeavoring to build a reputation worthy of our customers’ trust.

Future Growth

In the next few years, we plan to have sufficient capital on hand to take advantage of growth opportunities either through the acquisition of small banks in identified strategic markets, or through the acquisition of branch sites that may come available in markets we are trying to penetrate. Currently, we have no specific acquisition candidates targeted. During 2006, we anticipate opening one new office in our Charlotte County Region. The acquisition or formation of banks, the purchase of branch facilities, and the establishment of new branch facilities are subject to regulatory approvals and other requirements. See the “Supervision and Regulation” section for more details regarding the requirements surrounding the acquisition or formation of banks.

First Community Bank of America

First Community Bank, our primary operating subsidiary, is a federally-chartered stock savings bank providing a variety of banking services to small and middle market businesses and individuals through its offices in Pinellas, Hillsborough and Charlotte Counties. As of December 31, 2005, First Community Bank had assets of approximately $325 million, net loans of $273 million and deposits of $273 million. Due to our strong focus on commercial lending, approximately 51% of our total loans are commercial and 14% of our total deposits are comprised of non-interest bearing checking accounts.

Products and Services

General. We offer a broad array of traditional banking products and services to our customers, including the products and services described below. These services are offered at each of our banking locations, as well as through our online banking program atwww.efirstcommbank.com.

Deposits.We offer a full range of interest bearing and non-interest bearing accounts, including commercial and retail checking accounts, money market accounts, sweep accounts, cash management accounts, individual retirement accounts, savings accounts, and other time deposits, ranging from daily money market accounts to longer term certificates of deposit. We have tailored the rates and terms of our accounts and time deposits to compete with the rates and terms in our principal markets. We seek deposits from residents, businesses, professionals and employees of businesses in our primary markets. The FDIC insures all of our accounts up to the maximum amount permitted by law. In addition, we receive service charges that are competitive with other financial institutions in our principal markets, covering such matters as maintenance fees on checking accounts, per item processing fees on checking accounts, returned check charges and other similar fees.

2

Loan Activities. We use our deposits, borrowings and other sources of funds to originate loans. We offer a full range of short- and medium-term commercial, consumer and real estate loans. We generally seek to allocate our loan portfolio as follows: 60% to real estate loans; 20% to consumer loans; and 20% to commercial and industrial loans. Our loan approval process provides for various levels of officer lending authority. When a loan amount exceeds officer lending authority levels, it is reviewed by the loan committee of our Board of Directors, which has ultimate lending authority. The loan committee meets as needed.

The risk of non-payment of loans is inherent in all loans. However, we carefully evaluate all loan applicants and attempt to minimize our credit risk by using thorough loan application and approval procedures that we have established for each category of loan. In determining whether to make a loan, we consider the borrower’s credit history, analyze the borrower’s income and ability to repay the loan, and evaluate the need for collateral to secure recovery in the event of default. We have established an allowance for loan losses based upon assumptions and judgments regarding the ultimate collectibility of loans in our portfolio and a percentage of the outstanding balances of specific loans when their ultimate collectibility is considered questionable.

Our loan activities are primarily directed to individuals, businesses and professionals in our principal markets whose demand for funds generally fall within our bank’s respective legal lending limits and who are also likely deposit customers. We have the ability to make loans in excess of our individual loan limits when we are able to secure a commitment from another lending institution to purchase a participation in the loan. The following is a description of each of the major categories of loans which we make.

Commercial Loans. This category includes loans made to business entities for a variety of business purposes. We place particular emphasis on loans to small to medium-sized professional firms, retail and wholesale businesses, and light industry and manufacturing concerns operating in our principal markets. We consider “small businesses” to include those with generally less than $10 million in sales. Our commercial loans include term loans with variable interest rates secured by equipment, inventory, receivables and real estate, as well as secured and unsecured working capital lines of credit. The risks of these types of loans depend on the general business conditions in the local economy and the borrowers’ ability to sell its products and services in order to generate sufficient business profits to repay their loans under the agreed upon terms and conditions. Personal guarantees are obtained from the principals of business borrowers, and sometimes third parties, to further support the borrowers’ ability to service the debt and reduce the risk of non-payment.

Commercial Real Estate Loans. Commercial real estate loans are offered to developers of both commercial and residential properties. Interest rates may be fixed or adjustable. We manage credit risk associated with these loans by actively monitoring such measures as advance rate, cash flow, collateral value and other appropriate credit factors. Risks associated with commercial real estate loans include the general risk of the failure of the commercial borrower, which is different for each type of business and commercial entity. We evaluate each business on an individual basis. We attempt to reduce credit risks in the commercial real estate loan portfolio by emphasizing loans on owner-occupied office and retail buildings where the loan-to-value ratio established by independent appraisals does not exceed 80%. In addition, we typically require personal guarantees of the principal owners.

Construction and Development Loans. Construction and development loans are made on both a pre-sold and speculative basis, and generally have a fixed interest rate. If the borrower has entered into an arrangement to sell the property prior to beginning construction, we consider the loan to be on a pre-sold basis. If the borrower has not entered into an agreement to sell the property prior to beginning construction, we consider the loan to be on a speculative basis. We make residential and commercial construction loans to builders and developers, as well as to consumers who wish to build their own homes. As of December 31, 2005, our construction real estate portfolio consists of 24% residential and 76% commercial real estate loans or $20.5 million in construction loans. We limit the term of most construction and development loans to 12 months, although we may structure the payments based on a longer amortization basis. We base speculative loans on the borrower’s financial strength and cash flow position. Loan proceeds are disbursed based on the percentage of completion and only after an experienced construction lender or appraiser inspects the project. These loans generally command higher rates and fees commensurate with the risks warranted in the construction loan field. The risk in construction lending depends upon the performance of the builder in building the project to the plans and specifications of the borrower and our ability to administer and control all phases of the construction disbursements. Upon completion of the construction, we typically convert construction loans to permanent loans.

3

Residential Real Estate Loans. We make adjustable or fixed-interest rate residential real estate loans to qualified individuals for the purchase of existing single-family residences in our principal markets. We make these loans in accordance with our appraisal policy and real estate lending policy which detail maximum loan-to-value ratios and maturities. We believe that these loan-to-value ratios are sufficient to compensate us for fluctuations in real estate market values and minimize losses that could result from a downturn in the residential real estate market. We sell mortgage loans that do not conform to our policies in the secondary markets. The risk of these loans depends on our ability to sell the loans to national investors and on the frequency of interest rate changes. Our residential real estate loans are primarily in Florida.

We limit interest rate risk and credit risk on these loans by locking in the interest rate for each loan with a secondary market investor and receiving a forward sales agreement from the secondary market investor. Loans are retained for our portfolio when there is sufficient liquidity to fund the needs of the established customers and when rates are favorable to retain the loans. The loan underwriting standards and policies are generally the same for both loans sold in the secondary market and those retained in our portfolio.

Consumer and Installment Loans. Consumer loans include lines of credit and term loans secured by second mortgages on the residences of borrowers for a variety of purposes, including home improvements, education and other personal expenditures. Consumer loans also include installment loans to individuals for personal, family and household purposes, including automobile and boat loans and pre-approved lines of credit. Consumer loans generally involve more risk than mortgage loans because the collateral for a defaulted loan may not provide an adequate source of repayment of the principal. This risk is due to the potential for damage to the collateral or other loss of value, and the fact that any remaining deficiency often does not warrant further collection efforts. In addition, consumer loan performance depends on the borrower’s continued financial stability and is, therefore, more likely to be adversely affected by job loss, divorce, illness or personal bankruptcy.

In addition, we have been approved for participation in the OTS pilot program which allows us to lend up to 25% of our capital and surplus on certain types of loans.

Other Services and Products.In addition to the deposit and loan products discussed above, we also provide:

• Cash management services;

• Sweep accounts;

• Telephone banking;

• Safe deposit boxes;

• Traveler’s checks;

• Direct deposit of payroll and social security checks;

• Deposit pick-up for commercial customers;

• Online banking/bill payment services;

• Wire transfers and ACH services;

• Automatic drafts for various accounts;

• 1031 Exchange Services;

• Certificate of Deposit Account Registry Service (CDARS)

4

• Debit cards; and

• VISA^® and MasterCard^® credit card services through our correspondent banks.

We also offer extended banking hours (both drive-in and lobby) and an after-hours depository. We are associated with a shared network of automated teller machines that customers may use throughout our market areas and other regions. We are associated with third party Internet banking service providers that enable us to provide customers with cost effective, secure and reliable Internet banking services.

Asset and Liability Management

Our main assets are cash and cash equivalents, our loan portfolio and our investment portfolio. Our liabilities consist primarily of deposits. Our objective is to support asset growth through the growth of core deposits, which include deposits of all categories made by individuals, partnerships, corporations and other entities. Consistent with the requirements of prudent banking necessary to maintain liquidity, we seek to match maturities and rates of loans and the investment portfolio with those of deposits, although exact matching is not always possible. The largest portion of our assets is invested in real estate, commercial and consumer loans. Our investment portfolio consists primarily of marketable securities of the United States government and, federal agencies, generally with varied maturities.

Our asset/liability mix is monitored on a regular basis with a quarterly report detailing interest-sensitive assets and interest-sensitive liabilities. The objective of this policy is to control interest-sensitive assets and liabilities in order to minimize the impact of substantial movements in interest rates on our earnings.

Customers

We believe that the mergers in our market areas this past year and the consolidation of the Florida banking industry over the last several years provides community-oriented banks such as ours, significant opportunities to build a successful, locally managed bank. We further believe that many of the larger financial institutions do not provide the high level of personalized services desired by many small and medium-sized businesses and their principals. Our marketing efforts are focused on attracting small and medium-sized businesses and individuals, including service companies, manufacturing companies, commercial real estate developers, entrepreneurs and professionals, such as engineers, physicians, CPAs, architects and attorneys.

While a significant portion of our lending effort is concentrated on commercial and professional businesses, emphasis is also placed on generating a significant amount of consumer business. Many of our consumer customers are the principals and employees of our small and medium-sized business customers. We believe in old-fashioned “relationship banking,” where each customer can identify and establish a comfort level with our bank officers. We intend to continue to develop our consumer business with individuals who appreciate a high level of personal service, contact with their loan officer and responsive decision-making. Most of our business is developed through our loan officers and members of our board of directors and by pursuing an aggressive strategy of calling on customers and potential customers throughout our principal market areas.

First Community Lender Services, Inc.

First Community Lender Services, Inc. was incorporated in 2001 as a wholly owned subsidiary of First Community. First Community Lender Services was originally established to network with title insurance vendors. In November 2004, 1031 Exchange services were added. A 1031 Exchange allows customers to sell an investment property/properties and defer any capital gains taxes by purchasing a “like-kind” replacement property/properties within a certain time frame under Section 1031 of the Internal Revenue Code.

Information About Our Primary Markets

We currently consider our primary market areas to be Pinellas, Hillsborough, and Charlotte Counties. Pinellas County, located on Florida’s Gulf Coast, is a peninsula bordered by the Gulf of Mexico on the west

5

and by Tampa Bay on the east. Pinellas County estimated its population to be approximately one million between 2003 and 2010. Two of the top five beaches in the United States are located along the 588 miles of Pinellas County coastline, according to America’s Best Beaches’ List. Nicknamed the “Sunshine City,” St. Petersburg averages 361 sunny days every year, and is located in southeast Pinellas County. St. Petersburg is also home to the Tampa Bay Devil Rays. Top key business segments in Pinellas County are services industries, light manufacturing and financial services. Pinellas County has received the “Successful Community Award” for creating a special metropolitan region by improving housing, expanding recreational opportunities and protecting the environment. Hillsborough County is located midway along the west coast of Florida and is contiguous with Pinellas County. As of 2004, Hillsborough County estimated its population at 1,115,960. The City of Tampa is the largest city in Hillsborough County and is the third most populous city in Florida. It is approximately 20 miles northeast of St. Petersburg. Hillsborough’s key business segments include tourism, agriculture, construction, finance, health care, government, technology, and the port of Tampa, which is the seventh largest in the Nation. Tampa is home to both the NFL Tampa Bay Buccaneers and the NHL Tampa Bay Lightning. Charlotte County is located between Lee County (Fort Myers) and Sarasota County in Southwest Florida on the Gulf of Mexico. Charlotte County estimated its population in 2004 at 156,985. Port Charlotte, the county’s geographical center, is approximately 100 miles south of St. Petersburg. Charlotte County features over 70 parks and recreational areas, including Charlotte Harbor, which is the 17^th largest estuary in the Nation and the 2^nd largest estuary in the State encompassing 270 square miles. The top two business segments of the County are service industries and construction. Charlotte County has been designated one of the top ten sailing destinations by SAIL magazine, and ranked 3^rd “Best in America” place to live and golf by Golf Digest.

Competition

We are subject to intense competition in our primary market areas. We face substantial competition in all phases of our operations from a variety of different competitors. These competitors include:

• Large national and super-regional financial institutions that have well-established branches and significant market share in the communities we serve;

• Finance companies, investment banking and brokerage firms, and insurance companies that offer bank-like products;

• Credit unions, which can offer highly competitive rates on loans and deposits because they receive tax advantages not available to commercial banks;

• Other community banks, including start-up banks, that can compete with us for customers who desire a high degree of personal service;

• Technology-based financial institutions including large national and super-regional banks offering on-line deposit, bill payment, and mortgage loan application services; and

• Both local and out-of-state trust companies and trust service offices.

Other existing community banks with whom we compete directly, and many new community bank start-ups, have marketing strategies similar to ours. These other community banks may open new branches in the communities we serve and compete directly for customers who want the level of service offered by community banks. Other community banks also compete for the same management personnel in Florida.

Various legislative actions in recent years have led to increased competition among financial institutions. With the enactment of the Riegle-Neal Interstate Banking and Branching Efficiency Act of 1994 and other laws and regulations affecting interstate bank expansion, it is easier for financial institutions located outside of the State of Florida to enter the Florida market, including our targeted markets. In addition, recent legislative and regulatory changes and technological advances have enabled customers to conduct banking activities without regard to geographic barriers, through computer and telephone-based banking and similar services. There can be no assurance that the United States Congress, the Florida Legislature, or the applicable bank regulatory agencies will not enact legislation or promulgate rules that may further increase competitive pressures on us.

6

Personnel

First Community has no employees of its own and operates using employees of First Community Bank. First Community Bank currently employs 74 full-time personnel and 6 part-time persons.

SUPERVISION AND REGULATION

General

We are a registered unitary savings and loan holding company within the meaning of the Home Owners’ Loan Act (“HOLA”). We, and our subsidiary, First Community Bank, operate in a highly regulated environment. Our business activities, which are governed by statute, regulation and administrative policies, are supervised by a number of federal bank regulatory agencies, including the Office of Thrift Supervision (“OTS”), the Federal Deposit Insurance Corporation (“FDIC”) and, to a limited extent, the Federal Reserve Board. The following is a brief summary of the more recent legislation that affects our company and our subsidiaries.

Regulation of the Holding Company

Restrictions on the Acquisition of Savings Institutions. Section 1467a of the HOLA provides that no holding company, directly or indirectly or acting in concert with one or more persons, or through one or more subsidiaries, or through one or more transactions, may acquire “control” of an insured savings institution at any time without the prior approval of the OTS. In addition, any holding company that acquires such control becomes a savings and loan holding company subject to registration, examination and regulation under HOLA and the regulations promulgated thereunder. Control in this context means ownership, control of, or holding proxies representing more than 25% of the voting shares of, an insured institution, the power to control in any manner the election of a majority of the directors of such institution or the power to exercise a controlling influence over the management or policies of the institution.

The OTS also has established certain rebuttable control determinations. An acquiror must file for approval of control with the OTS, or file to rebut the presumptions before surpassing a rebuttable control level of ownership. To rebut the presumption, the acquiror must file a submission with the OTS setting forth the reasons for rebuttal. The submission must be filed when the acquiror acquires more than 25% of any class of voting stock of the savings bank and when they have any of the control factors enumerated in 12 C.F.R. Section 574.4(c) which include, but are not limited to:

• The acquiror would be one of the two largest stockholders of any class of voting stock;

• The acquiror and/or the acquiror’s representative or nominees would constitute more than one member of the savings bank’s board of directors; and

• The acquiror or nominee or management official of the acquiror would serve as the chairman of the board of directors, chairman of the executive committee, chief executive officer, chief operating officer, chief financial officer, or in any similar policy making authority in the savings bank.

Transactions with Affiliates. Our authority to engage in transactions with related parties or “affiliates” or to make loans to certain insiders is limited by Sections 23A and 23B of the Federal Reserve Act (“FRA”) and Regulation “W” adopted by the Federal Reserve. Section 23A limits the aggregate amount of transactions with any individual affiliate to 10% of the capital and surplus of the savings institution and also limits the aggregate amount of transactions with all affiliates to 20% of the savings institution’s capital and surplus.

Certain transactions with affiliates are required to be secured by collateral in an amount and of a type described in the FRA and the purchase of low quality assets from affiliates is generally prohibited. Section 23B provides that certain transactions with affiliates, including loans and asset purchases, must be on terms and circumstances, including credit standards, that are substantially the same or at least as favorable to the savings institution as those prevailing at the time for comparable transactions with a non-related party or

7

non-affiliated holding company. In the absence of comparable transactions, such transactions may only occur under terms and circumstances, including credit standards that in good faith would be offered to or would apply to non-related parties or non-affiliated companies. Notwithstanding Sections 23A and 23B, savings institutions are prohibited from lending to any affiliate that is engaged in activities that are not permissible for bank holding companies under Section 4(c) of the Bank Holding Company Act of 1956. Further, no savings institution may purchase the securities of any affiliate other than a subsidiary.

In addition, Sections 22(g) and 22(h) of the FRA and Regulation O (which set limits on extensions of credit to executive officers, directors and 10% stockholders, as well as companies which such persons control) apply to savings institutions. Among other things, such loans must be made on terms, including interest rates, substantially the same as loans to unaffiliated individuals and which involve no more than the normal risk of collectibility. These regulations also place limits on the amount of loans we may make to such persons. These restrictions apply in addition to certain restrictions on transactions with affiliates contained in the OTS regulations.

Support of Subsidiary Depository Institutions. Under OTS policy, First Community is expected to act as a source of financial strength to and to commit resources to support First Community Bank. This support may be required at times when, in the absence of such OTS policy, First Community might not be inclined to provide such support. In addition, any capital loans by First Community to First Community Bank must be subordinate in right of payment to deposits and to certain other indebtedness of First Community Bank. In the event of bankruptcy, any commitment by a holding company to a federal bank regulatory agency to maintain the capital of a subsidiary depository institution will be assumed by the bankruptcy trustee and will be entitled to a priority of payment.

Under the Federal Deposit Insurance Act, a depository institution of a holding company can be held liable for any loss incurred by, or reasonably expected to be incurred by, the FDIC, in connection with:

• The default of a commonly controlled FDIC-insured depository institution; or

• Any assistance provided by the FDIC to any commonly controlled FDIC-insured depository institution in danger of default.

Default is defined generally as the appointment of a conservator or a receiver and “in danger of default” is defined generally as the existence of certain conditions indicating that a default is likely to occur in the absence of regulatory assistance.

Payment of Dividends. There are statutory and regulatory limitations on the payment of dividends by First Community Bank. The ability of our bank subsidiary to pay a dividend to us is governed by the OTS’ capital distribution regulation. Under the regulation, we may make a capital distribution without the approval of the OTS, provided the OTS is notified 30 days before declaration of the capital distribution. We must also meet the following requirements:

• It is not of supervisory concern, and will remain adequately or well-capitalized, as defined in the OTS prompt corrective action regulations, following the proposed distribution; and

• The distribution does not exceed our net income for the calendar year-to-date plus retained net income for the previous two calendar years (less any dividends previously paid).

If we do not meet the above-stated requirements, we must obtain the prior approval of the OTS before declaring any proposed distributions. The OTS can prohibit a proposed capital distribution by a savings institution, which would otherwise be permitted by the regulation, if the OTS determines that such distribution would constitute an unsafe or unsound practice. We have never paid a dividend; instead earnings are reinvested in the bank to support our current growth rate.

8

Regulation of First Community Bank of America

Capital Requirements. Both OTS and FDIC have promulgated regulations setting forth capital requirements applicable to depository institutions. The OTS capital regulations require savings institutions to meet three capital standards:

• A 1.5% tangible capital ratio (defined as the ratio of tangible capital to adjusted total assets);

• A 4% leverage (core capital) ratio (defined as the ratio of core capital to adjusted total assets); and

• An 8% risk-based capital standard as defined below.

Our tangible capital, core capital, and risk-based capital ratios at December 31, 2005, were 7.33%, 9.46%, and 10.71%, respectively.

Core capital is defined as common stockholder’s equity (including retained earnings), certain non-cumulative perpetual preferred stock and related surplus, minority interests in equity accounts of consolidated subsidiaries, certain goodwill and certain mortgage servicing rights less certain intangible assets, mortgage servicing rights less certain intangible assets, mortgage servicing rights and investments in non-includable subsidiaries. Tangible capital is defined in the same manner as core capital, except that all intangible assets (excluding certain mortgage servicing rights) must be deducted. Adjusted total assets is defined as GAAP total assets, minus intangible assets (except those included in core capital). The OTS regulations also require that in calculating the leverage ratio, tangible and risk-based capital standards, savings institutions must deduct investments in and loans to subsidiaries engaged in activities not permissible for a national bank.

The OTS risk-based capital standard for savings institutions requires that total capital (comprised of core capital and supplementary capital) be at least 8% of risk-weighted assets. In determining risk-weighted assets, all assets, including certain off-balance sheet assets, are multiplied by a risk-weight of 0% to 100%, as assigned by the OTS capital regulation based on the risks OTS believes are inherent in the type of asset. Generally, zero weight is assigned to risk-free assets, such as cash and unconditionally guaranteed United States Government securities. A weight of 20% is assigned to, among other things, certain obligations of United States Government-sponsored agencies (such as the FNMA and the FHLMC) and certain high quality mortgage-related securities. A weight of 50% is assigned to qualifying mortgage loans and certain other mortgaged-related securities, repossessed assets and assets that are 90 days or more past due.

The components of core capital are equivalent to those discussed above. The components of supplementary capital include permanent capital instruments (such as cumulative perpetual preferred stock, mandatory convertible subordinated debt and perpetual subordinated debt), maturing capital instruments (such as mandatory convertible subordinated debt and intermediate-term preferred stock) and the allowance for loan and lease losses. Allowance for loan and lease losses includable in supplementary capital is limited to a maximum of 1.25% of risk-weighted assets. Overall, the amount of capital counted toward supplementary capital cannot exceed 100% of core capital.

At December 31, 2005, we met each of our capital requirements. See Note 12 to the consolidated financial statements for a summary of the regulatory capital levels and percentages.

Standards for Safety and Soundness. The FDICIA, as amended by the Reigle Community Development and Regulatory Improvement Act of 1994, requires each federal banking agency to prescribe standards relating to internal controls, information systems and audit systems, loan documentation, credit underwriting, interest rate risk exposure, asset growth, and compensation, fees and benefits and such other operational and managerial standards as the agency deems appropriate for all insured depository institutions and their holding companies. The OTS and the other federal banking agencies adopted a rule establishing deadlines for the agencies to submit and review safety and soundness compliance plans and Interagency Guidelines Establishing Standards for Safety and Soundness. The guidelines require depository institutions to maintain internal controls and information systems and internal audit systems that are appropriate for the size, nature and scope of the institution’s business.

9

The guidelines also establish certain basic standards for loan documentation, credit underwriting, interest rate-risk exposure, and asset growth. The guidelines further provide that savings institutions should maintain safeguards to prevent the payment of compensation, fees and benefits that are excessive or that could lead to material financial loss, and that they should take into account factors such as compensation practices at comparable institutions. The Interagency Guidelines also include asset quality and earnings standards.

If the OTS determines that a savings institution is not in compliance with the safety and soundness guidelines, it may require the institution to submit an acceptable plan to achieve compliance with the guidelines. A savings institution is required to submit an acceptable compliance plan to the OTS within 30 days after receipt of a request for such a plan. Failure to submit or implement a compliance plan may subject the institution to regulatory sanctions.

Insurance of Deposit Accounts. The FDIC is the administrator for the Savings Institution Insurance Fund (“SAIF”) and the Bank Insurance Fund (“BIF”), and independently establishes insurance premiums for each Fund. Our deposit accounts are insured by the SAIF which is also administered by the FDIC. The Federal Deposit Insurance Act requires that the reserves of the SAIF and the BIF to be 1.25% of total insured deposits. Both funds are fully funded.

The FDIC applies a risk-based assessment system for insured depository institutions that takes into account the risks attributable to different categories and concentrations of assets and liabilities. In accordance with its rule, the FDIC assigns a depository institution to one of three capital categories based on the institution’s financial information, as of the reporting period ending seven months before the assessment period. A depository institution’s assessment rate depends on the capital category and supervisory category to which it is assigned. There are nine assessment risk classifications (i.e., combinations of capital groups and supervisory subgroups) to which different assessment rates are applied.

Qualified Thrift Lender Test (“QTL”). The HOLA requires savings institutions to meet a QTL test. The QTL test, as amended by the FDICIA, requires a savings institution to maintain at least 65% of its “portfolio assets” (as defined by regulation) in qualified thrift investments, primarily residential mortgages and related investments on a monthly basis in nine out of every 12 months. The definition of portfolio assets has recently been amended to include the small business loans upon which we focus. As of December 31, 2005, we exceeded the QTL test, maintaining approximately 96% of our portfolio assets in qualified thrift investments.

Interstate Banking. Federally-chartered savings institutions are allowed to branch nationwide to the extent allowed by federal statute. This ability permits savings institutions with interstate networks to diversify their loan portfolios and lines of business. The OTS authority preempts any state law purporting to regulate branching by federal savings institutions. Prior approval of the OTS is required for a savings institution to branch interstate or intrastate. To obtain supervisory clearance for branching, an applicant’s regulatory capital must meet or exceed the minimum requirements established by law and by the OTS regulations. In addition, the savings institution must have a satisfactory record under the Community Reinvestment Act (“CRA”). First Community Bank does not conduct interstate branching operations and does not plan to do so in the foreseeable future.

The Reigle-Neal Interstate Banking and Branching Efficiency Act of 1994 (“Interstate Act”) eliminated many existing restrictions on interstate banking by authorizing interstate acquisitions of financial institutions by bank holding companies without geographic limitations. Under the Interstate Act, existing restrictions on interstate acquisitions of banks by bank holding companies were repealed. Bank holding companies located in Florida are able to acquire any Florida-based bank, subject to certain deposit percentage and other restrictions. The legislation also provides thatde novo branching by an out-of-state bank is permitted only if it is expressly permitted by the laws of the host state. The authority of a bank to establish and operate branches within a state is subject to applicable state branching laws. Florida law permits interstate branching through the acquisition of a bank in existence for more than three years, but prohibits de novo branching by out of state banks.

OTS Assessments. Savings institutions are required by OTS regulation to pay assessments to the OTS to fund the operations of the OTS. The general assessment, to be paid on a semiannually basis, is computed upon the savings institution’s total assets, including consolidated subsidiaries, as reported in the institution’s latest quarterly thrift financial report.

10

Federal Home Loan Bank System.We are a member of the Federal Home Loan Bank system, which consists of 12 regional FHLBs. The FHLB provides a central credit facility primarily for member institutions. As a member of the FHLB-Atlanta, we are required to acquire and hold shares of capital stock in that FHLB in an amount at least equal to 4.5% of our advances (borrowings) from the FHLB-Atlanta plus 8% of certain assets sold to the FHLB-Atlanta. We are in compliance with this requirement. FHLB advances must be secured by specified types of collateral and may be obtained only for the purpose of providing funds for residential housing finance.

The FHLBs are required to provide funds for the resolution of insolvent savings institutions and to contribute funds for affordable housing programs. These requirements could reduce the amount of dividends that the FHLBs pay to their members and could also result in the FHLBs imposing a higher rate of interest on advances to members. For the year ended December 31, 2005, dividends paid by the FHLB-Atlanta to First Community Bank amounted to approximately $44,000, at a yield of 4.14% of our pre-tax income. Should dividends be reduced, or interest on FHLB advances increased, our consolidated net interest income might also be reduced. Furthermore, there can be no assurance that the value of the FHLB-Atlanta stock we hold will not decrease as a result of any new legislation.

Federal Reserve System. Federal Reserve regulations require depository institutions to maintain non-interest-earning reserves against their transaction accounts (primarily NOW and regular checking accounts). The Federal Reserve regulations generally require that reserves of 3% must be maintained against aggregate transaction accounts of $40.6 million or less (subject to adjustment by the Federal Reserve) and an initial reserve of $1,218,000 plus 10% of accounts in excess of $40.6 million. The first $6.6 million of otherwise reversible balances (subject to adjustments by the Federal Reserve) are exempted from the reserve requirements. We are in compliance with the foregoing requirements. The balances maintained to meet the reserve requirements imposed by the Federal Reserve may be used to satisfy liquidity requirements imposed by the OTS.

Because required reserves must be maintained in the form of either vault cash, a non-interest-bearing account at a Federal Reserve or a pass-through account as defined by the Federal Reserve, the effect of this reserve requirement is to reduce our interest-earning assets. FHLB System members are also authorized to borrow from the Federal Reserve discount window, however, Federal Reserve regulations require institutions to exhaust all FHLB sources before borrowing from a Federal Reserve discount window.

Other Laws. State usury and credit laws limit the amount of interest and various other charges collected or contracted by a bank on loans. Our loans are also subject to federal laws applicable to credit transactions, such as the:

• Federal Truth-In-Lending Act, which governs disclosures of credit terms to consumer borrowers;

• Community Reinvestment Act, which requires financial institutions to meet their obligations to provide for the total credit needs of the communities they serve, including investing their assets in loans to low- and moderate-income borrowers;

• Home Mortgage Disclosure Act requiring financial institutions to provide information to enable public officials to determine whether a financial institution is fulfilling its obligations to meet the housing needs of the community it serves;

• Equal Credit Opportunity Act prohibiting discrimination on the basis of race, creed or other prohibitive factors in extending credit;

• Real Estate Settlement Procedures Act, which requires lenders to disclose certain information regarding the nature and cost of real estate settlements, and prohibits certain lending practices, as well as limits escrow account amounts in real estate transactions;

• Fair Credit Reporting Act governing the manner in which consumer debts may be collected by collection agencies; and

11

• Rules and regulations of various federal agencies charged with the responsibility of implementing such federal laws. Our operations are also subject to the:

• Privacy provisions of the Gramm-Leach-Bliley Act of 1999, which require us to maintain privacy policies intended to safeguard consumer financial information, to disclose these policies to our customers, and to allow customers to “opt out” of having their financial service providers disclose their confidential financial information to non-affiliated third parties, subject to certain exceptions;

• Right to Financial Privacy Act, which imposes a duty to maintain confidentiality of consumer financial records and prescribes procedures for complying with administrative subpoenas of financial records; and

• Electronic Funds Transfer Act and Regulation E, which govern automatic deposits to, and withdrawals from, deposit accounts and customers’ rights and liabilities arising from the use of debit cards, automated teller machines and other electronic banking services.

Financial Modernization. The Gramm-Leach-Bliley Act of 1999 sought to achieve significant modernization of the federal bank regulatory framework by allowing the consolidation of banking institutions with other types of financial services firms, subject to various restrictions and requirements. In general, the Gramm-Leach-Bliley Act repealed most of the federal statutory barriers which separated commercial banking firms from insurance and securities firms and authorized the consolidation of such firms in a “financial services holding company”. We have no immediate plans to utilize the structural options created by the Gramm-Leach-Bliley Act, but we may develop such plans in the future.

After the September 11, 2001 terrorist attacks in New York and Washington, D.C., the United States government acted in several ways to tighten control on activities perceived to be connected to money laundering and terrorist funding. A series of orders were issued which identified terrorists and terrorist organizations and required the blocking of property and assets of, as well as prohibiting all transactions or dealings with, such terrorists, terrorist organizations and those that assist or sponsor them. The USA Patriot Act:

• Substantially broadens existing anti-money laundering legislation and the extraterritorial jurisdiction of the United States;

• Imposes new compliance and due diligence obligations;

• Creates new crimes and penalties;

• Compels the production of documents located both inside and outside the United States; including those of foreign institutions that have a correspondent relationship in the United States; and

• Clarifies the safe harbor from civil liability to customers.

In addition, the United States Treasury Department issued regulations in cooperation with the federal banking agencies, the Securities and Exchange Commission, the Commodity Futures Trading Commission and the Department of Justice to:

• Require customer identification and verification;

• Expand the money-laundering program requirement to the major financial services sectors; including insurance and unregistered investment companies, such as hedge funds; and

• Facilitate and permit the sharing of information between law enforcement and financial institutions, as well as among financial institutions themselves.

12

The United States Treasury Department also has created the Treasury USA Patriot Act Task Force to work with other financial regulators, the regulated community, law enforcement and consumers to continually improve the regulations.

On July 30, 2002, President Bush signed into law the Sarbanes-Oxley Act of 2002 (“Act”). The Securities and Exchange Commission (“SEC”) has promulgated certain regulations pursuant to the Act and will continue to propose additional implementing or clarifying regulations as necessary in furtherance of the Act. The passage of the Act and the regulations implemented by the SEC subject publicly traded companies to additional and more cumbersome reporting regulations and disclosure. Compliance with the Act and corresponding regulations may increase our operating expenses. The effective date of the application of the provision of Section 404 of the Act concerning internal control compliance reporting for non-accelerated filers such as First Community has been extended to the first fiscal year ending on or after July 15, 2007.

Item 2. Description of Property.

We own our corporate headquarters, which also serves as our Mid-County office. Our headquarters is located at 9001 Belcher Road, Pinellas Park, Florida 33782 and consists of a 7,200 square foot, two-story stand alone building. The facility has three drive-through lanes and an ATM machine.

In addition to our headquarters, we currently have five branch offices: St. Petersburg, Largo, South Shore, West Shore, and Port Charlotte. We own our St. Petersburg, West Shore and Port Charlotte offices. The St. Petersburg office consists of a 7,400 square foot, single story facility, with two drive-through lanes and an ATM machine. Our West Shore office in Hillsborough County is a two-story, 6,200 square foot building, with four drive-through lanes and an ATM machine. The Port Charlotte office is located in a stand-alone building consisting of approximately 4,000 square feet, with one drive-through lane. We lease the Largo and South Shore offices. The Largo office consists of a 2,000 square foot, single story, stand alone facility with one drive-through lane. Our South Shore office, located in Apollo Beach in Hillsborough County, is a 3,227 square feet facility with one drive-through lane. During 2006, we will open the Deep Creek office in Charlotte County, which will be a two-story, 7,400 square foot building. The opening is anticipated for the fourth quarter of 2006.

We operate a loan production facility in Bradenton, Florida, which is leased. This facility consists of 400 square feet in an office complex.

Item 3. Legal Proceedings.

There are no pending legal proceedings to which we are a party or to which any of our properties are subject.

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

No matters were submitted to a vote of security holders, through the solicitation of proxies or otherwise, during the fourth quarter of 2005.

13

PART II

Item 5. Market for Common Equity and Related Stockholder Matters.

On September 4, 2003, our stock began trading on The NASDAQ SmallCap Market under the symbol “FCFL.” As of March 1, 2006, there were 191 registered holders of common stock of the Company and approximately 503 street name holders. On March 15, 2005, we paid a stock dividend in common stock equal to 5% of the outstanding shares to shareholders of record as of the close of business on March 1, 2005. On January 20, 2006, a three-for-two stock split was issued to shareholders of record as of the close of business on January 10, 2006.

On March 1, 2006, the closing sales price of our common stock was $20.75. At December 31, 2005, the closing sales price of our stock was $17.89 (adjusted for stock split).

	Calendar Years
	2005		2004
	Low$	High$	Low$	High$
	(Per share)		(Per share)
First Quarter*	15.93	18.41	13.64	21.71
Second Quarter*	16.13	17.53	18.10	24.28
Third Quarter*	16.38	18.17	18.95	21.43
Fourth Quarter*	16.57	19.83	20.71	29.05

* Reflects the 5% stock dividend paid on March 15, 2005 and three-for-stock split issued on January 20, 2006.

Equity Compensation Plan Information

Plan Category	Number of securities to be issued upon exercise of outstanding options**	Weighted-average exercise price of outstanding options**		Number of securities remaining available for future issuance under equity compensation plans* **
Equity compensation plans approved by security holders	534,744	$	7.02	86,672
Equity compensation plans not approved by security holders	—		—	—
Total	534,744	$	7.02	86,672

* Excludes securities reflected in first column.

** Reflects the 5% stock dividend paid on March 15, 2005 and the three-for-two stock split issued on January 20, 2006.

14

Item 6. Selected Consolidated Financial Data

The following selected financial data for the years ended December 31, 2005, 2004 and 2003, is derived from our financial statements and other data. The selected financial data should be read in conjunction with our financial statements, including the financial statement notes included elsewhere herein. Net loans are stated net of unearned income. Earnings per share is computed using the weighted average number of shares of common stock and dilutive common stock equivalents from stock options as required. Book value per share excludes the effect of any outstanding stock options.

	At or for the year ended December 31,
	2005			2004			2003
	(Dollars in thousands, except per share data)
Selected Balance Sheet Data:
Total assets	$	324,754		$	241,806		$	180,437
Cash and cash equivalents		21,698			9,738			3,197
Securities available for sale		8,918			13,032			3,949
Securities held to maturity		5,278			1,775			3,477
Loans, net		272,534			205,789			160,236
Deposit accounts		272,629			200,718			134,529
Stockholders’ equity		29,147			23,618			20,184
Selected Operating Data:
Total interest income	$	16,765		$	11,562		$	9,211
Total interest expense		4,795			3,212			2,792
Net interest income		11,970			8,350			6,419
Provision for loan losses		795			605			668
Net interest income after provision for loan losses		11,175			7,745			5,751
Non-interest income		1,165			1,081			1,248
Non-interest expenses		7,805			5,620			4,700
Net earnings		2,863			2,023			1,468
Per Share Data(1):
Basic earnings per share	$	.86		$	.62		$	.55
Diluted earnings per share		.79			.56			.51
Book value per share		7.78			7.09			6.43
Performance Ratios:
Return on average assets (R.O.A.)		1.02	%		0.94	%		0.89	%
Return on average equity (R.O.E.)		11.34	%		9.15	%		8.98	%
Dividend payout ratio		—			—			—
Equity to Assets		8.98			9.77			11.19
Interest-rate spread during the period		4.08			3.64			3.90
Net interest margin		4.57			4.13			4.21
Non-interest expense to average assets		2.79			2.62			2.86
Other Ratios and Data:
Average equity to average assets		9.03	%		10.32	%		9.96	%
Allowance for loan losses to total loans		1.24			1.27			1.26
Net charge-offs to average loans		(0.01	)		(0.00	)		(0.04	)
Non-performing loans to total loans		—			0.04			0.30
Allowance for loan losses to non-performing loans		—			3,300.00			425.21
Non-performing loans and foreclosed real estate as a percentage of total assets		—			0.05			0.29
Total number of full-service banking offices		6			4			4

⁽¹⁾ All per share amounts have been adjusted to reflect the 5% stock dividend paid March 15, 2005 and the three-for-two stock split issued on January 20, 2006.

15

Item 7. Management’s Discussion and Analysis or Plan of Operation

General

We own all of the outstanding common stock of First Community Bank and First Community Lender Services, Inc. Our primary business activity is the operations of First Community Bank. First Community Bank is a federally-chartered stock savings bank that provides a variety of banking services to small and middle market businesses and individuals through its three banking offices located in Pinellas County, two banking offices located in Hillsborough County and one banking office located in Charlotte County, Florida. FCLS provides tax deferred 1031 exchange services for eligible transactions. The following is a description of the significant accounting policies which the Company follows in preparing and presenting its consolidated financial statements.

Critical Accounting Policies

We believe that the determination of the allowance for loan losses represents a critical accounting policy. The allowance for loan losses is maintained at a level management considers to be adequate to absorb probable loan losses inherent in the portfolio, based on evaluations of the collectibility and historical loss experience of loans. Credit losses are charged and recoveries are credited to the allowance. 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 probable estimated losses inherent in the loan portfolio. Our methodology for assessing the appropriate allowance level consists of several key elements described below.

Larger commercial loans that exhibit probable or observed credit weaknesses are subject to individual review. Where appropriate, reserves are 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 as provided in Statement of Financial Accounting Standards No. 114, “Accounting by Creditors for Impairment of a Loan” as amended. Any specific reserves for impaired loans are measured based on the fair value of the underlying collateral. We evaluate the collectibility of both principal and interest when assessing the need for a specific reserve. Historical loss rates are applied to other commercial loans not subject to specific reserve allocations.

Homogenous loans, such as installment and residential mortgage loans, are not individually reviewed by management. Reserves are 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 for commercial and consumer loans may be 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, non-accrual 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.

An unallocated reserve is maintained to recognize the imprecision in estimating and measuring loss when evaluating reserves for individual loans or pools of loans.

16

Specific reserves on 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.

We have not substantially changed any aspect of our overall approach in the determination of the allowance for loan losses. There have been no material changes in assumptions or estimation techniques as compared to prior years that impacted the determination of the allowance during 2005.

Loans

We believe that general economic conditions in our primary service areas, including the real estate market, continue to be healthy due to the growth in the areas’ population and demand for real estate property and personal services. Accordingly, we have experienced continued demand for consumer and commercial loans in 2005 as net loans increased $66.7 million, or 32.4%, to $272.5 million at December 31, 2005. Commercial loan activity is focused on seasonal working capital loans and commercial real estate term loans. At December 31, 2005, 2004 and 2003, we had non-accrual loans with a balance of $0, $80,000 and $480,000, respectively.

We engage, through our bank subsidiary, in a full complement of lending activities, including commercial, consumer/installment and real estate loans.

Our commercial lending activities are directed principally towards businesses whose demands for funds fall within our bank subsidiary’s legal lending limits and who are potential deposit customers. Particular emphasis is placed on loans to small and medium-sized businesses. Our commercial loans consist primarily of loans made to individual, partnership or corporate borrowers, and who obtained those loans for a variety of business purposes.

Our real estate loans consist of residential and commercial first mortgage loans, second mortgage financing and construction loans.

Lines of credit include home equity, commercial, and consumer lines of credit.

Our consumer loans consist primarily of installment loans to individuals for personal, family and household purposes.

We have correspondent relationships with several banks, whereby we can engage in the sale and purchase of loan participations. Participations purchased, if any, are entered into using the same underwriting criteria that would be applied if we had originated the loan. This includes credit and collateral analyses and maintenance of a complete credit file on each purchased participation that is consistent with the credit files that we maintain on our customers.

Non-performing Loans and Real Estate Owned. When a borrower fails to make a required payment on a loan, our loan officers attempt to collect the payment by contacting the borrower. If a payment on a loan has not been received by the end of a grace period (usually 10 days from the payment due date), notices are sent at that time, with follow-up contacts made thereafter. In most cases, delinquencies are cured promptly. If the delinquency exceeds 29 days and is not cured through normal collection procedures, more formal measures are instituted to remedy the default, including the commencement of foreclosure proceedings. We will then attempt to negotiate with the delinquent borrower to establish a satisfactory payment schedule.

17

A loan is generally placed on non-accrual status and ceases accruing interest when loan payment performance is deemed unsatisfactory. All loans past due 90 days, however, are placed on non-accrual status and all prior accrued interest is reversed against income. Cash payments received while a loan is in non-accrual status are recorded as a reduction of principal as long as doubt exists as to collection. If a loan is brought current it will be taken off non-accrual status.

If foreclosure is required, when completed, the property would be sold at a public auction in which we will generally participate as a bidder. If we are the successful bidder, the acquired real estate property is then included in the foreclosed real estate account until it is sold. We are permitted under federal regulations to finance sales of foreclosed real estate by “loans to facilitate,” which may involve more favorable interest rates and terms than generally would be granted under normal underwriting guidelines.

Charge-Offs Policy. All loans deemed uncollectible by management will be charged-off or written down as per the following guidelines:

• All open-end credits past due for more than 90 days and all unsecured closed-end credits past due for 90 days must be charged-off.

• Secured non-real estate loans when deemed uncollectible by management will be charged-off or written down to no more than 100% of the net liquidated collateral value of the loan as determined by management.

• Unsecured loans past due 90 days or more will be charged-off in full or written down to an amount deemed collectible by management.

• Management has the authority to charge-off loan losses and/or overdrafts up to $10,000, when deemed uncollectible.

The following table presents various categories of loans contained in our loan portfolio and the total amount of all loans at December 31 for the years indicated.

	December 31,
Type of Loan	Amount 2005			Percent of Loans in Each Category to Total Loans 2005		Amount 2004			Percent of Loans in Each Category to Total Loans 2004		Amount 2003			Percent of Loans in Each Category to Total Loans 2003		Amount 2002			Percent of Loans in Each Category to Total Loans 2002		Amount 2001			Percent of Loans in Each Category to Total Loans 2001
	($ in thousands)
Residential mortgage loans	$	75,585		27.3	%	$	44,147		21.2	%	$	39,783		24.5	%	$	38,568		30.7	%	$	35,964		39.9	%
Commercial real estate loans		109,995		39.8			97,849		46.9			69,507		42.8			51,443		41. 0			32,840		36.5
Commercial loans		31,916		11.6			24,322		11.6			21,502		13.2			14,103		11. 3			8,983		10.0
Installment loans		58,708		21.3			42,335		20.3			31,578		19.5			21,391		17.0			12,249		13.6
Subtotal	$	276,204		100.0	%	$	208,653		100.0	%	$	162,370		100.0	%	$	125,505		100.0	%	$	90,036		100.0	%
Deduct:
Allowance for loan losses		(3,416	)				(2,640	)				(2,041	)				(1,434	)				(961	)
Net deferred loan fees		(254	)				(224	)				(93	)				(139	)				(84	)
Net loans	$	272,534				$	205,789				$	160,236				$	123,932				$	88,991

18

The following is an analysis of maturities of our loans as of December 31, 2005 (in thousands):

Type of Loan	Due in 1 Year or Less		Due in 1 to 5 Years		Due After 5 Years		Total
Residential mortgage loans	$	15,135	$	14,955	$	45,495	$	75,585
Commercial real estate loans		17,764		29,734		62,497		109,995
Commercial loans		15,134		16,631		151		31,916
Installment loans		5,744		44,300		8,664		58,708
Total	$	53,777	$	105,620	$	116,807	$	276,204

All loans are recorded according to original terms and demand loans, overdrafts and loans having no stated repayment terms or maturity are reported as due in one year or less.

At December 31, 2005, the amount of loans due after one year with fixed interest rates totaled approximately $62.7 million, while the amount of loans due after one year with floating interest rates totaled approximately $159.7 million. We generally do not make fixed-rate loans with maturities longer than five years.

At December 31, 2005, 2004, 2003, 2002 and 2001 non-accrual loans were as follows for the years indicated (in thousands):

	At December 31,
	2005		2004		2003		2002		2001
Residential mortgage loans	$	—	$	57	$	480	$	232	$	182
Commercial real estate loans		—		—		—		—		—
Commercial loans		—		—		—		—		—
Installment loans		—		23		—		73		24
Total non-accrual loans	$	—	$	80	$	480	$	305	$	206

At December 31, 2005, 2004, 2003, 2002 and 2001 there were no loans which would be defined as troubled debt restructurings or past due ninety days or more and still accruing.

An analysis of our allowance for loan losses and loan loss experience (charge-offs and recoveries) is furnished in the following table:

	Year Ended December 31,
	2005			2004			2003			2002			2001
	(Dollars in thousands)
Balance at beginning of period	$	2,640		$	2,041		$	1,434		$	961		$	525
Charge-offs:
Consumer		(20	)		(54	)		(6	)		(26	)		(8	)
Commercial		(2	)		(2	)		(25	)		(57	)		(144	)
Residential		—			—			(30	)		—			—
Recoveries:
Consumer		2			14			—			—			—
Commercial		1			—			—			—			38
Residential		—			36			—			13			1
Net charge-offs		(19	)		(6	)		(61	)		(70	)		(113	)
Provision for losses charged to operations		795			605			668			543			549
Balance at end of period	$	3,416		$	2,640		$	2,041		$	1,434		$	961
Asset Quality Ratios
Net charge-offs to average loans		(0.01	)%		(0.00	)%		(0.04	)%		(0.04	)%		(0.07	)%
Allowance for loan losses to total loans		1.24			1.27			1.26			1.14			1.07
Allowance for loan losses to non-performing loans		—			3,300.0			425.21			470.16			466.50
Non-performing loans to total loans		—			0.04			0.30			0.24			0.23
Non-performing loans to total assets		—			0.03			0.27			0.21			0.19

19

At December 31 the allowance for possible credit losses were generally allocated as follows for the years indicated:

	2005				2004				2003				2002						2001
	Amount		Percent of Loans in Each Category to Total Loans		Amount		Percent of Loans in Each Category to Total Loans		Amount		Percent of Loans in Each Category to Total Loans		Amount		Percent of Loans in Each Category to Total Loans		Amount		Percent of Loans in Each Category to Total Loans
	($ in thousands)
Residential mortgage loans	$	417	27.3	%	$	238	21.2	%	$	196	24.5	%	$	175	30.7	%	$	174	39.9	%
Commercial real estate loans		1,447	39.8			1,251	46.9			907	42.8			676	41. 0			450	36.5
Commercial loans		819	11.6			699	11.6			426	13.2			263	11. 3			156	10.0
Installment loans		733	21.3			452	20.3			512	19.5			320	17.0			181	13.6
Total	$	3,416	100.0	%	$	2,640	100.0	%	$	2,041	100.0	%	$	1,434	100.0	%	$	961	100.0	%

Although the allowance for loan losses was determined by category of loans, the entire allowance is available to absorb losses from any category.

The allowance for loan losses is established based upon management’s evaluation of the potential losses in our total loan portfolio. In analyzing the adequacy of the allowance for loan losses, management considers its own internal review, as well as the results of independent external credit reviews, changes in the composition and volume of the loan portfolio, levels of non-performing and charged-off loans, local and national economic conditions, and other factors.

Investment Securities. We primarily invest in obligations of the United States or obligations guaranteed as to principal and interest by the United States and other taxable securities or mortgage backed obligations. The following table presents, at December 31, 2005, 2004 and 2003 the carrying value of our investments:

	December 31,
Investment Category	2005		2004		2003
	($ in thousands)
Available for sale:
U.S. treasury securities	$	1,971	$	3,474	$	—
U.S. government agency securities		6,104		8,432		3,542
Mortgage-backed securities		843		1,126		321
Collateralized mortgage obligations		—		—		86
Total	$	8,918	$	13,032	$	3,949
Held to maturity:
U.S. Government agency securities	$	1,366	$	1,000	$	3,477
Mortgage-backed securities		1,897		775		—
Municipal securities		2,015		—		—
Total	$	5,278	$	1,775	$	3,477

20

The following table sets forth, by maturity distribution, certain information pertaining to the securities portfolio ($ in thousands):

	One Year or Less				After One Year to Five Years				After Five Years to Ten Years					After Ten Years				Total
	Carrying Value		Average Yield		Carrying Value		Average Yield		Carrying Value		Average Yield			Carrying Value		Average Yield		Carrying Value		Average Yield
Available for Sale:
U.S. Treasury Securities	$	1,483	2.66	%	$	488	2.96	%	$	—		—	%	$	—	—	%	$	1,971	2.74	%
U.S. Government agency securities		5,442	2.23	%		492	3.65	%		—		—			170	6.11	%		6,104	2.45	%
Total	$	6,925	2.32	%	$	980	3.31	%	$	—	$	—		$	170	6.11	%
Mortgage-backed Securities																			843	3.70	%
Total																		$	8918	2.63	%
Held to Maturity:
U.S. Government agency and municipal securities	$	866	4.41	%	$	500	3.50	%	$	—		—	%	$	2,015	4.08	%	$	3,381	4.08	%
Mortgage-backed Securities																			1,897	3.92	%
Total																		$	5,278	4.02	%

Liquidity and Capital Resources

Liquidity Management. Liquidity management involves monitoring our sources and uses of funds in order to meet our day-to-day cash flow requirements while attempting to maximize profits. Liquidity represents the ability of a company to convert assets into cash or cash equivalents without significant loss and to raise additional funds by increasing liabilities. Liquidity management is made more complicated because different balance sheet components are subject to varying degrees of management control. For example, the timing of maturities of the investment portfolio is very predictable and subject to a high degree of control at the time investment decisions are made. However, net deposit inflows and outflows are far less predictable and are not subject to the same degree of control. Asset liquidity is provided by cash and assets which are readily marketable, can be pledged, or which will mature in the near future. Liability liquidity is provided by access to core funding sources, principally the ability to generate customer deposits in our primary markets. In addition, liability liquidity is provided through the ability to borrow against approved lines of credit including federal funds purchased from correspondent banks and from the Federal Home Loan Bank.

Dividends. There are statutory and regulatory limitations on the payment of dividends by this subsidiary. The ability of First Community Bank to pay a dividend to us is governed by the OTS’ capital distribution regulation. This regulation and First Community Bank’s ability to pay dividends to us, is addressed in the sections entitled “Regulation and Supervision” and “Dividends.”

Management regularly reviews our liquidity position and has implemented internal policies that establish guidelines for sources of asset-based liquidity and limit the total amount of purchased funds used to support the balance sheet and funding from non-core sources.

Deposits and Other Sources of Funds. In addition to deposits, the sources of funds available for lending and other business purposes include loan repayments, loan sales, and borrowings from the Federal Home Loan Bank. Loan repayments are a relatively stable source of funds, while deposit inflows and outflows are influenced significantly by general interest rates and money market conditions. We maintain lines of credit at SunTrust Bank and at the Bankers Bank upon which we can draw up to $7.5 million. The line of credit at SunTrust Bank is secured by our common stock. There was no balance drawn on that line of credit as of December 31, 2005. The line of credit at the Bankers Bank is unsecured and had no funds drawn at year end. Borrowings may be used on a short-term basis to compensate for reductions in other sources, such as deposits at less than projected levels.

21

We offer a full range of interest bearing and non-interest bearing accounts, including business and consumer checking accounts, negotiable order of withdrawal (“NOW”) accounts, money market accounts with limited transactions, individual retirement accounts, regular interest bearing statement savings accounts and certificates of deposit with a range of maturity date options. The sources of deposits are individuals, businesses and employees of businesses within our market areas. Deposits are generally obtained through the personal solicitation of our officers and directors, direct mail solicitation and advertisements published in the local media. We pay competitive interest rates on time and savings deposits. In addition, we have implemented a service charge fee schedule competitive with other financial institutions in our market areas, covering such matters as maintenance fees on checking accounts, per item processing fees on checking accounts, returned check charges and the like.

Deposits from our primary market provide a relatively stable funding source for our loan portfolio and other earning assets. Our total deposits were $272.6, $200.7 and $134.5 million at December 31, 2005, 2004, and 2003, respectively. Most of the $71.9 million increase in deposits since December 31, 2004, was attributable to strong growth in savings, NOW and money market accounts as management directed a conscious effort to attract deposits from commercial business relationships. The funding requirements for loans have continued to increase in 2005, from 2004 levels. Net loans have increased $66.7 million during the period from December 31, 2004, to December 31, 2005. Management anticipates that a stable base of deposits will be our primary source of funding to meet both its short-term and long-term liquidity needs in the future.

The following table presents, for the years ended December 31 2005, 2004 and 2003 the average amount of, and average rate paid on, each of the following deposit categories

	Average Amount						Average Rate Paid
Deposit Category	2005		2004		2003		2005		2004		2003
	($ in thousands)
Non-interest bearing demand	$	35,933	$	34,003	$	16,156	—	%	—	%	—	%
Savings, NOW and money market deposits		88,654		52,822		44,851	1.31		1.03		.87
Time deposits		101,681		86,162		71,531	3.04		2.54		2.76
Total	$	226,268	$	172,987	$	132,538	1.81	%	1.58	%	1.79	%

The following table indicates the amount of outstanding time certificates of deposit of $100,000 or more and their respective maturities as of December 31 (in thousands)

	2005
months or less	$	17,464
3-12 months		17,640
1-3 years		18,543
Over 3 years		1,733
Total	$	55,380

22

Borrowings.To date First Community Bank has relied on deposits, proceeds from sales of its loans and securities, repurchase agreements, and the purchase of overnight funds from correspondent banks as its major sources of funding. As of December 31, 2005, First Community Bank held repurchase agreements, which are used as sweep account for commercial customers, of approximately $3.7 million. In the future, First Community Bank also will rely on loan repayments, loan sales, and the sale of investment securities as additional sources of funding. In addition, in the future if there are periods when the supply of funds from deposits or other sources cannot meet the demand for loans, First Community Bank has the ability to seek a portion of the needed funds through loans (advances) from the FHLB where it currently has the ability to borrow up to $30 million. The amounts advanced under FHLB advances, the maturity date, and the weighted-average interest rate as of December 31, 2005, 2004 and 2003 are set forth in the table below ($ in thousands):

Maturing in Year Ending December 31,	Interest Rate	At December 31, 2005		2004		2003
2004	5.93		—		—		1,000
2004	3.86		—		—		1,000
2004	1.15		—		—		6,000
2004	1.32		—		—		2,000
2005	4.54		—		1,000		1,000
2005	1.94		—		1,000		1,000
2006	2.48		2,000		2,000		2,000
2007(1)	3.66		—		2,000		2,000
2007	3.34		2,000		2,000		2,000
2008	4.14		2,000		2,000		2,000
2008	4.45		3,000		—		—
2009	3.71		1,000		1,000		—
2010(2)	4.02		1,000		—		—
2012(3)	3.93		1,000		1,000		1,000
		$	12,000	$	12,000	$	21,000

⁽¹⁾ FHLB called in July 2005

⁽²⁾ FHLB has call option in September 2006

⁽³⁾ FHLB has a call option in April 2006

Average Contractual Obligations

Contractual obligations for payments under long-term debt and lease obligations are shown as follows, stratified by remaining term to contractual maturity (in thousands):

	Less than 1 Year		1-3 Years		3-5 Years		More than 5 Years	Total
Real estate operating leases	$	157		309		115	—	$	581
Certificates of Deposit		77,291		38,196		4,846	—		120,333
Federal home loan bank advances		2,000		7,000		2,000	1,000		12,000
Total	$	79,448	$	45,505	$	6,961	1,000	$	132,914

Further discussion of the nature of each obligation is included in “Note 4-Premises and Equipment, Net”, “Note 5-Deposits”, and “Note 6-Federal Home Loan Bank Advances”.

23

Average Balance, Interest and Average Yields and Costs

The following is an analysis of the net interest earnings for the years ended December 31, 2005, 2004 and 2003 with respect to each major category of interest-earning assets and each major category of interest-bearing liabilities.

For purposes of these analyses, non-accruing loans, if any, are included in the average balances.

	For the Year Ended December 31,
	2005						2004						2003
	Average Balance		Interest and Dividends		Average Yield/ Rate		Average Balance		Interest and Dividends		Average Yield/ Rate		Average Balance		Interest and Dividends		Average Yield/ Rate
	($ in thousands)
ASSETS:
Earning assets:
Loans(1)	$	233,888	$	16,093	6.88	%	$	179,279	$	11,165	6.23	%	$	139,572	$	8,960	6.42	%
Securities(2)		16,352		455	2.78			12,089		277	2.29			7,034		193	2.74
Other interest earnings assets		11,787		217	1.84			10,690		120	1.12			5,775		58	1.00
Total earning assets		262,027		16,765	6.40			202,058		11,562	5.72			152,381		9,211	6.04
Non-earning assets		17,542						12,325						11,823
Total Assets	$	279,569					$	214,383					$	164,204
LIABILITIES:
Interest-bearing liabilities:
Savings NOW and money market	$	88,654	$	1,161	1.31		$	52,822	$	544	1.03		$	44,851	$	390	.87
Time Deposits		101,681		3,092	3.04			86,162		2,190	2.54			71,531		1,976	2.76
Total Interest Bearing Deposits		190,335		4,253	2.23			138,984		2,734	1.97			116,382		2,366	2.03
Other borrowings(3)		16,017		542	3.38			15,674		478	3.05			14,212		426	3.00
Total interest-bearing liabilities		206,352		4,795	2.32			154,658		3,212	2.08			130,594		2,792	2.14
Non interest-bearing liabilities		47,967						37,606						17,262
Stockholders’ equity		25,250						22,119						16,348
Total liabilities and equity	$	279,569					$	214,383					$	164,204
Net interest income			$	11,970					$	8,350					$	6.419
Interest-rate spread(4)					4.08	%					3.64	%					3.90	%
Net interest margin(5)					4.57	%					4.13	%					4.21	%
Ratio of average interest-earning assets to average interest-bearing liabilities		1.27						1.31						1.17

⁽¹⁾ Balances are net of deferred loan origination costs, undisbursed proceeds of construction loans in process, and include non-performing loans.

⁽²⁾ Yields on securities available for sale are based on average amortized cost.

⁽³⁾ Other borrowings include Federal Home Loan Bank Advances, repurchase agreements with customers and First Community’s line of credit.

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

⁽⁵⁾ Net interest margin represents net interest income as a percentage of average interest-earning assets.

24

Rate/Volume Analysis

The following tables set forth certain information regarding changes in interest income and interest expense for the periods indicated. For each category of interest-earning assets and interest-bearing liabilities, information is provided on changes attributable to:

• Changes in rate (change in rate multiplied by prior volume);

• Changes in volume (change in volume multiplied by prior rate); and

• Changes in rate-volume (change in rate multiplied by change in volume).

	Year Ended December 31, 2005 Compared to 2004 Increase (Decrease) Due to (In thousands)
	Rate		Volume		Rate/Volume		Total
Interest Income:
Loans	$	1,165	$	3,402	$	361	$	4,928
Securities		59		98		21		178
Other interest-earning assets		77		12		8		97
Total increase (decrease) in interest income	$	1,301	$	3,512	$	390	$	5,203
Interest Expense:
Deposits:
Savings, NOW and money-market deposits		148		369		100		617
Time deposits		431		394		77		902
Other borrowings		52		10		2		64
Total increase (decrease) in interest expense		631		773		179		1,583
Net change in net interest income	$	670	$	2,739	$	211	$	3,620

	Year Ended December 31, 2004 Compared to 2003 Increase (Decrease) Due to (In thousands)
	Rate			Volume		Rate/Volume			Total
Interest Income:
Loans	$	(265	)	$	2,549	$	(79	)	$	2,205
Securities		(32	)		139		(23	)		84
Other interest-earning assets		7			49		6			62
Total increase (decrease) in interest income	$	(290	)	$	2,737	$	(96	)	$	2,351
Interest Expense:
Deposits:
Savings, NOW and money-market deposits		67			69		18			154
Time deposits		(157	)		404		(33	)		214
Other borrowings		7			44		1			52
Total increase (decrease) in interest expense		(83	)		517		(14	)		420
Net change in net interest income	$	(207	)	$	2,220	$	(82	)	$	1,931

25

Comparison of the Years Ended December 31, 2005 and 2004

General. Our net earnings for the year ended December 31, 2005, increased to $2.9 million or $0.86 earnings per basic share and $0.78 earnings per diluted share compared to $2.0 million or $0.62 earnings per basic share and $0.56 earnings per diluted share for the year ended December 31 2004. Net earnings increased due to an increase in net interest income, which was partially offset by an increase in non-interest expenses and the provision for income taxes.

Net Interest Income. Interest income increased to $16.8 million during the year ended December 31, 2005, from $11.6 million in 2004. Interest on loans for the year ended December 31, 2005 increased to $16.1 million from $11.2 million for the year ended December 31, 2004. The increase in interest on loans was primarily due to an increase in the average balance of loans during the year ended December 31, 2005 when compared the year ended December 31, 2004. This was primarily due to the opening of two new banking offices during 2005. This increase was also due to an increase in the average yield earned for the year ended December 31, 2005 when compared to 2004. Interest on securities increased to $455,000 during the year ended December 31, 2005, from $277,000 for the year ended December 31, 2004. The increase in interest income on securities was due to an increase in the average balance of securities in 2005 when compared to 2004 and an increase in the average yield earned in 2005 when compared to 2004. Interest on other interest earning assets increased to $217,000 during the year ended December 31, 2005, from $120,000 during the year ended December 31, 2004 due to an increase in the average balance and average yield earned in 2005.

Interest expense on interest bearing deposit accounts increased to $4.3 million during the year ended December 31, 2005, compared to $2.7 million during the year ended December 31, 2004. The increase was due to an increase in the average balance of interest bearing deposits in 2005 due to the opening of additional banking offices in 2005 and also an increase in the average rate paid on deposit accounts.

Interest expense on other borrowings increased to $542,000 during the year ended December 31, 2005, compared to $478,000 in 2004. The increase was primarily due to an increase in the average balance of such accounts.

Provision for Loan Losses.Calculating the allowance for loan losses is divided into two primary allocation groups: (1) specific allocation loans and (2) all other passing grade loans. For specific allocation loans, the Company has determined an allowance amount to set aside which it believes is sufficient to cover any potential collateral shortfall. Problem loans are identified by the loan officer, loan review, loan committee or by the examiners. Those loans identified as problem loans are assigned a risk grade. Loans graded special mention are multiplied by an inherent loss factor of 3% - 5% to determine the amount to be included in the allowance. Loans graded substandard are generally multiplied by a loss factor of 5% to 15%, loans graded doubtful are generally multiplied by a loss factor of 50% and loans graded loss are multiplied by a loss factor of 100%. In addition to the 5% - 15% and 50% on substandard and doubtful loans, respectively, the loans are individually reviewed for any additional reserve that may be necessary. All other loans, graded pass are multiplied by an historical experience factor to determine the appropriate level of the allowance for loan losses. In addition to historical experience factors, the Company also provides for losses due to economic factors, concentration of credit risk and portfolio composition changes.

The provision for loan losses was $795,000 for the year ended December 31, 2005 compared to $605,000 for the year ended December 31, 2004. Continued economic weakness, rapidly rising interest rates, or other factors could cause stress on the loan portfolio and affect the levels of nonperforming assets and charge-offs which would require an increase to the loan loss reserves in the future.

The allowance for loan losses is $3,416,000 at December 31, 2005. While management believes that its allowance for loan losses is adequate as of December 31, 2005, 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.

26

Non-interest Income. Non-interest income increased to $1,165,000 in 2005 from $1,081,000 for the year ended December 31, 2004. The increase is primarily due to an increase in gains recognized on the sale of loans held for sale.

Non-interest Expense. Total non-interest expense increased to $7.8 million for the year ended December 31, 2005 from $5.6 million for the comparable period ended December 31, 2004, primarily due to an increase in employee compensation and benefits of $1.4 million due to the overall growth of the Company and the opening of two new banking offices in 2005.

Income Taxes. Income taxes for the year ended December 31, 2005, was $1,672,000 or 36.9% compared to $1,183,000 or 36.9% for the year ended December 31, 2004.

Comparison of the Years Ended December 31, 2004 and 2003

General. Our net earnings for the year ended December 31, 2004, increased to $2.0 million or $0.62 earnings per basic share and $0.56 earnings per diluted share compared to $1.5 million or $0.55 earnings per basic share and $0.51 earnings per diluted share for the year ended December 31 2003. Net earnings increased due to an increase in net interest income, which was partially offset by decrease in non-interest income, an increase in non-interest expenses and the provision for income taxes.

Net Interest Income. Interest income increased to $11.6 million during the year ended December 31, 2004, from $9.2 million in 2003. Interest on loans for the year ended December 31, 2004 increased to $11.2 million from $9.0 million for the year ended December 31, 2003. The increase in interest on loans was primarily due to an increase in the average balance of loans during the year ended December 31, 2004 when compared the year ended December 31, 2003. This was primarily due to the opening of two new banking offices during 2002 and 2003. This increase was partially offset by a decrease in the average yield earned for the year ended December 31, 2004 when compared to 2003. Interest on securities increased to $277,000 during the year ended December 31, 2004, from $193,000 for the year ended December 31, 2003. The increase in interest income on securities was due to an increase in the average balance of securities in 2004 when compared to 2003 partially offset by a decrease in the average yield earned in 2004 when compared to 2003. Interest on other interest earning assets increased to $120,000 during the year ended December 31, 2004, from $58,000 during the year ended December 31, 2003 due to an increase in the average balance and average yield earned in 2004.

Interest expense on interest bearing deposit accounts increased to $2.7 million during the year ended December 31, 2004, compared to $2.4 million during the year ended December 31, 2003. The increase was due to an increase in the average balance of interest bearing deposits in 2004 due to the opening of additional banking offices in 2002 and 2003 which was partially offset by a decrease in the average rate paid on deposit accounts. The decline in the average rate paid was the result of management’s efforts to increase low cost deposit accounts and the continued decline in overall interest rates.

Interest expense on other interest bearing liabilities increased to $478,000 during the year ended December 31, 2004, compared to $426,000 in 2003. The increase was primarily due to an increase in the average balance of such liability accounts.

Provision for Loan Losses.Calculating the allowance for loan losses is divided into two primary allocation groups: (1) specific allocation loans and (2) all other passing grade loans. For specific allocation loans, the Company has determined an allowance amount to set aside which it believes is sufficient to cover any potential collateral shortfall. Problem loans are identified by the loan officer, loan review, loan committee or by the examiners. Those loans identified as problem loans are assigned a risk grade. Loans graded special mention are multiplied by an inherent loss factor of 2% to determine the amount to be included in the allowance. Loans graded substandard are generally multiplied by a loss factor of 5%, loans graded doubtful are generally multiplied by a loss factor of 50% and loans graded loss are multiplied by a loss factor of 100%. In addition to the 5% and 50% on substandard and doubtful loans,

27

respectively, the loans are individually reviewed for any additional reserve that may be necessary. All other loans, graded pass are multiplied by an historical experience factor to determine the appropriate level of the allowance for loan losses. In addition to historical experience factors, the Company also provides for losses due to economic factors, concentration of credit risk and portfolio composition changes.

The provision for loan losses was $605,000 for the year ended December 31, 2004 compared to $668,000 for the year ended December 31, 2003. While continued economic weakness, rapidly rising interest rates, or other factors could cause stress on the loan portfolio and affect the levels of nonperforming assets and charge-offs, management believes that the levels of nonperforming assets and the charge-off ratio are stable under the current circumstances.

The allowance for loan losses is $2,640,000 at December 31, 2004. While management believes that its allowance for loan losses is adequate as of December 31, 2004, 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.

Non-interest Income. Non-interest income decreased to $1,081,000 in 2004 from $1,248,000 for the year ended December 31, 2003. The decrease is primarily due to a decrease in gains recognized on the sale of loans held for sale.

Non-interest Expense. Total non-interest expense increased to $5.6 million for the year ended December 31, 2004 from $4.7 million for the comparable period ended December 31, 2003, primarily due to an increase in employee compensation and benefits of $591,000 due to the opening of new banking offices in 2002 and 2003.

Income Taxes. Income taxes for the year ended December 31, 2004, was $1,183,000 or 36.9% compared to $831,000 or 36.1% for the year ended December 31, 2003.

28

Item 7A. Market Risk

ASSET/LIABILITY MANAGEMENT

It is our objective to manage assets and liabilities to provide a satisfactory, consistent level of profitability within the framework of established cash, loan, investment, borrowing and capital policies. Certain of the officers of First Community Bank are responsible for monitoring policies and procedures that are designed to ensure acceptable composition of the asset/liability mix, stability and leverage of all sources of funds while adhering to prudent banking practices. It is the overall philosophy of management to support asset growth primarily through growth of core deposits, which include deposits of all categories made by individuals, partnerships and corporations. Our management seeks to invest the largest portion of its assets in commercial, consumer and real estate loans.

The asset/liability mix is monitored on a quarterly basis and a quarterly report reflecting interest-sensitive assets and interest-sensitive liabilities is prepared and presented to First Community Bank’s Board of Directors. The objective of this policy is to control interest-sensitive assets and liabilities to minimize the impact of substantial movements in interest rates on the Banks’ earnings.

INTEREST SENSITIVITY

The objective of interest sensitivity management is to minimize the risk associated with the effect of interest rate changes on net interest margins while maintaining net interest income at acceptable levels. Managing this risk involves monthly monitoring of interest sensitive assets relative to interest sensitive liabilities over specific time intervals. All assets and liabilities are evaluated as maturing at the earlier of the re-pricing date or the contractual maturity date. While liabilities without specific terms such as money market, NOW and savings accounts are generally considered core deposits for liquidity purposes, they are deemed to re-price for purposes of interest rate sensitivity analysis. Management subjectively sets rates on all accounts.

At December 31, 2005, we had $165.8 million in interest sensitive assets compared to $200.3 million in interest sensitive liabilities that will mature or re-price within a year.

A negative gap position is indicative of a bank that has a greater amount of interest sensitive liabilities re-pricing (or maturing) than it does interest sensitive assets in a given time interval. In this instance, the impact on net interest income would be positive in a declining rate environment and negative if rates were rising. Conversely, a positive gap position represents a greater amount of interest sensitive assets re-pricing (or maturing). Thus, an increase in rates would positively impact net interest income, as the yield on earning assets would increase prior to the increase in the cost of interest bearing liabilities. The impact on net interest income described above is general, as other factors would additionally maximize or minimize the effect. For example, a change in the prime interest rate could effect an immediate change to rates on prime related assets, whereas a liability which re-prices according to changes in Treasury rates might (1) lag in the timing of the change and (2) change rates in an amount less than the change in the prime interest rate.

Management believes that the current balance sheet structure of interest sensitive assets and liabilities does not represent a material risk to earnings or liquidity in the event of a change in market rates.

29

The following is a combined maturity and re-pricing analysis of rate sensitive assets and liabilities as of December 31, 2005.

	0-90 Days			91-365 Days			Over 1 Year to 5 Years		Over 5 Years to Ten Years		Over Ten Years		Total
	($ in thousands)
Interest earning assets:
Interest-bearing deposits with banks	$	19,617		$	80		$	255	$	—	$	—	$	19,952
Investment securities(1)		997			6,794			2,230		—		4,175		14,196
Loans		105,883			31,249			125,100		6,253		7,719		276,204
Federal Home Loan Bank Stock		1,109			—			—		—		—		1109
Total rate-sensitive assets	$	127,606		$	38,123		$	127,585	$	6,253	$	11,894	$	311,461
Savings, NOW and Money Market Deposits		115,286			—			—		—		—		115,286
Time Deposits		29,072			48,223			43,038		—		—		120,333
Other borrowings(1)		3,709			4,000			8,000		—		—		15,709
Total rate sensitive liabilities	$	148,067			52,223		$	51,038	$	—	$	—	$	251,328
Interest sensitivity gap:
Sensitive assets less rate sensitive liabilities		(20,461	)		(14,100	)		76,547		6,253	$	11,894	$	60,133
Cumulative Gap	$	(20,461	)	$	(34,561	)	$	41,986	$	48,239	$	60,133

⁽¹⁾ Investments and Federal Home Loan Bank Advances are scheduled through call dates

MARKET RISK MANAGEMENT

Our market risk is the risk of loss that may result from changes in market prices and rates. A simple interest rate “gap” analysis by itself may not be an accurate indicator of how net interest income will be affected by changes in interest rates. The measurement of market risk associated with financial instruments is meaningful only when related offsetting on- and off-balance sheet transactions are aggregated, and the resulting net positions are identified. Accordingly, while the ALCO relies primarily on its asset liability structure to control interest rate risk, a sudden and substantial change in interest rates may adversely impact our earnings to the extent that the interest rates of our assets and liabilities do not change at the same speed, to the same extent, or on the same basis. The ALCO also evaluates how the repayment of particular assets and liabilities is impacted by changes in interest rates. Income associated with interest-earning assets and liabilities is impacted by changes in interest rates. Income associated with interest-earning assets and costs associated with interest-bearing liabilities may not be affected uniformly by changes in interest rates. In addition, the magnitude and duration of changes in interest rates may have a significant impact on net interest income. For example, although certain assets and liabilities may have similar maturities or periods of repricing, they may react in different degrees to changes in market interest rates. Interest rates on certain types of assets and liabilities fluctuate in advance of changes in general market interest rates. Interest rates on certain types of assets and liabilities fluctuate in advance of changes in general market interest rates, while interest rates on other types may lag behind changes in general market rates. In addition, certain assets, such as adjustable rate mortgage loans, have features (generally referred to as “interest rate caps”) that limit changes in interest rates on a short-term basis and over the life of the asset. In the event of a change in interest rates, prepayment and early withdrawal levels also could deviate significantly from those assumed in calculating the interest rate gap. The ability of many borrowers to service their debts also may decrease in the event of an interest rate increase.

Because gap analysis may not adequately address the interest rate risk, we also use simulation models to analyze net income sensitivity to movements in interest rates.

Economic Value of Equity.We measure the impact of market interest rate changes on the net present value of estimated cash flows from our assets, liabilities and off-balance sheet items, defined as economic value of equity, using the OTS model. This model assesses the changes in the market value of interest rate sensitive financial instruments that would occur in response to an instantaneous and sustained increase or decrease (shock) in market interest rates.

30

At December 31, 2005, our economic value of equity exposure related to those hypothetical changes in market interest rates was within the current guidelines established by us. The following table shows our projected change in economic value of equity for this set of rate shock at December 31, 2005.

Interest Rate Scenario	Economic Value	Percentage Change From Base		Percentage of Total Assets		Percentage of Equity Book Value
	(In thousands)
Up 200 basis points	35,549	(4.44	)%	10.95	%	121.97	%
Up 100 basis points	36,415	(2.11	)	11.21		124.94
BASE	37,201	—		11.46		127.63
Down 100 basis points	37,588	1.04		11.57		128.96
Down 200 basis points	37,739	1.45		11.62		129.48

The computation of prospective effects of hypothetical interest rate changes are based on numerous assumptions, including relative levels of market interest rates, asset prepayments and deposit decay, and should not be relied upon as indicative of actual results. Further, the computations do not contemplate any actions we may undertake in response to changes in interest rates. Actual amounts may differ from the projections set forth above should market conditions vary from the underlying assumptions.

Net Interest Income Simulation. In order to measure interest rate risk at December 31, 2005, we used a simulation model to project changes in net interest income that result from forecasted changes in interest rates.

This analysis calculates the difference between net income forecasted using a rising and a falling interest rate scenario and net interest income using a base market interest rate derived from the current treasury yield curve. The income simulation model includes various assumptions regarding the repricing relationship for each of our products. Many of our assets are floating rate loans, which are assumed to reprice immediately in proportion to a change in market rates as specified in the underlying contractual agreements. Accordingly, the simulation model uses indexes to estimate these prepayments and reinvest the proceeds at current yields. Our non-term deposit products reprice more slowly, usually changing less than the change in market rates and at our discretion.

This analysis indicates the impact of changes in net interest income for the given set of rate changes and assumptions. It assumes the balance sheet remains static and that its structure does not change over the course of the year. It does not account for all factors that impact this analysis, including changes by management to mitigate the impact of interest rate changes or secondary impacts such as changes to our credit risk profile as interest rates change.

Furthermore, loan prepayment rate estimates and spread relationships change regularly. Interest rate changes create changes in actual loan prepayment rates that will differ from the market estimates incorporated in this analysis. Changes that vary significantly from the assumptions may have significant effects on our net interest income.

For the rising and falling interest rate scenarios, the base market interest rate forecast was increased and decreased over 12 months by 200 basis points. At December 31, 2005, our net interest margin exposure related to these hypothetical changes in market interest rates was within the current guidelines established by us.

31

Interest Rate Scenario	Adjusted Net Interest Income	Percentage Change From Base
	(In thousands)
Up 200 basis points	13,759	1.18	%
BASE	13,599	—
Down 200 basis points	12,967	(4.65	)

32

Item 8. Financial Statements

FIRST COMMUNITY BANK CORPORATION OF AMERICA AND SUBSIDIARIES

Index to Consolidated Financial Statements

	Page
Report of Independent Registered Public Accounting Firm	F-2
Consolidated Balance Sheets, December 31, 2005 and 2004	F-3
Consolidated Statements of Earnings for the Years Ended December 31, 2005, 2004 and 2003	F-4
Consolidated Statements of Stockholders’ Equity for the Years Ended December 31, 2005, 2004 and 2003	F-5-F-6
Consolidated Statements of Cash Flows for the Years Ended December 31, 2005, 2004 and 2003	F-7-F-8
Notes to Consolidated Financial Statements for the Years Ended December 31, 2005, 2004 and 2003	F-9-F-29

All schedules are omitted because of the absence of the conditions under which they are required or because the required information is included in the Consolidated Financial Statements and related Notes.

F-1

Report of Independent Registered Public Accounting Firm

First Community Bank Corporation of America

St. Petersburg, Florida:

We have audited the accompanying consolidated balance sheets of First Community Bank Corporation of America and Subsidiaries (the “Company”) as of December 31, 2005 and 2004, and the related consolidated statements of earnings, stockholders’ equity and cash flows for each of the three years in the period ended December 31, 2005. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2005 and 2004, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2005, in conformity with U.S. generally accepted accounting principles.

HACKER, JOHNSON & SMITH PA

Tampa, Florida

February 24, 2006

F-2

FIRST COMMUNITY BANK CORPORATION OF AMERICA AND SUBSIDIARIES

Consolidated Balance Sheets

($ in thousands, except per share amounts)

	December 31,
	2005			2004
Assets
Cash and due from banks	$	2,273		2,513
Interest-bearing deposits with banks		19,425		7,225
Cash and cash equivalents		21,698		9,738
Other interest-bearing deposits with banks		527		715
Securities available for sale		8,918		13,032
Securities held to maturity		5,278		1,775
Loans, net of allowance for loan losses of $3,416 in 2005 and $2,640 in 2004		272,534		205,789
Federal Home Loan Bank stock, at cost		1,109		898
Premises and equipment, net		8,790		5,241
Foreclosed real estate		—		49
Accrued interest receivable		1,245		811
Deferred income taxes		1,471		849
Bank owned life insurance		2,310		2,224
Other assets		874		685
	$	324,754		241,806
Liabilities and Stockholders’ Equity
Liabilities:
Noninterest-bearing demand deposits		37,010		37,255
Savings, NOW and money-market deposits		115,286		68,909
Time deposits		120,333		94,554
Total deposits		272,629		200,718
Federal Home Loan Bank advances		12,000		12,000
Other borrowings		3,709		1,122
Accrued expenses and other liabilities		7,269		4,348
Total liabilities		295,607		218,188
Commitments (Notes 4 and 14)
Stockholders’ equity:
Common stock, $0.05 and $0.08 par value, 6,250,000 shares authorized, 3,747,582 and 2,115,497 shares issued and outstanding in 2005 and 2004		187		169
Additional paid-in capital		22,032		19,374
Retained earnings		6,994		4,136
Accumulated other comprehensive income (loss)		(66	)	(61	)
Total stockholders’ equity		29,147		23,618
	$	324,754		241,806

See Accompanying Notes to Consolidated Financial Statements.

F-3

FIRST COMMUNITY BANK CORPORATION OF AMERICA AND SUBSIDIARIES

Consolidated Statements of Earnings

(In thousands, except per share amounts)

	Year Ended December 31,_
	2005		2004	2003
Interest income:
Loans	$	16,093	11,165	8,960
Securities		455	277	193
Other interest earning assets		217	120	58
Total interest income		16,765	11,562	9,211
Interest expense:
Deposits		4,253	2,734	2,366
Other borrowings		542	478	426
Total interest expense		4,795	3,212	2,792
Net interest income		11,970	8,350	6,419
Provision for loan losses		795	605	668
Net interest income after provision for loan losses		11,175	7,745	5,751
Noninterest income:
Service charges on deposit accounts		521	544	532
Other service charges and fees		127	115	102
Income from bank owned life insurance		86	89	102
Gain on sale of loans held for sale		140	102	258
Other		291	231	254
Total noninterest income		1,165	1,081	1,248
Noninterest expenses:
Employee compensation and benefits		4,976	3,532	2,941
Occupancy and equipment		852	586	518
Data processing		749	567	429
Professional fees		197	192	206
Office supplies		203	109	90
Insurance		165	125	103
Advertising		31	49	27
Other		632	460	386
Total noninterest expenses		7,805	5,620	4,700
Earnings before income taxes		4,535	3,206	2,299
Income taxes		1,672	1,183	831
Net earnings	$	2,863	2,023	1,468
Earnings per share:
Basic earnings per share	$	.86	.62	.55
Diluted earnings per share	$	.78	.56	.51

See Accompanying Notes to Consolidated Financial Statements.

F-4

FIRST COMMUNITY BANK CORPORATION OF AMERICA AND SUBSIDIARIES

Consolidated Statements of Stockholders’ Equity

Years Ended December 31, 2005, 2004 and 2003

(In thousands, except share amounts)

	Shares	Common Stock		Additional Paid-In Capital	Retained Earnings	Accumulated Other Compre- hensive Income (Loss)		Total
Balance at December 31, 2002	1,021,748	$	102	10,477	645	37		11,261
Comprehensive income:
Net earnings	—		—	—	1,468	—		1,468
Net change in unrealized gain on securities available for sale, net of taxes	—		—	—	—	(36	)	(36	)
Comprehensive income								1,432
Exercise of stock options	350		—	4	—	—		4
Exercise of stock warrants	3,125		—	37	—	—		37
Sale of common stock, net of offering costs of $530	570,000		57	7,393	—	—		7,450
Five-for-four stock split	397,971		—	—	—	—		—
Balance at December 31, 2003	1,993,194		159	17,911	2,113	1		20,184
Comprehensive income:
Net earnings	—		—	—	2,023	—		2,023
Net change in unrealized gain on securities available for sale, net of taxes	—		—	—	—	(62	)	(62	)
Comprehensive income								1,961
Exercise of stock options	12,600		1	100	—	—		101
Exercise of stock warrants	109,703		9	1,307	—	—		1,316
Tax benefit from stock options exercised	—		—	56	—	—		56
Balance at December 31, 2004	2,115,497	$	169	19,374	4,136	(61	)	23,618

(continued)

F-5

FIRST COMMUNITY BANK CORPORATION OF AMERICA AND SUBSIDIARIES

Consolidated Statements of Stockholders’ Equity, Continued

Years Ended December 31, 2005, 2004 and 2003

(In thousands, except share amounts)

	Shares		Common Stock			Additional Paid-In Capital		Retained Earnings		Accumulated Other Compre- hensive Income (Loss)		Total
Balance at December 31, 2004	2,115,497		$	169		19,374		4,136		(61	)	23,618
Comprehensive income:
Net earnings	—			—		—		2,863		—		2,863
Net change in unrealized loss on securities available for sale, net of taxes of $3	—			—		—		—		(5	)	(5	)
Comprehensive income												2,858
Exercise of stock options	288,750			23		2,643		—		—		2,666
Tax benefit from stock options exercised	—			—		298		—		—		298
Repurchase of common stock	(11,500	)		(1	)	(287	)	—		—		(288	)
5% stock dividend, fractional shares paid-in cash of $4	105,641			9		(9	)	(4	)	—		(4	)
Three-for-two stock split, fractional shares paid-in cash of $1	1,249,194			(13	)	13		(1	)	—		(1	)
Balance at December 31, 2005	3,747,582		$	187		22,032		6,994		(66	)	29,147

See Accompanying Notes to Consolidated Financial Statements.

F-6

FIRST COMMUNITY BANK CORPORATION OF AMERICA AND SUBSIDIARIES

Consolidated Statements of Cash Flows

(In thousands)

	Year Ended December 31,
	2005			2004		2003
Cash flows from operating activities:
Net earnings	$	2,863		2,023		1,468
Adjustments to reconcile net earnings to net cash provided by operating activities:
Provision for loan losses		795		605		668
Depreciation and amortization		311		257		236
Net amortization of deferred loan fees and costs		30		112		102
Income from bank owned life insurance		(86	)	(89	)	(102	)
(Gain) loss on sale of foreclosed real estate		(1	)	22		(9	)
Origination of loans held for sale		(11,339	)	(5,477	)	(13,336	)
Proceeds from sale of loans held for sale		10,256		5,814		14,196
Gain on sale of loans held for sale		(140	)	(102	)	(258	)
Increase in accrued interest receivable		(434	)	(156	)	(57	)
(Increase) decrease in other assets		(189	)	354		(275	)
Deferred income taxes		(622	)	(269	)	(270	)
Increase (decrease) in accrued expenses and other liabilities		3,221		1,528		(61	)
Net cash provided by operating activities		4,665		4,622		2,302
Cash flows from investing activities:
Net change in other interest-bearing deposits with banks		188		(715	)	—
Purchase of securities available for sale		(487	)	(10,374	)	(3,519	)
Principal payments on securities available for sale		593		192		6,066
Proceeds from calls and maturities of securities available for sale		4,000		1,000		1,500
Principal payments on securities held to maturity		377		202		14
Purchase of securities held to maturity		(12,422	)	(500	)	(6,495	)
Proceeds from calls and maturities of securities held to maturity		8,542		2,000		3,513
Net increase in loans		(66,347	)	(46,560	)	(37,809	)
Purchase of premises and equipment, net		(3,860	)	(1,427	)	(270	)
Proceeds from sale of foreclosed real estate		50		32		94
(Purchase) redemption of Federal Home Loan Bank stock		(211	)	152		(425	)
Net cash used in investing activities		(69,577	)	(55,998	)	(37,331	)
Cash flows from financing activities:
Increase in deposits		71,911		66,189		13,897
Proceeds from Federal Home Loan Bank advances		33,800		1,000		15,000
Repayments of Federal Home Loan Bank advances		(33,800	)	(10,000	)	(4,000	)
Repayment of line of credit		—		—		(1,100	)
Proceeds from sale of common stock		—		—		7,450
Net increase (decrease) in other borrowings		2,587		(689	)	544
Proceeds from exercise of stock options and warrants		2,666		1,417		41
Repurchase of common stock		(288	)	—		—
Fractional shares of stock dividend paid in cash		(4	)	—		—
Net cash provided by financing activities		76,872		57,917		31,832
Net increase (decrease) in cash and cash equivalents		11,960		6,541		(3,197	)
Cash and cash equivalents at beginning of year		9,738		3,197		6,394
Cash and cash equivalents at end of year	$	21,698		9,738		3,197

(continued)

F-7

FIRST COMMUNITY BANK CORPORATION OF AMERICA AND SUBSIDIARIES

Consolidated Statements of Cash Flows, Continued

(In thousands)

	Year Ended December 31,
	2005			2004		2003
Supplemental disclosure of cash flow information:
Cash paid during the year for:
Interest	$	4,741		3,266		2,758
Income taxes	$	2,041		1,265		1,411
Noncash transactions:
Transfer from loans to foreclosed real estate	$	—		55		133
Accumulated other comprehensive income, net change in unrealized gain (loss) on securities available for sale, net of income taxes	$	(5	)	(62	)	(36	)
Tax benefit from stock options exercised	$	298		56		—
Fractional shares of stock split accrued	$	(1	)	—		—

See Accompanying Notes to Consolidated Financial Statements.

F-8

FIRST COMMUNITY BANK CORPORATION OF AMERICA AND SUBSIDIARIES

Notes to Consolidated Financial Statements

At December 31, 2005 and 2004 and For Each of the Three Years

in the Period Ended December 31, 2005

(1) Description of Business and Summary of Significant Accounting Policies

Organization. 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 operations of the Bank. The Bank is a federally-chartered stock savings bank that provides a variety of banking services to small and middle market businesses and individuals through its three banking offices located in Pinellas County, two banking offices located in Hillsborough County and one banking office located in Charlotte County, Florida. FCLS provides tax deferred 1031 exchange services for eligible transactions. The following is a description of the significant accounting policies which the Company follows in preparing and presenting its consolidated financial statements.

Principles of Consolidation. The consolidated financial statements include the accounts of the Holding Company, the Bank and FCLS. All significant intercompany accounts and transactions have been eliminated in consolidation.

Use of Estimates. In preparing consolidated financial statements in conformity with accounting principles generally accepted in the United States of America, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities as of the date of the consolidated balance sheet and reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Material estimates that are particularly susceptible to significant change in the near term relate to the determination of the allowance for loan losses and deferred tax assets.

Cash and Cash Equivalents. For purposes of the consolidated statements of cash flows, cash and cash equivalents include cash and balances due from banks and interest-bearing deposits with banks.

Banks are required to maintain cash reserves in the form of vault cash or in a noninterest-earning account with the Federal Reserve Bank or in noninterest-earning accounts with other qualified banks based on the balances of their transaction deposit accounts. The Bank’s reserve requirement at December 31, 2005 and 2004 was approximately $117,000 and $1,647,000, respectively. The difference is due to a deposit reclassification methodology that was approved by the Federal Reserve Board.

(continued)

F-9

FIRST COMMUNITY BANK CORPORATION OF AMERICA AND SUBSIDIARIES

Notes to Consolidated Financial Statements, Continued

(1) Description of Business and Summary of Significant Accounting Policies, Continued

Securities. The Company may classify its securities as either trading, held to maturity or available for sale. Trading securities are held principally for resale and recorded at their fair values. Unrealized gains and losses on trading securities are included immediately in earnings. Held-to-maturity securities are those which the Company has the positive intent and ability to hold to maturity and are reported at amortized cost. Available-for-sale securities consist of securities not classified as trading securities nor as held-to-maturity securities. Unrealized holding gains and losses, net of tax, on available-for-sale securities are excluded from earnings and reported in accumulated other comprehensive income (loss). Gains and losses on the sale of available-for-sale securities are reported on the trade date and are determined using the specific-identification method. Premiums and discounts on securities available for sale and held to maturity are recognized in interest income using the interest method over the period to maturity.

Derivatives.The Company for the convenience of its customers enters into fixed rate loan commitments for loans which will be sold to a secondary market investor. Simultaneously with the commitment the Company enters into a forward sales agreement with a secondary market investor. Any holding gains or losses associated with the loan commitments are offset by the holding gains or losses on the forward sales agreement.

Loans. Loans that management has the intent and ability to hold for the foreseeable future or until maturity or pay-off are reported at their outstanding principal adjusted for any charge-offs, the allowance for loan losses, and any deferred fees or costs on originated loans and unamortized premiums or discounts on purchased loans.

Loan origination fees are deferred and certain direct origination costs are capitalized. Both are recognized as an adjustment of the yield of the related loan.

The accrual of interest on loans is discontinued at the time the loan is ninety days delinquent unless the loan is well collateralized and in process of collection. In all cases, loans are placed on nonaccrual or charged-off at an earlier date if collection of principal or interest is considered doubtful.

All interest accrued but not collected for loans that are placed on nonaccrual or charged-off is reversed against interest income. The interest on these loans is accounted for on the cash-basis or cost-recovery method, until qualifying for return to accrual. Loans are returned to accrual status when all the principal and interest amounts contractually due are brought current and future payments are reasonably assured.

Loans Held for Sale.Loans originated that are intended to be sold in the secondary market are carried at the lower of cost or estimated fair value in the aggregate. Net unrealized losses are recognized through a valuation allowance by charges to earnings. The Company had approximately $1,386,000 and $163,000 of loans held for sale at December 31, 2005 and 2004, respectively, which are included in loans on the accompanying consolidated balance sheets and the fair value of these loans exceeded book value in the aggregate.

Loan origination fees are deferred and direct loan origination costs are capitalized until the related loan is sold, at which time the net fees are included in the gain on the sale of loans in the consolidated statements of earnings.

(continued)

F-10

FIRST COMMUNITY BANK CORPORATION OF AMERICA AND SUBSIDIARIES

Notes to Consolidated Financial Statements, Continued

(1) Description of Business and Summary of Significant Accounting Policies, Continued

Allowance for Loan Losses. The allowance for loan losses is established as losses are estimated to have occurred through a provision for loan losses charged to earnings. Loan losses are charged against the allowance when management believes the uncollectibility of a loan balance is confirmed. Subsequent recoveries, if any, are credited to the allowance.

Calculating the allowance for loan losses is divided into two primary allocation groups: (1) specific allocation loans, (2) all other passing grade loans. For specific allocation loans, the Company has determined an allowance amount to set aside which it believes is sufficient to cover any potential collateral shortfall. Problem loans are identified by the Loan Officer, Loan Review, Loan Committee or by the Examiners. Those loans identified as problem loans are assigned a risk grade. Loans graded special mention are multiplied by an inherent loss factor of 3% to 5% to determine the amount to be included in the allowance. Loans graded substandard are generally multiplied by a loss factor of 5% to 15%, loans graded doubtful are generally multiplied by a loss factor of 50% and loans graded loss are multiplied by a loss factor of 100%. In addition to the 5% to 15% and 50% on substandard and doubtful loans the loans are individually reviewed for any addition reserve that may be necessary. All other loans, graded pass are multiplied by an historical industry experience factor to determine the appropriate level of the allowance for loan losses. In addition to historical experience factors, the Company also provides for losses due to economic factors, concentration of credit and portfolio composition changes.

A loan is considered impaired when, based on current information and events, it is probable that the Company will be unable to collect the scheduled payments of principal or interest when due according to the contractual terms of the loan agreement. Factors considered by management in determining impairment include payment status, collateral value, and the probability of collecting scheduled principal and interest payments when due. Loans that experience insignificant payment delays and payment shortfalls generally are not classified as impaired. Management determines the significance of payment delays and payment shortfalls on a case-by-case basis, taking into consideration all of the circumstances surrounding the loan and the borrower, including the length of the delay, the reasons for the delay, the borrower’s prior payment record, and the amount of the shortfall in relation to the principal and interest owed. Impairment is measured on a loan by loan basis for commercial and commercial real estate loans by either the present value of expected future cash flows discounted at the loan’s effective interest rate, the loan’s obtainable market price, or the fair value of the collateral if the loan is collateral dependent.

Large groups of smaller balance homogeneous loans are collectively evaluated for impairment. Accordingly, the Company does not separately identify individual installment and residential loans for impairment disclosures.

Foreclosed Real Estate. Real estate acquired through, or in lieu of, foreclosure, is initially recorded at

the lower of fair value or the loan balance plus acquisition costs at the date of foreclosure. After foreclosure, valuations are periodically performed by management and the real estate is carried at the lower of carrying amount or fair value, less cost to sell. Revenue and expenses from operations and changes in the valuation allowance are included in earnings.

(continued)

F-11

FIRST COMMUNITY BANK CORPORATION OF AMERICA AND SUBSIDIARIES

Notes to Consolidated Financial Statements, Continued

(1) Description of Business and Summary of Significant Accounting Policies, Continued

Premises and Equipment. Land is stated at cost. Buildings, furniture, fixtures, equipment and leasehold improvements are carried at cost, less accumulated depreciation and amortization. Depreciation and amortization are computed using the straight-line method over the estimated useful life of each type of asset or lease term, if shorter.

Goodwill. Goodwill resulted from the initial acquisition of the Bank’s common stock by the Holding Company on December 4, 1995.

Statement of Financial Accounting Standards No. 142, “Goodwill and Other Intangible Assets” (“SFAS 142”) requires goodwill to be tested for impairment on an annual basis and between annual tests in certain circumstances, and written down when impaired. Based on the impairment tests performed, there was no impairment of goodwill during the years ended December 31, 2005, 2004 or 2003. There can be no assurance that future goodwill impairment tests will not result in a charge to earnings.

Off-Balance-Sheet Financial Instruments. In the ordinary course of business, the Company has entered into off-balance-sheet financial instruments consisting of commitments to extend credit, unused lines of credit and standby letters of credit. Such financial instruments are recorded in the consolidated financial statements when they are funded.

Transfer of Financial Assets. Transfers of financial assets are accounted for as sales, when control over the assets has been surrendered. Control over transferred assets is deemed to be surrendered when (1) the assets have been isolated from the Company, (2) the transferee obtains the right (free of conditions that constrain it from taking advantage of that right) to pledge or exchange the transferred assets, and (3) the Company does not maintain effective control over the transferred assets through an agreement to repurchase them before their maturity.

Income Taxes. Deferred income tax assets and liabilities are recorded to reflect the tax consequences on future years of temporary differences between revenues and expenses reported for financial statement and those reported for income tax purposes. Deferred tax assets and liabilities are measured using the enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be realized or settled. Valuation allowances are provided against assets which are not likely to be realized.

Stock Compensation Plans. Statement of Financial Accounting Standards (SFAS) No. 123,Accounting for Stock-Based Compensation, as amended by SFAS 148,Accounting for Stock-Based Compensation Transition and Disclosure (collectively “SFAS No. 123”) encourages all entities to adopt a fair value based method of accounting for employee stock compensation plans, whereby compensation cost is measured at the grant date based on the value of the award and is recognized over the service period, which is usually the vesting period. However, it also allows an entity to continue to measure compensation cost for those plans using the intrinsic value based method of accounting prescribed by Accounting Principles Board Opinion No. 25,Accounting for Stock Issued to Employees (“APB No. 25”), whereby compensation cost is the excess, if any, of the quoted market price of the stock at the grant date (or other measurement date) over the amount an employee must pay to acquire the stock.

(continued)

F-12

FIRST COMMUNITY BANK CORPORATION OF AMERICA AND SUBSIDIARIES

Notes to Consolidated Financial Statements, Continued

(1) Description of Business and Summary of Significant Accounting Policies, Continued

Stock Compensation Plans, Continued. The Company accounts for their stock option plans under the recognition and measurement principles of APB No. 25. No stock-based employee compensation cost is reflected in net earnings, as all options granted under those plans had an exercise price equal to the market value of the underlying common stock on the date of grant. The following table illustrates the effect on net earnings and earnings per share if the Company had applied the fair value recognition provisions of SFAS No. 123 to stock-based employee compensation. On October 17, 2005, the Board of Directors approved the acceleration of vesting for all unvested options and all remaining stock-base employee compensation is reflected in 2005. All per share information has been restated to reflect the 5% stock dividend paid in March, 2005 and the three-for-two stock split declared in December, 2005 (in thousands, except per share amounts).

	Year Ended December 31,
	2005			2004		2003
Net earnings, as reported	$	2,863		2,023		1,468
Deduct: Total stock-based employee compensation determined under the fair value based method for all awards, net of related tax effect		(133	)	(99	)	(77	)
Proforma net earnings	$	2,730		1,924		1,391
Earnings per share:
Basic, as reported	$	.86		.62		.55
Basic, proforma	$	.82		.59		.52
Diluted, as reported	$	.78		.56		.51
Diluted, proforma	$	.74		.53		.48

The fair value of each option grant is estimated on the date of grant using the Black-Scholes option-pricing model with the following assumptions ($ in thousands):

	Year Ended December 31,
	2005			2004		2003
Risk-free interest rate		3.79	%	4.93	%	4.49	%
Dividend yield		—		—		—
Expected volatility 10.00%		9.27	%	—		%
Expected life in years		3		10		10
Per share grant-date fair value of options issued during the year	$	3.82		8.25		2.48

(continued)

F-13

FIRST COMMUNITY BANK CORPORATION OF AMERICA AND SUBSIDIARIES

Notes to Consolidated Financial Statements, Continued

(1) Description of Business and Summary of Significant Accounting Policies, Continued

Fair Values of Financial Instruments. The fair value of a financial instrument is the current amount that would be exchanged between willing parties, other than in a forced liquidation. Fair value is best determined based upon quoted market prices. However, in many instances, there are no quoted market prices for the Company’s various financial instruments. In cases where quoted market prices are not available, fair values are based on estimates using present value or other valuation techniques. Those techniques are significantly affected by the assumptions used, including the discount rate and estimates of future cash flows. Accordingly, the fair value estimates may not be realized in an immediate settlement of the instrument. Certain financial instruments and all nonfinancial instruments and excluded from fair value disclosure requirements. Accordingly, the aggregate fair value amounts presented may not necessarily represent the underlying fair value of the Company. The following methods and assumptions were used by the Company in estimating fair values of financial instruments:

Cash and Cash Equivalents. The carrying amounts of cash and cash equivalents approximate their fair value.

Other Interest-Bearing Deposits with Banks.The carrying value of other interest-bearing deposits with bank approximates their fair value.

Securities. Fair values for securities available for sale and held to maturity are based on quoted market prices, where available. If quoted market prices are not available, fair values are based on quoted market prices of comparable instruments.

Loans. For variable-rate loans that reprice frequently and have no significant change in credit risk, fair values are based on carrying values. Fair values for certain fixed-rate mortgage (e.g. one-to-four family residential), commercial real estate and commercial loans are estimated using discounted cash flow analyses, using interest rates currently being offered for loans with similar terms to borrowers of similar credit quality.

Federal Home Loan Bank Stock.The carrying amount of the Federal Home Loan Bank stock approximates its fair value.

Accrued Interest Receivable. The carrying amount of accrued interest receivable approximates its fair value.

Deposits. The fair values disclosed for demand deposits, savings, money market and NOW accounts are, by definition, equal to the amount payable on demand at the reporting date (that is, their carrying amounts). Fair values for fixed-rate certificates of deposit are estimated using a discounted cash flow calculation that applies interest rates currently being offered on certificates to a schedule of aggregated expected monthly maturities of time deposits.

Borrowed Funds.The carrying amounts of other borrowings approximate their fair values. Fair values of advances from the Federal Home Loan Bank are estimated using discounted cash flow analysis based on the Company’s current incremental borrowing rates for similar types of borrowings.

(continued)

F-14

FIRST COMMUNITY BANK CORPORATION OF AMERICA AND SUBSIDIARIES

Notes to Consolidated Financial Statements, Continued

(1) Description of Business and Summary of Significant Accounting Policies, Continued

Fair Values of Financial Instruments, Continued.

Off-Balance-Sheet Instruments. Fair values for off-balance-sheet lending commitments are based on fees currently charged to enter into similar agreements, taking into account the remaining terms of the agreements and the counterparties’ credit standing.

Comprehensive Income. Accounting principles generally require that recognized revenue, expenses, gains and losses be included in net earnings. Although certain changes in assets and liabilities, such as unrealized gains and losses on available-for-sale securities, are reported as a separate component of the equity section of the consolidated balance sheet, such items along with net earnings, are components of comprehensive income.

Earnings Per Share. Basic earnings per share is computed on the basis of the weighted-average number of common shares outstanding. Diluted earnings per share is computed based on the weighted-average number of shares outstanding plus the effect of outstanding stock options and warrants, computed using the treasury stock method. All per share information has been restated to reflect the 5% stock dividend paid in March, 2005 and the three-for-two stock split declared in December, 2005.

Recent Accounting Pronouncements. In December 2003, the American Institute of Certified Public Accountants (“AICPA”) issued Statement of Position (“SOP”) 03-3,Accounting for Certain Loans or Debt Securities Acquired in a Transfer. This SOP requires acquired impaired loans for which it is probable that the investor will be unable to collect all contractually required payments receivable to be recorded at the present value of amounts expected to be received. The SOP also prohibits carrying over or creation of valuation allowances in the initial accounting for these loans. The SOP was effective for loans acquired in fiscal years beginning after December 15, 2004. The adoption of this SOP did not impact the Company’s consolidated financial position or results of operations.

In December 2004, the Financial Accounting Standards Board (“FASB”) issued Statement of Financial Accounting Standards (“SFAS”) No. 123 (Revised),Share-Based Payment (“SFAS No. 123(R)”). This Statement replaces SFAS No. 123 and supersedes APB No. 25. SFAS No. 123(R) clarifies and expands SFAS No. 123’s guidance in several areas, including measuring fair value, classifying an award as equity or as a liability, accounting for nonsubstantive vesting provisions, and attributing compensation cost to reporting periods. Under the provisions of SFAS No. 123(R), the alternative to use APB No. 25’s intrinsic value method of accounting that was provided in SFAS No. 123, as originally issued, is eliminated. Effective January 1, 2006, the Company will begin expensing the fair value of any future grants of stock options. The Company has no unvested stock options at December 31, 2005.

(continued)

F-15

FIRST COMMUNITY BANK CORPORATION OF AMERICA AND SUBSIDIARIES

Notes to Consolidated Financial Statements, Continued

(1) Description of Business and Summary of Significant Accounting Policies, Continued

Recent Pronouncements, Continued. In May 2005, the FASB issued SFAS 154,Accounting Changes and Error Corrections, which replaces APB Opinion No. 20,Accounting Changes,and SFAS 3,Reporting Accounting Changes in Interim Financial Statements An Amendment of APB Opinion No. 28. SFAS 154 changes the requirements for the accounting and reporting of a change in accounting principle. SFAS 154 is effective for accounting changes and corrections of errors made in fiscal years beginning after December 15, 2005.

Reclassifications.Certain amounts in the 2004 consolidated financial statements have been reclassified to conform to the 2005 presentation.

(2) Securities

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

	Amortized Cost		Gross Unrealized Gains	Gross Unrealized Losses		Fair Value
Available for Sale:
At December 31, 2005:
U.S. Treasury securities	$	1,994	—	(23	)	1,971
U.S. government agency securities		6,169	—	(65	)	6,104
Mortgage-backed securities		861	—	(18	)	843
	$	9,024	—	(106	)	8,918
At December 31, 2004:
U.S. Treasury securities		3,486	3	(15	)	3,474
U.S. government agency securities		8,508	—	(76	)	8,432
Mortgage-backed securities		1,136	—	(10	)	1,126
	$	13,130	3	(101	)	13,032
Held to Maturity:
At December 31, 2005:
U.S. government agency securities		1,366	—	(12	)	1,354
Mortgage-backed securities		1,897	—	(50	)	1,847
Municipal securities		2,015	—	(19	)	1,996
	$	5,278	—	(81	)	5,197
At December 31, 2004:
U.S. government agency securities		1,000	—	(1	)	999
Mortgage-backed securities		775	—	(9	)	766
	$	1,775	—	(10	)	1,765

(continued)

F-16

FIRST COMMUNITY BANK CORPORATION OF AMERICA AND SUBSIDIARIES

Notes to Consolidated Financial Statements, Continued

(2) Securities, Continued

The scheduled maturities of securities at December 31, 2005 were as follows (in thousands):

	Available for Sale			Held to Maturity
	Amortized Cost		Fair Value	Amortized Cost	Fair Value
Less than one year	$	6,997	6,925	866	863
One to five years		996	980	500	491
After ten years		170	170	2,015	1,996
Mortgage-backed securities		861	843	1,897	1,847
	$	9,024	8,918	5,278	5,197

There were no sales of securities in 2005, 2004 or 2003.

Securities with gross unrealized losses at December 31, 2005, 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				Over Twelve Months
	Gross Unrealized Losses			Fair Value	Gross Unrealized Losses		Fair Value
Securities available for sale:
U.S. treasury securities	$	—		—	(23	)	1,971
U.S. government agency securities		—		—	(65	)	6,104
Mortgage-backed securities		(13	)	394	(5	)	449
Total securities available for sale	$	(13	)	394	(93	)	8,524
Securities held to maturity:
U.S. government agency securities		(12	)	1,354	—		—
Mortgage-backed securities		(35	)	1,342	(15	)	505
Municipal securities		(19	)	1,996	—		—
Total securities held to maturity	$	(66	)	4,692	(15	)	505

Management evaluates securities for other-than-temporary impairment at least on a quarterly basis, and more frequently when economic or market concerns warrant such evaluation. Consideration is given to (1) the length of time and the extent to which the fair value has been less than cost, (2) the financial condition and near-term prospects of the issuer, and (3) the intent and ability of the Company to retain its investment in the issuer for a period of time sufficient to allow for any anticipated recovery in fair value.

The unrealized losses on 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.

(continued)

F-17

FIRST COMMUNITY BANK CORPORATION OF AMERICA AND SUBSIDIARIES

Notes to Consolidated Financial Statements, Continued

(2) Securities, Continued

As of December 31, 2005 and 2004, securities with a carrying value of approximately $6,175,000 and $6,886,000, respectively, were pledged for repurchase agreements and for various purposes required or permitted by law.

(3) Loans

The components of loans are summarized as follows (in thousands):

	At December 31,
	2005			2004
Residential mortgage loans	$	75,585		44,147
Commercial real estate loans		109,995		97,849
Commercial loans		31,916		24,322
Installment loans		58,708		42,335
Total loans		276,204		208,653
Deduct:
Allowance for loan losses		(3,416	)	(2,640	)
Net deferred loan fees		(254	)	(224	)
Loans, net	$	272,534		205,789

An analysis of the change in the allowance for loan losses follows (in thousands):

	Year Ended December 31,
	2005			2004		2003
Balance at beginning of year	$	2,640		2,041		1,434
Provision for loan losses		795		605		668
(Charge-offs) net of recoveries		(19	)	(6	)	(61	)
Balance at end of year	$	3,416		2,640		2,041

There were no impaired loans identified during the years ended December 31, 2005, 2004 or 2003.

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

	At December 31,
	2005		2004
Nonaccrual loans	$	—	80
Past due ninety days or more, still accruing		—	—
	$	—	80

(continued)

F-18

FIRST COMMUNITY BANK CORPORATION OF AMERICA AND SUBSIDIARIES

Notes to Consolidated Financial Statements, Continued

(4) Premises and Equipment, Net

Components of premises and equipment are summarized as follows (in thousands):

	At December 31,
	2005			2004
Land	$	3,319		1,879
Buildings		4,834		3,069
Furniture, fixtures and equipment		1,773		1,294
Leasehold improvements		214		52
Total, at cost		10,140		6,294
Less accumulated depreciation and amortization		(1,350	)	(1,053	)
	$	8,790		5,241

The Company leases two branch offices and a loan production office. The terms of the leases are for two to five years. The Largo branch office lease contains escalation clauses and four three-year renewal options. The Apollo Beach branch lease includes escalation clauses and two five-year renewal options. The loan production office lease includes escalation clauses and a two-year renewal option. Rent expense under operating leases was approximately $128,000, $57,000 and $29,000 for the years ended December 31, 2005, 2004 and 2003, respectively. Future minimum payments under these operating leases are as follows (in thousands):

Year Ending December 31,	Amount
2006	$	157
2007		163
2008		146
2009		108
2010		7
Total	$	581

In December 2005, the Company executed a contract to build a new branch in Port Charlotte, Florida for approximately $1.6 million. The Company expects to open the branch in the fourth quarter of 2006, subject to regulatory approval.

(continued)

F-19

FIRST COMMUNITY BANK CORPORATION OF AMERICA AND SUBSIDIARIES

Notes to Consolidated Financial Statements, Continued

(5) Deposits

The aggregate amount of time deposits of $100,000 or more was approximately $55.4 million and $43.0 million at December 31, 2005 and 2004, respectively.

At December 31, 2005, scheduled maturities of time deposits are as follows (in thousands):

Year Ending December 31,	Amount
2006	$	77,291
2007		28,433
2008		9,763
2009		2,233
2010		2,613
Total	$	120,333

(6) Federal Home Loan Bank Advances

A summary of the Company’s Federal Home Loan Bank of Atlanta (“FHLB”) advances by maturity follows ($ in thousands):

Maturing in Year Ending December 31,	Interest Rate	At December 31,
		2005		2004
2005	4.54	$	—	1,000
2005	1.94		—	1,000
2006	2.48		2,000	2,000
2007(1)	3.66		—	2,000
2007	3.34		2,000	2,000
2008	4.14		2,000	2,000
2008	4.45		3,000	—
2009	3.71		1,000	1,000
2010(2)	4.02		1,000	—
2012(3)	3.93		1,000	1,000
		$	12,000	12,000

⁽¹⁾ FHLB called in July 2005.

⁽²⁾ FHLB has a call option in September 2006.

⁽³⁾ FHLB has a call option in April 2006.

The Company has entered into a collateral agreement with the FHLB. These advances are collateralized by all of the Company’s FHLB stock and a blanket floating lien on all qualified 1-4 family mortgage loans.

(continued)

F-20

FIRST COMMUNITY BANK CORPORATION OF AMERICA AND SUBSIDIARIES

Notes to Consolidated Financial Statements, Continued

(7) Other Borrowings

The Company enters into repurchase agreements with customers. These agreements require the Company to pledge securities as collateral for borrowings under these agreements. At December 31, 2005 and 2004, the outstanding balance of such borrowings totaled approximately $3,709,000 and $1,122,000, respectively and the Company pledged securities with a carrying value of approximately $5,678,000 and $3,511,000, respectively as collateral for these agreements.

(8) Income Taxes

Income taxes consisted of the following (in thousands):

	Year Ended December 31,
	2005			2004		2003
Current:
Federal	$	1,958		1,240		940
State		336		212		161
Total current		2,294		1,452		1,101
Deferred:
Federal		(531	)	(230	)	(231	)
State		(91	)	(39	)	(39	)
Total deferred		(622	)	(269	)	(270	)
Total income taxes	$	1,672		1,183		831

The reasons for the differences between the statutory Federal income tax rate and the effective tax rate are summarized as follows ($ in thousands):

	Year Ended December 31,
	2005					2004					2003
	Amount			% of Earnings		Amount			% of Earnings		Amount			% of Earnings
Income taxes at statutory rate	$	1,542		34.0	%	$	1,087		34.0	%	$	782		34.0	%
Increase (decrease) in taxes resulting from:
State taxes, net of Federal benefit		162		3.6			114		3.6			81		3.5
Other		(32	)	(.7	)		(18	)	(.7	)		(32	)	(1.4	)
Income taxes	$	1,672		36.9	%	$	1,183		36.9	%	$	831		36.1	%

(continued)

F-21

FIRST COMMUNITY BANK CORPORATION OF AMERICA AND SUBSIDIARIES

Notes to Consolidated Financial Statements, Continued

(8) Income Taxes, Continued

The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and liabilities are presented below (in thousands):

	At December 31,
	2005			2004
Deferred tax assets:
Allowance for loan losses	$	1,211		904
Deferred loan fees		322		269
Deferred compensation		218		—
Other		—		10
Total deferred tax assets		1,751		1,183
Deferred tax liabilities:
Accrual to cash conversions		—		(37	)
Deferred loan costs		(229	)	(185	)
FHLB dividends		—		(16	)
Accumulated depreciation		(51	)	(96	)
Total deferred tax liabilities		(280	)	(334	)
Net deferred tax asset	$	1,471		849

(9) Profit Sharing Plan

The Company sponsors a 401(k) profit sharing plan which is available to all employees electing to participate after meeting certain length-of-service requirements. The Company contributed approximately $88,000, $68,000 and $50,000 to the plan during the years ended December 31, 2005, 2004 and 2003, respectively.

(10) Benefit Agreement

During the year ended December 31, 2005, the Company entered into a Salary Continuation Agreement (the “Agreement”) with the President and Chief Executive Officer of the Company which requires the Company to provide salary continuation benefits to him upon retirement. The Agreement requires the Company to pay monthly benefits following normal retirement age. The Agreement also provides for salary continuation in the event of a change in control of the Company and for early voluntary termination. The Company is accruing the present value of the future benefits over the term of the Agreement. The Company expensed approximately $83,000, under the Agreement in 2005.

(11) Stockholders’ Equity

In 2001, the Company sold 180,784 shares of common stock for an aggregate of approximately $2,169,000 in a private placement stock offering (the “Offering”). For each two shares of common stock purchased in the Offering, the purchaser received a warrant to purchase one share of common stock for a price of $12.00. All warrants issued pursuant to the Offering expired June 30, 2004. During the year ended December 31, 2004, 109,703 warrants were exercised.

In February, 2005, the Company declared a 5% stock dividend to shareholders of record on March 1, 2005 which was paid on March 15, 2005.

On December 19, 2005, a three-for-two stock split was declared by the Company for shareholders of record as of January 10, 2006, which was paid on January 20, 2006. Also, the par value of the common stock was decreased from $.08 per share to $.05 per share.

(continued)

F-22

FIRST COMMUNITY BANK CORPORATION OF AMERICA AND SUBSIDIARIES

Notes to Consolidated Financial Statements, Continued

(12) Regulatory Matters

Banking regulations place certain restrictions on dividends and loans or advances made by the Bank to the Holding Company.

The Bank is subject to various regulatory capital requirements administered by the regulatory banking agencies. Failure to meet minimum capital requirements can initiate certain mandatory and possibly additional discretionary actions by regulators that, if undertaken, could have a direct material effect on the Company’s and the Bank’s financial statements. Under capital adequacy guidelines and the regulatory framework for prompt corrective action, the Bank must meet specific capital guidelines that involve quantitative measures of their assets, liabilities, and certain off-balance-sheet items as calculated under regulatory accounting practices. The capital amounts and classification are also subject to qualitative judgments by the regulators about components, risk weightings, and other factors.

Quantitative measures established by regulation to ensure capital adequacy require the Bank to maintain minimum amounts and percentages (set forth in the following table) of total and Tier 1 capital (as defined in the regulations) to risk-weighted assets (as defined) and of Tier 1 capital (as defined) to average assets (as defined). Management believes, as of December 31, 2005, the Bank met all capital adequacy requirements to which they are subject.

As of December 31, 2005, the most recent notification from the regulatory authorities categorized the Bank as well capitalized under the regulatory framework for prompt corrective action. To be categorized as well capitalized, an institution must maintain minimum total risk-based, Tier I risk-based, and Tier I leverage percentages as set forth in the following tables. There are no conditions or events since that notification that management believes have changed the Bank’s category. The Bank’s actual capital amounts and percentages are also presented in the table (dollars in thousands).

	Actual				For Capital Adequacy Purposes				Minimum To Be Well Capitalized Under Prompt Corrective Action Provisions
	Amount		%		Amount		%		Amount		%
As of December 31, 2005:
Total capital to Risk-Weighted assets	$	26,506	10.71	%	$	19,794	8.00	%	$	24,743	10.00	%
Tier I Capital to Risk-Weighted Assets		23,413	9.46			9,897	4.00			14,846	6.00
Tier I Capital (to Total Assets)		23,413	7.33			12,785	4.00			15,981	5.00
As of December 31, 2004:
Total capital to Risk-Weighted assets		20,970	11.10			15,110	8.00			18,887	10.00
Tier I Capital to Risk-Weighted Assets		18,609	9.85			7,555	4.00			11,332	6.00
Tier I Capital (to Total Assets)		18,609	7.79			9,572	4.00			11,966	5.00

(continued)

F-23

FIRST COMMUNITY BANK CORPORATION OF AMERICA AND SUBSIDIARIES

Notes to Consolidated Financial Statements, Continued

(13) Related Parties

The aggregate amount of loans owed to the Company by its officers and directors at December 31, 2005 and 2004 was approximately $306,000 and $518,000, respectively. During 2005, total principal additions were approximately $582,000 and total principal payments were approximately $794,000.

(14) Financial Instruments

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 are 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 amount recognized in the consolidated balance sheet. The contract amounts of these instruments reflect the extent of involvement the Company has in these financial instruments.

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 some of the commitments are expected to expire without being drawn upon, the total commitment 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 deemed necessary by the Company upon extension of credit is based on management’s credit evaluation of the counterparty.

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, and at December 31, 2005 and 2004 such collateral amounted to $574,000 and $2,670,000, respectively.

(continued)

F-24

FIRST COMMUNITY BANK CORPORATION OF AMERICA AND SUBSIDIARIES

Notes to Consolidated Financial Statements, Continued

(14) Financial Instruments, Continued

The estimated fair values of the Company’s financial instruments were as follows (in thousands):

	At December 31, 2005			At December 31, 2004
	Carrying Amount		Fair Value	Carrying Amount	Fair Value
Financial assets:
Cash and cash equivalents	$	21,698	21,698	9,738	9,738
Other interest-bearing deposits with banks		527	527	715	715
Securities		14,196	14,115	14,807	14,797
Loans		272,534	269,139	205,789	207,485
Federal Home Loan Bank stock		1,109	1,109	898	898
Accrued interest receivable		1,245	1,245	811	811
Financial liabilities:
Deposits		272,629	278,396	200,718	205,192
Federal Home Loan Bank advances		12,000	11,686	12,000	10,049
Other borrowings		3,709	3,709	1,122	1,122

A summary of the notional amounts of the Company’s financial instruments, which approximates fair value, with off-balance sheet risk at December 31, 2005, follows (in thousands):

	Contract Amount		Carrying Amount	Estimated Fair Value
Commitments to extend credit	$	57,352	—	—
Unused lines of credit	$	28,492	—	—
Standby letters of credit	$	675	—	—

(15) Credit Risk

Most of the Company’s business activity is with customers located within Charlotte, Pinellas and Hillsborough Counties, Florida. Therefore, the Company’s exposure to credit risk is significantly affected by changes in the economy in the Charlotte, Pinellas and Hillsborough Counties.

(continued)

F-25

FIRST COMMUNITY BANK CORPORATION OF AMERICA AND SUBSIDIARIES

Notes to Consolidated Financial Statements, Continued

(16) Stock Option Plans

The Company has stock option plans for directors and employees of the Company. Under the plans, the total number of options which may be granted to purchase common stock is 590,625 (amended) for directors and 492,188 (amended) for employees. At December 31, 2005, no options remain available for grant under the directors’ plan and 86,672 options remain available for grant under the employees’ plan. The directors’ options vest immediately and have a life of five years. The employees’ options vest over a range from grant date to eight years and expire six years after vesting is complete, however no employee option exceeds 10 years. All options and share prices have been adjusted to reflect the 5% stock dividend paid in March, 2005 and the three-for-two stock split declared in December, 2005 (dollars in thousands, except per share amounts).

	Number of Shares		Range of Per Share Option Price			Weighted Average Per Share Price		Aggregate Option Price
Options outstanding at December 31, 2003	904,935		$	5.08-7.62		5.76		5,211
Options granted	23,625			14.21		14.21		336
Options exercised	(19,845	)		(5.08-6.09	)	(5.09	)	(101	)
Options outstanding at December 31, 2004	908,715			5.08-14.21		6.00		5,446
Options granted	74,904			16.00-18.41		16.88		1,262
Options exercised	(433,125	)		(5.08-7.62	)	6.15		(2,664	)
Options forfeited	(15,750	)		(18.41	)	18.41		(290	)
Options outstanding at December 31, 2005	534,744		$	5.08-18.41		7.02		3,754

The weighted-average remaining contractual life of options outstanding at December 31, 2005 and 2004 was 4.0 years and 5.4 years, respectively. The Company accelerated the vesting of all unvested options in 2005, primarily to reduce noncash compensation expense that would have been recorded in its consolidated statements of earnings in future years due to the adoption of SFAS No. 123(R) in January 2006. At December 31, 2005, all options are exercisable.

(continued)

F-26

FIRST COMMUNITY BANK CORPORATION OF AMERICA AND SUBSIDIARIES

Notes to Consolidated Financial Statements, Continued

(17) Earnings Per Share

Earnings per share (“EPS”) of common stock has been computed on the basis of the weighted-average number of shares of common stock outstanding. Outstanding stock options and warrants are considered dilutive securities for purposes of calculating diluted EPS which is computed using the treasury stock method. All per share amounts have been adjusted to reflect the 5% stock dividend paid in March, 2005 and the three-for-two stock split declared in December 2005. The following tables present the calculations of EPS (dollars in thousands, except per share amounts).

	Earnings		Weighted- Average Shares	Per Share Amount
Year Ended December 31, 2005:
Basic EPS:
Net earnings available to common stockholders	$	2,863	3,344,088	$	.86
Effect of dilutive securities-
Incremental shares from assumed conversion of options			341,303
Diluted EPS:
Net earnings available to common stockholders and assumed conversions	$	2,863	3,685,391	$	.78
Year Ended December 31, 2004:
Basic EPS:
Net earnings available to common stockholders		2,023	3,251,039	$	.62
Effect of dilutive securities-
Incremental shares from assumed conversion of options			383,510
Diluted EPS:
Net earnings available to common stockholders and assumed conversions	$	2,023	3,634,549	$	.56
Year Ended December 31, 2003:
Basic EPS:
Net earnings available to common stockholders		1,468	2,688,933	$	.55
Effect of dilutive securities-
Incremental shares from assumed conversion of options			218,414
Diluted EPS:
Net earnings available to common stockholders and assumed conversions	$	1,468	2,907,347	$	.51

(continued)

F-27

FIRST COMMUNITY BANK CORPORATION OF AMERICA AND SUBSIDIARIES

Notes to Consolidated Financial Statements, Continued

(17) Earnings Per Share, Continued

At December 31, 2005 and 2004, the following options were excluded from the calculation of EPS due to the exercise price being above the average market price:

	Number of Outstanding Options	Exercise Price	Expire
2005
Options	750	17.64	2011
2004
Options	23,625	14.21	2014

(18) Holding Company Financial Information

The Holding Company’s unconsolidated financial information is as follows (in thousands):

Condensed Balance Sheets

	At December 31,
	2005		2004
Assets
Cash	$	5,047	4,559
Investment in subsidiaries		23,803	18,990
Other assets		306	75
Total assets	$	29,156	23,624
Liabilities and Stockholders’ Equity
Liabilities		9	6
Stockholders’ equity		29,147	23,618
Total liabilities and stockholders’ equity	$	29,156	23,624

Condensed Statements of Earnings

	Year Ended December 31,
	2005			2004		2003
Revenues	$	79		53		27
Expenses		(84	)	(77	)	(44	)
Loss before earnings of subsidiaries		(5	)	(24	)	(17	)
Earnings of subsidiaries		2,868		2,047		1,485
Net earnings	$	2,863		2,023		1,468

(continued)

F-28

FIRST COMMUNITY BANK CORPORATION OF AMERICA AND SUBSIDIARIES

Notes to Consolidated Financial Statements, Continued

(18) Holding Company Financial Information, Continued

Condensed Statements of Cash Flows

	Year Ended December 31,
	2005			2004		2003
Cash flows from operating activities:
Net earnings	$	2,863		2,023		1,468
Adjustments to reconcile net earnings to net cash used in operating activities:
Equity in undistributed earnings of subsidiaries		(2,868	)	(2,047	)	(1,485	)
Increase in other assets		(231	)	(61	)	(8	)
Increase (decrease) in liabilities		2		62		(8	)
Net cash used in operating activities		(234	)	(23	)	(33	)
Cash flows used in investing activity-Investment in subsidiaries		(1,652	)	(1,350	)	(3,178	)
Cash flows from financing activities:
Proceeds from exercise of stock options and warrants		2,666		1,417		41
Repurchase of common stock		(288	)	—		—
Fractional shares of stock dividend paid in cash		(4	)	—		—
Proceeds from sale of common stock, net		—		—		7,450
Repayment of line of credit		—		—		(1,100	)
Net cash provided by financing activities		2,374		1,417		6,391
Net increase in cash		488		44		3,180
Cash at beginning of year		4,559		4,515		1,335
Cash at end of year	$	5,047		4,559		4,515
Supplemental disclosure of cash flow information-Noncash transactions:
Accumulated other comprehensive income, net change in unrealized gain (loss) on securities available for sale of the Bank, net of income taxes	$	(5	)	(62	)	(36	)
Tax benefit from common stock options exercised and increase in investment in subsidiaries	$	298		56		—
Fractional shares of stock split accrued	$	(1	)	—		—

F-29

Item 9. Changes In and Disagreements With Accountants on Accounting and Financial Disclosure.

Neither First Community nor First Community Bank has had any disagreements with its accountants.

Item 9a. Controls and Procedures.

(a) Evaluation of disclosure controls and procedures.

We maintain controls and procedures designed to ensure that information required to be disclosed in the reports that we file or submit 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, our Chief Executive and Chief Financial Officer concluded that our disclosure controls and procedures were adequate.

(b) Changes in internal controls.

We 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 Officer.

PART III

Item 10. Directors, Executive Officers, Promoters and Control Persons; Compliance With Section 16(a) of the Exchange Act.

Information required by this item appears in First Community’s Proxy Statement for the 2006 Annual Meeting of Shareholders under the caption, “Election of Directors”, “Non-Director Executive Officers”, “Report of the Audit Committee” and “Compliance with Section 16(a) of the Securities and Exchange Act of 1934”, and is hereby incorporated by reference. We have adopted a code of ethics that applies to our executive officers, a copy of which has been filed with this report on Form 10-K as Exhibit 14. Persons who would like a copy of such code of ethics may receive one without charge upon request made to Kay M. McAleer, Vice President/Corporate Secretary, First Community Bank Corporation of America, 9001 Belcher Road, Pinellas Park, Florida 33782.

Item 11. Executive Compensation.

Information required by this item appears in First Community’s Proxy Statement for the 2006 Annual Meeting of Shareholders under the caption, “Executive Compensation” and “Compensation Committee Report”, and is hereby incorporated by reference.

Item 12. Security Ownership of Certain Beneficial Owners and Management

Information required by this item appears in First Community’s Proxy Statement for the 2006 Annual Meeting of Shareholders under the caption, “Beneficial Stock Ownership of Directors and Executive Officers”, and is hereby incorporated by reference.

33

Item 13. Certain Relationships and Related Transactions.

Information required by this item appears in First Community’s Proxy Statement for the 2006 Annual Meeting of Shareholders under the caption, “Certain Transactions”, and is hereby incorporated by reference.

Item 14. Principal Accountant Fees and Services.

Information required by this item appears in First Community’s Proxy Statement for the 2006 Annual Meeting of Shareholders under the caption, “Audit Fees” and “All Other Fees” and is hereby incorporated by reference.

34

Item 15. Exhibits and Financial Statement Schedules.

The following documents are filed as part of this report at pages F-1 through F-29.

Consolidated Financial Statements of First Community Bank Corporation of America, Inc. (including all required schedules):

1. Independent Auditor’s Report;

2. Consolidated Balance Sheets at December 31, 2005 and 2004;

3. Consolidated Statements of Earnings, Stockholders’ Equity, and Statements of Cash Flows for years ended December 31, 2005, 2004 and 2003.

4. Notes to Consolidated Financial Statements

Exhibits.

The following exhibits are filed with or incorporated by reference into this report. Certain of the exhibits were previously filed as a part of First Community’s Registration Statement on Form SB-2 and Form 10-QSB as indicated and are hereby incorporated by reference.

Exhibit No.	Description of Exhibit
*3.1	Amended and Restated Articles of Incorporation
*3.2	Bylaws
3.3	Amendment to Amended and Restated Articles of Incorporation
*4.1	Specimen Common Stock Certificate
*4.3	Warrant Certificate
**10.1	Employment Agreement of Kenneth P. Cherven
*10.2	First Amended and Restated Non-Employee Director Stock Option Plan
*10.3	Long-Term Incentive Plan
*10.4	Incentive Compensation Plan
14.	Code of Ethics
21.	Subsidiaries of the Registrant
31.1	Certification of Chief Executive Officer required by Rule 13a-14(a)/15-14(a) under the Exchange Act
31.2	Certification of Chief Financial Officer required by Rule 13a-14(a)/15-14(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

35

SIGNATURES

In accordance with Section 13 or 15(d) of the Securities Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

FIRST COMMUNITY BANK CORPORATION OF AMERICA
By	/s/ Kenneth P. Cherven Kenneth P. Cherven, President and Chief Executive Officer
Date: March 13, 2006
By	/s/ John A. Stewart, Jr. John A. Stewart, Jr., Chief Financial Officer
Date: March 13, 2006

In accordance with the Securities Exchange Act, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

/s/ Brad Bishop	March 13, 2006
Brad Bishop, Director	Date
/s/ Kenneth P. Cherven	March 13, 2006
Kenneth P. Cherven, Director, President and Chief Executive Officer	Date
/s/ Kenneth Delarbre	March 13, 2006
Kenneth Delarbre, Director	Date
/s/ Edwin C. Hussemann	March 13, 2006
Edwin C. Hussemann, Director	Date
/s/ James Macaluso	March 13, 2006
James Macaluso, Director	Date
/s/ David K. Meehan	March 13, 2006
David K. Meehan, Director	Date
/s/ Robert G. Menke	March 13, 2006
Robert G. Menke, Director	Date
/s/ Robert M. Menke	March 13, 2006
Robert M. Menke, Director	Date

36

Exhibit Index

Exhibit No.	Description
3.3	Amendment to Amended and Restated Articles of Incorporation
14.	Code of Ethics
21.	Subsidiaries of the Registrant
31.1	Certification of Chief Executive Officer required by Rule 13a-14(a)/15-14(a) under the Exchange Act
31.2	Certification of Chief Financial Officer required by Rule 13a-14(a)/15-14(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