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UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

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FORM
10-QSB

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| | x | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2003
| | - | ------------------------------------------------------------------------------------------------------------------------------------

OR

| | o | 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: 000-49736

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FIRST COMMUNITY FINANCIAL CORPORATION

(Exact name of small business issuer as
specified in its charter)

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| | PENNSYLVANIA(Stateorotherjurisdictionofincorporationororganization) |  | 23-2321079(I.R.S.EmployerIdentificationNo.) | 
| | ------------------------------------------------------------------- |  | ------------------------------------------- | 



| | TWONORTHMAINSTREET,MIFFLINTOWN,PENNSYLVANIA(Address of principal executive offices) |  | 17059(Zip Code) | 
| | ----------------------------------------------------------------------------------- |  | --------------- | 

(717)436-2144(Issuerstelephonenumber,includingareacode)

APPLICABLE ONLY TO ISSUERS INVOLVED IN
BANKRUPTCY PROCEEDINGSDURING THE PROCEEDING FIVE YEARS

Check whether registrant filed all documents and reports required to be filed by
Section 12, 13, or 15(d) of the Exchange Act after the distribution of securities under a plan confirmed by a court. Yes o No o

APPLICABLE ONLY TO CORPORATE ISSUERS

State the number of shares outstanding of each of the issuers classes of common stock, as of
the latest practical date:COMMON STOCK, Par Value $5.00 per share 700,000 shares outstanding as of July 31, 2003

Transitional Small Business
Disclosure Format (Check one): Yes o No x

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PART I  FINANCIAL INFORMATIONItem 1. Financial Statements

FIRST COMMUNITY FINANCIAL CORPORATIONCONSOLIDATED BALANCE SHEETS(Dollars In Thousands, Except Per Share
Data)



|                                                                                               |  | (unaudited)June30,2003 |         | December31,2002 |  
|---------------------------------------------------------------------------------------------- |  | ---------------------- | ------- | --------------- | -
|                                                                                               |  |                        |         |                 |  
|                                                                                               |  |                        |         |                 |  
|ASSETS                                                                                         |  |                        |         |                 |  
|Cash & Due from Banks                                                                          |  | $                      | 6,156   |                 | $
|Interest Bearing Deposits with Banks                                                           |  |                        | 5,915   |                 |  
|Federal Funds Sold                                                                             |  |                        | 3,477   |                 |  
|                                                                                               |  |                        |         |                 |  
|Cash & Cash Equivalents                                                                        |  |                        | 15,548  |                 |  
|Securities available for sale                                                                  |  |                        | 34,557  |                 |  
|Securities held to maturity, fair value 2003 $17,621; 2002 $ 15,831                            |  |                        | 17,140  |                 |  
|Loans - Net of allowance for loan losses 2003 $ 1,157; 2002 $ 1,111                            |  |                        | 131,490 |                 |  
|Premises and Equipment                                                                         |  |                        | 6,300   |                 |  
|Restricted investment in bank stocks                                                           |  |                        | 1,212   |                 |  
|Investment in life insurance                                                                   |  |                        | 4,124   |                 |  
|Other Assets                                                                                   |  |                        | 1,691   |                 |  
|                                                                                               |  |                        |         |                 |  
|TOTAL ASSETS                                                                                   |  | $                      | 212,062 |                 | $
|                                                                                               |  |                        |         |                 |  
|LIABILITIES                                                                                    |  |                        |         |                 |  
|Deposits                                                                                       |  |                        |         |                 |  
|Non-Interest Bearing                                                                           |  | $                      | 18,403  |                 | $
|Interest Bearing                                                                               |  |                        | 166,994 |                 |  
|                                                                                               |  |                        |         |                 |  
|Total Deposits                                                                                 |  |                        | 185,397 |                 |  
|Short-Term Borrowings                                                                          |  |                        | 1,796   |                 |  
|Long-Term Borrowings                                                                           |  |                        | 8,000   |                 |  
|Other Liabilities                                                                              |  |                        | 1,337   |                 |  
|                                                                                               |  |                        |         |                 |  
|TOTAL LIABILITIES                                                                              |  |                        | 196,530 |                 |  
|                                                                                               |  |                        |         |                 |  
|SHAREHOLDERS EQUITY                                                                           |  |                        |         |                 |  
|Preferred stock, without par value; 10,000,000 shares authorized and unissued                  |  |                        |        |                 |  
|Common stock, $ 5 par value; 10,000,000 shares authorized; 700,000 shares issued & outstanding |  |                        | 3,500   |                 |  
|Capital in Excess of Par Value                                                                 |  |                        | 245     |                 |  
|Retained Earnings                                                                              |  |                        | 11,114  |                 |  
|Accumulated Other Comprehensive Income                                                         |  |                        | 673     |                 |  
|                                                                                               |  |                        |         |                 |  
|TOTAL SHAREHOLDERS EQUITY                                                                     |  |                        | 15,532  |                 |  
|                                                                                               |  |                        |         |                 |  
|TOTAL LIABILITIES & SHAREHOLDERS EQUITY                                                       |  | $                      | 212,062 |                 | $
|                                                                                               |  |                        |         |                 |  

2



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PART I  FINANCIAL INFORMATION, CONTINUEDItem 1. Financial Statements, continued

FIRST COMMUNITY FINANCIAL CORPORATIONCONSOLIDATED STATEMENTS OF INCOME(Unaudited)(In Thousands, Except Per Share Data)



|                                                   |  | ThreeMonthsEndedJune30, |       | SixMonthsEndedJune30, |  
|-------------------------------------------------- |  | ----------------------- | ----- | --------------------- | -
|                                                   |  |                         |       |                       |  
|                                                   |  | 2003                    |       | 2002                  |  
|                                                   |  |                         |       |                       |  
|INTEREST INCOME                                    |  |                         |       |                       |  
|Interest & Fees on Loans                           |  | $                       | 2,413 |                       | $
|Interest on Taxable Securities                     |  |                         | 363   |                       |  
|Interest on Tax-Exempt Securities                  |  |                         | 175   |                       |  
|Other Interest & Dividends                         |  |                         | 17    |                       |  
|                                                   |  |                         |       |                       |  
|TOTAL INTEREST INCOME                              |  |                         | 2,968 |                       |  
|                                                   |  |                         |       |                       |  
|INTEREST EXPENSE                                   |  |                         |       |                       |  
|Interest on Deposits                               |  |                         | 1,181 |                       |  
|Interest on Short Term Borrowings                  |  |                         | 5     |                       |  
|Interest on Long Term Borrowings                   |  |                         | 119   |                       |  
|                                                   |  |                         |       |                       |  
|TOTAL INTEREST EXPENSE                             |  |                         | 1,305 |                       |  
|                                                   |  |                         |       |                       |  
|NET INTEREST INCOME                                |  |                         | 1,663 |                       |  
|Provision for Loan Losses                          |  |                         | 30    |                       |  
|                                                   |  |                         |       |                       |  
|NET INTEREST INCOME AFTERPROVISION FOR LOAN LOSSES |  |                         | 1,633 |                       |  
|NON-INTEREST INCOME                                |  |                         |       |                       |  
|Service Charges on Deposits                        |  |                         | 111   |                       |  
|Fiduciary Activities                               |  |                         | 45    |                       |  
|Earnings on Investment in Life Insurance           |  |                         | 53    |                       |  
|ATM Card Fees                                      |  |                         | 45    |                       |  
|Realized Gains on Sales of Securities              |  |                         | 121   |                       |  
|Realized Gain on Sale of Foreclosed Real Estate    |  |                         | 124   |                       |  
|Other Income                                       |  |                         | 63    |                       |  
|                                                   |  |                         |       |                       |  
|TOTAL OTHER INCOME                                 |  |                         | 562   |                       |  
|                                                   |  |                         |       |                       |  
|NON-INTEREST EXPENSES                              |  |                         |       |                       |  
|Employee Compensation & Benefits                   |  |                         | 649   |                       |  
|Net Occupancy & Equipment                          |  |                         | 237   |                       |  
|ATM Expense                                        |  |                         | 47    |                       |  
|Professional & Regulatory Fees                     |  |                         | 55    |                       |  
|Director & Advisory Boards Compensation            |  |                         | 48    |                       |  
|Supplies & Postage                                 |  |                         | 56    |                       |  
|Other Non-Interest Expenses                        |  |                         | 229   |                       |  
|                                                   |  |                         |       |                       |  
|TOTAL NON-INTEREST EXPENSES                        |  |                         | 1,321 |                       |  
|                                                   |  |                         |       |                       |  
|Income Before Income Taxes                         |  |                         | 874   |                       |  
|Applicable Income Taxes                            |  |                         | 227   |                       |  
|                                                   |  |                         |       |                       |  
|NET INCOME                                         |  | $                       | 647   |                       | $
|                                                   |  |                         |       |                       |  
|Basic Earnings Per Share                           |  | $                       | 0.92  |                       | $
|                                                   |  |                         |       |                       |  
|Dividends Per Share                                |  | $                       | 0.155 |                       | $
|                                                   |  |                         |       |                       |  

3



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PART I  FINANCIAL INFORMATION, CONTINUEDItem 1. Financial Statements, continued

FIRST COMMUNITY FINANCIAL CORPORATIONCONSOLIDATED STATEMENTS OF SHAREHOLDERS EQUITYFor the Six Months
Ended June 30, 2002(Unaudited)(In Thousands, Except Per Share Data)



|                                                                                  |  | CommonStock |       | CapitalInExcessofParValue |   | RetainedEarnings |  | AccumulatedOtherComprehensiveIncome |       | Total |  
|--------------------------------------------------------------------------------- |  | ----------- | ----- | ------------------------- | - | ---------------- |  | ----------------------------------- | ----- | ----- | -
|                                                                                  |  |             |       |                           |   |                  |  |                                     |       |       |  
|Balance December 31, 2001                                                         |  | $           | 3,500 |                           | $ | 245              |  | $                                   | 8,822 |       | $
|Comprehensive income:                                                             |  |             |       |                           |   |                  |  |                                     |       |       |  
|Net Income                                                                        |  |             |       |                           |   |                  |  |                                     | 845   |       |  
|Net change in unrealized gains on securities available for sale, net of taxes $34 |  |             |       |                           |   |                  |  |                                     |       |       |  
|                                                                                  |  |             |       |                           |   |                  |  |                                     |       |       |  
|Total comprehensive income                                                        |  |             |       |                           |   |                  |  |                                     |       |       |  
|Cash dividends, $.27 per share                                                    |  |             |       |                           |   |                  |  |                                     | (189  | )     |  
|                                                                                  |  |             |       |                           |   |                  |  |                                     |       |       |  
|Balance June 30, 2002                                                             |  | $           | 3,500 |                           | $ | 245              |  | $                                   | 9,478 |       | $
|                                                                                  |  |             |       |                           |   |                  |  |                                     |       |       |  

FIRST COMMUNITY FINANCIAL CORPORATIONCONSOLIDATED STATEMENTS OF SHAREHOLDERS EQUITYFor the Six Months Ended June 30, 2003(Unaudited)(In Thousands, Except Per Share
Data)



|                                                                                  |  | CommonStock |       | CapitalInExcessofParValue |   | RetainedEarnings |  | AccumulatedOtherComprehensiveIncome |        | Total |  
|--------------------------------------------------------------------------------- |  | ----------- | ----- | ------------------------- | - | ---------------- |  | ----------------------------------- | ------ | ----- | -
|                                                                                  |  |             |       |                           |   |                  |  |                                     |        |       |  
|                                                                                  |  |             |       |                           |   |                  |  |                                     |        |       |  
|Balance December 31, 2002                                                         |  | $           | 3,500 |                           | $ | 245              |  | $                                   | 10,207 |       | $
|Comprehensive income:                                                             |  |             |       |                           |   |                  |  |                                     |        |       |  
|Net Income                                                                        |  |             |       |                           |   |                  |  |                                     | 1,124  |       |  
|Net change in unrealized gains on securities available for sale, net of taxes $33 |  |             |       |                           |   |                  |  |                                     |        |       |  
|                                                                                  |  |             |       |                           |   |                  |  |                                     |        |       |  
|Total comprehensive income                                                        |  |             |       |                           |   |                  |  |                                     |        |       |  
|Cash dividends, $.31 per share                                                    |  |             |       |                           |   |                  |  |                                     | (217   | )     |  
|                                                                                  |  |             |       |                           |   |                  |  |                                     |        |       |  
|Balance June 30, 2003                                                             |  | $           | 3,500 |                           | $ | 245              |  | $                                   | 11,114 |       | $
|                                                                                  |  |             |       |                           |   |                  |  |                                     |        |       |  

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PART I  FINANCIAL INFORMATION, CONTINUEDItem 1. Financial Statements, continued

FIRST COMMUNITY FINANCIAL CORPORATIONCONSOLIDATED STATEMENTS OF CASH FLOWS(Unaudited)(Dollars In Thousands)



|                                                                                  |  | SixMonthsEndedJune30, |       
|--------------------------------------------------------------------------------- |  | --------------------- | ------
|                                                                                  |  |                       |       
|                                                                                  |  | 2003                  |       
|                                                                                  |  |                       |       
|CASH FLOWS FROM OPERATING ACTIVITIES                                              |  |                       |       
|Net income                                                                        |  | $                     | 1,124 
|Adjustments to reconcile net income to net cash provided by operating activities: |  |                       |       
|Provision for loan losses                                                         |  |                       | 60    
|Depreciation and amortization                                                     |  |                       | 276   
|Net amortization of securities premium                                            |  |                       | 194   
|Net realized gain on sale of foreclosed real estate                               |  |                       | (124  
|Net realized gain on sale of securities                                           |  |                       | (123  
|Earnings on life insurance                                                        |  |                       | (105  
|Increase in other assets                                                          |  |                       | (542  
|Increase (decrease) in other liabilities                                          |  |                       | 46    
|                                                                                  |  |                       |       
|Net cash provided by operating activities                                         |  |                       | 806   
|CASH FLOWS FROM INVESTING ACTIVITIES                                              |  |                       |       
|Securities held to maturity:                                                      |  |                       |       
|Maturities, calls and principal repayments                                        |  |                       | 2,761 
|Purchases                                                                         |  |                       | (4,473
|Securities available for sale:                                                    |  |                       |       
|Maturities, calls and principal repayments                                        |  |                       | 9,582 
|Purchases                                                                         |  |                       | (8,144
|Proceeds from sales                                                               |  |                       | 3,826 
|Net increase in loans receivable                                                  |  |                       | (5,924
|Purchases of premises and equipment                                               |  |                       | (159  
|Proceeds from sale of foreclosed real estate                                      |  |                       | 331   
|                                                                                  |  |                       |       
|Net cash used in investing activities                                             |  |                       | (2,200
|CASH FLOWS FROM FINANCING ACTIVITIES                                              |  |                       |       
|Net increase in non-interest bearing demand and savings deposits                  |  |                       | 6,597 
|Net increase in time deposits                                                     |  |                       | 4,674 
|Net decrease in short-term borrowings                                             |  |                       | (1,814
|Repayment of long-term borrowings                                                 |  |                       |      
|Dividends paid                                                                    |  |                       | (217  
|                                                                                  |  |                       |       
|Net cash provided by financing activities                                         |  |                       | 9,240 
|                                                                                  |  |                       |       
|Net increase (decrease) in cash and cash equivalents                              |  |                       | 7,846 
|Cash and due from banks:                                                          |  |                       |       
|Beginning of year                                                                 |  |                       | 7,702 
|                                                                                  |  |                       |       
|End of period                                                                     |  | $                     | 15,548
|                                                                                  |  |                       |       
|SUPPLEMENTAL DISCLOSURES:                                                         |  |                       |       
|Cash payments for interest                                                        |  | $                     | 2,614 
|                                                                                  |  |                       |       
|Cash payments for income taxes                                                    |  | $                     | 325   
|                                                                                  |  |                       |       

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PART I  FINANCIAL INFORMATION, CONTINUEDItem 1. Financial Statements, continued

FIRST COMMUNITY FINANCIAL CORPORATIONNOTES TO FINANCIAL STATEMENTS(Unaudited)

June 30, 2003

Note A  Basis of Presentation

The consolidated financial statements include the accounts of First Community Financial Corporation (the Corporation) and its wholly-owned subsidiary, The First National Bank of Mifflintown (the
Bank). All material inter-company transactions have been eliminated. First Community Financial Corporation was organized on November 13, 1984 and is subject to regulation by the Board of Governors of the Federal Reserve System.

The accompanying unaudited consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information
and are presented in accordance with the instructions to Form 10-QSB and Rule 10-01 of the Securities and Exchange Commission Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted
accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three months
and six months ended June 30, 2003, are not necessarily indicative of the results that may be expected for the year ending December 31, 2003.

The consolidated financial
statements presented in this report should be read in conjunction with the audited financial statements and the accompanying notes for the year ended December 31, 2002, included in the Corporations Form 10-KSB filed with the Securities and
Exchange Commission on March 10, 2003.

Note B  Accounting Policies

The accounting
policies of the Corporation as applied in the interim financial statements presented, are substantially the same as those followed on an annual basis as presented in the Corporations Form 10-KSB.

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Note C  Comprehensive Income

The only comprehensive income item that
the Corporation presently has is unrealized gains (losses) on securities available for sale. The components of the change in unrealized gains (losses) are as follows:



|                                                   |  | ThreeMonthsEndedJune30, |      | SixMonthsEndedJune30, |  
|-------------------------------------------------- |  | ----------------------- | ---- | --------------------- | -
|                                                   |  |                         |      |                       |  
|                                                   |  | 2003                    |      | 2002                  |  
|                                                   |  |                         |      |                       |  
|                                                   |  | (Dollars in Thousands)  |     
|Unrealized holding gains arising during the period |  | $                       | 44   |                       | $
|Reclassification of gains realized in net income   |  |                         | (121 | )                     |  
|                                                   |  |                         |      |                       |  
|                                                   |  |                         | (77  | )                     |  
|Deferred income tax effect                         |  |                         | 26   |                       |  
|                                                   |  |                         |      |                       |  
|Change in accumulated other comprehensive income   |  |                         | ($51 | )                     | $
|                                                   |  |                         |      |                       |  

Note D  Earnings Per Share

The Corporation has a simple capital structure. Basic earnings per share represents net income divided by the weighted average number of common shares outstanding during the period. The weighted average number of
common shares outstanding was 700,000 in 2003 and 2002.

Note E  New Accounting Standards

In
April 2003, the Financial Accounting Standards Board issued Statement No. 149, Amendment of Statement No. 133, Accounting for Derivative Instruments and Hedging Activities. This statement clarifies the definition of a derivative and
incorporates certain decisions made by the Board as part of the

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Derivatives Implementation Group process. This statement is effective for contracts entered into or modified, and for hedging relationships designated
after June 30, 2003 and should be applied prospectively. The provisions of the Statement that relate to implementation issues addressed by the Derivatives Implementation Group that have been effective should continue to be applied in accordance with
their respective effective dates. Adoption of this standard is not expected to have a significant impact on the Corporations financial condition or results of operations.

In May 2003, the Financial Accounting Standards Board issued Statement No. 150, Accounting for Certain Financial Instruments with Characteristics of both Liabilities and Equity. This Statement requires that an issuer classify a
financial instrument that is within its scope as a liability. Many of these instruments were previously classified as equity. This Statement was effective for financial instruments entered into or modified after May 31, 2003 and otherwise was
effective beginning July 1, 2003.The adoption of this standard did not have any impact on the Companys financial condition or results of operations.

In November 2002, the Financial Accounting Standards Board (FASB) issued FASB Interpretation No. 45 (FIN 45), Guarantors Accounting and Disclosure Requirements for Guarantees, Including
Indirect Guarantees of Indebtedness of Others. This Interpretation expands the disclosures to be made by a guarantor in its financial statements about its obligations under certain guarantees and requires the guarantor to recognize a liability
for the fair value of an obligation assumed under certain specified guarantees. FIN 45 clarifies the requirements of FASB Statement No. 5, Accounting for Contingencies. In general, FIN 45 applies to contracts or indemnification
agreements that contingently require the guarantor to make payments to the guaranteed party based on changes in an underlying that is related to an asset, liability or equity security of the guaranteed party, which would include financial standby
letters of credit. Certain guarantee contracts are excluded from both the disclosure and recognition requirements of this Interpretation, including, among others, guarantees related to commercial letters of credit and loan commitments. The
disclosure requirements of FIN 45 require disclosure of the nature of the guarantee, the maximum potential amount of future payments that the guarantor could be required to make under the guarantee and the current amount of the liability, if any,
for the guarantors obligations under the guarantee. The accounting recognition requirements of FIN 45 are to be applied prospectively to guarantees issued or modified after December 31, 2002. Adoption of FIN 45 did not have a significant
impact on the Corporations financial condition or results of operations.

Outstanding letters of credit written are conditional commitments issued by the Corporation to
guarantee the performance of a customer to a third party. The Corporations exposure to credit loss in the event of nonperformance by the other party to the financial instrument for standby letters of credit is represented by

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the contractual amount of those instruments. The Corporation had $126,000 of standby letters of credit as of June 30, 2003. The Corporation uses the same
credit policies in making conditional obligations as it does for on-balance sheet instruments.

The majority of these standby letters of credit expire within the next twelve
months. The credit risk involved in issuing letters of credit is essentially the same as that involved in extending other loan commitments. The Corporation requires collateral and personal guarantees supporting these letters of credit as deemed
necessary. Management believes that the proceeds obtained through a liquidation of such collateral and the enforcement of personal guarantees would be sufficient to cover the maximum potential amount of future payments required under the
corresponding guarantees. The current amount of the liability as of June 30, 2003 for guarantees under standby letters of credit issued after December 31, 2002 is not material.

In January 2003, the Financial Accounting Standards Board issued FASB Interpretation No. 46, Consolidation of Variable Interest Entities, an Interpretation of ARB No. 51. This interpretation provides new guidance for the
consolidation of variable interest entities (VIEs) and requires such entities to be consolidated by their primary beneficiaries if the entities do not effectively disperse risk among parties involved. The interpretation also adds disclosure
requirements for investors that are involved with unconsolidated VIEs. The disclosure requirements apply to all financial statements issued after January 31, 2003. The consolidation requirements apply immediately to VIEs created after January 31,
2003 and are effective for the first fiscal year or interim period beginning after June 15, 2003 for VIEs acquired before February 1, 2003. The adoption of this interpretation did not have any impact on the Companys financial condition or
results of operations.

Item 2  Managements Discussion and Analysis of Financial Condition and Results of Operations

Forward-Looking Statements

Except for historical information, this report may be deemed to contain forward-looking
statements regarding the Corporation. Examples of forward-looking statements include, but are not limited to, (a) projections or statements regarding future earnings, expenses, net interest income, other income, earnings or loss per share, asset mix
and quality, growth prospects, capital structure and other financial terms, (b) statements of plans and objectives of management or the board of directors, and (c) statements of assumptions, such as economic conditions in the Corporations
market areas. Such forward-looking statements can be identified by the use of forward-looking terminology such as believes, expects,

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may, intends, will, should, anticipates, or the negative of any of the foregoing or other
variations thereon or comparable terminology, or by discussion of strategy.

No assurance can be given that the future results covered by forward-looking statements will be
achieved. Such statements are subject to risks, uncertainties, and other factors that could cause actual results to differ materially from future results expressed or implied by such forward-looking statements. Important factors that could impact
the Corporations operating results include, but are not limited to, (i) the effects of changing economic conditions in the Corporations market areas and nationally, (ii) credit risks of commercial, real estate, consumer and other lending
activities, (iii) significant changes in interest rates, (iv) changes in federal and state banking laws and regulations which could impact the Corporations operations, (v) funding costs, and (iv) other external developments which could
materially affect the Corporations business and operations.

Critical Accounting Policies

The consolidated financial statements include the Corporation and its wholly-owned subsidiary, The First National Bank of Mifflintown (the Bank). All significant intercompany accounts and transactions have been
eliminated.

The consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States of America, which require the
Corporation to make estimates and assumptions (see footnote 1 to the financial statements). The Corporation believes that of its significant accounting policies, the allowance for loan losses may involve a higher degree of judgment and
complexity.

The allowance for loan losses is established through a charge to the provision for loan losses. In determining the balance in the allowance for loan losses,
consideration is given to a variety of factors in establishing this estimate. In estimating the allowance for loan losses, management considers current economic conditions, diversification of the loan portfolio, delinquency statistics, results of
internal loan reviews, borrowers perceived financial and managerial strengths, the adequacy of the underlying collateral, if collateral dependent, or present value of future cash flows and other relevant factors. The use of different estimates
for assumptions could produce different provisions for loan losses. Additional information is provided in the discussion below about the Provision for Loan Losses.

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Financial Condition

Total assets of the Corporation increased $10,292,000
or 5.1% during the first six months of 2003. Loans increased $5,864,000 or 4.7% and cash and cash equivalents increased by $7,846,000 or 101.9% since December 31, 2002, which were partially offset by a decline in investments of $3,725,000. The
increase in loans was primarily in residential and commercial mortgages. The increase in cash and cash equivalents and the decrease in investments are interrelated. In June 2003 the Corporation sold several mortgage backed securities that were
prepaying at a rapid pace. The funds were reinvested in loans and other securities early in the third quarter.

Total deposits increased by $11,271,000 or 6.5% since year-end
2002. Short term borrowings declined by $1,814,000 during the same time period. The current rate environment contributed to the growth in deposits, along with the Corporations expansion and business development.

Results of Operations

Net income for the six month period ending June 30, 2003 was $1,124,000 or $1.61 per share
compared to $845,000 or $1.21 per share for the same period in 2002. This reflects a 33.0% increase in net income for the first six months of this year compared to last year. Annualized return on average equity was 14.96% for the first six months of
2003 and 12.59% for the same period in 2002. Annualized return on average assets was 1.11% for the first six months of 2003 and 0.93% for the same period in 2002.

Income before
income taxes increased $422,000 during the first six months of 2003 compared to the same time period in 2002. This increase includes gains on sales of securities of $123,000 and a gain of $124,000 on the sale of foreclosed real estate.

Net income for the quarter ending June 30, 2003 was $647,000 or $0.92 per share compared to $447,000 or $0.64 per share for the same period in 2002. Annualized return on average equity was
16.89% for the second quarter 2003 and 13.21% for the same period in 2002. Annualized return on average assets for the second quarter 2003 was 1.25% compared to 0.96% during the second quarter 2002.

Income before income taxes was $874,000 for the quarter ended June 30, 2003 compared to $570,000 for the same time period in 2002. This increase of $304,000 includes gains on sales of securities of $121,000 and a gain
on the sale of foreclosed real estate of $124,000.

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Net interest income for the first six months of 2003 increased by $298,000 or 9.9% compared to the same period in 2002. This increase is primarily a result
of increased volume of interest earning assets. For the first six months of 2003, the net interest margin on a fully tax equivalent (FTE) basis was 3.75% compared to 3.86% for the same period in 2002. The FTE basis is calculated by grossing up the
yield on tax-exempt securities and loans by the federal tax rate of 34%, in order that the yield on tax-exempt assets may be comparable to interest earned on taxable assets. The primary driver of the decrease in the net interest margin was the
decline in the yield on earning assets of 0.76% from 7.30% in 2002 to 6.54% in 2003. This was partially offset by a decrease in the cost of funds of 0.65% from 3.44% to 2.79% during the same time period. The Corporation expects the margin to
continue to compress as the year progresses.

Net interest income for the quarter ending June 30, 2003 increased by $110,000 compared to the same period last year. Net interest
margin for the quarter was 3.70% compared to 3.90% during the same period in 2002. The decrease in the cost of funds from 3.33% to 2.73% was more than offset by the decrease in the yield on earning assets from 7.23% to 6.43%.

The Corporation recorded a $60,000 provision for loan losses for the first six months of 2003, the same as the provision for the first six months of 2002. The provision for the second quarter 2003
was $30,000, the same as the provision for the second quarter 2002. As a percentage of loans, the allowance for loan losses was 0.87% at June 30, 2003, compared to 0.88% at year-end 2002 and 0.86% at June 30, 2002. Provisions for loan losses are
charged to income to bring the allowance for loan losses to a level deemed appropriate by management. Management determines the adequacy of the allowance based on on-going quarterly assessments of the loan portfolio, including such factors as:
changes in the nature and volume of the portfolio, effects of concentrations of credit, current and projected economic and business conditions, regulatory and consultant recommendations, repayment patterns on loans, borrowers financial
condition, current charge-offs, trends in volume and severity of past due loans and classified loans, potential problem loans and supporting collateral. Management believes the allowance is presently adequate to cover the inherent risks associated
with the Corporations loan portfolio.

Excluding the $123,000 securities gain and the $124,000 gain on sale of other real estate in the first six months of 2003,
non-interest income in the first six months of 2003 increased by $56,000 or 10.1% compared to the same period in 2002. Service charges on deposits increased by $46,000, primarily as a result of an increase in demand deposits, income from fiduciary
activities increased by $18,000, and ATM card fees increased by $8,000, while earnings on investment in life insurance decreased $12,000.

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Excluding the $121,000 securities gain and the $124,000 gain on sale of other real estate, non-interest income for the quarter ending June 30, 2003 was
$317,000 compared to $284,000 for the same period in 2002, primarily as a result of an increase in service charges on deposits.

Total non-interest expense increased in the
first six months of 2003 by $179,000 compared to the first six months 2002. Employee compensation and benefits increased by $81,000 or 6.5% compared to the same period in 2002. Several factors contributed to this increase including payroll increases
as a result of normal merit increases, additions to staff, and increases in medical insurance. Additional increases in employee compensation and benefits are anticipated as the Corporation continues to grow in size and number of locations. Also, net
occupancy and equipment expense increased $41,000 and ATM expense increased $20,000. The increase in net occupancy & equipment was primarily related to the addition of the Shermans Dale Branch in February 2002. As the Corporation continues to
add new offices and services, additional operating costs will be generated. Over time it is anticipated these costs will be offset by the additional income generated through the expansion of services to our customers and community and new business
development.

During the quarter ending June 30, 2003, total non-interest expense increased $84,000 compared to the second quarter of 2002. Employee compensation and benefits
increased by $38,000 and was the principal reason for the increase in total non-interest expense.

Income tax expense was $371,000 for the six month time period ending June 30,
2003 compared to $228,000 for the same time period in 2002. Income tax expense as a percentage of income before income taxes was 24.8% for the period compared to 21.2% for 2002. Income tax expense for the quarter ending June 30, 2003 was $227,000,
an effective rate of 26.0%, compared to $123,000, an effective rate of 21.6%, during the same period in 2002. The reason for the increase in the effective tax rate for the period in 2003 compared to 2002 is due primarily to the tax exempt income
representing a smaller portion of income before taxes in 2003 compared to 2002.

The decrease in the Corporations effective tax rate below the statutory rate of 34.0% is a
result of tax-exempt income on loans, securities and bank-owned life insurance.

Liquidity

Liquidity represents the Corporations ability to efficiently manage cash flows to support customers loan demand, withdrawals by depositors, the payment of operating expenses, as well as the ability to take advantage of business
and investment opportunities as they arise. One of the Corporations sources of

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liquidity is $185,397,000 in deposits at June 30, 2003, which increased $11,271,000 over total deposits of $174,126,000 at year-end 2002. Other sources of
liquidity at June 30, 2003 are available from the following: (1) investments in interest-bearing deposits with banks and federal funds sold, which totaled $9,392,000, (2) securities maturing in one year or less, which totaled $1,700,000, and (3)
investments in mortgage-backed securities, which supply income and principal cash flow streams on an ongoing basis.In addition, the Corporation has established
federal funds lines of credit with Atlantic Central Bankers Bank and with the Federal Home Loan Bank of Pittsburgh, which can be drawn upon if needed as a source of liquidity. Management is of the opinion that the Corporations liquidity is
sufficient to meet its anticipated needs.

Capital Resources

Total shareholders equity was
$15,532,000 as of June 30, 2003, representing an $839,000 increase from December 31, 2002. The growth in capital was primarily a result of net earnings retention of $907,000, which was partially offset by an other comprehensive loss of
$68,000.

At June 30, 2003, the Corporation had a leverage ratio of 7.11%, a Tier I capital to risk-based assets ratio of 12.93% and a total capital to risk-based assets ratio
of 13.95%. These ratios indicate the Corporation exceeds the federal regulatory minimum requirements for a well capitalized bank. The Banks ratios are not materially different than those of the Corporation.

Quantitative and Qualitative Disclosure about Market

There are no material changes in the Corporations interest
rate risk exposure since December 31, 2002. Please refer to the Annual Report on Form 10-KSB of First Community Financial Corporation, filed with the Securities and Exchange Commission on March 10, 2003.

Item 3.      Controls and Procedures

We maintain a system of controls and procedures designed to provide
reasonable assurance as to the reliability of the financial statements and other disclosures included in this report, as well as to safeguard assets from unauthorized use or disposition. The Corporations Chief Executive Officer and Chief
Financial Officer have evaluated the effectiveness of our disclosure controls and procedures as of June 30, 2003. Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and
procedures are effective in timely alerting them to information required to be included in our periodic Securities and Exchange Commission filings. There was no significant change in our internal control over financial reporting that occurred during
the quarter ended June 30, 2003, that

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materially affected, or is reasonably likely to materially affect, the Corporations internal control over financial reporting.

PART II  OTHER INFORMATION

Item 1.Legal Proceedings

Not Applicable

Item 2.Changes in Securities and Use of Proceeds

Not Applicable

Item 3.Defaults Upon Senior Securities

Not Applicable

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

At the annual shareholders meeting on April 8, 2003 the following directors were elected toClass C for a
term of three years as follows:



|                    |  | FOR     |  | AGAINST |  | ABSTENTIONSANDBROKERNON-VOTES | 
|------------------- |  | ------- |  | ------- |  | ----------------------------- | 
|                    |  |         |  |         |  |                               | 
|Samuel G. Kint      |  | 593,922 |  | 4,930   |  |  0                          | 
|Clair E. McMillen   |  | 594,480 |  | 4,372   |  |  0                          | 
|Roger Shallenberger |  | 594,480 |  | 4,372   |  |  0                          | 
|Lowell M. Shearer   |  | 594,280 |  | 4,572   |  |  0                          | 

Item 5.Other
Information

Not Applicable

Item 6.Exhibits and Reports on Form 8-K

| | (a) | Exhibits
| | --- | --------



|Exhibit | Title                                                                                                                                                                                                                                         
|------- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|        |                                                                                                                                                                                                                                               
|3.1     | Articles of Incorporation of the Corporation. (Incorporated by reference to Exhibit 2(a) to the Corporations December 31, 2001 Registration Statement on Form 10-SB, as
filed with the Securities and Exchange Commission on April 17, 2002.)
|        |                                                                                                                                                                                                                                               
|3.2     | Bylaws of the Corporation. (Incorporated by reference to Exhibit 2(b) to the Corporations Registration Statement on Form 10-SB, as filed with the Securities and Exchange
Commission on April 17, 2002.)                                     
|        |                                                                                                                                                                                                                                               
|10.1    | Lease Agreement  Delaware Branch Office (Incorporated by reference to Exhibit 6(b)(1) to the Corporations Registration Statement on Form 10-SB, as filed with the
Securities and Exchange Commission on April 17, 2002.)                    
|        |                                                                                                                                                                                                                                               
|10.2    | Lease Agreement  East Waterford Branch Office (Incorporated by reference to Exhibit 6(b)(2) to the Corporations Registration Statement on Form 10-SB, as filed with
the Securities and Exchange Commission on April 17, 2002.)              
|        |                                                                                                                                                                                                                                               

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|10.3  | Lease Agreement  Shermans Dale Branch Office (Incorporated by reference to Exhibit 6(b)(3) to the Corporations Registration Statement on Form 10-SB, as filed with the
Securities and Exchange Commission on April 17, 2002.)                                                                                 
|----- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|      |                                                                                                                                                                                                                                                                                                                 
|10.4  | Salary Continuation Agreement dated August 19, 1997 between James McLaughlin and The First National Bank of Mifflintown (Incorporated by reference to Exhibit 6(c) (1) to the
Corporations Registration Statement on Form 10-SB, as filed with the Securities and Exchange Commission on April 17, 2002.)      
|      |                                                                                                                                                                                                                                                                                                                 
|10.5  | Salary Continuation Agreement dated September 22, 1997 between Leona Shellenberger and The First National Bank of Mifflintown (Incorporated by reference to Exhibit 6(c) (2) to
the Corporations Registration Statement on Form 10-SB, as filed with the Securities and Exchange Commission on April 17, 2002.)
|      |                                                                                                                                                                                                                                                                                                                 
|10.6  | Salary Continuation Agreement dated August 28, 1997 between Jody Graybill and The First National Bank of Mifflintown (Incorporated by reference to Exhibit 6(c) (3) to the
Corporations Registration Statement on Form 10-SB, as filed with the Securities and Exchange Commission on April 17, 2002.)         
|      |                                                                                                                                                                                                                                                                                                                 
|10.7  | Salary Continuation Agreement dated September 18, 1997 between Timothy Stayer and The First National Bank of Mifflintown (Incorporated by reference to Exhibit 6(c) (4) to the
Corporations Registration Statement on Form 10-SB, as filed with the Securities and Exchange Commission on April 17, 2002.)     
|      |                                                                                                                                                                                                                                                                                                                 
|10.8  | Salary Continuation Agreement dated April 10, 2000 between Marcie A. Barber and The First National Bank of Mifflintown (Incorporated by reference to Exhibit 6(c) (5) to the
Corporations Registration Statement on Form 10-SB, as filed with the Securities and Exchange Commission on April 17, 2002.)       
|      |                                                                                                                                                                                                                                                                                                                 
|10.9  | Salary Continuation Agreement dated November 5, 2001 between Richard R. Leitzel and The First National Bank of Mifflintown (Incorporated by reference to Exhibit 6(c) (6) to the
Corporations Registration Statement on Form 10-SB, as filed with the Securities and Exchange Commission on April 17, 2002.)   
|      |                                                                                                                                                                                                                                                                                                                 
|10.10 | Officer Group Term Replacement Plan (Incorporated by reference to Exhibit 6(c) (7) to the Corporations Registration Statement on Form 10-SB, as filed with the Securities
and Exchange Commission on April 17, 2002.)                                                                                          
|      |                                                                                                                                                                                                                                                                                                                 
|10.11 | Director Deferred Fee Agreement dated September 29, 1997 between James McLaughlin and The First National Bank of Mifflintown (Incorporated by reference to Exhibit 6(c) (8) to the
Corporations Registration Statement on Form 10-SB, as filed with the Securities and Exchange Commission on April 17, 2002.) 
|      |                                                                                                                                                                                                                                                                                                                 
|10.12 | Director Deferred Fee Agreement dated September 29, 1997 between Joseph Barnes and The First National Bank of Mifflintown (Incorporated by reference to Exhibit 6(c) (9) to the
Corporations Registration Statement on Form 10-SB, as filed with the Securities and Exchange Commission on April 17, 2002.)    
|      |                                                                                                                                                                                                                                                                                                                 
|10.13 | Director Deferred Fee Agreement dated September 30,1997 between Roger Shallenberger and The First National Bank of Mifflintown (Incorporated by reference to Exhibit 6(c)
(10)                                                                                                                                  
|      |                                                                                                                                                                                                                                                                                                                 

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|      | to the Corporations Registration Statement on Form 10-SB, as filed with the Securities and Exchange Commission on April 17, 2002.)                                                                                                                                                                                              
|----- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|      |                                                                                                                                                                                                                                                                                                                                  
|10.14 | Director Deferred Fee Agreement dated April 9, 2002 between Nancy S. Bratton and The First National Bank of Mifflintown (Incorporated by reference to Exhibit 6(c) (11) to the
Corporations Registration Statement on Form 10-SB, as filed with the Securities and Exchange Commission on April 17, 2002.)                      
|      |                                                                                                                                                                                                                                                                                                                                  
|10.15 | Director Deferred Fee Agreement dated April 9, 2002 between John P. Henry and The First National Bank of Mifflintown (Incorporated by reference to Exhibit 6(c) (12) to the
Corporations Registration Statement on Form 10-SB, as filed with the Securities and Exchange Commission on April 17, 2002.)                         
|      |                                                                                                                                                                                                                                                                                                                                  
|10.16 | Director Deferred Fee Agreement dated April 9, 2002 between Samuel G. Kint and The First National Bank of Mifflintown (Incorporated by reference to Exhibit 6(c) (13) to the
Corporations Registration Statement on Form 10-SB, as filed with the Securities and Exchange Commission on April 17, 2002.)                        
|      |                                                                                                                                                                                                                                                                                                                                  
|10.17 | Director Revenue Neutral Retirement Agreement dated September 29, 1997 between James McLaughlin and The First National Bank of Mifflintown (Incorporated by reference to Exhibit
6(c) (14) to the Corporations Registration Statement on Form 10-SB, as filed with the Securities and Exchange Commission on April 17, 2002.)   
|      |                                                                                                                                                                                                                                                                                                                                  
|10.18 | Director Revenue Neutral Retirement Agreement dated September 30, 1997 between John H. Sheaffer and The First National Bank of Mifflintown (Incorporated by reference to Exhibit
6(c) (15) to the Corporations Registration Statement on Form 10-SB, as filed with the Securities and Exchange Commission on April 17, 2002.)   
|      |                                                                                                                                                                                                                                                                                                                                  
|10.19 | Director Revenue Neutral Retirement Agreement dated September 29, 1997 between Donald Adams and The First National Bank of Mifflintown (Incorporated by reference to Exhibit 6(c)
(16) to the Corporations Registration Statement on Form 10-SB, as filed with the Securities and Exchange Commission on April 17, 2002.)       
|      |                                                                                                                                                                                                                                                                                                                                  
|10.20 | Director Revenue Neutral Retirement Agreement dated September 29, 1997 between Joseph Barnes and The First National Bank of Mifflintown (Incorporated by reference to Exhibit 6(c)
(17) to the Corporations Registration Statement on Form 10-SB, as filed with the Securities and Exchange Commission on April 17, 2002.)      
|      |                                                                                                                                                                                                                                                                                                                                  
|10.21 | Director Revenue Neutral Retirement Agreement dated September 29, 1997 between Samuel F. Metz and The First National Bank of Mifflintown (Incorporated by reference to Exhibit
6(c) (18) to the Corporations Registration Statement on Form 10-SB, as filed with the Securities and Exchange Commission on April 17, 2002.)     
|      |                                                                                                                                                                                                                                                                                                                                  
|10.22 | Director Revenue Neutral Retirement Agreement dated September 30, 1997 between Clair E. McMillen and The First National Bank of Mifflintown (Incorporated by reference to Exhibit
6(c) (19) to the Corporations Registration Statement on Form 10-SB, as filed with the Securities and Exchange Commission on April 17, 2002.)  
|      |                                                                                                                                                                                                                                                                                                                                  
|10.23 | Director Revenue Neutral Retirement Agreement dated September 29, 1997 between Roger Shallenberger and The First National Bank of Mifflintown (Incorporated by reference to
Exhibit 6(c) (20) to the Corporations Registration Statement on Form 10-SB, as filed with the Securities and Exchange Commission on April 17, 2002.)
|      |                                                                                                                                                                                                                                                                                                                                  

17



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|10.24 | Director Revenue Neutral Retirement Agreement dated September 29, 1997 between John Tetweiler and The First National Bank of Mifflintown (Incorporated by reference to Exhibit
6(c) (21) to the Corporations Registration Statement on Form 10-SB, as filed with the Securities and Exchange Commission on April 17, 2002.)
|----- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|      |                                                                                                                                                                                                                                                                                                                             
|10.25 | Director Revenue Neutral Retirement Agreement dated September 29, 1997 between Richard Weible and The First National Bank of Mifflintown (Incorporated by reference to Exhibit
6(c) (22) to the Corporations Registration Statement on Form 10-SB, as filed with the Securities and Exchange Commission on April 17, 2002.)
|      |                                                                                                                                                                                                                                                                                                                             
|10.26 | Director Revenue Neutral Retirement Agreement dated March 31, 1998 between Lowell M. Shearer and The First National Bank of Mifflintown (Incorporated by reference to Exhibit 6(c)
(23) to the Corporations Registration Statement on Form 10-SB, as filed with the Securities and Exchange Commission on April 17, 2002.) 
|      |                                                                                                                                                                                                                                                                                                                             
|10.27 | Director Revenue Neutral Retirement Agreement dated March 24, 1998 between Charles C. Saner and The First National Bank of Mifflintown (Incorporated by reference to Exhibit 6(c)
(24) to the Corporations Registration Statement on Form 10-SB, as filed with the Securities and Exchange Commission on April 17, 2002.)  
|      |                                                                                                                                                                                                                                                                                                                             
|31.1  | Certification of Chief Executive Officer of First Community Financial Corporation Pursuant to Securities and Exchange Commission Rule 13a-15(e) / 15d-15(e).                                                                                                                                                                
|      |                                                                                                                                                                                                                                                                                                                             
|31.2  | Certification of Chief Financial Officer of First Community Financial Corporation Pursuant to Securities and Exchange Commission Rule 13a-15(e) / 15d-15(e).                                                                                                                                                                
|      |                                                                                                                                                                                                                                                                                                                             
|32.1  | Certification of Chief Executive Officer of First Community Financial Corporation Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.                                                                                                                                                                                
|      |                                                                                                                                                                                                                                                                                                                             
|32.2  | Certification of Chief Financial Officer of First Community Financial Corporation Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.                                                                                                                                                                                
|      |                                                                                                                                                                                                                                                                                                                             

(b) Reports on Form 8-KThere were no
reports filed on Form 8-K during the second quarter of 2003.

18



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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.



|                      | FIRSTCOMMUNITYFINANCIALCORPORATION
|--------------------- | ----------------------------------
|                      |                                   
|                      |                                   
|Date: August 13, 2003 |                                   
|                      |                                   
|                      |                                   
|                      |                                   
|                      |                                   
|                      |                                   
|Date: August 13, 2003 |                                   
|                      |                                   
|                      |                                   



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