Table of Contents

Table of Contents

Table of Contents

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 ~~September~~March 3031, ~~2010~~2011

¨	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

~~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)

9001 Belcher Road

Pinellas Park, Florida 33782

(Address of principal executive offices) (Zip Codes)

(727) 520-0987

(Registrant’s telephone number, including area code)

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

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

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

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

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

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

Common stock, par value $.05 per share		58,~~457~~592,~~173~~143 shares
(class)		Outstanding at ~~November~~May 1512, ~~2010~~2011

FIRST COMMUNITY BANK CORPORATION OF AMERICA AND SUBSIDIARIES

INDEX

	Page
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Condensed Consolidated Balance Sheets -At September 30, 2010 (unaudited) and At December 31, 2009		2
Condensed Consolidated Balance Sheets - At March 31, 2011 (unaudited) and At December 31, 2010		2
Condensed Consolidated Statements of Operations -Three and Nine Months Ended September 30, 2010 and 2009 (unaudited)		3
Condensed Consolidated Statements of Operations - Three Months Ended March 31, 2011 and 2010 (unaudited)		3
Condensed Consolidated Statements of Changes in Stockholders’ Equity -Nine Months Ended September 30, 2010 and 2009 (unaudited)		4-5
Condensed Consolidated Statements of Changes in Stockholders’ Equity - Three Months Ended March 31, 2011 and 2010 (unaudited)		4-5
Condensed Consolidated Statements of Cash Flows -Nine Months Ended September 30, 2010 and 2009 (unaudited)		6-7
Condensed Consolidated Statements of Cash Flows - Three Months Ended March 31, 2011 and 2010 (unaudited)		6-7
Notes to Condensed Consolidated Financial Statements (unaudited)		8-1724
Review by Independent Registered Public Accounting Firm		1825
Report of Independent Registered Public Accounting Firm		1926
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations		2027-3337
Item 3. Quantitative and Qualitative Disclosures About Market Risk		3438
Item 4T. Controls and Procedures		3438
PART II. OTHER INFORMATION
Item 1. Legal Proceedings		3438
Item 1A.Risk Factors		34
Item 1A. Risk Factors		38
Item 6. Exhibits		3539
SIGNATURES		3640

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)

	September 30,2010			December 31,2009
	March 31,			December 31,
	2011			2010
	(Unaudited)
Assets
Cash and due from banks	$	45,~~857~~234			53,~~623~~513
Interest-bearing deposits with banks		56,817			45,074
Federal funds sold		98			—
Cash and cash equivalents		61,674			50,697
Interest-bearing deposits with banks		35,902			44,802
Other interest-bearing deposits with banks		1,765			491
Cash and cash equivalents		41,234			48,315
Securities available for sale		56,024			50,850
Other interest-bearing deposits with banks		1,765			1,765
Securities held to maturity (market value of $0 and $7,554)		—			7,583
Securities available for sale		44,170			45,761
Loans, net of allowance for loan losses of $14,042 in 2010 and $7,830 in 2009		347,324			399,265
Loans, net of allowance for loan losses of $11,461 and $11,717		323,363			332,779
Federal Home Loan Bank stock, at cost		23,~~526~~606			23,~~549~~606
Premises and equipment, net		12,~~484~~317			12,~~834~~424
Foreclosed real estate		7,925			2,892
Foreclosed real estate, net		11,241			11,385
Accrued interest receivable		1,~~512~~282			21,~~016~~378
Deferred income taxes		—			4,912
Bank-owned life insurance		8,208			8,157
Bank-owned life insurance		8,093			7,940
Prepaid deposit insurance assessment		3,225			3,627
Prepaid FDIC assessment		3,866			4,661
Other assets		1,895			1,490
Other assets		2,380			1,228
	$	452,306			470,687
	$	505,573			547,918
Liabilities and Stockholders’ Equity
Liabilities:
Noninterest-bearing demand deposits		3739,~~150~~166			3634,~~293~~500
Savings, NOW and money-market deposits		~~231~~198,~~148~~143			~~205~~216,~~553~~179
Time deposits		~~157~~123,~~894~~866			~~216~~123,~~671~~975
Total deposits		~~426~~361,~~192~~175			~~458~~374,~~517~~654
Federal Home Loan Bank advances		3560,~~875~~000			3660,000
Other borrowings		~~6,668~~505			21,~~767~~764
Accrued expenses and other liabilities		65,~~435~~040			5,~~133~~511
Total liabilities		~~475~~426,~~170~~720			~~502~~441,~~417~~929
Stockholders’ equity:
Preferred stock, $0.01 par value, 2,000,000 shares authorized:
Series A, 10,685 shares designated, issued and outstanding		10,685			10,685
Series A preferred stock discount		(2218	)		(2720	)
Series B, 720,000 shares designated, 313,497 and 189,018 shares issued and outstanding		7,837			4,725
Series B, 720,000 shares designated, 0 and 313,497 shares issued and outstanding		—			7,837
Common stock, $0.05 par value, 40,000,000 shares authorized, 5,457,173 and 4,938,692 shares issued and outstanding		273			247
Common stock, $0.05 par value, 40,000,000 shares authorized, 8,592,143 and 5,457,173 shares issued and outstanding		430			273
Additional paid-in capital		3240,~~389~~071			32,~~154~~390
Accumulated deficit		(2125,~~371~~420	)		(222,~~618~~050	)
Accumulated other comprehensive income		612			335
Accumulated other comprehensive loss		(162	)		(357	)
Total stockholders’ equity		3025,~~403~~586			4528,~~501~~758
	$	~~505~~452,~~573~~306			~~547~~470,~~918~~687

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 EndedSeptember 30,						Nine Months EndedSeptember 30,
	Three Months EndedMarch 31,
	2010			2009			2010			2009
	2011			2010
Interest income:
Loans	$	4,~~843~~285			5,~~796~~410			~~15,414~~			~~17,779~~
Securities		~~387~~348			~~566~~557			~~1,367~~			~~1,596~~
Other interest earning assets		4633			3831			~~114~~			60
Total interest income		54,~~276~~666			65,~~400~~998			~~16,895~~			~~19,435~~
Interest expense:
Deposits		~~1,537~~985			2,~~491~~002			~~5,261~~			~~7,700~~
Other borrowings		~~347~~288			~~349~~342			~~1,035~~			~~1,065~~
Total interest expense		1,~~884~~273			2,~~840~~344			~~6,296~~			~~8,765~~
Net interest income		3,~~392~~393			3,~~560~~654			~~10,599~~			~~10,670~~
Provision for loan losses		83,~~359~~060			43,~~670~~941			~~16,149~~			~~6,702~~
Net interest (expense) income after provision for loan losses		(4,967	)		(1,110	)		(5,550	)		3,968
Net interest income (loss) after provision for loan losses		333			(287	)
Noninterest income:
Service charges on deposit accounts		~~178~~125			~~200~~168			~~526~~			~~612~~
Other service charges and fees		5772			7448			~~174~~			~~241~~
Income from bank owned life insurance		57			45			153			130
Income from bank-owned life insurance		51			44
Gain on sale of securities		479			398			1,015			440
Net gain on sale of securities		—			159
Other		9947			40178			~~373~~			~~192~~
Total noninterest income		~~870~~295			~~757~~597			~~2,241~~			~~1,615~~
Noninterest expenses:
Employee compensation and benefits		1,~~434~~261			1,~~632~~604			~~4,454~~			~~4,753~~
Occupancy and equipment		~~422~~384			~~452~~421			~~1,260~~			~~1,322~~
Data processing		~~275~~266			~~374~~387			~~997~~			~~1,085~~
Professional fees		~~313~~360			86282			~~955~~			~~407~~
Office supplies		3331			6334			95			~~164~~
Insurance		~~309~~464			~~346~~314			~~956~~			~~937~~
Other		~~319~~1,230			~~505~~340			~~1,097~~			~~1,174~~
Total noninterest expenses		3,~~105~~996			3,~~458~~382			~~9,814~~			~~9,842~~
Loss before income taxes (benefit)		(7,202	)		(3,811	)		(13,123	)		(4,259	)
Loss before income taxes		(3,368	)		(3,072	)
Income taxes (benefit)		—			(1,477	)		5,228			(1,713	)
Income tax benefit		—			(1,200	)
Net loss		(73,~~202~~368	)		(21,~~334~~872	)		~~(18,351~~	)		~~(2,546~~	)
Preferred stock dividend requirements and amortization of preferred discount		(135	)		(132	)		(602	)		(416	)
Preferred stock dividend requirements and amortization of preferred stock discount		(135	)		(331	)
Net loss applicable to common stock holders	$	(7,337	)		(2,466	)		(18,953	)		(2,962	)
Net loss available for common stockholders	$	(3,503	)		(2,203	)
Loss per share:
Basic earnings per share	$	(1.34	)		(.59	)		(3.51	)		(.71	)
Basic and diluted loss per share	$	(.64	)		(.42	)
Diluted earnings per share	$	(1.34	)		(.59	)		(3.51	)		(.71	)
Common stock dividends per share	$	—			—			—			—

See Accompanying Notes to Condensed Consolidated Financial Statements.

FIRST COMMUNITY BANK CORPORATION OF AMERICA AND SUBSIDIARIES

Condensed Consolidated Statements of Changes in Stockholders’ Equity

~~Nine~~Three Months Ended ~~September~~March 3031, ~~2010~~2011 and ~~2009~~2010

(In thousands, except share amounts)

	Preferred Stock							Common Stock				Additional Paid-In		Retained			AccumulatedOtherComprehensive
																						AccumulatedOther Compre-hensiveIncome		Total
	Shares		Amount		Discount			Shares		Amount		Capital		Earnings			Income		Total
	Preferred Stock																AdditionalPaid-In Capital
Balance at December 31, 2008		10,685	$	10,685		(33	)		4,111,121	$	205		30,388		2,843			386		44,474
	Series A							Series B				Common Stock							AccumulatedDeficit
Comprehensive loss:
	Shares		Amount		Discount			Shares		Amount		Shares		Amount
Net loss (unaudited)		—		—		—			—		—		—		(2,546	)		—		(2,546	)
Balance at December 31, 2009		10,685	$	10,685		(27	)		189,018	$	4,725		4,938,692	$	247			32,154		(2,618	)		335		45,501
Net change in unrealized gain on securities available for sale, net of taxes of $59 (unaudited)		—		—		—			—		—		—		—			99		99
Comprehensive loss:
Comprehensive loss (unaudited)																				(2,447	)
Net loss (unaudited)		—		—		—			—		—		—		—			—		(1,872	)		—		(1,872	)
Exercise of stock options (unaudited)		—		—		—			40,310		3		192		—			—		195
Net change in unrealized gain on securities available for sale, net of taxes of $62 (unaudited)		—		—		—			—		—		—		—			—		—			103		103
Share-based compensation expense (unaudited)		—		—		—			—		—		30		—			—		30
Comprehensive loss (unaudited)																									(1,769	)
Dividend on preferred stock to U.S. Treasury, Series A (unaudited)		—		—		—			—		—		—		(411	)		—		(411	)
Issuance of convertible perpetual preferred stock, Series B, net of offering costs of $72 (unaudited)		—		—		—			124,479		3,112		—		—			542		—			—		3,654
Amortization of common stock warrants issued to U.S. Treasury, Series A (unaudited)		—		—		5			—		—		—		(5	)		—		—
Issuance of common stock, net of offering costs of $217 (unaudited)		—		—		—			—		—		518,481		26			180		—			—		206
Balance at September 30, 2009 (unaudited)		10,685	$	10,685		(28	)		4,151,431	$	208		30,610		(119	)		485		41,841
Share-based compensation expense (unaudited)		—		—		—			—		—		—		—			9		—			—		9
Dividend on cumulative convertible perpetual preferred stock, Series B (unaudited)		—		—		—			—		—		—		—			—		(196	)		—		(196	)
Dividend on preferred stock to U.S. Treasury, Series A (unaudited)		—		—		—			—		—		—		—			—		(133	)		—		(133	)
Amortization of common stock warrants issued to U.S. Treasury (unaudited)		—		—		2			—		—		—		—			—		(2	)		—		—
Balance at March 31, 2010 (unaudited)		10,685	$	10,685		(25	)		313,497	$	7,837		5,457,173	$	273			32,885		(4,821	)		438		47,272

(continued)

FIRST COMMUNITY BANK CORPORATION OF AMERICA AND SUBSIDIARIES

Condensed Consolidated Statements of Changes in Stockholders’ Equity, Continued

~~Nine~~Three Months Ended ~~September~~March 3031, ~~2010~~2011 and ~~2009~~ 2010

(In thousands, except share amounts)

	Preferred Stock																	Additional					AccumulatedOther
																							AccumulatedOther Compre-hensiveLoss
	Series A							Series B						Common Stock				Paid-In		Accumulated			Comprehensive
	Preferred Stock																	AdditionalPaid-In Capital
	Shares		Amount		Discount			Shares			Amount			Shares		Amount		Capital		Deficit			Income			Total
	Series A							Series B						Common Stock						AccumulatedDeficit
Balance at December 31, 2009		10,685	$	10,685		(27	)		189,018		$	4,725			4,938,692	$	247		32,154		(2,618	)		335			45,501
	Shares		Amount		Discount			Shares			Amount			Shares		Amount										Total
Balance at December 31, 2010		10,685	$	10,685		(20	)		313,497		$	7,837			5,457,173	$	273		32,390		(22,050	)		(357	)		28,758
Comprehensive loss:
Net loss (unaudited)		—		—		—			—			—			—		—		—		(183,~~351~~368	)		—			(183,~~351~~368	)
Net change in unrealized gain on securities available for sale (unaudited)		—		—		—			—			—			—		—		—		—			~~277~~195			~~277~~195
Comprehensive loss (unaudited)																											(183,~~074~~173	)
Issuance of convertible perpetual preferred stock, Series B, net of offering costs of $597 (unaudited)		—		—		—			124,479			3,112			—		—		163		—			—			3,275
Conversion of convertible perpetual preferred stock, Series B to common stock (unaudited)		—		—		—			(313,497	)		(7,837	)		3,134,970		157		7,680		—			—			—
Issuance of common stock, net of offering costs of $199 (unaudited)		—		—		—			—			—			518,481		26		53		—			—			79
Share-based compensation expense (unaudited)		—		—		—			—			—			—		—		1		—			—			1
Share-based compensation expense (unaudited)		—		—		—			—			—			—		—		19		—			—			19
Amortization of common stock warrants issued to U.S. Treasury, Series A (unaudited)		—		—		2			—			—			—		—		—		(2	)		—			—
Dividend on cumulative convertible perpetual preferred stock, Series B (unaudited)		—		—		—			—			—			—		—		—		(196	)		—			(196	)
Balance at March 31, 2011 (unaudited)		10,685	$	10,685		(18	)		—		$	—			8,592,143	$	430		40,071		(25,420	)		(162	)		25,586
Dividend on preferred stock to U.S. Treasury, Series A (unaudited)		—		—		—			—			—			—		—		—		(201	)		—			(201	)
Amortization of common stock warrants issued to U.S. Treasury, Series A (unaudited)		—		—		5			—			—			—		—		—		(5	)		—			—
Balance at September 30, 2010 (unaudited)		10,685	$	10,685		(22	)		313,497		$	7,837			5,457,173	$	273		32,389		(21,371	)		612			30,403

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)

	Nine Months EndedSeptember 30,
	Three Months Ended
	2010			2009
	March 31,
	2011			2010
Cash flows from operating activities:
Net loss	$	(183,~~351~~368	)		(21,~~546~~872	)
Adjustments to reconcile net loss to net cash provided by operating activities:
Adjustments to reconcile net loss to net cash used in operating activities:
Provision for loan losses		163,~~149~~060			63,~~702~~941
Deferred tax provision		5,113			(1,713	)
Depreciation and amortization		112			141
Depreciation and amortization		392			467
Deferred income tax benefit		—			573
Share-based compensation		191			309
Net amortization of deferred loan fees and costs		(~~146~~9	)		(~~183~~61	)
Net amortization of premium and discounts on securities		~~347~~90			~~(46~~103	)
Income from bank owned life insurance		(153	)		(130	)
Income from bank-owned life insurance		(51	)		(43	)
Decrease (increase) in accrued interest receivable		504			(204	)
Decrease in accrued interest receivable		96			188
Write down of foreclosed real estate		—			140
Increase in prepaid deposit insurance assessment and other assets		(3	)		(1,577	)
Net (gain) loss on sale of foreclosed real estate		(46	)		42
Decrease in accrued expenses and other liabilities		(471	)		(1,698	)
Increase in prepaid FDIC assessments and other assets		(357	)		(634	)
Net gain on sale of securities		—			(159	)
Increase in accrued expenses and other liabilities		1,302			441
Provision for losses on foreclosed real estate		115			—
Gain on sale of securities available for sale		(1,015	)		(440	)
Net (gain) loss on sale of foreclosed real estate		(88	)		36
Net cash provided by operating activities		3,758			1,926
Net cash used in operating activities		(516	)		(419	)
Cash flows from investing activities:
Net change in other interest-bearing deposits with banks		~~(1,274~~—	)		~~(191~~220	)
Purchase of securities available for sale		~~(77,887~~—	)		(4723,~~195~~707	)
Principal payments on securities available for sale		51,~~573~~696			51,~~711~~581
Proceeds from calls and maturities of securities available for sale		~~21,370~~—			17,~~500~~270
Proceeds from the sale of securities available for sale		46,544			14,599
Proceeds on the sale of securities available for sale		—			14,980
Proceeds from maturities of securities held to maturity		—			500
Principal payments on securities held to maturity		—			32
Principal payments on securities held to maturity		32			156
Proceeds on the sale of securities held to maturity		—			7,521
Proceeds from the sale of securities held to maturity		7,521			—
Net decrease in loans		5,546			1,969
Net decrease (increase) in loans		28,269			(13,821	)
Purchase of premises and equipment, net		(5	)		(12	)
Purchase of premises and equipment, net		(42	)		(540	)
Proceeds from the sale of foreclosed real estate		936			1,062
Redemption of Federal Home Loan Bank stock		23			6
Net cash provided by investing activities		8,173			10,916
Proceeds from sale of foreclosed real estate		2,682			1,342
Net cash provided by (used in) investing activities		32,811			(37,933	)
Cash flows from financing activities:
(Decrease) increase in deposits		(32,325	)		69,426
Net decrease in deposits		(13,479	)		(303	)
Repayment of Federal Home Loan Bank advances		(125	)		(2,000	)
Net (decrease) increase in other borrowings		(1,259	)		2,188
Net increase (decrease) in other borrowings		3,901			(6,151	)
Dividend on preferred stock to U.S. Treasury, Series A		—			(133	)
Proceeds from exercise of stock options		—			195
Dividend on cumulative convertible preferred perpetual stock, Series B		—			(196	)
Issuance of cumulative convertible preferred stock, Series B		3,275			—
Issuance of cumulative convertible preferred perpetual stock, Series B		—			3,654
Issuance of common stock		79—			—206
Dividend on cumulative convertible preferred stock, Series B		(196	)		—
Net cash (used in) provided by financing activities		(14,738	)		5,416
Dividend on preferred stock to U.S. Treasury, Series A		(201	)		(411	)
Net (decrease) increase in cash and cash equivalents		(7,081	)		15,913
Net cash (used in) provided by financing activities		(25,592	)		61,059
Cash and cash equivalents at beginning of period		48,315			50,697
Net increase in cash and cash equivalents		10,977			25,052
Cash and cash equivalents at end of period	$	41,234			66,610
Cash and cash equivalents at beginning of period		50,697			32,458
Cash and cash equivalents at end of period	$	61,674			57,510

(continued)

FIRST COMMUNITY BANK CORPORATION OF AMERICA AND SUBSIDIARIES

Condensed Consolidated Statements of Cash Flows (Unaudited), Continued

(In thousands)

	Nine Months EndedSeptember 30,
	Three Months Ended
	2010			2009
	March 31,
	2011			2010
Supplemental disclosure of cash flow information:
Cash paid during the period for:
Interest, net of capitalized interest of $0 and $22	$	6,444			8,709
Interest, net of capitalized interest	$	1,259			2,341
Income taxes refund	$	(1,711	)		(671	)
Noncash transactions:
Accumulated other comprehensive income, net change in unrealized gain on securities available for sale, net of income taxes	$	~~277~~195			99103
Transfer from loans to foreclosed real estate	$	~~7,669~~819			~~2,241~~632
Amortization of common stock warrants issued to U.S. Treasury	$	(52	)		(52	)

See Accompanying Notes to Condensed Consolidated Financial Statements.

FIRST COMMUNITY BANK CORPORATION OF AMERICA AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Unaudited)

1. General. First Community Bank Corporation of America (the “Holding Company” or “First Community”) owns all of the outstanding common stock of First Community Bank of America (the “Bank” or “First Community 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 ~~nine~~three months ended ~~September~~March 3031, ~~2010~~2011 and ~~2009~~2010.

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 ~~September~~March 3031, ~~2010,~~2011 and the results of operations ~~for the three-~~ and ~~nine-month periods ended September 30, 2010 and 2009 and~~ cash flows for the ~~nine~~ three-month periods ended ~~September~~March 3031, ~~2010~~2011 and ~~2009~~2010. The results of operations and other data for the three- ~~and nine-~~month ~~periods~~period ended ~~September~~March 3031, ~~2010~~2011 are not necessarily indicative of results that may be expected for the year ending December 31, ~~2010~~2011.

2.Going ~~Securities~~Concern. ~~Securities~~The ~~have~~Company ~~been~~has ~~classified~~experienced recent and continuing ~~according~~increases toin ~~management’s~~nonperforming ~~intent.~~assets, ~~The~~increases ~~carrying~~in ~~amounts~~provisions for loan losses, declining net interest margin, continuing high levels of ~~securities~~noninterest expenses related to the credit problems and ~~their~~eroding ~~fair~~regulatory ~~value~~capital. ~~were~~These factors raise substantial doubt about the Company’s ability to continue as ~~follows~~a ~~(in~~going ~~thousands):~~concern.

	AmortizedCost		GrossUnrealizedGains		GrossUnrealizedLosses			FairValue
Available for Sale:
At September 30, 2010:
U.S. Government agency securities	$	8,758		94		—			8,852
Mortgage-backed securities		46,654		613		(95	)		47,172
	$	55,412		707		(95	)		56,024
At December 31, 2009:
U.S. Government agency securities		17,451		21		(260	)		17,212
Mortgage-backed securities		26,413		561		(38	)		26,936
Municipal securities		6,450		306		(54	)		6,702
	$	50,314		888		(352	)		50,850
Held to Maturity:
At December 31, 2009:
Mortgage-backed securities		568		8		—			576
Municipal securities		7,015		88		(125	)		6,978
	$	7,583		96		(125	)		7,554

On February 10, 2011, the Holding Company and the Bank entered into an Acquisition Agreement with CBM Florida Holding Company (“CBM Holdings”) and Community Bank & Company, under which the Bank will be merged with and into Community Bank & Company, and the Holding Company will transfer to CBM Holdings all of the shares of FCLS. Under the terms of the Acquisition Agreement, the Holding Company will receive $10 million in cash at closing.

Our Board of Directors, in connection with entering into the Acquisition Agreement, approved a Plan of Complete Liquidation and Dissolution for the Holding Company (the “Plan”). The Plan was approved by the holders of a majority of the outstanding shares of common stock of the Holding Company at a special shareholders meeting held for April 11, 2011. Final regulatory approvals were received on May 10, 2011. It is presently anticipated the transactions will be consummated on May 31, 2011. Following the consummation of the transactions, the Holding Company will be required to wind up of all of its business and distribute thereafter to its common stockholders all of its remaining cash, such distributions will take place towards the end of 2011.

(continued)

FIRST COMMUNITY BANK CORPORATION OF AMERICA AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Unaudited), ~~Continued~~

21. ~~Securities~~General, Continued. ~~Available-for-sale securities at September 30, 2010 measured at fair value on a recurring basis are summarized below (in thousands):~~

	FairValue		Quoted PricesIn ActiveMarkets forIdenticalAssets(Level 1)		SignificantOtherObservableInputs(Level 2)		SignificantUnobservableInputs(Level 3)
U.S. Government agency securities	$	8,852		—		8,852		—
Mortgage-backed securities		47,172		—		47,172		—
Available-for-sale securities	$	56,024		—		56,024		—

The completion of the transactions contemplated by the Acquisition Agreement is subject to certain conditions in addition to shareholder approval, including, among others, (i) the receipt of all regulatory approvals; (ii) the absence of any material adverse change in the business of the Bank; (iii) the accuracy of the representations and warranties made by each of the parties, and (iv) the compliance by each of the parties with their respective obligations under the Acquisition Agreement. In the event all conditions are not met and the transaction contemplated by the Acquisition Agreement is not completed, there is no assurance that any other acceptable financing alternative or recapitalization plan would be successfully implemented, or receive regulatory approval.

~~There~~2. ~~were~~Securities. noSecurities ~~transfers~~have ofbeen ~~securities~~classified ~~between~~according ~~levels~~to management’s intent. The carrying amounts of ~~inputs~~securities ~~for~~and ~~the~~their ~~nine~~fair ~~months~~value ~~ended~~were ~~September 30, 2010.~~as follows (in thousands):

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


			Gross		Gross
	Amortized		Unrealized		Unrealized			Fair
	Cost		Gains		Losses			Value
Available for Sale:
*At March 31, 2011:*
U.S. Government agency securities	$	7,758		—		(242	)		7,516
Mortgage-backed securities		36,574		265		(185	)		36,654


	$	44,332		265		(427	)		44,170


*At December 31, 2010:*
U.S. Government agency securities		7,758		—		(301	)		7,457
Mortgage-backed securities		38,360		246		(302	)		38,304


	$	46,118		246		(603	)		45,761

	Available for Sale
	AmortizedCost		FairValue
Five to ten years	$	1,000		1,004
After ten years		7,758		7,848
Mortgage-backed securities		46,654		47,172
	$	55,412		56,024

Securities sold are summarized as follows (in thousands):

	Nine Months EndedSeptember 30,
	2010			2009
Principal received from sales	$	54,065			14,524
Gross gains		1,149			440
Gross losses		(134	)		—
Net gain	$	1,015			440

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

(continued)

FIRST COMMUNITY BANK CORPORATION OF AMERICA AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Unaudited), ~~Continued~~

2. Securities, Continued. ~~Securities~~Available-for-sale ~~with~~securities ~~gross unrealized losses~~ at ~~September~~March 3031, ~~2010, aggregated by~~2011 ~~investment~~measured ~~category~~at ~~and~~fair ~~length~~value ofon ~~time that individual securities have been in~~ a ~~continuous~~recurring ~~loss~~basis ~~position,~~are issummarized asbelow ~~follows~~ (in thousands):

	Less Than Twelve Months
			Quoted Prices
	GrossUnrealizedLosses		FairValue
			In Active		Significant
Securities Available for Sale-
			Markets for		Other		Significant
Mortgage-backed securities	$	95		15,901
			Identical		Observable		Unobservable
	Fair		Assets		Inputs		Inputs
	Value		(Level 1)		(Level 2)		(Level 3)
At March 31, 2011:
U.S. Government agency securities	$	7,516		—		7,516		—
Mortgage-backed securities		36,654		—		36,654		—
Available-for-sale securities	$	44,170		—		44,170		—
At December 31, 2010:
U.S. Government agency securities		7,457		—		7,457		—
Mortgage-backed securities		38,304		—		38,304		—
Available-for-sale securities	$	45,761		—		45,761		—

~~The~~There ~~unrealized losses on eighteen investment securities~~ were ~~caused~~no bytransfers ~~interest~~of ~~rate changes. It is expected that the~~ securities ~~would~~between ~~not~~levels ~~be settled at a price less than the par value~~ of ~~the~~inputs ~~investments.~~for ~~Because~~ the ~~decline~~three inmonths ~~fair~~ended ~~value is attributable to changes in interest rates and not credit quality~~March 31, ~~and because the Company has the ability and intent~~ ~~to hold these investments until a market price recovery or maturity, these investments are not considered other-than-temporarily impaired~~2011.

AsThe ofscheduled ~~September 30,~~maturities ~~2010~~of ~~and~~securities ~~December~~at March 31, ~~2009,~~2011 ~~securities with a carrying value of $48,358,000 and $42,715,000, respectively,~~ were ~~pledged~~as ~~for~~follows ~~repurchase~~(in ~~agreements~~thousands): ~~with customers and for various purposes required or permitted by law.~~

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


	Available for Sale
	Amortized		Fair
	Cost		Value

After ten years	$	7,758		7,516
Mortgage-backed securities		36,574		36,654


	$	44,332		44,170

	Three Months EndedSeptember 30,						Nine Months EndedSeptember 30,
	2010			2009			2010			2009
Balance at beginning of period	$	7,393			7,844			7,830			8,230
Provision for loan losses		8,359			4,670			16,149			6,702
Charge-offs		(1,915	)		(3,746	)		(10,177	)		(6,215	)
Recoveries		205			30			240			81
Balance at end of period	$	14,042			8,798			14,042			8,798

No securities were sold during the three months ended March 31, 2011. Securities sold during the three months ended March 31, 2010 are summarized as follows (in thousands):


Principal received from sales	$	22,501


Gross gains		293
Gross losses		(134	)


Net gain	$	159

Due to a change in the Company’s investment policy, in 2010, the Company sold securities with a book value of $7,552,000 from the held to maturity category resulting in gross gains of $72,000 and gross losses of $103,000. Due to this sale, the Company is prohibited from classifying securities as held to maturity for a period of two years.

(continued)

FIRST COMMUNITY BANK CORPORATION OF AMERICA AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Unaudited), Continued

32. ~~Loan~~Securities, ~~Impairment~~Continued. Securities ~~and~~with ~~Loan~~gross ~~Losses~~unrealized losses at March 31, ~~Continued.~~2011, ~~The~~aggregated ~~following~~by ~~summarizes~~investment ~~the~~category ~~amount~~and length of ~~impaired~~time ~~loans~~that individual securities have been in a continuous loss position, is as follows (in thousands):

	September 30,2010			December 31,2009
	Less Than Twelve Months
Collateral dependent loans identified as impaired:
	Gross
Gross loans with no related allowance for losses (1)	$	29,101			23,938
	Unrealized			Fair
Gross loans with related allowance for losses		3,460			2,172
	Losses			Value
Less allowances on these loans		(1,847	)		(547	)
Securities Available for Sale:
Net investment in collateral dependent impaired loans		30,714			25,563
U.S. Government agency securities	$	(242	)		7,516
Noncollateral dependent loans identified as impaired:
Mortgage-backed securities		(185	)		19,659
Gross loans with no related allowance for losses (2)		6,226			3,781
Total securities available for sale	$	(427	)		27,175
Gross loans with related allowance for losses recorded (3)		12,576			16,252
Less allowance on these loans		(195	)		(291	)
Net investment in noncollateral dependent impaired loans		18,607			19,742
Net investment in impaired loans	$	49,321			45,305

~~(1)~~The ~~Charge-offs~~unrealized ~~related~~losses toon ~~these~~fifteen ~~loans~~investment securities were $5caused by interest rate changes. It is expected that the securities would not be settled at a price less than the par value of the investments. Because the decline in fair value is attributable to changes in interest rates and not credit quality,~~055~~ and $6because the Company has the ability and intent to hold these investments until a market price recovery or maturity,~~349,~~ ~~respectively~~these investments are not considered other-than-temporarily impaired.

~~(2)~~As ~~Troubled~~of ~~debt~~March 31, ~~restructure~~2011 ~~balances~~and ~~with~~December 31, no2010, ~~allowance~~securities ~~for~~with ~~losses~~a ~~were~~carrying value of $635,~~219~~377,000 and $337,~~720~~872,000, respectively, were pledged for repurchase agreements with customers and for various purposes.

(3). ~~Troubled~~Loans. ~~debt~~The ~~restructure~~components ~~balances~~of ~~with~~loans ~~allowance~~are ~~for~~summarized ~~losses~~as ~~were~~follows ~~$12,576~~(in ~~and $16,252, respectively.~~thousands):

	September 30,2010			December 31,2009
	March 31,			December 31,
Average investment in impaired loans	$	49,952			32,963
	2011			2010
Interest income recognized on impaired loans	$	661			665
Commercial real estate loans	$	157,053			161,580
Interest income received on impaired loans	$	958			842
Residential mortgage loans		87,243			93,946
Commercial loans		17,754			17,706
Installment loans		73,307			71,846
Total loans		335,357			345,078
Deduct:
Allowance for loan losses		(11,461	)		(11,717	)
Net deferred loan fees		(533	)		(582	)
Loans, net	$	323,363			332,779

(continued)

FIRST COMMUNITY BANK CORPORATION OF AMERICA AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Unaudited), Continued

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

	At September 30, 2010															LossesRecorded inOperationsFor thePeriod Ended
	Three Months Ended March 31,
	FairValue			Level 1			Level 2			Level 3			TotalLosses			September 30,2010
	2011
Impaired loans	$	13,188	(1)		—			—			13,188			9,181			6,924
	CommercialRealEstate			ResidentialRealEstate			Commercial			Installment			Total			2010
Beginning balance	$	5,939			4,166			211			1,401			11,717			7,830
Provision for loan losses		1,836			(511	)		241			1,494			3,060			3,941
Charge-offs		(1,665	)		(836	)		(250	)		(680	)		(3,431	)		(3,755	)
Recoveries		31			44			—			40			115			8
Ending balance	$	6,141			2,863			202			2,255			11,461			8,024
Individually evaluated for impairment:
Recorded investment	$	30,296			16,322			1,825			2,823			51,266			54,087
Balance in allowance for loan losses	$	1,705			1,863			34			350			3,952			690
Collectively evaluated for impairment:
Recorded investment	$	126,757			70,921			15,929			70,484			284,091			347,758
Balance in allowance for loan losses	$	4,436			1,000			168			1,905			7,509			7,334

~~(1)~~The ~~Loans~~following ~~with~~summarizes athe ~~carrying~~loan ~~value~~credit ofquality ~~$17,526 at September 30, 2010 were measured for impairment using Level 3 inputs and had a fair value~~ (in ~~excess~~thousands): ~~of carrying value.~~

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


	Commercial Real Estate								Residential Real Estate		Commercial				Installment
	Construction		Non- Residential		Land		Multi- Family		1-4 Family		Secured		Unsecured		Home Equity		Consumer		Total
*At March 31, 2011:*
*Credit Risk Profile by Internally Assigned Grade:*
Grade:
Pass	$	268		96,288		15,925		10,325		75,231		15,359		427		33,567		37,270		284,660
Special mention		—		9,438		1,314		1,940		—		144		—		—		15		12,851
Substandard		—		11,559		8,569		1,418		12,012		1,812		12		2,071		384		37,837
Doubtful		—		—		—		9		—		—		—		—		—		9
Loss		—		—		—		—		—		—		—		—		—		—

Total	$	268		117,285		25,808		13,692		87,243		17,315		439		35,638		37,669		335,357


*At December 31, 2010:*
*Credit Risk Profile by Internally Assigned Grade:*
Grade:
Pass		189		96,056		17,882		10,562		84,087		14,790		439		30,030		38,977		293,012
Special mention		—		9,369		1,314		1,940		9		139		12		480		17		13,280
Substandard		—		14,765		8,510		984		9,850		2,326		—		2,250		92		38,777
Doubtful		—		—		—		9		—		—		—		—		—		9
Loss		—		—		—		—		—		—		—		—		—		—

Total	$	189		120,190		27,706		13,495		93,946		17,255		451		32,760		39,086		345,078

	At September 30,
	2010		2009
Nonaccrual loans	$	29,911		29,262
Past due ninety days or more, still accruing		—		—
	$	29,911		29,262

(continued)

FIRST COMMUNITY BANK CORPORATION OF AMERICA AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Unaudited), Continued

43. ~~Loss~~Loans, ~~Per Share~~Continued. ~~Loss per share (“EPS”) of common stock has been computed on the basis of the~~ ~~weighted-average~~Internally ~~number~~assigned ofloan ~~shares~~grades ~~of common stock outstanding. Outstanding stock options and warrants~~ are ~~considered~~defined ~~dilutive~~as securities for purposes of calculating diluted EPS which is computed using the treasury stock method. The outstanding cumulative convertible perpetual preferred stock, Series B is considered dilutive using the converted method. For three and nine months ended September 30, 2010 and 2009, outstanding stock options warrants and preferred stock were not considered dilutive because of the Company’s loss applicable to common shareholders. The following tables present the calculations of loss per share (dollars in thousands, except per share amounts)follows:

	2010								2009
	Earnings(Loss)			Weighted-AverageShares		PerShareAmount			Earnings(Loss)			Weighted-AverageShares		PerShareAmount
Three Months Ended September 30:
Basic EPS-
Net loss available to common stockholders	$	(7,337	)		5,457,173	$	(1.34	)	$	(2,466	)		4,151,431	$	(0.59	)
Effect of dilutive securities-
Incremental shares from assumed conversion of options and warrants					—								—
Diluted EPS-
Net loss available to common stockholders and assumed conversions	$	(7,337	)		5,457,173	$	(1.34	)	$	(2,466	)		4,151,431	$	(0.59	)
Nine Months Ended September 30:
Basic EPS-
Net loss available to common stockholders	$	(18,953	)		5,400,664	$	(3.51	)	$	(2,962	)		4,152,012	$	(0.71	)
Effect of dilutive securities-
Incremental shares from assumed conversion of options and warrants					—								—
Diluted EPS-
Net loss available to common stockholders and assumed conversions	$	(18,953	)		5,400,664	$	(3.51	)	$	(2,962	)		4,152,012	$	(0.71	)

Pass – A Pass loan’s primary source of loan repayment is satisfactory, with secondary sources very likely to be realized if necessary.

Special Mention – A Special Mention loan has potential weaknesses that deserve management’s close attention. If left uncorrected, these potential weaknesses may result in the deterioration of the repayment prospects for the asset or the Company’s credit position at some future date. Special Mention loans are not adversely classified and do not expose the Company to sufficient risk to warrant adverse classification.

Substandard – A Substandard loan is inadequately protected by the current sound worth and paying capacity of the obligor or of the collateral pledged, if any. Loans so classified must have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt. They are characterized by the distinct possibility that the Company will sustain some loss if the deficiencies are not corrected.

Doubtful – A loan classified Doubtful has all the weaknesses inherent in one classified Substandard with the added characteristics that the weaknesses make collection or liquidation in full, on the basis of currently existing facts, conditions, and values, highly questionable and improbable.

Loss – A loan classified Loss is considered uncollectible and of such little value that continuance as a bankable asset is not warranted. This classification does not mean that the asset has absolutely no recovery or salvage value, but rather it is not practical or desirable to defer writing off this basically worthless asset even though partial recovery may be affected in the future.

The following summarizes the amount of impaired loans (in thousands):


	With No Related Allowance Recorded						With an Allowance Recorded						Total
	Recorded Investment		Unpaid Principal Balance		Related Allowance		Recorded Investment		Unpaid Principal Balance		Related Allowance		Recorded Investment		Unpaid Principal Balance		Related Allowance
*At March 31, 2011:*
Commercial real estate:
Nonresidential	$	12,752		13,615		—		6,254		6,368		312		19,006		19,983		312
Land		5,020		7,783		—		4,174		4,796		1,208		9,194		12,579		1,208
Multi-family		697		723		—		1,399		2,091		185		2,096		2,814		185

Residential real estate-
1-4 family		9,449		10,500		—		6,873		7,506		1,863		16,322		18,006		1,863

Commercial:
Secured		949		949		—		864		864		33		1,813		1,813		33
Unsecured		—		—		—		12		12		1		12		12		1

Installment:
Home Equity		1,183		1,183		—		1,253		1,253		302		2,436		2,436		302
Consumer		4		4		—		383		383		48		387		387		48


	$	30,054		34,757		—		21,212		23,273		3,952		51,266		58,030		3,952

(continued)

FIRST COMMUNITY BANK CORPORATION OF AMERICA AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Unaudited), Continued

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

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


	With No Related Allowance Recorded						With an Allowance Recorded						Total
	Recorded Investment		Unpaid Principal Balance		Related Allowance		Recorded Investment		Unpaid Principal Balance		Related Allowance		Recorded Investment		Unpaid Principal Balance		Related Allowance

*At December 31, 2010:*
Commercial real estate:
Nonresidential	$	14,214		15,479		—		7,649		8,342		538		21,863		23,821		538
Land		4,529		5,604		—		4,148		6,230		1,517		8,677		11,834		1,517
Multi-family		698		709		—		680		680		14		1,378		1,389		14

Residential real estate-
1-4 family		6,668		7,055		—		9,070		10,547		1,707		15,738		17,602		1,707

Commercial-
Secured		781		781		—		1,545		1,545		198		2,326		2,326		198

Consumer:
Home Equity		2,024		2,024		—		743		756		109		2,767		2,780		109
Installment		11		11		—		208		208		25		219		219		25


	$	28,925		31,663		—		24,043		28,308		4,108		52,968		59,971		4,108

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


	Average Recorded Investment		Interest Income Recognized		Interest Income Received
*Three Months Ended March 31, 2011:*
Commercial real estate:
Nonresidential	$	19,138		93		137
Land		9,382		24		32
Multi-family		1,188		6		6
Residential real estate-
1-4 family		15,343		68		83
Commercial:
Secured		1,843		—		2
Unsecured		12		—		—
Installment:
Home equity		2,426		9		15
Consumer		257		—		—


Total	$	49,589		200		275


Comparative totals for three months ended March 31, 2010	$	49,463		212		254

	Number ofOptions			Weighted-AverageExercisePrice		Weighted-AverageRemainingContractualTerm		AggregateIntrinsicValue
Outstanding at December 31, 2009		355,148		$	7.92
Options forfeited and expired		(153,591	)		5.99
Outstanding at September 30, 2010		201,557		$	9.40		3.33 years	$	—
Exercisable at September 30, 2010		195,457		$	9.29		2.95 years	$	—

At September 30, 2010, there was approximately $6,000 of total unrecognized compensation expense related to nonvested share-based compensation arrangements granted under the plans. The cost is expected to be recognized over a weighted-average period of seven months. The total fair value of shares vesting and recognized as compensation expense was approximately $19,000 and $30,000 for the nine months ended September 30, 2010 and 2009, respectively. There was no associated tax benefit recognized for both the nine months ended September 30, 2010 and 2009.

(continued)

FIRST COMMUNITY BANK CORPORATION OF AMERICA AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Unaudited), Continued

63. ~~Regulatory~~Loans, ~~Capital~~Continued. Impaired ~~The~~collateral-dependent ~~Bank~~loans iscarried ~~required~~at tofair ~~maintain~~value ~~certain~~when ~~minimum~~the ~~regulatory~~current ~~capital~~collateral ~~requirements~~value ~~to be~~is ~~considered~~lower ~~Well~~than ~~Capitalized.~~the Atcarrying ~~September 30,~~value ~~2010,~~of the ~~Bank~~loan. ~~was~~Those ~~considered~~impaired ~~Adequately~~collateral-dependent ~~Capitalized.~~loans ~~Regulatory~~which ~~capital~~are ~~ratios~~measured ~~were~~at fair value on a nonrecurring basis are as follows (in thousands):

	September 30,2010		December 31,2009		Required toBe WellCapitalized
	FairValue		Level 1		Level 2		Level 3		TotalLosses		LossesRecorded inOperationsfor the ThreeMonths EndedMarch 31, 2011
Total capital to risk weighted assets		9.49		11.24		10.00
At March 31, 2011:
Tier 1 capital to risk weighted assets		8.21		9.99		6.00
Commercial real estate:
Tier 1 capital to total assets		5.55		7.30		5.00
Nonresidential	$	8,392		—		—		8,392		1,289		116
Land		5,621		—		—		5,621		4,593		396
Multi-family		2,097		—		—		2,097		902		37
Residential real estate-
1-4 family		8,340		—		—		8,340		3,548		567
Commercial-
Secured		864		—		—		864		33		—
Unsecured		12		—		—		12		1		—
Installment:
Home equity		1,253		—		—		1,253		302		165
Consumer		383		—		—		383		48		—
	$	26,962		—		—		26,962		10,716		1,281

~~7. Foreclosed~~Loans ~~Real~~with ~~Estate.~~a ~~Expenses~~carrying ~~applicable~~value toof ~~foreclosed~~$24,304,000 ~~assets~~at ~~follow~~March 31, (2011, were measured for impairment using Level 3 inputs and had a fair value in ~~thousands):~~excess of carrying value.

	Nine Months EndedSeptember 30,
	FairValue			Level 1		Level 2		Level 3		TotalLosses		LossesRecorded inOperationsDuring theYear
	2010			2009
At December 31, 2010:
Net (gain) loss on sales of foreclosed assets	$	(46	)		42
Commercial real estate:
Provision for losses		—			—
Nonresidential	$	12,881			—		—		12,881		2,609		2,065
Operating expenses		206			238
Land		5,666			—		—		5,666		4,737		3,688
Total included in other noninterest expenses	$	160			280
Multi-family		1,378			—		—		1,378		63		57
Residential real estate-
1-4 family		12,398			—		—		12,398		3,727		2,935
Commercial-
Secured		1,545			—		—		1,545		198		198
Installment:
Home equity		743			—		—		743		122		122
Consumer		207			—		—		207		25		25
	$	34,818			—		—		34,818		11,481		9,090

~~Foreclosed~~Loans ~~assets~~with ~~are~~a ~~recorded~~carrying ~~at fair~~ value ~~less~~of ~~estimated~~$18,150,000 ~~selling~~at ~~costs. At September~~December 3031, 2010, ~~those foreclosed~~were ~~assets~~measured ~~which~~for ~~are~~impairment ~~measured~~using Level at3 ~~fair~~inputs ~~value~~and onhad a ~~nonrecurring~~fair ~~basis~~value ~~are~~in asexcess ~~follows~~of ~~(in~~carrying ~~thousands):~~value.

		Total				Level 1				Level 2				Level 3				TotalLosses				LossesRecorded inOperationsDuring2010
Foreclosed real estate		$	7,925				—				—				7,925				—				—

(continued)

FIRST COMMUNITY BANK CORPORATION OF AMERICA AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Unaudited), Continued

83. ~~Fair~~Loans, ~~Value of Financial Instruments~~Continued. Age ~~The~~analysis ~~estimated~~of ~~fair~~nonaccrual ~~values~~and ofpast ~~the~~due ~~Company’s~~loans ~~financial instruments~~ were as follows (in thousands):

	At September 30, 2010				At December 31, 2009
	Accruing Loans
	CarryingAmount		FairValue		CarryingAmount		FairValue
	30-59DaysPast Due		60-89DaysPast Due		GreaterThan 90DaysPast Due		TotalPastDue		Current		NonaccrualLoans		TotalLoans
Financial assets:
At March 31, 2011:
Cash and cash equivalents	$	61,674		61,674		50,697		50,697
Commercial real estate:
Other interest-bearing deposits with banks		1,765		1,765		491		491
Construction	$	—		—		—		—		268		—		268
Securities		56,024		56,024		58,433		58,404
Nonresidential		3,578		83		—		3,661		102,452		11,172		117,285
Loans		347,324		342,648		399,265		399,723
Land		—		—		294		294		18,582		6,932		25,808
Federal Home Loan Bank stock		2,526		2,526		2,549		2,549
Multi-family		—		306		—		306		11,959		1,427		13,692
Accrued interest receivable		1,512		1,512		2,016		2,016
Residential real estate-
Financial liabilities:
1-4 family		2,422		1,338		—		3,760		74,854		8,629		87,243
Deposits		426,192		425,856		458,517		452,280
Commercial:
Federal Home Loan Bank advances		35,875		36,911		36,000		37,828
Secured		1,057		—		—		1,057		14,446		1,812		17,315
Other borrowings		6,668		6,668		2,767		2,767
Unsecured		—		—		—		—		439		—		439
Off-balance sheet financial instruments		—		—		—		—
Installment:
Home equity		163		90		—		253		33,789		1,596		35,638
Consumer		802		22		—		824		36,461		384		37,669
Total	$	8,022		1,839		294		10,155		293,250		31,952		335,357
At December 31, 2010:
Commercial real estate:
Construction		—		—		—		—		189		—		189
Nonresidential		4,088		—		—		4,088		101,591		14,511		120,190
Land		1,977		599		—		2,576		18,487		6,643		27,706
Multi-family		423		—		—		423		12,365		707		13,495
Residential real estate-
1-4 family		1,316		2,583		—		3,899		82,938		7,109		93,946
Commercial:
Equipment		28		—		—		28		14,748		2,479		17,255
Unsecured		—		—		—		—		451		—		451
Consumer:
Home equity		145		400		—		545		29,405		2,810		32,760
Consumer		254		192		—		446		38,421		219		39,086
Total	$	8,231		3,774		—		12,005		298,595		34,478		345,078

9. Deferred Tax Asset. The Company established an allowance against its deferred tax asset of $9,535,000, as of September 30, 2010, as it became apparent that the extended deterioration of credit markets would result in the Company recording its third consecutive annual loss in 2010. The Company continues to feel that the base earnings are sufficient to recover all or part of this tax benefit when the credit conditions improve. Management believes the magnitude of these loan losses occurred because of the current economic downturn and the situation is unusual and infrequent and an aberration rather than a continuing condition.

(continued)

FIRST COMMUNITY BANK CORPORATION OF AMERICA AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Unaudited), Continued

104. ~~Regulatory~~Loss ~~Matters~~Per Share. AsLoss aper share ~~result of an examination by the Office of Thrift Supervision~~ (~~the~~ “~~OTS~~LPS”), ~~the Bank and the Holding Company entered into separate memorandums~~ of ~~understanding~~common ~~(the~~stock ~~“Memorandums”)~~has ~~with~~been ~~the~~computed ~~OTS~~on ~~in October 2009 with~~ the ~~intent~~basis ~~to protect the interests~~ of the ~~Company’s~~weighted-average ~~depositors,~~number ~~customers~~of ~~and shareholders.~~shares ~~The Memorandums provided, among other things, that the Boards~~ of ~~Directors~~common ~~will~~stock oroutstanding. ~~will~~Outstanding ~~cause~~stock ~~the~~options ~~Company to 1) Prepare~~ and ~~monitor~~warrants ~~comprehensive~~are ~~business~~considered ~~plans,~~anti 2)dilutive ~~Adopt~~securities ~~detailed~~for ~~capital~~purposes ~~plans,~~of ~~3) Not negotiate, purchase or commit to~~calculating ~~any~~diluted ~~land~~LPS. ~~acquisition,~~There ~~development~~were ~~or construction loans until the comprehensive business plan has been approved by the OTS~~5, ~~4) Take steps to identify~~492,006 ~~evaluate~~ and ~~reduce the level of problem assets,~~ 5~~) Limit asset growth until it obtains OTS approval of the Bank’s comprehensive business plan~~, ~~6) Not pay or declare dividends without OTS approval~~287,025 7)weighted-average ~~Not~~shares ~~continue~~outstanding tofor ~~roll~~the orthree ~~accept~~months ~~brokered~~ended ~~deposits without OTS approval and must submit plan to OTS to reduce brokered deposits~~March 31, ~~8) Prepare~~2011 and ~~adopt a written plan detailing the Company’s obligations with receipt of funds under Troubled Asset Relief Program~~2010, ~~and 9) Submit variance reports on the Company’s compliance with various plans required by the Memorandums~~respectively.

~~Management~~5. ~~plans~~Share-Based toCompensation. ~~vigorously~~The ~~seek~~Company ~~compliance~~currently ~~with~~has ~~the~~one ~~Memorandums.~~stock Atoption ~~this~~plan ~~time,~~for ~~the~~employees ~~financial impact, if any,~~ of ~~regulatory sanctions~~the ~~that~~Company. ~~may~~Under ~~result~~the ifplan, the ~~Company~~total ~~fails~~number toof ~~comply~~options ~~with~~which ~~the~~may ~~Memorandums~~be ~~requirements~~granted ~~described~~to ~~above~~purchase common stock is ~~not~~516,797 ~~known~~(amended). ~~The~~At ~~OTS~~March 31, ~~has~~2011, ~~provided~~313,873 aoptions ~~temporary~~have ~~extension~~been ofgranted, ~~the~~190,344 ~~Bank’s~~options ~~use~~have ofbeen ~~customer~~exercised ~~driven~~and ~~CDARs~~202,924 ~~deposits~~options ~~which~~remain ~~technically~~available ~~fall~~for grant under the ~~brokered~~employees’ ~~deposit classification~~plan. The ~~Bank~~employees’ ~~has~~options ~~received~~vest ~~approval~~over periods ofup ~~its plan that was submitted~~ to ~~the~~four ~~OTS~~years and ~~believes~~have itterms toup ~~be in substantial compliance with the memorandum of understanding except with regard~~ to ~~risk-based~~ten ~~capital~~years.

11. Equity Offering. Pursuant to a prospectus dated December 30, 2009, the Company offered to sell a maximum of 600,000 units at a price of $33.33 per unit. Each unit consisted of 4.165 shares of common stock, par value $.05 per share, and one share of 10% Cumulative Convertible Perpetual Preferred Stock, Series B, with an initial liquidation preference of $25.00. The Series B preferred stock has parity with the Series A ~~preferred~~summary ~~stock issued to the Treasury. Each~~ of the ~~shares~~activity ofin ~~Series B preferred stock is currently convertible into ten shares of common stock. At December 31, 2009,~~ the Company’s ~~had issued 189,018 shares of Series B preferred~~ stock ~~and~~option ~~787,261~~plans ~~shares of common stock, for net proceeds of $6,300,000. During 2010, an additional 518,481 shares of common stock and 124,479 shares of Series B~~is ~~preferred~~as ~~stock~~follows ~~were~~(dollars ~~issued,~~in ~~for net proceeds of $3~~thousands,~~354,000.~~ ~~The~~except ~~offering~~per ~~terminated~~share onamounts): ~~February 12, 2010.~~

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


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

Outstanding at December 31, 2010		172,157	$	8.31
Options forfeited and expired		48,628		9.18


Outstanding at March 31, 2011		123,529	$	7.98		3.32 years	$	—


Exercisable at March 31, 2011		120,529	$	7.93		3.22 years	$	—

~~The~~At ~~Office~~March 31, ~~of Thrift Supervision~~2011, ~~the~~there ~~Bank’s~~was ~~primary~~approximately ~~regulator~~$1,000 ~~under~~of ~~the~~total ~~Memorandum~~unrecognized ofcompensation ~~Understanding~~expense ~~(MOU)~~related ~~must~~to ~~approve~~nonvested ~~quarterly~~share-based ~~dividends~~compensation arrangements granted under the plans. IfThe wecost ~~are~~is ~~unable~~expected to ~~pay~~be ~~dividends~~recognized onover ~~the~~a ~~Convertible~~weighted-average ~~Preferred~~period ~~Series~~of Bthree months. The total fair value of shares ~~for~~vesting ~~four~~and ~~consecutive~~recognized ~~quarters~~as compensation expense was approximately $1,000 and $9,000 for the ~~shares~~three ~~will~~months ~~automatically~~ended ~~convert~~March 31, to2011 ~~ten~~and ~~shares~~2010, ofrespectively. ~~Common~~There ~~Stock~~was no associated tax benefit recognized for both the three months ended March 31, 2011 and 2010.

(continued)

FIRST COMMUNITY BANK CORPORATION OF AMERICA AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Unaudited), Continued

6. Regulatory Capital. The Bank is required to maintain certain minimum regulatory capital requirements to be considered Well Capitalized. At March 31, 2011, the Bank was considered Adequately Capitalized. Regulatory capital ratios were as follows:


	March 31,		December 31,		Required to Be Well
	2011		2010		Capitalized

Total capital to risk weighted assets		8.90		9.65		10.00
Tier 1 capital to risk weighted assets		7.63		8.37		6.00
Tier 1 capital to total assets		5.38		5.81		5.00

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


	Three Months Ended March 31,
	2011			2010

Net (gain) loss on sales of foreclosed assets	$	(88	)		36
Provision for losses		115			—
Operating expenses		98			10


Total included in other noninterest expenses	$	125			46

Foreclosed assets are recorded at fair value less estimated selling costs. Foreclosed assets which are measured at fair value on a nonrecurring basis are as follows (in thousands):


	Total		Level 1		Level 2		Level 3		Total Losses		Losses Recorded During 2011

*March 31, 2011-*
Foreclosed real estate, net	$	11,241		—		—		11,241		533		115


*December 31, 2010-*
Foreclosed real estate, net	$	11,385		—		—		11,385		418		418

(continued)

FIRST COMMUNITY BANK CORPORATION OF AMERICA AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Unaudited), Continued

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


	At March 31, 2011				At December 31, 2010
	Carrying		Fair		Carrying		Fair
	Amount		Value		Amount		Value
Financial assets:
Cash and cash equivalents	$	41,234		41,234		48,315		48,315
Other interest-bearing deposits with banks		1,765		1,765		1,765		1,765
Securities		44,170		44,170		45,761		45,761
Loans		323,363		316,964		332,779		326,723
Federal Home Loan Bank stock		3,606		3,606		3,606		3,606
Accrued interest receivable		1,282		1,282		1,378		1,378

Financial liabilities:
Deposits		361,175		353,445		374,654		368,097
Federal Home Loan Bank advances		60,000		59,876		60,000		60,036
Other borrowings		505		505		1,764		1,764
Off-balance sheet financial instruments		—		—		—		—

9. Deferred Tax Asset. The Company established an allowance against its deferred tax asset as of June 30, 2010, as it became apparent that the extended deterioration of credit markets would result in the Company recording its fourth consecutive annual loss in 2010.

(continued)

FIRST COMMUNITY BANK CORPORATION OF AMERICA AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Unaudited), Continued

10. Acquisitions and Winding Up of the Company

Acquisition Agreement with CBM Florida Holding Company and Community Bank & Company

As previously announced, on February 10, 2011, First Community and First Community Bank entered into an Acquisition Agreement (referred to in the Company’s December 31, 2010 Form 10-K as the “Acquisition Agreement”) with CBM Florida Holding Company (“CBM Holdings”) and Community Bank & Company (formerly, Community Bank of Manatee), under which First Community Bank will be merged with and into Community Bank & Company, and First Community will transfer to CBM Holdings all of the shares of First Community Lender (these two transactions are referred to in the Form 10-K as the “Disposition”). Under the terms of the Acquisition Agreement, First Community will receive $10 million in cash at the closing of the Disposition.

Our Board of Directors, in connection with entering into the Acquisition Agreement, approved a Plan of Complete Liquidation and Dissolution for First Community (the “Plan”). The Plan was approved by the holders of a majority of the outstanding shares of common stock of First Community at the special shareholders meeting held on April 11, 2011. Following the consummation of the Disposition, First Community will be required to wind up of all of its business and distribute thereafter to its common stockholders all of its remaining cash. It is presently anticipated that, if the Disposition is consummated in May or June 2011, such distributions will take place towards the end of 2011.

Agreement with the U.S. Department of the Treasury Regarding Repurchase of TARP Stock

First Community currently has outstanding 10,685 shares of Fixed-Rate Cumulative Perpetual Preferred Stock, Series A (the “Series A Stock”) that were issued to the U.S. Department of the Treasury under the TARP program on December 23, 2008. The liquidation value of the Series A Stock, including accrued but unpaid dividends, is approximately $11.15 million. While First Community was negotiating the Acquisition Agreement, it began negotiating with the Treasury to repurchase the Series A Stock at a discount. As previously announced, on March 11, 2011, First Community entered into a definitive Securities Purchase Agreement with the U.S. Department of the Treasury relating to the repurchase by First Community of the Series A Stock, as well as a Warrant to purchase 228,312 shares of First Community common stock (the “Warrant”), which was issued by First Community to the Treasury in connection with the issuance of the Series A Stock.

(continued)

FIRST COMMUNITY BANK CORPORATION OF AMERICA AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Unaudited), Continued

10. Acquisitions and Winding Up of the Company, Continued

Subject to, and on the terms and conditions of, the Treasury agreement, effective at the closing of the Disposition, First Community will purchase from the Treasury all of the Series A Stock and the Warrant. The aggregate purchase price for the Series A Stock and the Warrant will be an amount in cash equal to (i) $7,200,000.00 (or 72% of the proceeds to be received from Community Bank & Company upon the closing of the Disposition) plus (ii) seventy-two percent (72%) of all cash assets of First Community at the closing of the Disposition after giving effect to (x) the payment by First Community of any expenses relating to the Disposition (the “Disposition Expenses”), (y) the payment of its debts and liabilities (the “Debt and Liabilities Payment”) and (z) a future distribution to (1) holders of First Community common stock outstanding as of the date of the Agreement plus (2) holders of the 3,132,970 shares of common stock to be issued upon the conversion of First Community’s 10% Cumulative Convertible Perpetual Preferred Stock, Series B, of up to Thirty-Five Cents ($0.35) per share of common stock (the “Distribution”), provided that the sum of the Disposition Expenses, the Debt and Liabilities Payment and the Distribution shall not exceed Three Million Five Hundred Twenty Seven Thousand Two Hundred Fifty Dollars ($3,527,250) in the aggregate.

11. Regulatory Matters

Cease and Desist Orders of the OTS

As previously announced, on February 24, 2011, First Community and First Community Bank each entered into a Stipulation and Consent to the Issuance of Order to Cease and Desist with the Office of Thrift Supervision (“OTS”), and the OTS issued Orders to Cease and Desist to each of First Community and First Community Bank.

Under the terms of the OTS Orders, First Community Bank and First Community are required to, among other things:

within sixty (60) days, submit a written plan for First Community Bank to achieve by June 30, 2011, and thereafter maintain, a Tier 1 Capital Ratio equal to or greater than eight percent (8%) and a Total Risk-Based Capital Ratio equal to or greater than thirteen percent (13%) (the “Bank Capital Plan”);

within sixty (60) days, submit for review and non-objection a written plan for First Community to achieve by June 30, 2011, and thereafter maintain, the capital requirements imposed by the OTS on First Community Bank;

within sixty (60) days, submit for review and non-objection a written business plan for First Community Bank for 2011 and 2012 that addresses all corrective actions in the 2010 OTS examination relating to First Community Bank’s business operations, including First Community Bank’s plans to improve its core earnings and achieve profitability on a consistent basis throughout the term of the Business Plan (the “Bank Business Plan”);

(continued)

FIRST COMMUNITY BANK CORPORATION OF AMERICA AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Unaudited), Continued

11. Regulatory Matters, Continued

within sixty (60) days, submit for review and non-objection a written business plan for First Community for 2011 and 2012 that addresses, among other things, the capital needs and requirements of First Community Bank, the capital necessary to support operations and debt service at First Community, and plans to improve First Community’s core earnings, reduce expenses, and achieve profitability on a consistent basis throughout the term of the Business Plan;

within sixty (60) days, revise First Community Bank’s policies, procedures and methodology relating to the timely establishment and maintenance of an adequate allowance for loan and lease losses (ALLL) level (ALLL Policy) to address all corrective actions set forth in the 2010 OTS Examination relating to ALLL;

within sixty (60) days, submit an updated comprehensive written plan with specific strategies, targets and timeframes to reduce First Community Bank’s level of problem assets;

within sixty (60) days, develop, implement and adhere to a formal written Risk Management Function and Plan for First Community Bank that addresses all corrective actions discussed in the 2010 OTS Examination related to risk management at First Community Bank;

within sixty (60) days, develop, implement and adhere to a formal written Enterprise Risk Management Function and Plan for First Community that addresses all corrective actions discussed in the 2010 OTS Examination related to enterprise risk management;

within sixty (60) days, revise First Community Bank’s liquidity and funds management policies and procedures to address all corrective actions set forth in the 2010 OTS Examination relating to liquidity and funds management;

prepare and provide to the OTS various reports, including progress reports; and

ensure First Community Bank’s compliance with applicable laws, rules, regulations and agency guidelines, including the terms of the Orders.

(continued)

FIRST COMMUNITY BANK CORPORATION OF AMERICA AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Unaudited), Continued

11. Regulatory Matters, Continued

Under the terms of the OTS Orders, First Community Bank and First Community may not:

increase First Community Bank’s total assets during any quarter in excess of an amount equal to net interest credited on deposit liabilities during the prior quarter without the prior written notice of non-objection by the OTS;

incur, issue, renew, or rollover any debt, increase any current lines of credit, or otherwise incur any additional debt without receiving the prior written non-objection of the OTS;

originate or purchase any new nonresidential real estate loans until the OTS approves First Community Bank Capital Plan notifies First Community Bank that it does not object to First Community Bank Business Plan;

appoint any new director or senior executive officer or change the responsibilities of any current senior executive officers without prior notice to the OTS;

enter into, renew, extend or revise any compensation or benefit agreements for directors or senior executive officers without prior notice to the OTS;

pay dividends or make any capital distributions without the prior approval of the OTS;

make any golden parachute payments or prohibited indemnification payments unless they comply with applicable regulations; or

make any incentive compensation payments to any senior executive officers who are directors of First Community Bank without prior approval of the OTS.

All requirements of the OTS orders were met by First Community Bank and First Community as of April 25, 2011. The OTS orders will remain in effect until modified or terminated by the OTS.

All customer deposits remain fully insured to the fullest extent permitted by the FDIC. The Bank expects to continue to serve its customers in all areas including making loans (other than nonresidential real estate loans), establishing lines of credit, accepting deposits and processing banking transactions. Neither First Community nor First Community Bank admitted any wrongdoing in entering into the respective Stipulation and Consent to the Issuance of a Cease and Desist Order. The OTS did not impose or recommend any monetary penalties.

(continued)

FIRST COMMUNITY BANK CORPORATION OF AMERICA AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Unaudited), Continued

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

The Office of Thrift Supervision, the Bank’s primary regulator, under the Cease and Desist Order, must approve quarterly dividends.

13. Conversion of Series B Preferred Stock into Common Stock. On March 31, 2011, each outstanding share of 10% Cumulative Convertible Perpetual Preferred Stock, Series B (the “Series B Stock”), of First Community was mandatorily converted into ten (10) shares of common stock, pursuant to the terms of Section 4 of the Company’s Amended and Restated Articles of Incorporation designating and governing the Series B Stock (which Amended and Restated Articles were filed with the Secretary of State of Florida on December 39, 2009), as a result of First Community’s inability to declare and pay dividends on the Series B Stock for the four (4) consecutive quarters ending March 31, 2011. Following the conversion, there are 8,592,143 shares outstanding of First Community’s common stock.

FIRST COMMUNITY BANK CORPORATION OF AMERICA AND SUBSIDIARIES

Review by Independent Registered Public Accounting Firm

Hacker, Johnson & Smith PA, the Company’s independent registered public accounting firm, have made a limited review of the financial data as of ~~September~~March 3031, ~~2010~~2011, and for the three- ~~and nine-~~month periods ended ~~September~~March 3031, ~~2010~~2011 and ~~2009~~2010 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.

1825

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 ~~September~~March 3031, ~~2010,~~2011 ~~the related condensed consolidated statements of operations for the three-~~ and ~~nine-month periods ended September 30, 2010 and 2009 and~~ the related condensed consolidated statements of operations, changes in stockholders’ equity and cash flows for the ~~nine~~three-month periods ended ~~September~~March 3031, ~~2010~~2011 and ~~2009~~2010. These interim financial statements are the responsibility of the Company’s management.

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

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

We have previously audited, in accordance with the standards of the Public Company Accounting Oversight Board, the consolidated balance sheet of the Company as of December 31, ~~2009~~2010, and the related consolidated statements of operations, changes in stockholders’ equity and cash ~~flow~~flows for the year then ended (not presented herein); and in our report dated March 3130, ~~2010~~ 2011, we expressed ana ~~unqualified~~qualified opinion on those consolidated financial statements. Those consolidated financial statements had been prepared assuming that the Company will continue as a going concern. As discussed in Note 1 to the consolidated financial statements, the Company’s recent and continuing increases in nonperforming assets, increases in provisions for loan losses, declining net interest margin, continuing high levels of noninterest expenses related to the credit problems and eroding regulatory capital raise substantial doubt about the Company’s ability to continue as a going concern. Management’s plans are described in Note 1. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. In our opinion, the information set forth in the accompanying condensed consolidated balance sheet as of December 31, ~~2009~~2010, 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

~~November~~May 1512, ~~2010~~2011

1926

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 ~~nine~~three months ended ~~September~~March 3031, ~~2010~~2011 and ~~2009~~2010.

Liquidity and Capital Resources

The Company’s primary source of cash during the ~~nine~~three months ended ~~September~~March 3031, ~~2010,~~2011 was ~~an increase in~~ core deposits ~~of $26 million~~. The Bank considers savings, NOW, money-market, and noninterest-bearing demand deposits as core deposits. ~~This~~There ~~inflow~~ was ~~offset by~~ a $5813 million decrease in ~~time~~ deposits resulting from athe implementation of the Dodd-Frank Act and the Bank’s strategy of lowering levels of brokered and high costs certificates of deposit. The ~~Company netted $3.3 million in preferred capital and $.1 million in common capital as it completed its stock offering. The~~ Bank maintained a $5624.6 million balance deposited at the Federal Reserve Bank on ~~September~~ March 3031, ~~2010~~2011.

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.

2027

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 ~~September~~March 3031, ~~2010~~2011, follows (in thousands):

	ContractAmount
Commitments to extend credit	$	~~1,661~~823
Unused lines of credit	$	2719,~~763~~675
Standby letters of credit	$	~~818~~548

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.

2128

FIRST COMMUNITY BANK CORPORATION OF AMERICA AND SUBSIDIARIES

Selected Financial Information

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

	Nine MonthsEndedSeptember 30,2010			Year EndedDecember 31,2009			Nine MonthsEndedSeptember 30,2009
	Three MonthsEndedMarch 31,2011			Year EndedDecember 31,2010			Three MonthsEndedMarch 31,2010
Average equity as a percentage of average assets		75.8885	%		87.0843	%		8.1155	%
Equity to total assets at end of period		65.0166	%		86.3011	%		78.4660	%
Return on average assets (1)		(42.6198	)%		(3.9062	)%		(1.7462	)%
Return on common average equity (1)		(~~103~~124.7002	)%		(1492.7020	)%		(2830.3547	)%
Noninterest expenses to average assets		23.4662	%		2.4665	%		2.5848	%
Nonperforming assets as a percentage of total assets at end of period		79.4855	%		59.4774	%		56.6211	%

(1) Annualized for the ~~nine~~three months ended ~~September~~March 3031.

Local Economic Conditions

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

2229

FIRST COMMUNITY BANK CORPORATION OF AMERICA AND SUBSIDIARIES

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

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

Determining Loan Losses

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

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

2330

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):

	$		%
June 30, 2009:
Residential mortgages	$	7,961		1.88
Commercial real estate		15,081		3.56
Land and lots		8,319		1.96
Commercial loans		407		0.10
Installments		150		0.04
Total	$	31,918
September 30, 2009:
Residential mortgages	$	15,654		3.73
Commercial real estate		15,452		3.69
Land and lots		6,295		1.50
Commercial loans		698		0.17
Installments		412		0.10
Total	$	38,511
December 31, 2009:
Residential mortgages	$	12,138		2.97
Commercial real estate		17,158		4.20
Land and lots		7,989		1.96
Commercial loans		740		0.18
Installments		555		0.14
Total	$	38,580
March 31, 2010:
Residential mortgages	$	13,966		3.48
Commercial real estate		21,459		5.34
Land and lots		8,455		2.10
Commercial loans		1,326		0.33
Installments		605		0.15
Total	$	45,811
June 30, 2010:
Residential mortgages	$	13,719		3.71
Commercial real estate		17,621		4.76
Land and lots		9,024		2.44
Commercial loans		796		0.22
Installments		212		0.06
Total	$	41,372
September 30, 2010:
Residential mortgages	$	12,187		3.44
Commercial real estate		16,651		4.70
Land and lots		7,594		2.14
Commercial loans		1,702		0.48
Installments		433		0.12
Total	$	38,567
December 31, 2010:
Residential mortgages	$	13,118		3.79
Commercial real estate		16,351		4.73
Land and lots		8,438		2.44
Commercial loans		2,466		0.71
Installments		659		0.19
Total	$	41,032
March 31, 2011:
Residential mortgages	$	12,111		3.61
Commercial real estate		15,451		4.61
Land and lots		6,659		1.99
Commercial loans		2,675		0.80
Installments		2,601		0.78
Total	$	39,497

2431

FIRST COMMUNITY BANK CORPORATION OF AMERICA AND SUBSIDIARIES

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

	Nonaccrual				REO
	#		$		#		$
June 30, 2009:
Residential mortgages		26		5,378		3		1,481
Commercial real estate		12		10,935		1		391
Land and lots		33		7,663		14		822
Commercial loans		2		700		—		—
Installments		2		12		3		194
Total		75		24,688		21		2,888
September 30, 2009:
Residential mortgages		32		7,724		2		1,283
Commercial real estate		17		14,193		—		—
Land and lots		29		6,926		19		877
Commercial loans		3		408		—		—
Installments		2		11		2		80
Total		83		29,262		23		2,240
December 31, 2009:
Residential mortgages		35		8,863		8		1,434
Commercial real estate		18		12,610		2		447
Land and lots		29		4,899		11		931
Commercial loans		5		623		—		—
Installments		3		109		2		80
Total		90		27,104		23		2,892
March 31, 2010:
Residential mortgages		42		9,208		7		875
Commercial real estate		20		13,599		3		535
Land and lots		29		7,653		10		942
Commercial loans		5		584		—		—
Installments		5		128		2		74
Total		101		31,172		22		2,426
June 30, 2010:
Residential mortgages		48		10,528		10		1,356
Commercial real estate		19		11,283		10		4,619
Land and lots		26		5,226		14		1,610
Commercial loans		5		495		—		—
Installments		5		112		3		105
Total		103		27,644		37		7,690
September 30, 2010:
Residential mortgages		44		10,857		19		1,749
Commercial real estate		20		11,846		9		4,374
Land and lots		24		6,250		20		1,710
Commercial loans		8		814		—		—
Installments		4		144		2		92
Total		100		29,911		50		7,925
December 31, 2010:
Residential mortgages		44		9,919		24		3,793
Commercial real estate		29		15,218		13		5,140
Land and lots		26		6,643		23		2,282
Commercial loans		9		2,479		—		—
Installments		4		219		4		170
Total		112		34,478		64		11,385
March 31, 2011:
Residential mortgages		40		8,629		21		3,640
Commercial real estate		27		12,599		14		5,322
Land and lots		28		6,932		23		2,051
Commercial loans		6		1,812		—		—
Installments		15		1,980		5		228
Total		116		31,952		63		11,241

2532

FIRST COMMUNITY BANK CORPORATION OF AMERICA AND SUBSIDIARIES

The following chart illustrates the combination of allowance and charge-off compared to related loans at ~~September~~March 3031, ~~2010~~2011 and for the ~~nine~~three months then ended (in thousands):

	NonimpairedLoans			ImpairedLoans			Total
Allowance for loan losses:
Beginning balance	$	7,~~283~~609			~~547~~4,108			711,~~830~~717
Provision		91,~~402~~250			61,~~747~~810			163,~~149~~060
Charge-offs		(41,~~925~~465	)		(51,~~252~~966	)		(103,~~177~~431	)
Recoveries		~~240~~115			—			~~240~~115
Ending balance	$	127,~~000~~509			23,~~042~~952			1411,~~042~~461
Loss allowance		127,~~000~~509			23,~~042~~952			1411,~~042~~461
Partial charge-offs of loans currently in portfolio		—			76,~~313~~764			76,~~313~~764
Total	$	127,~~000~~509			910,~~355~~716			2118,~~355~~225
Total loans	$	~~301~~284,~~741~~091			5951,~~265~~266			~~361~~335,~~006~~357
Allowance for loss and charge-offs as a percentage of total loans at September 30, 2010		3.98	%		15.79	%		5.92	%
Allowance for loss and charge-offs as a percentage of total loans at March 31, 2011		2.64	%		20.90	%		5.43	%
Allowance for loss and charge-offs as a percentage of total loans at December 31, 2009		2.07	%		17.03	%		3.61	%
Allowance for loss and charge-offs as a percentage of total loans at December 31, 2010		2.60	%		20.98	%		5.43	%

2633

FIRST COMMUNITY BANK CORPORATION OF AMERICA AND SUBSIDIARIES

	At September 30,2010
	At March 31,
	2011
Collateral dependent impaired loans with partial charge-offs or specific reserves:
Fair value of collateral	$	1426,~~852~~226
Estimated selling costs		(13,~~664~~216	)
Fair value less selling costs		1323,~~188~~010
Gross impaired loans prior to charge-offs		2233,~~348~~726
Partial charge-offs of impaired loans		(76,~~313~~764	)
Loss allowance		(13,~~847~~952	)
Book value of impaired loans with partial charge-offs		1323,~~188~~010
Fair value less selling costs in excess of book value	$	—
Collateral dependent impaired loans without partial charge-offs or specific reserves:
Fair value of collateral		3032,~~547~~486
Estimated selling costs		(3,~~055~~249	)
Fair value less selling costs		2729,~~492~~237
Book value of impaired loans		17,526
Impaired loans		24,288
Fair value less selling costs in excess of book value	$	9,966
Loss allowance		—
Troubled debt restructuring:
Book value of impaired loans		24,288
Carrying value	$	18,795
Fair value less selling costs in excess of book value	$	4,949

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

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

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

2734

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 September 30,
	Three Months Ended March 31,
	2010							2009
	2011							2010
	AverageBalance		InterestandDividends		AverageYield/Rate			AverageBalance		InterestandDividends		AverageYield/Rate
	InterestAverageBalance		AverageandDividends		Yield/Rate			InterestAverageBalance		AverageandDividends		Yield/Rate
	(Dollars in thousands)
Interest-earning assets:
Loans (1)	$	~~368~~328,~~326~~744		4,~~843~~285		5.2621	%	$	~~414~~397,~~331~~711		5,~~796~~410		5.6044	%
Securities		5644,~~508~~826		~~387~~348		23.7411			5762,~~325~~265		~~566~~557		3.9558
Other interest-earning assets (2)		5539,~~711~~199		4633		0.3334			5946,~~640~~006		3831		0.2527
Total interest-earning assets		~~480~~412,~~545~~769		54,~~276~~666		4.3952			~~531~~505,~~296~~982		65,~~400~~998		4.8274
Noninterest-earning assets		4245,~~410~~692							3147,~~150~~039
Total assets	$	~~522~~458,~~955~~461						$	~~562~~553,~~446~~021
Interest-bearing liabilities:
Savings, NOW, money-market deposit accounts		~~229~~202,~~593~~380		~~586~~395		10.0278			~~183~~217,~~622~~807		~~757~~736		1.6535
Time deposits		~~173~~126,~~794~~857		~~951~~590		21.1986			~~252~~208,~~161~~748		1,~~734~~266		2.7543
Total interest-bearing deposits		~~403~~329,~~387~~237		~~1,537~~985		1.5220			~~435~~426,~~783~~555		2,~~491~~002		21.2988
Other borrowings (3)		40,256		347		3.45			39,613		349		3.52
Other interest-bearing liabilities (3)		61,027		288		1.89			40,066		342		3.41
Total interest-bearing liabilities		~~443~~390,~~643~~264		1,~~884~~273		1.7030			~~475~~466,~~396~~621		2,~~840~~344		2.3901
Noninterest-bearing liabilities		4041,~~551~~379							4439,~~334~~130
Stockholders’ equity		38,761							42,716
Stockholders’ common equity		26,818							47,270
Total liabilities and stockholders’ equity	$	~~522~~458,~~955~~461						$	~~562~~553,~~446~~021
Net interest income			$	3,~~392~~393						$	3,~~560~~654
Interest-rate spread (4)						23.6922	%						2.4373	%
Net interest margin (5)						23.8229	%						2.6889	%
Ratio of average interest-earning assets to average interest-bearing liabilities		1.0806							1.1208

(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.

2835

FIRST COMMUNITY BANK CORPORATION OF AMERICA AND SUBSIDIARIES

~~The~~Comparison ~~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~~Three-~~earning~~Month ~~assets~~Periods ~~and~~Ended ~~the resultant average yields; (ii)~~March ~~the total dollar amount of interest expense on~~31, ~~interest-bearing~~2011 ~~liabilities~~ and ~~the~~2010 ~~resultant average cost; (iii) net interest income; (iv) interest-rate spread; and (v) net interest margin.~~

	Nine Months Ended September 30,
	2010							2009
	AverageBalance		InterestandDividends		AverageYield/Rate			AverageBalance		InterestandDividends		AverageYield/Rate
	(Dollars in thousands)
Interest-earning assets:
Loans (1)	$	379,023		15,414		5.42	%	$	413,831		17,779		5.73	%
Securities		57,140		1,367		3.19			50,970		1,596		4.18
Other interest-earning assets (2)		53,128		114		0.29			38,454		60		0.21
Total interest-earning assets		489,291		16,895		4.60			503,255		19,435		5.15
Noninterest-earning assets		43,097							39,503
Total assets	$	532,388						$	542,758
Interest-bearing liabilities:
Savings, NOW, money-market deposit accounts		227,087		1,981		1.16			161,066		2,048		1.70
Time deposits		183,449		3,280		2.38			253,768		5,652		2.97
Total interest-bearing deposits		410,536		5,261		1.71			414,834		7,700		2.47
Other borrowings (3)		40,244		1,035		3.43			41,852		1,065		3.39
Total interest-bearing liabilities		450,780		6,296		1.86			456,686		8,765		2.56
Noninterest-bearing liabilities		39,630							42,028
Stockholders’ equity		41,978							44,044
Total liabilities and stockholders’ equity	$	532,388						$	542,758
Net interest income			$	10,599						$	10,670
Interest-rate spread (4)						2.74	%						2.59	%
Net interest margin (5)						2.89	%						2.83	%
Ratio of average interest-earning assets to average interest-bearing liabilities		1.09							1.10

General. First Community Bank Corporation of America recorded a net loss for the first quarter ended March 31, 2011 of $3.4 million compared to a net loss of $1.9 million for the same period in 2010. The increase in losses was due to a decrease in net interest income to increased expenses related to problem assets.

The company recorded a net loss available to common stockholders, after preferred stock dividends requirements and amortization of preferred discount, for the three-months ended March 31, 2011 of $3.5 million or $(10.64) ~~Includes~~per ~~nonperforming~~basic ~~loans~~share compared to a net loss of $2.2 million or $(0.42) per basic share for the three-months ended march 31, 2010.

~~(2)~~The ~~Includes~~first ~~Federal~~quarter ~~Home~~2011 ~~Loan~~reflected ~~Bank~~a ~~stock~~$984,000 ~~and~~increase ~~interest~~in other non-~~bearing~~interest ~~deposits~~expenses ~~with~~related ~~banks~~to problem assets.

(Net Interest Income. Interest income decreased to $4.7 million during the three-months ended March 31, 2011 compared to $6.0 million during the three-months ended March 31, 2010. Interest on loans for the three-months ended March 31, 2011 decreased to $4.3) ~~Includes~~million ~~Federal~~from ~~Home~~$5.4 ~~Loan~~million ~~Bank~~for ~~advances~~the ~~and~~three-months ~~other~~ended ~~borrowings~~March 31, 2010. The decrease in interest income on loans was attributable to a decline in the average balance on loans to $329 million for the three-months ended March 31, 2011 from $398 million for the three-months ended March 31, 2010 combined with a decrease in the rate earned on the loan portfolio. Interest on securities decreased to $348,000 for the three-months ended March 31, 2011 from $557,000 for the three-months ended March 31, 2010. The decrease in interest income on securities was due to a decrease in the average balance to $44.8 million for the three-months ended March 31, 2011 from $62.3 for the three-months ended March 31, 2010 along with a decrease in the rate earned on the portfolio.

~~(4)~~ Interest expense on interest-bearing deposit accounts decreased to $1.0 million for the three-months ended March 31, 2011, compared to $2.0 million for the three-months ended March 31, 2010. The decrease was due to a decrease in the rate ~~spread~~paid ~~represents~~to 1.20% for the ~~difference~~three-months ~~between~~ended March 31, 2011, from 1.88% for the three-months ended March 31, 2010 along with a decrease in the average ~~yield~~deposit balance. Interest expense on ~~interest~~other borrowings decreased to $288,000 for the three-~~earning~~months ~~assets~~ended ~~and~~March 31, 2011, compared to $342,000 for the ~~average~~three-months ~~rate~~ended ofMarch 31, 2010. The decrease in interest expenses on other borrowings was due to a decrease in the average yield to 1.89% for the three-~~bearing~~months ~~liabilities~~ended March 31, 2011 from 3.41% for the three-months ended March 31, 2010.

(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 September 30, 2010 and 2009

General. First Community Bank Corporation of America recorded a net loss for the third quarter ended September 30, 2010 of $7,202,000 compared to net loss of $2,334,000 for the same period in 2009. The decline in earnings was due to increased credit losses.

The Company recorded a net loss available to common stockholders, after preferred stock dividends requirements and amortization of preferred discount, for the three-months ended September 30, 2010 of $7,337,000 or $(1.34) per basic share and diluted share compared to $2,466,000 or $(.59) per basic share and diluted share for the three-months ended September 30, 2009.

The third quarter 2010 results included an $8,359,000 charge to provision for loan losses compared to $4,670,000 for the period in 2009. The continuing high loan loss provision was due to a high level of delinquencies resulting from a continued weakness in the local economy.

Net Interest Income. Interest income decreased to $5.3 million during the three-months ended September 30, 2010, from $6.4 million in 2009. Interest on loans for the three-months ended September 30, 2010 decreased to $4.8 million from $5.8 million for the three-months ended September 30, 2009. This decrease was also due to a decrease in the average yield earned to 5.26% for the three-months ended September 30, 2010 from 5.60% for the three-months ended September 30, 2009. Interest on securities decreased to $387,000 during the three-months ended September 30, 2010 from $566,000 for the three-months ended September 30, 2009. The decrease in interest income on securities was due to a decrease in the average yield of securities from 3.95% in 2009 to 2.74% in 2010.

Interest expense on interest-bearing deposit accounts decreased to $1.5 million during the three-months ended September 30, 2010, compared to $2.5 million during the three-months ended September 30, 2009. The decrease was due to a decrease in the rate paid to 1.52% during the three-months ended September 30, 2010 from 2.29% during the three-months ended September 30, 2009. Interest expense on other borrowings decreased to $347,000 during the three-months ended September 30, 2010, compared to $349,000 during the three-months ended September 30, 2009. The decrease was due to a decrease in the average yield from 3.52% in 2009 to 3.45% in 2010.

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

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

~~Larger~~36 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. Any specific reserves 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. 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 Three-Month Periods Ended ~~September~~March 3031, 2011 ~~2010~~ and ~~2009~~2010, Continued

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

The provision for loan losses was $8,359,000 for the three-months ended September 30, 2010 compared to $4,670,000 for the three-months ended September 30, 2009. On September 30, 2010, an additional $6.7 million was added to the provision due to the augmented level of nonperforming loans as a result of deteriorating economic conditions; primarily declining home values and higher unemployment rates in the four markets that the Company serves.

The allowance for loan losses is $14,042,000 at September 30, 2010. While management believes that its allowance for loan losses is adequate as of September 30, 2010, future adjustments may be necessary as economic conditions dictate.

Noninterest Income. Noninterest income increased to $870,000 in 2010 from $757,000 for the three-months ended September 30, 2009. The increase was primarily due to $479,000 in security gains recorded during the third quarter of 2010.

Noninterest Expense. Total noninterest expenses decreased to $3.1 million for the three-months ended September 30, 2010 from $3.5 million for the comparable period ended September 30, 2009, resulting from a $198,000 decrease in employee compensation and benefit.

Income Taxes (Benefit). Income taxes benefit for the three-months ended September 30, 2010 was $0 compared to $(1,477,000) for the period ended September 30, 2009.

FIRST COMMUNITY BANK CORPORATION OF AMERICA AND SUBSIDIARIES

Comparison of the Nine-Month Periods Ended September 30, 2010 and 2009

General. First Community Bank Corporation of America recorded a net loss for the nine-months ended September 30, 2010 of $18,351,000 compared to a net loss of $2,546,000 for the same period in 2009. The increase in losses was due to increased credit losses.

The Company recorded a net loss available to common stockholders, after preferred stock dividends requirements and amortization of preferred discount, for the nine-months ended September 30, 2010 of $18,953,000 or $(3.51) per basic share and diluted share compared to $2,962,000 or $(.71) per basic share and diluted share for the nine-months ended September 30, 2009.

The first nine months of 2010 included a $16,149,000 charge to provision for loan losses compared to $6,702,000 in 2009. The continuing high loan loss provision was due to a high level of delinquencies resulting from a continued weakness in the local economy.

Net Interest Income. Interest income decreased to $16.9 million during the nine-months ended September 30, 2010, from $19.4 million in 2009. Interest on loans for the nine-months ended September 30, 2010 decreased to $15.4 million from $17.8 million for the nine-months ended September 30, 2009. The decrease was also due to a decrease in the average yield earned on loans declined to 5.42% from 5.73% for the same period in 2009. Interest on securities decreased to $1.4 million during the nine-months ended September 30, 2010 from $1.6 million for the nine-months ended September 30, 2009. The decrease in interest income on securities was due to a decrease in the average yield on securities from 4.18% in 2009 to 3.19% in 2010.

Interest expense on interest-bearing deposit accounts decreased to $5.3 million during the nine-months ended September 30, 2010, compared to $7.7 million during the nine-months ended September 30, 2009. The decrease was due to a decrease in the rate paid to 1.71% during the nine-months ended September 30, 2010 from 2.47% during the nine-months ended September 30, 2009. Interest expense on other borrowings decreased to $1.0 million during the nine-months ended September 30, 2010, compared to $1.1 million during the nine-months ended September 30, 2009. The decrease was due to a decrease in the average balance of other borrowings to $40.2 million in 2010 from $41.8 million in 2009.

Provision for Loan Losses. Provisions for loan losses are based on our review of the historical loan loss experience and such factors which, in management’s judgment, deserve consideration under existing economic conditions in estimating probable credit losses. The allowance is based on ongoing assessments of the estimated losses 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. Any specific reserves 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. Historical loss rates are applied to other commercial loans not subject to specific allocations.

32Homogenous 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.

FIRST COMMUNITY BANK CORPORATION OF AMERICA AND SUBSIDIARIES

Comparison of the Nine-Month Periods Ended September 30, 2010 and 2009, Continued

The provision for loan losses was $~~16,149,000~~3.1 million for the ~~nine~~three-months ended ~~September~~March 3031, ~~2010~~2011, compared to $~~6,702,000~~3.9 million for the ~~nine~~ three-months ended ~~September~~March 3031, ~~2009~~2010. OnEconomic ~~September 30,~~weakness ~~2010,~~has ancontinued ~~additional~~to ~~$6.7~~stress ~~million~~the ~~was~~loan ~~added~~portfolio towhich ~~the~~has ~~provision~~attributed ~~due~~ to hethe augmented level of nonperforming loans aswhich ahas ~~result~~continued ofto ~~deteriorating~~result ~~economic~~in ~~conditions; primarily~~ declining home ~~values~~ values and higher unemployment rates in the four markets that the Company serves.

The allowance for loan losses iswas $~~14,042,000 at~~11.5 ~~September~~million at March 3031, ~~2010~~2011. While management believes that its allowance for loan losses is adequate as of ~~September~~March 3031, ~~2010~~2011, future adjustments to the allowance for loan losses may be necessary as economic conditions dictate.

Noninterest Income. Noninterest income ~~increased~~decreased to $2389,~~241,~~000 infor ~~2010~~the three-months ended March 31, 2011, from $1597,~~615,~~000 for the ~~nine~~three-months ended ~~September~~March 3031, ~~2009~~2010. The ~~increase~~decrease was primarily due to $1159,~~015,~~000 in security gains recorded ~~during~~for the ~~nine~~three-months ended ~~September~~March 3031, 2010 with no corresponding amount in 2011.

Noninterest Expenses. Total noninterest expenses for the ~~nine~~three-months ended ~~September~~March 3031, ~~2010~~2011 were $94.8 0 million compared to $93.84 million for the ~~period~~three-months ended ~~September~~March 3031, ~~2009~~2010. The increase was primarily due to expenses related to impaired loans and foreclosed real estate.

Income Taxes (Benefit). Income taxes ~~(expense)~~ for the ~~nine~~three-months ended ~~September~~March 3031, ~~2010~~ 2011, were $~~5,228,000~~0.0 compared to a benefit of $(1~~,713,000~~.2) million for the ~~period~~three-months ended ~~September~~March 3031, ~~2009~~2010.

3337

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

a. 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~~Principal 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~~Principal Financial officers.

PART II. OTHER INFORMATION

Item 1. Legal Proceedings

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

Item 1A. Risk Factors

There have been no material changes to the risk factors disclosed in Item 1A “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, ~~2009~~2010.

3438

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
ExhibitNo.		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.
****10.6		Deferred Compensation Plan of Kenneth P. Cherven dated January 1, 2005.
31.1		Certification of Chief Executive Officer required by Rule 13a- 14(a)/15d-14(a) under the Exchange Act
31.2		Certification of Chief Financial Officer required by Rule 13a- 14(a)/15d-14(a) under the Exchange Act
32.1		Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of Sarbanes-Oxley Act of 2002
32.2		Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of Sarbanes-Oxley Act of 2002
** 99.5		Audit Committee Charter

*		Exhibits marked with an asterisk were submitted with the Company’s original filing of Form SB-2 on April 7, 2003.
**		Exhibits marked with a double asterisk were submitted with the Company’s filing of its Amendment One to Form SB-2 on May 8, 2003.
***		Exhibits marked with triple asterisk were submitted with the Company’s filing of Form 10-QSB on May 13, 2005.
****		Exhibits marked with quadruple asterisk were submitted with the Company’s filing of Form 10-QSB on August 12, 2005.
*****		Exhibits marked with quintuple asterisk are filed with the Company’s filing Form 10-Q on August 12, 2010.

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

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

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

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

*****

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

FIRST COMMUNITY BANK CORPORATION OF AMERICA AND SUBSIDIARIES

SIGNATURES

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

		FIRST COMMUNITY BANK CORPORATION OF AMERICA
		(Registrant)
Date:	~~November~~May 1512, ~~2010~~2011	By:	/s/ Kenneth P. Cherven
			Kenneth P. Cherven, President and Chief Executive Officer
			Kenneth P. Cherven, President and Chief
Date:	November 15, 2010	By:	/s/ Cheryl R. Bryan
			Executive Officer
			Cheryl R. Bryan, Principal Financial and Principal Accounting Officer
Date:	May 12, 2011	By:	/s/ Cheryl R. Bryan
			Cheryl R. Bryan, Principal Financial and
			Principal Accounting Officer

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