U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
(Mark One)
| x | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the fiscal year ended December 31, 2005
| ¨ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Commission file number 000-49736
FIRST COMMUNITY FINANCIAL CORPORATION
(Name of registrant in its charter)
| PENNSYLVANIA | 23-2321079 | |
(State or other jurisdiction of incorporation or organization) | (IRS Employer Identification No.) |
TWO NORTH MAIN STREET, MIFFLINTOWN, PENNSYLVANIA | 17059 | |
| (Address of principal executive office) | (Zip Code) |
Registrant’s telephone number, including area code (717) 436-2144
| Securities registered under Section 12(g) of the Exchange Act: | COMMON STOCK, $5.00 PAR VALUE | |
(Title of class) |
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 report pursuant to Section 13 or Section 15(d) of the 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 Exchange Act 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 ¨
Indicated by check mark if disclosure of delinquent filers in response to Item 405 of Regulation S-K 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 or any amendment to this Form 10-K.x
Indicate by check mark whether the registrant is a large accelerated filer, accelerated filer, or a non-accelerated filer. See definition of “accelerated filer” and “large accelerated filer” in Rule 12b-2 of the 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 voting and non-voting common equity held by nonaffiliates of the registrant as of June 30, 2005 was $29,385,009.
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 $5.00 per share, 1,400,000 shares outstanding as of February 28, 2006.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the First Community Financial Corporation Annual Report for the year ended December 31, 2005 are incorporated by reference into Parts I and II. Portions of the Proxy Statement filed with respect to the First Community Financial Corporation 2006 Annual Meeting are incorporated by reference into Part III.
Description | Page | |||
PART I | ||||
Item 1. | 1 | |||
Item 1A. | 10 | |||
Item 1B. | 13 | |||
Item 2. | 13 | |||
Item 3. | 14 | |||
Item 4. | 15 | |||
PART II | ||||
Item 5. | 15 | |||
Item 6. | 16 | |||
Item 7. | Management’s Discussion and Analysis of Financial Condition and Results of Operation | 17 | ||
Item 7A. | 17 | |||
Item 8. | 17 | |||
Item 9. | Changes in and Disagreements with Accountants on Accounting and Financial Disclosure | 17 | ||
Item 9A. | 17 | |||
Item 9B. | 18 | |||
PART III | ||||
Item 10. | 18 | |||
Item 11. | 18 | |||
Item 12. | Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters | 18 | ||
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Description | Page | |||
PART III - continued | ||||
Item 13. | 19 | |||
Item 14. | 19 | |||
PART IV | ||||
Item 15. | 19 | |||
| 25 | ||||
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PART I
| ITEM 1. | Business. |
First Community Financial Corporation (the “Corporation”) is a one bank holding company incorporated under the laws of the Commonwealth of Pennsylvania and registered under the Bank Holding Company Act of 1956, as amended. The Corporation is headquartered in Mifflintown, Pennsylvania and was organized on November 13, 1984 for the purpose of acquiring First National Bank of Mifflintown (the “Bank”) as a wholly-owned national bank subsidiary. The Corporation’s principal activity consists of owning and supervising the Bank, which is engaged in providing banking and banking related services in central Pennsylvania, principally in Juniata and Perry Counties. The day-to-day management of the Bank is conducted by its officers, subject to review by its Board of Directors. Each Director of the Corporation also is a Director of the Bank. The Corporation derives substantially all of its current income from the Bank. The Corporation also has made certain investments in other Pennsylvania banking institutions, the dividends on which also are included in our current income.
First National Bank of Mifflintown.
The Bank became a wholly-owned subsidiary of the Corporation pursuant to a Plan of Reorganization and Merger consummated in April 1985. The Bank was originally chartered as a private bank in 1864 and converted to a national bank in 1889. The Bank conducts business through eleven full service banking offices. The main banking office is located in the Borough of Mifflintown, four branch offices are maintained in Juniata County and six branch offices are maintained in Perry County, Pennsylvania.
As of December 31, 2005, the Bank had total assets of $267.2 Million, total shareholders’ equity of $18.3 Million, and total deposits of $211.9 Million.
The deposits of the Bank are insured by the Federal Deposit Insurance Corporation (the “FDIC”) to the extent provided by law. The Bank provides a wide range of banking services to businesses and individuals, with particular emphasis on serving the needs of the individual consumer. Banking services include secured and unsecured financing, real estate financing, agricultural financing, mortgage lending, and trust and other related services, as well as checking, savings and time deposits, and a wide variety of other financial services to individuals, businesses, municipalities and governmental bodies
The Bank concentrates its lending activities on residential real estate, commercial real estate, commercial loans, agricultural loans and consumer installment loans. A substantial portion of the loan portfolio is secured by commercial and residential real estate, either as primary or secondary collateral. Loan approvals are made in accordance with a policy that includes delegated authorities approved by the Board of Directors. Loans are approved at various management levels up to and including the Board of Directors, depending on the amount of the loan.
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As of December 31, 2005, residential real estate loans represented 67.4% of the total loan portfolio. These types of loans represent a relatively low level of risk, especially in the absence of speculative lending. The most prominent risks in this market are those associated with declining economic conditions resulting from economic downturns and increases in unemployment, which could affect borrowers’ abilities to repay loans. The Bank limits its risk in this area by requiring private mortgage insurance for all residential real estate loans in excess of 80% of the appraised value.
Commercial real estate loans represented 20.6%, commercial loans represented 8.0% and agricultural loans represented 0.9% of the total loan portfolio at December 31, 2005. Commercial real estate loans consist primarily of loans to local businesses where the collateral for the loans includes the real estate occupied by the business. Commercial loans are comprised of loans to small businesses whose demand for funds fall within the legal lending limits of the Bank. The Bank’s agricultural loans generally consist of operating lines used to finance farming operations through the growing season and term loans to finance farm equipment purchases. Risks associated with these types of loans can be significant and include, but are not limited to, fraud, bankruptcy, economic downturn, deteriorated or non-existing collateral and changes in interest rates. The Bank controls risk by using certified appraisers in determining property values, by performing thorough credit analysis and by limiting the Bank’s total exposure to these types of loans. Additionally, the Bank generally does not lend above 80% of the collateral value and does not have significant loan concentrations within any one business industry.
As of December 31, 2005, consumer installment loans represented 3.1% of the total loan portfolio and are made on a secured and unsecured basis, primarily to fund personal, family and household purposes, including loans for automobiles, home improvement, education loans and investments. Risks associated with consumer installment loans include, but are not limited to, fraud, deteriorated or non-existing collateral, general economic downturn and customer financial problems. Risk in this area is limited by analyzing creditworthiness and controlling debt to income limits.
The Bank’s Trust Department provides a broad range of personal and corporate trust services. It administers and provides investment management services for estates, trusts, agency accounts and employee benefit plans. For the year ended December 31, 2005, income from the Bank’s fiduciary activities amounted to $331,000 and the Bank had assets worth $67.1 million under management in its Trust Department at that time.
The Bank is subject to regulation and periodic examination by the Office of the Comptroller of the Currency (the “OCC”).
During the last three years, the Corporation has experienced substantial growth. Specifically, the Corporation’s total assets increased from $201.8 million as of December 31, 2002 to $267.2 million as of December 31, 2005, funded primarily by an increase in the Bank’s total deposits over this period from $174.1 million to $211.9 million. Additionally, the Bank’s loans increased from $125.6 million to $161.8 million over this same period, while the Corporation’s net income remained steady at $2.1 million.
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The growth in the Bank’s deposits and loans reflect its efforts to increase its market share in Juniata and Perry Counties and is largely attributable to the maturation of the Bank’s newer branches in East Waterford, Juniata County and Loysville, New Bloomfield and Shermans Dale, Perry County.
Market Area and Competition.
The Bank’s primary market area lies within Juniata and Perry Counties, Pennsylvania. By all indications, this region has good economic prospects. Juniata and Perry Counties had a combined population of approximately 66,000 in 2000, representing an increase from 1990 of 10.6% for Juniata County and 5.9% for Perry County. The primary industries in the region are agriculture and timber/woodworking. Unemployment rates in 2000 of 7.1% in Juniata County and 3.0% in Perry County reflect a relatively stable workforce. With a stable workforce and growing population, the Corporation believes that the region’s economic prospects are positive.
As of June 30, 2005, four commercial banks (the Bank, Juniata Valley Bank, Omega Bank, N.A. and Mifflinburg Bank & Trust Company) operated offices in Juniata County. Of all financial institutions operating in Juniata County, the Bank ranked first in terms of total deposits at June 30, 2005 with 41.29%. The Juniata Valley Bank followed closely with 41.18% and Omega Bank, N.A. ranked third with 11.06%. With the exception of Mifflinburg Bank & Trust, each of the institutions with which the Bank competes in Juniata County is substantially larger than the Bank. With the advantages of larger asset and capital bases, these competitors tend to have larger lending limits and tend to offer a wider variety of services than does the Bank.
In Perry County, the Bank faces competition from seven banks. Several of these competitors also are substantially larger than the Bank and are likely to enjoy the competitive advantages provided by larger asset and capital bases. Moreover, the Perry County market is less concentrated, and therefore more competitive, than the Juniata County market. The Bank’s principal competitors in Perry County are Bank of Landisburg, with approximately 29.53% of deposits at June 30, 2005, First National Bank of Newport, with approximately 21.34%, and First National Bank of Marysville with approximately 16.98%. The Bank has 12.22% of the deposits in Perry County.
The Bank also competes with other types of financial institutions, including credit unions, finance companies, brokerage firms, insurance companies and retailers. Deposit deregulation has intensified the competition for deposits in recent years.
Supervision and Regulation
As a bank holding company, the Corporation is subject to regulation by the Pennsylvania Department of Banking and the Federal Reserve Board. The deposits of the Bank are insured by the Federal Deposit Insurance Corporation (“FDIC”) and the Bank is a member of the Bank Insurance Fund which is administered by the FDIC. The Bank is therefore subject to regulation
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by the FDIC but, as a national bank, is primarily regulated and examined by the Office of the Comptroller of the Currency (“OCC”).
The Corporation is required to file with the Federal Reserve Board an annual report and such additional information as the Federal Reserve Board may require pursuant to the Bank Holding Company Act of 1956, as amended (the “BHC Act”). The Federal Reserve Board may also make examinations of the Corporation. The BHC Act requires each bank holding company to obtain the approval of the Federal Reserve Board before it may acquire substantially all the assets of any bank, or before it may acquire ownership or control of any voting shares of any bank if, after such acquisition, it would own or control, directly or indirectly, more than five percent of the voting shares of such bank.
Pursuant to provisions of the BHC Act and regulations promulgated by the Federal Reserve Board thereunder, the Corporation may only engage in or own companies that engage in activities deemed by the Federal Reserve Board to be closely related to the business of banking or managing or controlling banks, and the Corporation must gain permission from the Federal Reserve Board prior to engaging in most new business activities.
A bank holding company and its subsidiaries are subject to certain restrictions imposed by the BHC Act on any extensions of credit to the Bank or any of its subsidiaries, investments in the stock or securities thereof, and on the taking of such stock or securities as collateral for loans to any borrower. A bank holding company and its subsidiaries are also prevented from engaging in certain tie-in arrangements in connection with any extension of credit, lease or sale of property or furnishing of services.
Source of Strength Doctrine.
Under Federal Reserve Board regulations, a bank holding company is required to serve as a source of financial and managerial strength to its subsidiary banks and may not conduct its operations in an unsafe or unsound manner. In addition, it is the Federal Reserve Board’s policy that in serving as a source of strength to its subsidiary banks, a bank holding company should stand ready to use available resources to provide adequate capital funds to its subsidiary banks during periods of financial stress or adversity and should maintain the financial flexibility and capital-raising capacity to obtain additional resources for assisting its subsidiary banks. A bank holding company’s failure to meet its obligations to serve as a source of strength to its subsidiary banks will generally be considered by the Federal Reserve Board to be an unsafe and unsound banking practice or a violation of the Federal Reserve Board regulations or both. This doctrine is commonly known as the “source of strength” doctrine.
Dividends.
Dividends are paid by the Corporation from its earnings, which are mainly provided by dividends from the Bank. However, certain regulatory restrictions exist regarding the ability of the Bank to transfer funds to the Corporation in the form of cash dividends, loans or advances. The approval of the Comptroller of the Currency is required if the total of all dividends declared
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by a national bank in any calendar year exceeds the Bank’s net profits (as defined) for that year combined with its retained net profits for the preceding two calendar years. Under this restriction, at December 31, 2005, the Bank, without prior regulatory approval, could currently declare dividends to the Corporation totaling approximately $4,602,000.
Capital Adequacy.
The federal banking regulators have adopted risk-based capital guidelines for bank holding companies and banks, such as the Corporation and the Bank. Currently, the required minimum ratio of total capital to risk-weighted assets (including off-balance sheet activities, such as standby letters of credit) is 8%. At least half of the total capital is required to be Tier 1 capital, consisting principally of common shareholders’ equity, non-cumulative perpetual preferred stock, a limited amount of cumulative perpetual preferred stock and minority interests in the equity accounts of consolidated subsidiaries, less goodwill. The remainder (Tier 2 capital) may consist of a limited amount of subordinated debt and intermediate-term preferred stock, certain hybrid capital instruments and other debt securities, perpetual preferred stock and a limited amount of the general loan loss allowance.
In addition to the risk-based capital guidelines, the Federal banking regulators established minimum leverage ratio (Tier 1 capital to total assets) guidelines for bank holding companies. These guidelines provide for a minimum leverage ratio of 3% for those bank holding companies which have the highest regulatory examination ratings and are not contemplating or experiencing significant growth or expansion. All other bank holding companies are required to maintain a leverage ratio of at least 1% to 2% above the 3% stated minimum. The Corporation and the Bank exceed all applicable capital requirements.
FDICIA.
The Federal Deposit Insurance Corporation Improvement Act (“FDICIA”) was enacted into law in 1991. FDICIA established five different levels of capitalization of financial institutions, with “prompt corrective actions” and significant operational restrictions imposed on institutions that are capital deficient under the categories. The five categories are: well capitalized, adequately capitalized, undercapitalized, significantly undercapitalized and critically undercapitalized.
To be considered well capitalized, an institution must have a total risk-based capital ratio of at least 10%, a Tier 1 risk-based capital ratio of at least 6%, a leverage capital ratio of 5%, and must not be subject to any order or directive requiring the institution to improve its capital level. An institution falls within the adequately capitalized category if it has a total risk-based capital ratio of at least 8%, a Tier 1 risk-based capital ratio of at least 4%, and a leverage capital ratio of at least 4%. Institutions with lower capital levels are deemed to be undercapitalized, significantly undercapitalized or critically undercapitalized, depending on their actual capital levels. In addition, the appropriate federal regulatory agency may downgrade an institution to the next lower capital category upon a determination that the institution is in an unsafe or unsound condition, or is engaged in an unsafe or unsound practice. Institutions are required under FDICIA
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to closely monitor their capital levels and to notify their appropriate regulatory agency of any basis for a change in capital category. Regulatory oversight of an institution becomes more stringent with each lower capital category, with certain “prompt corrective actions” imposed depending on the level of capital deficiency. On December 31, 2005, the Corporation and the Bank each exceeded the minimum capital levels of the well capitalized category.
Other Provisions of FDICIA.
Each depository institution must submit audited financial statements to its primary regulator and the FDIC, which reports are made publicly available. In addition, the audit committee of each depository institution must consist of outside directors and the audit committee at “covered institutions” (as defined by FDIC regulation) must include members with banking or financial management expertise. The audit committee at “covered institutions” must also have access to independent outside counsel. In addition, an institution must notify the FDIC and the institution’s primary regulator of any change in the institution’s independent auditor, and annual management letters must be provided to the FDIC and the depository institution’s primary regulator. The regulations define a “covered institution” as one with over $500 million in assets, which does not include the Bank.
Under FDICIA, each federal banking agency must prescribe certain safety and soundness standards for depository institutions and their holding companies. Three types of standards must be prescribed: asset quality and earnings, operational and managerial, and compensation. Such standards would include a ratio of classified assets to capital, minimum earnings, and, to the extent feasible, a minimum ratio of market value to book value for publicly traded securities of such institutions and holding companies. Operational and managerial standards must relate to: (i) internal controls, information systems and internal audit systems, (ii) loan documentation, (iii) credit underwriting, (iv) interest rate exposure, (v) asset growth, and (vi) compensation, fees and benefits.
Provisions of FDICIA relax certain requirements for mergers and acquisitions among financial institutions, including authorization of mergers of insured institutions that are not members of the same insurance fund, and provide specific authorization for a federally chartered savings association or national bank to be acquired by an insured depository institution.
Under FDICIA, all depository institutions must provide 90 days notice to their primary federal regulator of branch closings, and penalties are imposed for false reports by financial institutions. Depository institutions with assets in excess of $250 million must be examined on-site annually by their primary federal or state regulator or the FDIC.
FDICIA also sets forth Truth in Savings disclosure and advertising requirements applicable to all depository institutions.
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FDIC Insurance.
As an institution whose deposits are insured by the FDIC, the Bank is also subject to insurance assessments imposed by the FDIC. The FDIC has adopted a risk related premium assessment system for both the Bank Insurance Fund (“BIF”) for banks and the Savings Association Insurance fund (“SAIF”) for savings associations. Under this system, FDIC insurance premiums are assessed based on capital and supervisory measures.
Under the risk related premium assessment system, the FDIC, on a semiannual basis, assigns each institution to one of three capital groups (well capitalized, adequately capitalized, or undercapitalized) and further assigns such institution to one of three subgroups within a capital group corresponding to the FDIC’s judgment of its strength based on supervisory evaluations, including examination reports, statistical analysis, and other information relevant to gauging the risk posed by the institution. Only institutions with a total risk-based capital to risk-adjusted assets ratio of 10% or greater, a Tier 1 capital to risk adjusted assets ratio of 6% or greater, and a Tier 1 leverage ratio of 5% or greater, are assigned to the well capitalized group.
The Deposit Insurance Funds Act of 1996 recapitalized SAIF and provided for repayment of the FICO (Financial Institution Collateral Obligation) bonds issued by the United States Treasury Department. Since 1999, BIF and SAIF share the FICO cost equally. The FICO assessment rate is adjusted quarterly to reflect changes in the assessment bases of the respective funds based on quarterly Call Report submissions. For the fourth quarter of 2005, the FICO assessment rate for BIF and SAIF was approximately 1.46 cents per $100 of deposits. The FICO bonds will mature in 2017-2019, ending the interest payment obligation.
In 2005, the Bank’s FDIC assessment was $27,000.
Community Reinvestment Act.
Under the Community Reinvestment Act of 1977 (“CRA”) and implementing regulations of the banking agencies, a financial institution has a continuing and affirmative obligation, consistent with safe and sound operation, to meet the credit needs of its entire community, including low and moderate income neighborhoods. The CRA does not establish specific lending requirements or programs for financial institutions, nor does it limit an institution’s discretion to develop the types of products and services it believes to be best suited to its particular community. The CRA requires that bank regulatory agencies conduct regular CRA examinations and provide written evaluations of institutions’ CRA performance. The CRA also requires that an institution’s CRA performance rating be made public. CRA performance evaluations are based on a four-tiered rating system: Outstanding, Satisfactory, Needs to Improve and Substantial Noncompliance. Although CRA examinations occur on a regular basis, CRA performance evaluations have been used principally in the evaluation of regulatory applications submitted by an institution. CRA performance evaluations are considered in evaluating applications for such things as mergers, acquisitions and applications to open branches. A bank holding company cannot elect to be a “financial holding company” with the expanded securities, insurance and other powers that designation entails unless all of the depository institutions
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owned by the holding company have a CRA rating of satisfactory or better. The Gramm-Leach-Bliley Act also provides that a financial institution with total assets of $250 million or less, such as the Bank, will be subject to CRA examinations no more frequently than every 5 years if its most recent CRA rating was “outstanding,” or every 4 years if its rating was “satisfactory.” Following a CRA examination as of November 17, 2003, the Bank received a rating of “satisfactory.”
Financial Services Modernization Legislation.
In 1999, the Gramm-Leach-Bliley Act was signed into law. This financial services reform law has had and will continue to have a significant impact on all financial institutions, including banks. The impact of the act is two-fold. First, the Act has swept away much of the regulatory structure established in the 1930’s under the Glass-Steagall Act. The law creates opportunities for banks, other depository institutions, insurance companies, and securities firms to enter into business combinations that permit a single financial services organization to offer customers a complete array of financial products. The result will be increased competition in the market place for banks and other financial institutions, tempered by an enhanced ability to compete in this new market. Banks, insurance companies and securities firms may now affiliate through a “financial holding company” and engage in a broad range of activities authorized by the Federal Reserve Board and the Department of Treasury. The new activities that the Act permits for financial holding companies and their affiliates are those that are financial in nature or incidental to financial activities, including insurance underwriting, investment banking, investment advisory services and securities brokerage services. The Federal Reserve maintains the authority to require that the financial holding company remain well capitalized and well managed.
In addition, national banks are authorized to conduct these activities through “financial subsidiaries,” under the supervision of the Department of Treasury’s Office of the Comptroller of the Currency, except that national bank subsidiaries may not engage in insurance underwriting, merchant banking, insurance company portfolio investment, or real estate investment and development.
Secondly, the Act has altered the regulatory boundaries for all financial services organizations, including the Bank. For example, by repealing an exemption from SEC broker/dealer registration formerly enjoyed by banks for their securities activities, the Act adds a potential layer of SEC regulation to the bank’s regulatory structure.
To the extent that the Gramm-Leach-Bliley Act permits banks, securities firms and insurance companies to affiliate, the financial services industry may experience further consolidation. This could result in a growing number of larger financial institutions that offer a wider variety of financial services than the Bank is able to offer and that can aggressively compete in the markets that the Bank intends to serve.
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Other Laws and Regulations
State usury and credit laws limit the amount of interest and various other charges collected or contracted by a bank on loans. The Bank’s loans are also subject to federal laws applicable to credit transactions, such as the following:
| • | Federal Truth-In-Lending Act, which governs disclosures of credit terms to consumer 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 |
| • | Various rules and regulations of various federal agencies charged with the implementation of such federal laws. |
Additionally, our operations are subject to the additional federal laws and regulations, including, without limitation:
| • | Privacy provisions of the Gramm-Leach-Bliley Act and related regulations, which require us to maintain privacy policies intended to safeguard customer financial information, to disclose the 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; |
| • | Consumer protection rules for the sale of insurance products by depository institutions, adopted pursuant to the requirements of the Gramm-Leach-Bliley Act; and |
| • | Title III of the USA Patriot Act, which requires financial institutions to take certain actions to help prevent, detect and prosecute international money laundering and the financing of terrorism. |
Proposed Legislation and Regulations
From time to time, various federal and state legislation is proposed that could result in additional regulation of, and restrictions on, the business of the Corporation or the Bank, or
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otherwise change the business environment. We cannot predict whether any of this legislation, if enacted, will have a material effect on the business of the Corporation or the Bank.
Employees
As of December 31, 2005, the Bank had a total of 65 full-time and 50 part-time employees.
Selected Statistical Information
Certain statistical information is included as part of Management’s Discussion and Analysis of Financial Conditions and Results of Operations, included on pages 34 through 49 of the Annual Report to Shareholders for the year ended December 31, 2005, attached to this Report as Exhibit 13 and incorporated herein by reference.
| ITEM 1A. | Risk Factors. |
There are a number of factors, including those specified below, that may adversely affect the Corporation’s business, financial results or stock price. Additional risks that the Corporation currently does not know about or currently views as immaterial may also impair the Corporation’s business or adversely impact its financial results or stock price.
Changes in interest rates may have an adverse effect on our profitability.
Our business is affected by fiscal and monetary policies of the federal government, including those of the Federal Reserve Board, which regulates the national money supply in order to manage recessionary and inflationary pressures. Among the techniques available to the Federal Reserve Board are engaging in open market transactions of U.S. Government securities, changing the discount rate and changing reserve requirements against bank deposits. The use of these techniques may also affect interest rates charged on loans and paid on deposits.
Interest income is the most significant component of our net income, accounting for approximately 88% of total revenues in 2004 and 87% of total revenues in 2005. The narrowing of interest rate spreads (the difference between interest rates earned on loans and investments and interest rates paid on deposits and borrowings), could adversely affect our earnings and financial condition. Among other things, regional and local economic conditions as well as fiscal and monetary policies of the federal government, including those of the Federal Reserve Board, may affect prevailing interest rates. We cannot predict or control changes in interest rates.
Changes in economic conditions and the composition of our loan portfolio could lead to higher loan charge-offs or an increase in our allowance for loan losses and may reduce our income.
Changes in national and regional economic conditions could impact the Bank’s loan portfolio. For example, an increase in unemployment, a decrease in real estate values or increases in interest rates, as well as other factors, could weaken the economies of the
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communities we serve. Weakness in the market areas served by the Bank could depress our earnings and consequently our financial condition because:
| • | customers may not want or need our products or services; |
| • | borrowers may not be able to repay their loans; |
| • | the value of the collateral securing our loans to borrowers may decline; and |
| • | the quality of our loan portfolio may decline. |
Any of the later three scenarios could require the Bank to “charge-off” a higher percentage of its loans and/or increase its provision for loan and lease losses, which would reduce its income.
In addition, the amount of the Bank’s provision for loan losses and the percentage of loans it is required to “charge-off” may be impacted by the overall risk composition of the loan portfolio. While we believe that the Bank’s allowance for loan losses as of December 31, 2005 is sufficient to cover losses inherent in the loan portfolio on each of those dates, we cannot assure investors that the Bank will not be required in the future to increase its loan-loss provision or “charge-off” a higher percentage of loans due to changes in the risk characteristics of the loan portfolio, which would thereby reduce our net income.
The competition we face is increasing and may reduce our customer base and negatively impact our results of operations.
There is significant competition among commercial banks in the market areas we serve. In addition, as a result of the deregulation of the financial industry, we also compete with other providers of financial services such as savings and loan associations, credit unions, consumer finance companies, securities firms, insurance companies, commercial finance and leasing companies, the mutual funds industry, full service brokerage firms and discount brokerage firms, some of which are subject to less extensive regulations than us with respect to the products and services they provide. Some of our competitors, including certain super-regional and national bank holding companies that have made acquisitions in its market area, have greater resources than we have, and as such, may have higher lending limits and may offer other services we do not offer.
We also experience competition from a variety of institutions outside our market areas. Some of these institutions conduct business primarily over the internet and may thus be able to realize certain cost savings and offer products and services at more favorable rates and with greater convenience to the customer.
Competition may adversely affect the interest rates we pay on deposits and charges on loans, thereby potentially adversely affecting our profitability. Our profitability depends upon our continued ability to successfully compete in the market areas we serve while achieving our investment objectives.
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The supervision and regulation to which we are subject can be a competitive disadvantage.
We are a bank holding company, and the Bank is a national banking association whose deposits are insured by the Federal Deposit Insurance Corporation (FDIC). As a result, the company and the Bank are each subject to various regulations and examinations by various regulatory authorities. In general, statutes establish the corporate governance and permitted business activities, certain acquisition and merger restrictions, limitations on inter-company transactions such as loans and dividends, and capital adequacy requirements, requirements for anti-money laundering programs and other compliance matters, among other regulations. We are extensively regulated under federal and state banking laws and regulations that are intended primarily for the protection of depositors, federal deposit insurance funds and the banking system as a whole. Compliance with these statutes and regulations is important to our ability to engage in new activities and to consummate additional acquisitions. In addition, we are subject to changes in federal and state tax laws as well as changes in banking and credit regulations, accounting principles and governmental economic and monetary policies. We cannot predict whether any of these changes may adversely and materially affect us. Federal and state banking regulators also possess broad powers to take supervisory actions as they deem appropriate. These supervisory actions may result in higher capital requirements, higher insurance premiums and limitations on our activities that could have a material adverse effect on its business and profitability. While these statutes are generally designed to minimize potential loss to depositors and the FDIC insurance funds, they do not eliminate risk, and compliance with such statutes increases our expenses, requires management’s attention and can be a disadvantage from a competitive standpoint with respect to unregulated competitors.
The Corporation relies on dividends from the Bank for most of its revenue.
The Corporation is a separate and distinct legal entity from its subsidiaries. It receives substantially all of its revenue from dividends from the Bank. These dividends are the principal source of funds to pay dividends on the Corporation’s common stock and interest and principal on its debt. Various federal and/or state laws and regulations limit the amount of dividends that the Bank may pay to the Corporation. Also, the Corporation’s right to participate in a distribution of assets upon a subsidiary’s liquidation or reorganization is subject to the prior claims of the subsidiary’s creditors.
Our controls and procedures may fail or be circumvented.
Management regularly reviews and updates our internal controls, disclosure controls and procedures, and corporate governance policies and procedures. Any system of controls, however well designed and operated, is based in part on certain assumptions and can provide only reasonable, not absolute, assurances that the objectives of the system are met. Any failure or circumvention of our controls and procedures or failure to comply with regulations related to controls and procedures could have a material adverse effect on our business, results of operations and financial condition.
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There is no established public market for our common stock.
There are presently no broker-dealers that make a market in our common stock. Consequently, shares of our common stock are traded from time to time in private transactions. There can be no assurance that at any given time any persons will be interested in acquiring shares of our common stock. Accordingly, persons interested in purchasing shares must be willing to bear the general economic risks of an investment in the shares for an indefinite period of time. Such risks include, among other things, changes in governmental rules and fiscal policies, changes in employment and other changes in the economy generally.
Our stock price can be volatile.
The price at which our common stock trades may fluctuate in response to numerous factors, including variations in our annual or quarterly financial results, or those of our competitors, changes by financial research analysts in their estimates of our earnings or our competitors earnings or our failure or that of our competitors to meet such estimates, conditions in the economy in general or the banking industry in particular, or unfavorable publicity affecting us, the Bank, or the industry. In addition, equity markets have, on occasion, experienced significant price and volume fluctuations that have affected the market price for many companies’ securities and have been unrelated to the operating performance of those companies. Any fluctuation may adversely affect the price at which our common stock may trade.
An investment in our common stock is not an insured deposit.
Our common stock is not a bank deposit and, therefore, is not insured against loss by the FDIC, any other deposit insurance fund or by any other public or private entity. Investment in our common stock is inherently risky for the reasons described in this “Risk Factors” section and elsewhere in this report and is subject to the same market forces that affect the price of common stock in any company. As a result, if you acquire our common stock, you may lose some or all of your investment.
| ITEM 1B. | Unresolved Staff Comments. |
Not applicable.
| ITEM 2. | Properties. |
The Bank owns its main office located at Two North Main Street in Mifflintown, Pennsylvania and the following branch offices:
Tuscarora Valley Branch
Route 75 & “Old” U.S. Route 22/322
Walker Township, Juniata County, Pennsylvania
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Fermanagh Branch
Pa. Route 35 & U.S. Route 22/322
Fermanagh Township, Juniata County, Pennsylvania
Loysville Branch
Pa. Route 850 & Pa. Route 274
Loysville, Perry County, Pennsylvania
New Bloomfield Branch
Route 274 West & Cold Storage Road
Center Township, Perry County, Pennsylvania
West Perry Branch
Route 74 & Route 274
Spring and Tyrone Townships, Perry County, Pennsylvania
Ickesburg Branch
Route 17 West
Ickesburg, Perry County, Pennsylvania
Bloomfield Borough Branch
216 S. Carlisle St.
New Bloomfield, Perry County, Pennsylvania
The Bank leases the building space occupied by its Delaware branch office located on Pa. Route 333 in Delaware Township, Juniata County under a lease that shall expire on March 31, 2009.
The Bank also leases the land where it constructed its East Waterford branch office, located on North Main Street in Tuscarora Township, Juniata County. The initial term of this lease expires June 18, 2009. Upon expiration of the initial term, the Bank may extend the lease for three successive renewal periods of five years each.
The Bank also leases the space occupied by the Shermans Dale Branch, located at the intersection of Pa. Route 850 and Pa. Route 34 in Carroll Township. The initial term of this lease expired February 28, 2003. However, the Bank has exercised its annual options to renew the lease for an additional one-year term, which options ultimately extend through February 28, 2008.
Each of the Bank’s eleven banking offices is a full service office, ten of which provide drive-through teller and automated teller machine services.
| ITEM 3. | Legal Proceedings. |
Neither the Corporation nor the Bank is a party to any material pending legal proceeding other than routine legal proceedings incidental to its business.
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| ITEM 4. | Submission of Matters to a Vote of Security Holders. |
The Corporation had no matters submitted to a vote of security holders during the fourth quarter of the year ended December 31, 2005.
PART II
| ITEM 5. | Market for Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities. |
Although shares of the Corporation’s common stock are traded from time to time in private transactions, there is no established public trading market for the stock. The Corporation’s common stock is not listed on any stock exchange or automated quotation system and there are no present plans to so list the stock. There can be no assurance that, at any given time, any persons will be interested in acquiring shares of the Corporation’s common stock. Price quotations for the Corporation’s common stock do not appear in any generally recognized investment media.
The following table reports the highest and lowest per share prices at which the Corporation’s common stock has actually traded in private transactions during the periods indicated and of which management has knowledge. To the best of management’s knowledge, such prices do not include any retail mark-up, mark-down or commission. Shares may also have been sold in transactions, the price and terms of which are not known to the Corporation. Therefore, the per share prices at which the Corporation’s stock has previously traded may not necessarily be indicative of the true market value of the shares.
Highest and Lowest Per Share
Prices for Common Stock
in Actual Private Transactions
Known to Corporation
| 2005 | 2004 | |||||||||
| High | Low | High | Low | |||||||
First Quarter | $ | 27.50 | 26.50 | $ | 24.00 | 24.00 | ||||
Second Quarter | $ | 29.50 | 28.00 | $ | 25.00 | 24.50 | ||||
Third Quarter | $ | 31.50 | 29.50 | $ | 25.00 | 25.00 | ||||
Fourth Quarter | $ | 33.00 | 30.50 | $ | 26.00 | 25.00 | ||||
The authorized common stock of the Corporation consists of 10,000,000 shares of common stock, par value $5.00 per share, of which 1,400,000 shares were outstanding at February 28, 2006. There are no shares of the Corporation’s common stock (i) that are subject to outstanding options, warrants or securities convertible into common stock; (ii) that could be sold pursuant to Rule 144
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under the Securities Act or that the Corporation has agreed to register under the Securities Act for sale by security holders; or (iii) that are or have been proposed to be publicly offered by the Corporation. The Corporation has 551 shareholders of record as of February 28, 2006.
The Corporation pays dividends on the outstanding shares of our common stock as determined by the Board of Directors from time to time. It has been the practice of the Board of the Corporation to declare dividends on a quarterly basis after considering the Corporation’s earnings, financial position, cash requirements and such other factors as the Board of Directors may deem relevant. The following table sets forth the cash dividends declared per share of the Corporation’s common stock for the stated periods.
| Cash Dividends Declared Per Share | |||
2005 First Quarter | $ | 0.0950 | |
Second Quarter | 0.0950 | ||
Third Quarter | 0.1000 | ||
Fourth Quarter | 0.1000 | ||
| $ | 0.3900 | ||
2004 First Quarter | $ | 0.0850 | |
Second Quarter | 0.0850 | ||
Third Quarter | 0.0900 | ||
Fourth Quarter | 0.0900 | ||
| $ | 0.3500 | ||
See discussion under “Supervision and Regulation – Dividends” in Item 1 of this Report and Note 11 to the financial statements contained in the Annual Report to Shareholders for the year ended December 31, 2005 for a description of restrictions that may limit the Corporation’s ability to pay dividends on its common stock.
The Corporation has not adopted any compensation plans, including individual compensation arrangements, under which shares of the Corporation’s common stock are authorized for issuance.
| ITEM 6. | Selected Financial Data. |
The selected five year financial data, included on page 49 of the Annual Report to Shareholders for the year ended December 31, 2005, attached to this Report as Exhibit 13, is incorporated herein by reference.
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| ITEM 7. | Management’s Discussion and Analysis of Financial Condition and Results of Operations. |
Management’s Discussion and Analysis of Financial Conditions and Results of Operations, included on pages 34 through 49 of the Annual Report to Shareholders for the year ended December 31, 2005, attached to this Report as Exhibit 13, is incorporated herein by reference.
| ITEM 7A. | Quantitative and Qualitative Disclosures about Market Risk. |
The information required to be disclosed by this item is included in Management’s Discussion and Analysis of Financial Condition and Results of Operations on page 47 of the Annual Report to Shareholders for the year ended December 31, 2005, attached to this Report as Exhibit 13 and incorporated herein by reference.
| ITEM 8. | Financial Statements and Supplementary Data. |
The financial statements included on pages 7 through 33 of the Annual Report to Shareholders for the year ended December 31, 2005 attached to this Report as Exhibit 13, are incorporated herein by reference.
| ITEM 9. | Changes in and Disagreements With Accountants on Accounting and Financial Disclosure. |
Not Applicable.
| ITEM 9A. | Controls and Procedures. |
We maintain a system of controls and procedures designed to provide reasonable assurance as to the reliability of the financial statements and other disclosures included in this report, as well as to safeguard assets from unauthorized use or disposition. The Corporation’s President (principal executive officer) and Chief Financial Officer (principal financial officer) have evaluated the effectiveness of our disclosure controls and procedures as of December 31, 2005. Based upon that evaluation, our President and Chief Financial Officer concluded that our disclosure controls and procedures are effective in timely alerting them to information required to be included in our periodic Securities and Exchange Commission filings.
There was no significant change in our internal control over financial reporting that occurred during the quarter ended December 31, 2005, that materially affected or is reasonably likely to materially affect, the Corporation’s internal control over financial reporting.
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| ITEM 9B. | Other Information. |
None.
PART III
| ITEM 10. | Directors and Executive Officers of the Registrant. |
The information required by Item 10 concerning the Corporation’s directors and executive officers is incorporated herein by reference from the sections captioned “Election of Directors,” “Biographical Summaries of Nominees and Directors,” “Executive Officers” and “Board Committees and Meeting Attendance – Audit-Compliance Committee” in First Community Financial Corporation’s definitive proxy statement for the 2006 Annual Meeting of Shareholders filed pursuant to Regulation 14A. The required information regarding compliance with Section 16(a) of the Exchange Act is incorporated by reference to the section captioned “Share Ownership of Management – Section 16(a) Beneficial Ownership Reporting Compliance” in First Community Financial Corporation’s definitive proxy statement for the 2006 Annual Meeting of Shareholders filed pursuant to Regulation 14A.
The Bank has adopted a code of ethics that applies to its principal executive officer, principal financial officer and other senior officers. Because the Bank’s principal executive officer and principal financial officer also serve, respectively, as the principal executive officer and principal financial officer of the Corporation, the Bank’s code of ethics applies to them in their capacities as officers of the Corporation as well. A copy of the code of ethics is available, without charge, upon written request to Richard R. Leitzel, Chief Financial Officer, First Community Financial Corporation, Two North Main Street, Mifflintown, Pennsylvania 17059.
| ITEM 11. | Executive Compensation. |
The information required by Item 11 is incorporated by reference from the sections captioned “Compensation of Directors,” and “Executive Compensation,” in First Community Financial Corporation’s definitive proxy statement for the 2006 Annual Meeting of Shareholders filed pursuant to Regulation 14A. Such incorporation by reference shall not be deemed to specifically incorporate by reference information referred to in Item 402(a)(8) of Regulation S-K.
| ITEM 12. | Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters. |
The information required by Item 12 is incorporated by reference from the sections captioned “Share Ownership of Certain Beneficial Owners” and “Share Ownership of Management” in First Community Financial Corporation’s definitive proxy statement for the 2006 Annual Meeting of Shareholders filed pursuant to Regulation 14A.
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| ITEM 13. | Certain Relationships and Related Transactions. |
The information required by Item 13 is incorporated by reference from the section captioned “Transactions with Management” in First Community Financial Corporation’s definitive proxy statement for the 2006 Annual Meeting of Shareholders filed pursuant to Regulation 14A.
| ITEM 14. | Principal Accountant Fees and Services. |
The information required by Item 14 is incorporated by reference from the section captioned “Independent Certified Public Accountants” in First Community Financial Corporation’s definitive proxy statement for the 2006 Annual Meeting of Shareholders filed pursuant to Regulation 14A. Information concerning the policy adopted by the Audit Committee regarding the pre-approval of audit and non-audit services provided by the Corporation’s independent auditors is incorporated by reference from the section captioned “Board Committees and Meeting Attendance – Audit-Compliance Committee” in First Community Financial Corporation’s definitive proxy statement for the 2006 Annual Meeting of Shareholders filed pursuant to Regulation 14A.
PART IV
| ITEM 15. | Exhibits, Financial Statement Schedules. |
| (a) | The following documents are filed as a part of this report: |
| (1) | List of financial statements: |
The following consolidated financial statements of First Community Financial Corporation and its subsidiaries, included in the registrant’s annual report to shareholders for the year ended December 31, 2005, are incorporated by reference in Item 8:
Consolidated Balance Sheets: December 31, 2005 and 2004 | 7 | |
Consolidated Statements of Income: Years ended December 31, 2005, 2004 and 2003 | 8 | |
Consolidated Statements of Shareholders’ Equity: Years ended December 31, 2005, 2004 and 2003 | 9 | |
Consolidated Statements of Cash Flows: Years ended December 31, 2005, 2004 and 2003 | 10 | |
Notes to Consolidated Financial Statements | 11 | |
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| (2) | List of financial statement schedules: |
All financial statement schedules for which provision is made under the applicable accounting regulations of the Securities and Exchange Commission are not required under the related instructions or are inapplicable and have therefore been omitted.
| (3) | Exhibits |
The exhibits listed on the index to exhibits in Item 15(b) below are filed as part of, or hereby incorporated by reference into, this Form 10-K.
| (b) | Exhibits: |
| Exhibit | Title | |
| 3.1 | Articles of Incorporation of the Corporation. (Incorporated by reference to Exhibit 2(a) to the Corporation’s Registration Statement on Form 10-SB, as filed with the Securities and Exchange Commission on April 17, 2002.) | |
| 3.2 | Bylaws of the Corporation. (Incorporated by reference to Exhibit 2(b) to the Corporation’s Registration Statement on Form 10-SB, as filed with the Securities and Exchange Commission on April 17, 2002.) | |
| 4.1 | Certain instruments defining the rights of the holders of long-term debt of the Corporation and certain of its Subsidiaries, none of which authorize a total amount of indebtedness in excess of 10% of the Corporation and its Subsidiaries on a consolidated basis, have not been filed as Exhibits in accordance with Item 601(b)(4)(iii) of Regulation S-K. The Corporation hereby agrees to furnish a copy of these instruments to the Commission upon request. | |
| 10.1 | Lease Agreement – Delaware Branch Office (Incorporated by reference to Exhibit 6(b)(1) to the Corporation’s Registration Statement on Form 10-SB, as filed with the Securities and Exchange Commission on April 17, 2002.) | |
| 10.2 | Lease Agreement – East Waterford Branch Office (Incorporated by reference to Exhibit 6(b)(2) to the Corporation’s Registration Statement on Form 10-SB, as filed with the Securities and Exchange Commission on April 17, 2002.) | |
| 10.3 | Lease Agreement – Shermans Dale Branch Office (Incorporated by reference to Exhibit 6(b)(3) to the Corporation’s Registration Statement on Form 10-SB, as filed with the Securities and Exchange Commission on April 17, 2002.) | |
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| 10.4 | Salary Continuation Agreement dated August 19, 1997 between James McLaughlin and The First National Bank of Mifflintown (Incorporated by reference to Exhibit 6(c) (1) to the Corporation’s Registration Statement on Form 10-SB, as filed with the Securities and Exchange Commission on April 17, 2002.) | |
| 10.5 | Salary Continuation Agreement dated September 22, 1997 between Leona Shellenberger and The First National Bank of Mifflintown (Incorporated by reference to Exhibit 6(c) (2) to the Corporation’s Registration Statement on Form 10-SB, as filed with the Securities and Exchange Commission on April 17, 2002.) | |
| 10.6 | Salary Continuation Agreement dated August 28, 1997 between Jody Graybill and The First National Bank of Mifflintown (Incorporated by reference to Exhibit 6(c) (3) to the Corporation’s Registration Statement on Form 10-SB, as filed with the Securities and Exchange Commission on April 17, 2002.) | |
| 10.7 | Salary Continuation Agreement dated September 18, 1997 between Timothy Stayer and The First National Bank of Mifflintown (Incorporated by reference to Exhibit 6(c) (4) to the Corporation’s Registration Statement on Form 10-SB, as filed with the Securities and Exchange Commission on April 17, 2002.) | |
| 10.8 | Salary Continuation Agreement dated April 10, 2000 between Marcie A. Barber and The First National Bank of Mifflintown (Incorporated by reference to Exhibit 6(c) (5) to the Corporation’s Registration Statement on Form 10-SB, as filed with the Securities and Exchange Commission on April 17, 2002.) | |
| 10.9 | Salary Continuation Agreement dated November 5, 2001 between Richard R. Leitzel and The First National Bank of Mifflintown (Incorporated by reference to Exhibit 6(c) (6) to the Corporation’s Registration Statement on Form 10-SB, as filed with the Securities and Exchange Commission on April 17, 2002.) | |
| 10.10 | Officer Group Term Replacement Plan (Incorporated by reference to Exhibit 6(c) (7) to the Corporation’s Registration Statement on Form 10-SB, as filed with the Securities and Exchange Commission on April 17, 2002.) | |
| 10.11 | Director Deferred Fee Agreement dated September 29, 1997 between James McLaughlin and The First National Bank of Mifflintown (Incorporated by reference to Exhibit 6(c) (8) to the Corporation’s Registration Statement on Form 10-SB, as filed with the Securities and Exchange Commission on April 17, 2002.) | |
| 10.12 | Director Deferred Fee Agreement dated September 29, 1997 between Joseph Barnes and The First National Bank of Mifflintown (Incorporated by reference to Exhibit 6(c) (9) to the Corporation’s Registration Statement on Form 10-SB, as filed with the Securities and Exchange Commission on April 17, 2002.) | |
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| 10.13 | Director Deferred Fee Agreement dated September 30, 1997 between Roger Shallenberger and The First National Bank of Mifflintown (Incorporated by reference to Exhibit 6(c) (10) to the Corporation’s Registration Statement on Form 10-SB, as filed with the Securities and Exchange Commission on April 17, 2002.) | |
| 10.14 | Director Deferred Fee Agreement dated April 9, 2002 between Nancy S. Bratton and The First National Bank of Mifflintown (Incorporated by reference to Exhibit 6(c) (11) to the Corporation’s Registration Statement on Form 10-SB, as filed with the Securities and Exchange Commission on April 17, 2002.) | |
| 10.15 | Director Deferred Fee Agreement dated April 9, 2002 between John P. Henry and The First National Bank of Mifflintown (Incorporated by reference to Exhibit 6(c) (12) to the Corporation’s Registration Statement on Form 10-SB, as filed with the Securities and Exchange Commission on April 17, 2002.) | |
| 10.16 | Director Deferred Fee Agreement dated April 9, 2002 between Samuel G. Kint and The First National Bank of Mifflintown (Incorporated by reference to Exhibit 6(c) (13) to the Corporation’s Registration Statement on Form 10-SB, as filed with the Securities and Exchange Commission on April 17, 2002.) | |
| 10.17 | Director Revenue Neutral Retirement Agreement dated September 29, 1997 between James McLaughlin and The First National Bank of Mifflintown (Incorporated by reference to Exhibit 6(c) (14) to the Corporation’s Registration Statement on Form 10-SB, as filed with the Securities and Exchange Commission on April 17, 2002.) | |
| 10.18 | Director Revenue Neutral Retirement Agreement dated September 30, 1997 between John H. Sheaffer and The First National Bank of Mifflintown (Incorporated by reference to Exhibit 6(c) (15) to the Corporation’s Registration Statement on Form 10-SB, as filed with the Securities and Exchange Commission on April 17, 2002.) | |
| 10.19 | Director Revenue Neutral Retirement Agreement dated September 29, 1997 between Donald Adams and The First National Bank of Mifflintown (Incorporated by reference to Exhibit 6(c) (16) to the Corporation’s Registration Statement on Form 10-SB, as filed with the Securities and Exchange Commission on April 17, 2002.) | |
| 10.20 | Director Revenue Neutral Retirement Agreement dated September 29, 1997 between Joseph Barnes and The First National Bank of Mifflintown (Incorporated by reference to Exhibit 6(c) (17) to the Corporation’s Registration Statement on Form 10-SB, as filed with the Securities and Exchange Commission on April 17, 2002.) | |
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| 10.21 | Director Revenue Neutral Retirement Agreement dated September 29, 1997 between Samuel F. Metz and The First National Bank of Mifflintown (Incorporated by reference to Exhibit 6(c) (18) to the Corporation’s Registration Statement on Form 10-SB, as filed with the Securities and Exchange Commission on April 17, 2002.) | |
| 10.22 | Director Revenue Neutral Retirement Agreement dated September 30, 1997 between Clair E. McMillen and The First National Bank of Mifflintown (Incorporated by reference to Exhibit 6(c) (19) to the Corporation’s Registration Statement on Form 10-SB, as filed with the Securities and Exchange Commission on April 17, 2002.) | |
| 10.23 | Director Revenue Neutral Retirement Agreement dated September 29, 1997 between Roger Shallenberger and The First National Bank of Mifflintown (Incorporated by reference to Exhibit 6(c) (20) to the Corporation’s Registration Statement on Form 10-SB, as filed with the Securities and Exchange Commission on April 17, 2002.) | |
| 10.24 | Director Revenue Neutral Retirement Agreement dated September 29, 1997 between John Tetweiler and The First National Bank of Mifflintown (Incorporated by reference to Exhibit 6(c) (21) to the Corporation’s Registration Statement on Form 10-SB, as filed with the Securities and Exchange Commission on April 17, 2002.) | |
| 10.25 | Director Revenue Neutral Retirement Agreement dated September 29, 1997 between Richard Wible and The First National Bank of Mifflintown (Incorporated by reference to Exhibit 6(c) (22) to the Corporation’s Registration Statement on Form 10-SB, as filed with the Securities and Exchange Commission on April 17, 2002.) | |
| 10.26 | Director Revenue Neutral Retirement Agreement dated March 31, 1998 between Lowell M. Shearer and The First National Bank of Mifflintown (Incorporated by reference to Exhibit 6(c) (23) to the Corporation’s Registration Statement on Form 10-SB, as filed with the Securities and Exchange Commission on April 17, 2002.) | |
| 10.27 | Director Revenue Neutral Retirement Agreement dated March 24, 1998 between Charles C. Saner and The First National Bank of Mifflintown (Incorporated by reference to Exhibit 6(c) (24) to the Corporation’s Registration Statement on Form 10-SB, as filed with the Securities and Exchange Commission on April 17, 2002.) | |
| 13 | Annual Report to Security Holders. | |
| 21 | Subsidiaries of the Registrant. | |
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| 31.1 | Certification of Principal Executive Officer of First Community Financial Corporation Pursuant to Securities and Exchange Commission Rule 13a-14(a) / 15d-14(a). | |
| 31.2 | Certification of Principal Financial Officer of First Community Financial Corporation Pursuant to Securities and Exchange Commission Rule 13a-14(a) / 15d-14(a). | |
| 32.1 | Certification of Principal Executive Officer of First Community Financial Corporation Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | |
| 32.2 | Certification of Principal Financial Officer of First Community Financial Corporation Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | |
| (c) | Financial statement schedules. |
None.
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Pursuant to the requirements of Section 13 of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed by the undersigned, thereunto duly authorized.
FIRST COMMUNITY FINANCIAL CORPORATION | ||||||||
Date: March 14, 2006 | By: | /s/ Jody D. Graybill | ||||||
Jody D. Graybill President (Principal Executive Officer) | ||||||||
Date: March 14, 2006 | By: | /s/ Richard R. Leitzel | ||||||
Richard R. Leitzel Vice President and Chief Financial Officer (Principal Financial Officer) | ||||||||
In accordance with the Exchange Act, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the date indicated.
Signatures | Title | Date | ||
/s/ Joseph E. Barnes, Sr. | Director | March 14, 2006 | ||
Joseph E. Barnes, Sr. | ||||
/s/ Nancy S. Bratton | Director | March 14, 2006 | ||
Nancy S. Bratton | ||||
/s/ John P. Henry | Director | March 14, 2006 | ||
John P. Henry | ||||
/s/ Samuel G. Kint | Director | March 14, 2006 | ||
Samuel G. Kint | ||||
/s/ James R. McLaughlin | Director | March 14, 2006 | ||
James R. McLaughlin | ||||
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| /s/ Clair E. McMillen | Director | March 14, 2006 | ||
| Clair E. McMillen | ||||
| /s/ Jody D. Graybill | President and Director | March 14, 2006 | ||
| Jody D. Graybill | ||||
| /s/ Charles C. Saner | Director | March 14, 2006 | ||
| Charles C. Saner | ||||
| /s/ Roger Shallenberger | Director | March 14, 2006 | ||
| Roger Shallenberger | ||||
| /s/ Lowell M. Shearer | Director | March 14, 2006 | ||
| Lowell M. Shearer | ||||
| /s/ Frank L. Wright | Director | March 14, 2006 | ||
| Frank L. Wright | ||||
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