First Community Bank Corp of America 10Q 2009 Q2 Quarterly report

First Community Bank Corp of America (FCFL) Inactive 10-Q2009 Q2 Quarterly report

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

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

For the quarterly period ended June 30, 2009

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

For the transition period from to

Commission file number 000-50357

FIRST COMMUNITY BANK CORPORATION OF AMERICA

(Exact name of registrant as specified in its charter)

Florida

65-0623023

(State or other jurisdiction of

incorporation or organization)

(I.R.S. Employer

Identification No.)

9001 Belcher Road

Pinellas Park, Florida 33782

(Address of principal executive offices) (Zip Codes)

(727) 520-0987

(Registrant’s telephone number, including area code)

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

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

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). ¨ Yes ¨ No

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

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

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


Common stock, par value $.05 per share		4,151,431 shares
(class)		Outstanding at July 20, 2009

FIRST COMMUNITY BANK CORPORATION OF AMERICA AND SUBSIDIARIES

INDEX


		Page
PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

Condensed Consolidated Balance Sheets - At June 30, 2009 (unaudited) and At December 31, 2008		2

Condensed Consolidated Statements of Operations - Three and Six Months Ended June 30, 2009 and 2008 (unaudited)		3

Condensed Consolidated Statements of Changes in Stockholders’ Equity - Six Months Ended June 30, 2009 and 2008 (unaudited)		4-5

Condensed Consolidated Statements of Cash Flows - Six Months Ended June 30, 2009 and 2008 (unaudited)		6-7

Notes to Condensed Consolidated Financial Statements (unaudited)		8-13

Review by Independent Registered Public Accounting Firm		14

Report of Independent Registered Public Accounting Firm		15

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations		16-26

Item 3. Quantitative and Qualitative Disclosures About Market Risk		27

Item 4T. Controls and Procedures		27

PART II. OTHER INFORMATION

Item 1. Legal Proceedings		27

Item 1A. Risk Factors		27

Item 4. Submission of Matters to a Vote of Security Holders		28

Item 6. Exhibits		29

SIGNATURES		30

FIRST COMMUNITY BANK CORPORATION OF AMERICA AND SUBSIDIARIES

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

Condensed Consolidated Balance Sheets

(In thousands, except share amounts)


	June 30, 2009			December 31, 2008
	(Unaudited)
Assets

Cash and due from banks	$	48,624		6,873
Interest-bearing deposits with banks		220		141
Federal funds sold		—		25,444


Cash and cash equivalents		48,844		32,458

Other interest-bearing deposits with banks		571		300
Securities available for sale		49,804		25,227
Securities held to maturity (market value of $7,539 and $7,781)		7,703		8,296
Loans, net of allowance for loan losses of $7,844 and $8,230		414,713		403,855
Federal Home Loan Bank stock, at cost		2,549		2,555
Premises and equipment, net		13,122		12,903
Foreclosed real estate		2,888		1,523
Accrued interest receivable		1,965		1,765
Bank owned life insurance		7,846		7,762
Other assets		5,457		5,001


	$	555,462		501,645


Liabilities and Stockholders’ Equity

Liabilities:
Noninterest-bearing demand deposits		39,417		32,796
Savings, NOW and money-market deposits		168,154		123,098
Time deposits		257,237		246,977


Total deposits		464,808		402,871

Federal Home Loan Bank advances		36,000		38,000
Other borrowings		4,005		10,325
Accrued expenses and other liabilities		6,676		5,975


Total liabilities		511,489		457,171


Stockholders’ equity:
Preferred stock, $0.01 par value, 2,000,000 shares authorized, 10,685 shares issued and outstanding, at redemption value		10,685		10,685
Preferred stock discount		(30	)	(33	)
Common stock, $0.05 par value, 20,000,000 shares authorized, 4,151,431 and 4,111,121 shares issued and outstanding		208		205
Additional paid-in capital		30,600		30,388
Retained earnings		2,347		2,843
Accumulated other comprehensive income		163		386


Total equity		43,973		44,474


	$	555,462		501,645

See Accompanying Notes to Condensed Consolidated Financial Statements.

FIRST COMMUNITY BANK CORPORATION OF AMERICA AND SUBSIDIARIES

Condensed Consolidated Statements of Operations (Unaudited)

(In thousands, except per share amounts)


	Three Months Ended June 30,				Six Months Ended June 30,
	2009			2008	2009		2008
Interest income:
Loans	$	5,950		6,324	11,983		13,015
Securities		550		344	1,030		591
Other interest earning assets		13		135	22		235


Total interest income		6,513		6,803	13,035		13,841


Interest expense:
Deposits		2,583		2,741	5,209		5,486
Other borrowings		354		477	716		980


Total interest expense		2,937		3,218	5,925		6,466


Net interest income		3,576		3,585	7,110		7,375

Provision for loan losses		1,337		713	2,032		893


Net interest income after provision for loan losses		2,239		2,872	5,078		6,482


Noninterest income:
Service charges on deposit accounts		206		186	412		410
Other service charges and fees		117		92	167		129
Income from bank owned life insurance		44		78	84		160
Gain on sale of loans held for sale		—		38	2		63
Other		113		54	193		80


Total noninterest income		480		448	858		842


Noninterest expenses:
Employee compensation and benefits		1,362		1,844	3,121		3,750
Occupancy and equipment		450		400	870		817
Data processing		359		290	711		565
Professional fees		168		111	321		196
Office supplies		56		55	101		112
Insurance		473		108	591		316
Other		362		325	669		579


Total noninterest expenses		3,230		3,133	6,384		6,335


(Loss) earnings before income taxes (benefit)		(511	)	187	(448	)	989

Income taxes (benefit)		(230	)	29	(236	)	282


Net (loss) earnings		(281	)	158	(212	)	707

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


Net (loss) earnings applicable to common stockholders	$	(416	)	158	(496	)	707


(Loss) earnings per share:

Basic earnings per share	$	(.10	)	.04	(.12	)	.17


Diluted earnings per share	$	(.10	)	.04	(.12	)	.17


Dividends per share	$	—		—	—		—

See Accompanying Notes to Condensed Consolidated Financial Statements.

FIRST COMMUNITY BANK CORPORATION OF AMERICA AND SUBSIDIARIES

Condensed Consolidated Statements of Changes in Stockholders’ Equity

Six Months Ended June 30, 2009 and 2008

(In thousands, except share amounts)


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

Balance at December 31, 2007	—	$	—	—	4,082,002		$	204	30,216		6,478	70		36,968


Comprehensive income:

Net earnings (unaudited)	—		—	—	—			—	—		707	—		707

Net change in unrealized gain on securities available for sale, net of taxes of $156 (unaudited)	—		—	—	—			—	—		—	(260	)	(260	)


Comprehensive income (unaudited)														447


Exercise of stock options (unaudited)	—		—	—	35,141			1	168		—	—		169

Retirement of common stock (unaudited)	—		—	—	(6,022	)		—	(59	)	—	—		(59	)

Share-based compensation expense (unaudited)	—		—	—	—			—	18		—	—		18


Balance at June 30, 2008 (unaudited)	—	$	—	—	4,111,121		$	205	30,343		7,185	(190	)	37,543

(continued)

FIRST COMMUNITY BANK CORPORATION OF AMERICA AND SUBSIDIARIES

Condensed Consolidated Statements of Changes in Stockholders’ Equity, Continued

Six Months Ended June 30, 2009 and 2008

(In thousands, except share amounts)


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

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

Comprehensive loss:

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

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


Comprehensive loss (unaudited)														(435	)


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

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

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

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


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

See Accompanying Notes to Condensed Consolidated Financial Statements.

FIRST COMMUNITY BANK CORPORATION OF AMERICA AND SUBSIDIARIES

Condensed Consolidated Statements of Cash Flows (Unaudited)

(In thousands)


	Six Months Ended June 30,
	2009			2008
Cash flows from operating activities:
Net (loss) earnings	$	(212	)	707
Adjustments to reconcile net (loss) earnings to net cash provided by operating activities:
Provision for loan losses		2,032		893
Depreciation and amortization		308		303
Net amortization of premiums and discounts on securities		84		(21	)
Share-based compensation		20		18
Net amortization of deferred loan fees and costs		(128	)	(175	)
Income from bank owned life insurance		(84	)	(160	)
Origination of loans held for sale		—		(4,312	)
Proceeds from sale of loans held for sale		—		4,645
Gain on sale of loans held for sale		—		(63	)
(Increase) decrease in accrued interest receivable		(200	)	106
Increase in other assets		(456	)	(1,120	)
Net gain on sale of foreclosed real estate		(53	)	—
Increase in accrued expenses and other liabilities		835		873


Net cash provided by operating activities		2,146		1,694


Cash flows from investing activities:
Net change in other interest-bearing deposits with banks		(271	)	198
Purchase of securities available for sale		(33,574	)	(17,898	)
Principal payments on securities available for sale		3,556		717
Proceeds from calls and maturities of securities available for sale		1,500		500
Proceeds from sale of securities available for sale		3,500		—
Proceeds from maturities of securities held to maturity		500		1,160
Principal payments on securities held to maturity		93		178
Net increase in loans		(14,491	)	(4,913	)
Purchase of premises and equipment, net		(527	)	(1,312	)
Proceeds from the sale of foreclosed real estate		417		—
Redemption (purchase) of Federal Home Loan Bank stock		6		(397	)


Net cash used in investing activities		(39,291	)	(21,767	)


Cash flows from financing activities:
Increase in deposits		61,937		42,282
Proceeds from Federal Home Loan Bank advances		—		20,000
Repayment of Federal Home Loan Bank advances		(2,000	)	(13,000	)
Net decrease in other borrowings		(6,320	)	(4,870	)
Proceeds from exercise of stock options		195		169
Retirement of common stock		—		(59	)
Dividend on preferred stock to U.S. Treasury		(281	)	—


Net cash provided by financing activities		53,531		44,522


Net increase in cash and cash equivalents		16,386		24,449

Cash and cash equivalents at beginning of period		32,458		9,100


Cash and cash equivalents at end of period	$	48,844		33,549

(continued)

FIRST COMMUNITY BANK CORPORATION OF AMERICA AND SUBSIDIARIES

Condensed Consolidated Statements of Cash Flows (Unaudited), Continued

(In thousands)


	Six Months Ended June 30,
	2009			2008
Supplemental disclosure of cash flow information:
Cash paid during the period for:
Interest, net of capitalized interest of $13 and $181	$	5,888		6,344


Income taxes	$	—		595


Noncash transactions:
Accumulated other comprehensive income (loss), net change in unrealized gain (loss) on securities available for sale, net of income taxes	$	(223	)	(260	)


Transfer from loans to foreclosed real estate	$	1,729		2,124

See Accompanying Notes to Condensed Consolidated Financial Statements.

FIRST COMMUNITY BANK CORPORATION OF AMERICA AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Unaudited)

General.First Community Bank Corporation of America (the “Holding Company”) owns all of the outstanding common stock of First Community Bank of America (the “Bank”) and First Community Lender Services, Inc. (“FCLS”) (collectively, the “Company”). The Holding Company’s primary business activity is the operation of the Bank. The Bank is a federally-chartered stock savings bank providing a variety of banking services to small and middle market businesses and individuals through its four banking offices located in Pinellas County, two banking offices in Pasco County, three banking offices located in Charlotte County, and two offices located in Hillsborough County, Florida. FCLS had minimal activity during the six months ended June 30, 2009 and 2008.

In the opinion of the management of the Company, the accompanying condensed consolidated financial statements contain all adjustments (consisting principally of normal recurring accruals) necessary to present fairly the financial position at June 30, 2009, the results of operations for the three- and six-month periods ended June 30, 2009 and 2008 and cash flows for the six-month periods ended June 30, 2009 and 2008. The results of operations and other data for the three- and six-month periods ended June 30, 2009 are not necessarily indicative of results that may be expected for the year ending December 31, 2009.

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


	Three Months Ended June 30,					Six Months Ended June 30,
	2009			2008		2009		2008

Balance at beginning of period	$	7,923		4,201		8,230		4,479
Provision for loan losses		1,337		713		2,032		893
Charge-offs		(1,426	)	(1,032	)	(2,469	)	(1,490	)
Recoveries		10		1		51		1


Balance at end of period	$	7,844		3,883		7,844		3,883

(continued)

FIRST COMMUNITY BANK CORPORATION OF AMERICA AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Unaudited), Continued

2.	*Loan Impairment and Loan Losses, Continued.*Impaired loans are as follows (in thousands):


	At June 30,
	2009			2008

Loans identified as impaired:
Troubled debt restructurings	$	19,286	⁽¹⁾	623	⁽¹⁾

Gross collateral dependent loans with no related allowance for loan losses		23,698	⁽²⁾	6,867	⁽²⁾
Gross collateral dependent loans with related allowance for losses recorded		1,738		2,824
Less: Allowances on these loans		(442	)	(810	)


Net investment in impaired loans	$	44,280		9,504

⁽¹⁾

Charge-offs related to these loans were $583,000 and $67,000, respectively.

⁽²⁾

Charge-offs related to these loans were $2,187,000 and $90,000, respectively.

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


	At June 30, 2009							Losses Recorded in Operations For the Period Ended June 30, 2009
	Fair Value			Level 1	Level 2	Level 3	Total Losses

Impaired loans	$	30,081	⁽¹⁾	—	—	30,081	3,212	1,885


Foreclosed real estate	$	2,888		—	—	2,888	—	—

⁽¹⁾

Loans with a carrying value of $14,199,000 at June 30, 2009 were measured for impairment using Level 3 inputs and had a fair value in excess of carrying value.

(continued)

FIRST COMMUNITY BANK CORPORATION OF AMERICA AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Unaudited), Continued

2.	*Loan Impairment and Loan Losses, Continued.*


	Six Months Ended June 30,
	2009		2008

Average investment in impaired loans	$	34,071	6,498

Interest income recognized on impaired loans	$	417	—

Interest income received on impaired loans	$	478	—

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


	At June 30,
	2009		2008

Nonaccrual loans	$	24,689	6,544
Past due ninety days or more, still accruing		—	—


	$	24,689	6,544

(Loss) Earnings Per Share (“EPS”).(Loss) earnings per share (“EPS”) of common stock has been computed on the basis of the weighted-average number of shares of common stock outstanding for the three and six months ended June 30, 2008. Outstanding stock options are considered dilutive securities for purposes of calculating diluted EPS which is computed using the treasury stock method. For the three and six months ended June 30, 2009, outstanding stock options and warrants are not considered dilutive securities due to the net loss applicable to common shareholders. The following table presents the calculations of EPS (dollars in thousands, except per share amounts).


	Three Months Ended June 30,
	2009							2008
	(Loss)			Weighted- Average Shares	Per Share Amount			Earnings		Weighted- Average Shares	Per Share Amount
Basic EPS:
Net (loss) earnings applicable to common stockholders	$	(416	)	4,151,431	$	(0.10	)	$	158	4,111,121	$	0.04


Effect of dilutive securities-
Incremental shares from assumed conversion of options				—						140,400


Diluted EPS:
Net (loss) earnings applicable to common stockholders and assumed conversions	$	(416	)	4,151,431	$	(0.10	)	$	158	4,251,521	$	0.04

(continued)

FIRST COMMUNITY BANK CORPORATION OF AMERICA AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Unaudited), Continued

3.	*(Loss) Earnings Per Share (“EPS”), Continued.*


	Six Months Ended June 30,
	2009							2008
	(Loss)			Weighted- Average Shares	Per Share Amount			Earnings		Weighted- Average Shares	Per Share Amount
Basic EPS:
Net (loss) earnings applicable to common stockholders	$	(496	)	4,150,801	$	(0.12	)	$	707	4,112,147	$	0.17


Effect of dilutive securities-
Incremental shares from assumed conversion of options				—						138,747


Diluted EPS:
Net (loss) earnings applicable to common stockholders and assumed conversions	$	(496	)	4,150,801	$	(0.12	)	$	707	4,250,894	$	0.17

The following options were excluded from the calculation of EPS for the three and six months ended June 30, 2008 due to the exercise price being above the average market price:


	Number Outstanding	Year Granted	Exercise Price		Expire

Options	220,500	2005	$	16.31	2011
	16,538	2004		13.53	2010-2014
	15,750	2005		15.24	2011-2015
	19,688	2005		15.36	2011
	12,602	2005		16.31	2011
	788	2005		16.80	2011
	6,300	2006		19.23	2012-2016
	5,250	2006		19.52	2012-2016
	10,500	2006		20.00	2012-2016
	4,200	2006		20.00	2016
	10,500	2007		18.71	2017
	6,850	2007		18.57	2017
	5,000	2007		14.75	2017

Stock-Based Compensation. The Company currently has two 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 620,156 (amended) for directors and 516,797 (amended) for employees. At June 30, 2009, no options remain available for grant under the directors’ plan and 69,662 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 periods up to four years and have terms up to 10 years.

(continued)

FIRST COMMUNITY BANK CORPORATION OF AMERICA AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Unaudited), Continued

Stock-Based Compensation, Continued. The 2005 Stock Plan approved by shareholders in April 2006 was terminated by the Board of Directors and the options covering 220,500 shares were cancelled effective February 17, 2009 due to erratic market conditions, the conditions of the national, state and local economies, and out of a desire to evaluate and consider compensation plan options more appropriate to the current economy and regulatory environment.

A summary of the activity in the Company’s stock option plans is as follows:


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

Outstanding at December 31, 2008	661,881		$	10.79
Options exercised	(40,310	)		4.84
Options forfeited	(40,923	)		10.85
Options terminated	(220,500	)		16.31


Outstanding at June 30, 2009	360,148		$	7.19	2.8 years	$	—


Exercisable at June 30, 2009	345,742		$	7.70	2.5 years	$	—

The total intrinsic value of options exercised during the six months ended June 30, 2009 and 2008 was $0 and $222,000. At June 30, 2009, there was approximately $53,000 of total unrecognized compensation expense related to nonvested share-based compensation arrangements granted under the plans. The cost is expected to be recognized over a weighted-average period of sixteen months. The total fair value of shares vesting and recognized as compensation expense was approximately $20,000 and $18,000 for the six months ended June 30, 2009 and 2008, respectively. There was no associated tax benefit recognized for both the six months ended June 30, 2009 and 2008.

5.	*Regulatory Capital.* The Bank is required to maintain certain minimum regulatory capital requirements. At June 30, 2009, the Bank was in compliance with its regulatory capital requirements.

6.	*Financial Covenant Compliance Status.* First Community Bank Corporation of America terminated its $12 million line of credit with Silverton Bank. As of June 30, 2009, the Company had paid-off this line.

(continued)

FIRST COMMUNITY BANK CORPORATION OF AMERICA AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Unaudited), Continued

7.	*Securities.*Securities as of June 30, 2009 subject to fair value measurements on a recurring basis are as follows (in thousands):


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

Available for sale securities	$	49,804	—	49,804	—

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


	At June 30, 2009			At December 31, 2008
	Carrying Amount		Fair Value	Carrying Amount	Fair Value

Financial assets:
Cash and cash equivalents	$	48,844	48,844	32,458	32,458
Other interest-bearing deposits with banks		571	571	300	300
Securities		57,507	57,604	33,523	33,008
Loans		414,713	417,753	403,855	408,245
Federal Home Loan Bank stock		2,549	2,549	2,555	2,555
Accrued interest receivable		1,965	1,965	1,765	1,765

Financial liabilities:
Deposits		464,808	468,251	402,871	406,011
Federal Home Loan Bank advances		36,000	38,442	38,000	40,756
Other borrowings		4,005	4,005	10,325	10,325

Off-Balance Sheet Financial Instruments		—	—	—	—

FIRST COMMUNITY BANK CORPORATION OF AMERICA AND SUBSIDIARIES

Review by Independent Registered Public Accounting Firm

Hacker, Johnson & Smith PA, the Company’s independent registered public accounting firm, have made a limited review of the financial data as of June 30, 2009, and for the three- and six- month periods ended June 30, 2009 and 2008 presented in this document, in accordance with standards established by the Public Company Accounting Oversight Board.

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

Report of Independent Registered Public Accounting Firm

The Board of Directors and Stockholders

First Community Bank Corporation of America

Pinellas Park, Florida:

We have reviewed the accompanying condensed consolidated balance sheet of First Community Bank Corporation of America and Subsidiaries (the “Company”) as of June 30, 2009, the related condensed consolidated statements of operations for the three- and six-month periods ended June 30, 2009 and 2008 and the related condensed consolidated statements of changes in stockholders’ equity and cash flows for the six-month periods ended June 30, 2009 and 2008. These interim financial statements are the responsibility of the Company’s management.

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

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

We have previously audited, in accordance with the standards of the Public Company Accounting Oversight Board, the consolidated balance sheet of the Company as of December 31, 2008, and the related consolidated statements of operations, changes in stockholders’ equity and cash flow for the year then ended (not presented herein); and in our report dated March 24, 2009, we expressed an unqualified opinion on those consolidated financial statements. In our opinion, the information set forth in the accompanying condensed consolidated balance sheet as of December 31, 2008, is fairly stated, in all material respects, in relation to the consolidated balance sheet from which it has been derived.

/s/ Hacker, Johnson & Smith PA

HACKER, JOHNSON & SMITH PA

Tampa, Florida

August 7, 2009

FIRST COMMUNITY BANK CORPORATION OF AMERICA AND SUBSIDIARIES

Item 2. Management’s Discussion and Analysis of

Financial Condition and Results of Operations

Forward Looking Statements

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

General

First Community Bank Corporation of America (the “Holding Company”) owns all of the outstanding common stock of First Community Bank of America (the “Bank”) and First Community Lender Services, Inc. (“FCLS”) (collectively, the “Company”). The Holding Company’s primary business activity is the operation of the Bank. The Bank is a federally-chartered stock savings bank providing a variety of banking services to small and middle market businesses and individuals through its four banking offices located in Pinellas County, two banking offices located in Pasco County, three banking offices located in Charlotte County and two offices located in Hillsborough County, Florida. FCLS had minimal activity during the six months ended June 30, 2009 and 2008.

Liquidity and Capital Resources

The Company’s primary source of cash during the six months ended June 30, 2009, was from net deposit inflows of approximately $62 million. Cash was used primarily to increase securities $24 million and to increase loans by $15 million. The remaining cash increase is deposited at the Federal Reserve Bank.

Off-Balance Sheet Arrangements

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

FIRST COMMUNITY BANK CORPORATION OF AMERICA AND SUBSIDIARIES

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

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

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

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

A summary of the amounts of the Company’s financial instruments, with off-balance sheet risk at June 30, 2009, follows (in thousands):


	Contract Amount

Commitments to extend credit	$	11,162


Unused lines of credit	$	31,470


Standby letters of credit	$	10,488

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

FIRST COMMUNITY BANK CORPORATION OF AMERICA AND SUBSIDIARIES

Selected Financial Information

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


	Six Months Ended June 30, 2009		Year Ended December 31, 2008		Six Months Ended June 30, 2008

Average equity as a percentage of average assets	8.39	%	8.03	%	8.20	%

Equity to total assets at end of period	7.92	%	8.87	%	7.79	%

Return on average assets (1)	(0.21	)%	(0.78	)%	0.31	%

Return on common average equity (1)	(3.35	)%	(9.74	)%	3.78	%

Noninterest expenses to average assets	2.46	%	2.83	%	2.78	%

Nonperforming assets as a percentage of total assets at end of period	4.96	%	2.93	%	1.91	%

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

Local Economic Conditions

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

FIRST COMMUNITY BANK CORPORATION OF AMERICA AND SUBSIDIARIES

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

In light of these real estate trends the Bank has experienced an increase in its problem assets specifically in vacant residential lots and single family which has comprised 69% of charge-off activity. Commercial real estate related charge-off’s have been minimal to date at 8.5% of total charge-offs. The remaining charge-offs have been consumer loans.

Determining Loan Losses

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

The Bank obtains external appraisals on commercial real estate loans considered collateral dependent and on commercial foreclosed real estate on an annual basis. Once the appraisal is in hand, the Bank will evaluate and if required will write-down the loan. The Bank obtains a brokers price opinion or other valuation service estimate every six months on any impaired collateral dependent single family or residential lot loans, or foreclosed real estate and a write-down is made as required. A formal appraisal is ordered to evaluate the fair value when the foreclosure process is completed and the property title is being transferred to the Bank as foreclosed real estate. The foreclosed real estate is initially valued at the appraised value less estimated costs to sell.

The Bank uses broker’s price opinions or valuation service values on residential or vacant lot loans when evaluating a potential loss. Prior to a final charge-off of the loan a formal appraisal is ordered to make the necessary transfer to foreclosed real estate. Once the property is in foreclosed real estate, after six months a broker’s price opinion or valuation service model will be used to evaluate the current value. An allowance is established for any additional losses.

FIRST COMMUNITY BANK CORPORATION OF AMERICA AND SUBSIDIARIES

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


	December 2007		December 2008		March 2009		June 2009
	$	%	$	%	$	%	$	%

Residential mortgages	1,780	.46	4,994	1.21	6,466	1.53	7,962	1.88
Commercial real estate	1,183	.41	6,462	1.57	6,473	1.53	15,081	3.56
Land and lots	1,160	.30	4,577	1.11	4,945	1.17	8,319	1.96
Commercial loans	347	.09	394	0.10	4,293	1.01	407	0.10
Installments	74	.02	180	0.04	95	0.02	150	0.04

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


	December 2008				March 2009				June 2009
	Nonaccrual		REO		Nonaccrual		REO		Nonaccrual		REO
	#	$	#	$	#	$	#	$	#	$	#	$

Residential mortgages	10	3,216	3	234	13	2,762	10	1,784	26	5,378	3	1,481
Commercial real estate	5	6,069	1	391	9	6,077	1	391	12	10,935	1	391
Land and lots	15	3,667	10	699	20	4,762	9	629	33	7,663	14	822
Commercial loans	1	74	—	—	—	—	—	—	2	700	—	—
Installment	2	138	3	199	2	18	3	194	2	12	3	194

At fiscal year end December 2008 the Bank provision was increased to build up the loan loss allowance. A number of loans were charged-off in the fourth quarter of 2008 and the first quarter of 2009. The following chart illustrates the combination of allowance and charge-off compared to related loans at June 30, 2009:


	Nonimpaired Loans			Impaired Loans		Total
Allowance for loan losses:
Beginning balance	$	8,134		96		8,230
Provision		244		1,788		2,032
Charge-offs		(1,026	)	(1,443	)	(2,469	)
Recoveries		50		1		51


Ending balance	$	7,402		442		7,844


Loss allowance		7,402		442		7,844
Partial charge-offs of loans currently in portfolio		210		2,771		2,981

Total	$	7,612		3,213		10,825


Total loans	$	377,955		44,602		422,252


Allowance loss and charge-offs as a percentage of total loans		2.01	%	7.20	%	2.56	%

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

FIRST COMMUNITY BANK CORPORATION OF AMERICA AND SUBSIDIARIES

Results of Operations

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


	Three Months Ended June 30,
	2009						2008
	Average Balance		Interest and Dividends		Average Yield/ Rate		Average Balance		Interest and Dividends		Average Yield/ Rate
	(Dollars in thousands)
Interest-earning assets:
Loans (1)	$	416,084		5,950	5.72	%	$	381,243		6,324	6.64	%
Securities		52,573		550	4.18			27,741		344	4.96
Other interest-earning assets (2)		27,271		13	0.19			11,276		135	4.79


Total interest-earning assets		495,928		6,513	5.25			420,260		6,803	6.48


Noninterest-earning assets		51,688						43,647


Total assets	$	547,616					$	463,907


Interest-bearing liabilities:
Savings, NOW, money-market deposit accounts		161,801		700	1.73			132,404		606	1.83
Time deposits		257,579		1,883	2.92			196,296		2,135	4.35


Total interest-bearing deposits		419,380		2,583	2.46			328,700		2,741	3.34

Other interest-bearing liabilities (3)		40,597		354	3.49			56,386		477	3.38


Total interest-bearing liabilities		459,977		2,937	2.55			385,086		3,218	3.34


Noninterest-bearing liabilities		42,965						41,444
Net preferred stock		10,655						—
Stockholders’ equity		34,019						37,377


Total liabilities and stockholders’ equity	$	547,616					$	463,907


Net interest income			$	3,576					$	3,585


Interest-rate spread (4)					2.70	%					3.14	%


Net interest margin (5)					2.88	%					3.41	%


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

(1)	Includes nonperforming loans.

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

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

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

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

FIRST COMMUNITY BANK CORPORATION OF AMERICA AND SUBSIDIARIES


	Six Months Ended June 30,
	2009						2008
	Average Balance		Interest and Dividends		Average Yield/ Rate		Average Balance		Interest and Dividends		Average Yield/ Rate
	(Dollars in thousands)
Interest-earning assets:
Loans (1)	$	413,577		11,983	5.79	%	$	384,768		13,015	6.77	%
Securities		47,740		1,030	4.32			24,101		591	4.90
Other interest-earning assets (2)		21,835		22	0.20			10,041		235	4.68


Total interest-earning assets		483,152		13,035	5.40			418,910		13,841	6.61


Noninterest-earning assets		49,599						39,988


Total assets	$	532,751					$	458,898


Interest-bearing liabilities:
Savings, NOW, money-market deposit accounts		149,601		1,291	1.73			128,594		1,231	1.91
Time deposits		254,585		3,918	3.08			195,483		4,255	4.35


Total interest-bearing deposits		404,186		5,209	2.58			324,077		5,486	3.39

Other interest-bearing liabilities (3)		42,990		716	3.33			55,923		980	3.50


Total interest-bearing liabilities		447,176		5,925	2.65			380,000		6,466	3.40


Noninterest-bearing liabilities		40,856						41,263
Net preferred stock		10,654						—
Stockholders’ equity		34,065						37,635


Total liabilities and stockholders’ equity	$	532,751					$	458,898


Net interest income			$	7,110					$	7,375


Interest-rate spread (4)					2.75	%					3.21	%


Net interest margin (5)					2.94	%					3.52	%


Ratio of average interest-earning assets to average interest-bearing liabilities		1.08						1.10

(1)	Includes nonperforming loans.

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

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

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

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

FIRST COMMUNITY BANK CORPORATION OF AMERICA AND SUBSIDIARIES

Comparison of the Three-Month Periods Ended June 30, 2009 and 2008

General. First Community Bank Corporation of America reported a net loss for the second quarter ended June 30, 2009 of $(281,000) compared to net earnings of $158,000 for the same period in 2008. The decline in earnings reflected increased credit losses.

The Company recorded a net loss available to common stockholders, after preferred stock dividend and amortization of preferred discount, for the quarter ended June 30, 2009 of $(416,000) or $(0.10) basic per share, compared to net earnings of $158,000 or $0.04 basic per share for the same period in 2008.

The second quarter 2009 results included a $1,337,000 charge to provision for loan losses compared to $713,000 for the period in 2008. The increased loan loss provision was due to increased levels of delinquencies resulting from a continued weakness in the local economy.

Net Interest Income. Interest income decreased to $6.5 million during the three months ended June 30, 2009, from $6.8 million in 2008. Interest on loans for the three months ended June 30, 2009 decreased to $6.0 million from $6.3 million for the three months ended June 30, 2008. This decrease was due to a decrease in the average yield earned to 5.72% for the three months ended June 30, 2009 from 6.64% for the three months ended June 30, 2008. Interest on securities increased to $550,000 during the three months ended June 30, 2009 from $344,000 for the three months ended June 30, 2008. The increase in interest income on securities was due to an increase in the average balance of securities from $27.7 million in 2008 to $52.6 million in 2009. This increase was partially offset by a decrease in the average yield earned from 4.96% in 2008 to 4.18% in 2009.

Interest expense on interest-bearing deposit accounts decreased to $2.6 million during the three months ended June 30, 2009, compared to $2.7 million during the three months ended June 30, 2008. The decrease was due to a decrease in the rate paid to 2.46% during the three months ended June 30, 2009 from 3.34% during the three months ended June 30, 2008. Interest expense on other borrowings decreased to $354,000 during the three months ended June 30, 2009, compared to $477,000 during the three months ended June 30, 2008. The decrease was due to a decrease in the average balance of other borrowings to $40.6 million in 2009 from $56.4 million in 2008. The average rate paid on other borrowings increased to 3.49% during the three months ended June 30, 2009 compared to 3.38% during the three months ended June 30, 2008.

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

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

FIRST COMMUNITY BANK CORPORATION OF AMERICA AND SUBSIDIARIES

Comparison of the Three-Month Periods Ended June 30, 2009 and 2008

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

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

During 2007, we changed our overall approach in the determination of the allowances for loan losses. A new methodology was created to be in compliance with the guidance issued by the federal agencies in December of 2006. This methodology incorporated the calculation of loans considered impaired under FAS 114 and allocations for performing portfolio categories based on applying historical charge off data for loans categorized by similar risk characteristics based on the Company’s experience as per FAS 5.

The provision for loan losses was $1,337,000 for the three months ended June 30, 2009 compared to $713,000 for the three months ended June 30, 2008. Continued economic weakness, has resulted in increasing levels of nonperforming loans and charge-offs.

The allowance for loan losses is $7.8 million at June 30, 2009. While management believes that its allowance for loan losses is adequate as of June 30, 2009, future adjustments to the Company’s allowance for loan losses may be necessary if economic conditions differ substantially from the assumptions used in making the initial determination.

Noninterest Income. Noninterest income increased to $480,000 in 2009 from $448,000 for the three- months ended June 30, 2008. The increase was primarily due to a $53,000 gain on the sale of foreclosed real estate.

Noninterest Expenses. Total noninterest expenses increased to $3.2 million for the three months ended June 30, 2009 from $3.1 million for the comparable period ended June 30, 2008. The increase was primarily due to a $365,000 increase in insurance premiums including special FDIC assessment of $251,000 during the second quarter of 2009.

Income Taxes (Benefit). Income taxes (benefit) for the three months ended June 30, 2009 was $(230,000) compared to $29,000 for the period ending June 30, 2008. The Company continues to recognize a net deferred tax asset because based on current operations and management’s forecast of future earnings. Management believes it is more likely than not that the asset will be realized in the future.

FIRST COMMUNITY BANK CORPORATION OF AMERICA AND SUBSIDIARIES

Comparison of the Six-Month Periods Ended June 30, 2009 and 2008

General.For the six-month period ended June 30, 2009, First Community reported a net loss of $(212,000) compared to net earnings of $707,000 for the same period in 2008. The decline in earnings reflected increased credit losses.

For the six month period ended June 30, 2009, the Company recorded a net loss applicable to common stockholders of $(496,000) or $(0.12) basic per share, compared to net earnings of $707,000 or $0.17 basic per share for the same period in 2008. For the first six months, provision for loan losses was $2,032,000 in 2009 compared to $893,000 in 2008. The increased loan loss provision was due to increased levels of delinquencies resulting from a continued weakness in the local economy.

Net Interest Income. Interest income decreased to $13.0 million during the six months ended June 30, 2009, from $13.8 million in 2008. Interest on loans for the six months ended June 30, 2009 decreased to $12.0 million from $13.0 million for the six months ended June 30, 2008. The decrease in interest on loans reflected the impact of rapidly declining interest rates during the end of 2008 and the first half of 2009 as well as increases in nonperforming loans. The average yield earned on loans declined to 5.79% from 6.77% for the same period in 2008. The average balance of loans was $413.6 million during the six months ended June 30, 2009 compared to $384.8 million during the six months ended June 30, 2008. Interest on securities increased to $1.0 million during the six months ended June 30, 2009, from $591,000 for the six months ended June 30, 2008. The increase in interest income on securities was due to an increase in the average balance of securities from $24.1 million in 2008 to $47.7 million in 2009. The average yield on securities earned decreased from 4.90% in 2008 to 4.32% in 2009.

Interest expense on interest-bearing deposit accounts decreased to $5.2 million during the six months ended June 30, 2009, compared to $5.5 million during the six months ended June 30, 2008. The decrease was due to a decrease in the rate paid to 2.58% during the six months ended June 30, 2009 from 3.39% during the six months ended June 30, 2008. The average balance of interest bearing deposits increased to $404.2 million in 2009 from $324.1 million in 2008. Interest expense on other borrowings decreased to $716,000 during the six months ended June 30, 2009, compared to $980,000 during the six months ended June 30, 2008. The decrease was due to a decrease in the average balance of other borrowings to $43.0 million in 2009 from $55.9 million in 2008. The average rate paid on other borrowings declined to 3.33% during the six months ended June 30, 2009 compared to 3.50% during the six months ended June 30, 2008.

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

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

FIRST COMMUNITY BANK CORPORATION OF AMERICA AND SUBSIDIARIES

Comparison of the Six-Month Periods Ended June 30, 2009 and 2008

The provision for loan losses was $2,032,000 for the six months ended June 30, 2009 compared to $893,000 for the six months ended June 30, 2008. Continued economic weakness has resulted in increasing levels of nonperforming loans and charge-offs.

Noninterest Income. Noninterest income increased to $858,000 in 2009 from $842,000 for the six months ended June 30, 2008. The increase was primarily due to a $53,000 gain on the sale of foreclosed real estate.

Noninterest Expenses. Total noninterest expenses increased to $6.4 million for the six months ended June 30, 2009 from $6.3 million for the comparable period ended June 30, 2008. The increase was primarily due to a $275,000 increase in insurance premiums including special FDIC assessment of $251,000 during the second quarter of 2009.

Income Taxes (Benefit). Income taxes (benefit) for the six months ended June 30, 2009 was $(236,000) compared to $282,000 for the period ending June 30, 2008. The Company continues to recognize a net deferred tax asset because based on current operations and management’s forecast of future earnings. Management believes it is more likely than not that the asset will be realized in the future.

FIRST COMMUNITY BANK CORPORATION OF AMERICA AND SUBSIDIARIES

Item 3. Quantitative and Qualitative Disclosures about Market Risk

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

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

Item 4T. Controls and Procedures

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

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

PART II. OTHER INFORMATION

Item 1. Legal Proceedings

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

Item 1A. Risk Factors

There have been no material changes to the risk factors disclosed in Item 1A“Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2008.

FIRST COMMUNITY BANK CORPORATION OF AMERICA AND SUBSIDIARIES

PART II. OTHER INFORMATION, CONTINUED

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

The Annual Meeting of Shareholders (the “Annual Meeting”) of First Community Bank Corporation of America, was held on May 18, 2009, to consider the election of eight directors with terms expiring at the Annual Meeting in 2010, to fix the number of directors to serve on the board for the ensuing year at eleven, an advisory vote on the compensation of named executive officers, and the adjournment of the Annual Meeting to solicit additional proxies in the event there were not sufficient votes to approve any of the foregoing items.

At the Annual Meeting 3,279,421 shares were present in person or by proxy. Listed below are the directors that were elected at the Annual Meeting, their terms, and a summary of the votes cast for each nominee.


	Term Expiring	For	Against	Abstain

Brad Bishop	2010	3,234,384	—	45,037

Kenneth P. Cherven	2010	3,257,785	—	21,636

Kenneth Delarbre	2010	3,225,602	—	53,819

Kenneth F. Faliero	2010	3,240,280	—	39,141

James Macaluso	2010	3,236,862	—	42,559

David K. Meehan	2010	3,236,967	—	42,454

Robert G. Menke	2010	3,234,290	—	45,131

Robert M. Menke	2010	3,237,592	—	41,829

The shareholders voted on three other matters-


	For	Against	Abstain

Fix the number of directors to serve on the board	3,230,787	37,993	10,641


An advisory vote on the compensation of named executive officers	3,220,168	50,591	8,662


Solicit additional proxies if needed	3,194,323	47,264	37,834

FIRST COMMUNITY BANK CORPORATION OF AMERICA AND SUBSIDIARIES

PART II. OTHER INFORMATION, CONTINUED

Item 6. Exhibits

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


Exhibit No.		Description of Exhibit
*	3.1	Amended and Restated Articles of Incorporation

*	3.2	Bylaws

*	4.1	Specimen Common Stock Certificate

*	4.3	Warrant Certificate

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

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

*	10.3	Long-Term Incentive Plan

*	10.4	Incentive Compensation Plan

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

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

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

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

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

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

**	99.5	Audit Committee Charter

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

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

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

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

FIRST COMMUNITY BANK CORPORATION OF AMERICA AND SUBSIDIARIES

SIGNATURES

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


	FIRST COMMUNITY BANK CORPORATION OF AMERICA
	(Registrant)

Date: August 14, 2009	By:	/s/ Kenneth P. Cherven
		Kenneth P. Cherven, President and Chief Executive Officer

Date: August 14, 2009	By:	/s/ Stan B. McClelland
		Stan B. McClelland, Chief Financial Officer

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