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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q



|x | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|- | ---------------------------------------------------------------------------------------

FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2006

or



| ̈ | 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

FIRST COMMUNITY FINANCIAL CORPORATION

(Exact name of registrant as specified in its charter)



|                                                              |  |                                    
|------------------------------------------------------------- |  | -----------------------------------
|PENNSYLVANIA                                                  |  | 23-2321079                         
|(State or other jurisdiction ofincorporation or organization) |  | (I.R.S. EmployerIdentification No.)



|                                                |  |           
|----------------------------------------------- |  | ----------
|TWO NORTH MAIN STREET,MIFFLINTOWN, PENNSYLVANIA |  | 17059     
|(Address of principal executive offices)        |  | (Zip Code)

(717) 436-2144

(Issuers telephone number, including area code)

Indicate by check mark whether the Company (1) has filed
all reports required to be filed by Section 13 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 is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of accelerated filer
and large accelerated filer in Rule 12-b-2 of the Exchange Act. (Check One).

Large accelerated filer ̈Accelerated filer ̈Non-accelerated filer  x

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act.)

Yes ̈No   x

Indicate 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 1,400,000 shares outstanding as of April 30, 2006



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PART I  FINANCIAL INFORMATION



|Item 1. | Financial Statements
|------- | --------------------

FIRST COMMUNITY FINANCIAL
CORPORATION

CONSOLIDATED BALANCE SHEETS

(Dollars In Thousands, Except Per Share Data)



|                                                                                              |  |               |         |   |                  |   |         |  
|--------------------------------------------------------------------------------------------- |  | ------------- | ------- | - | ---------------- | - | ------- | -
|                                                                                              |  | March 31,2006 |         |   | December 31,2005 |  
|                                                                                              |  | (unaudited)   |         |   |                  |  
|ASSETS                                                                                        |  |               |         |   |                  |   |         |  
|Cash & Due from Banks                                                                         |  | $             | 6,370   |   |                  | $ | 7,648   |  
|Interest Bearing Deposits with Banks                                                          |  |               | 495     |   |                  |   | 502     |  
|Federal Funds Sold                                                                            |  |               | 491     |   |                  |   |        |  
|                                                                                              |  |               |         |   |                  |   |         |  
|Cash & Cash Equivalents                                                                       |  |               | 7,356   |   |                  |   | 8,150   |  
|Time Certificates of Deposit                                                                  |  |               | 2,972   |   |                  |   | 2,972   |  
|Securities available for sale                                                                 |  |               | 51,865  |   |                  |   | 52,140  |  
|Securities held to maturity, fair value 2006 $25,415; 2005 $24,810                            |  |               | 25,472  |   |                  |   | 24,824  |  
|Loans - Net of allowance for loan losses 2006 $1,263; 2005 $1,264                             |  |               | 164,772 |   |                  |   | 161,800 |  
|Premises and Equipment                                                                        |  |               | 7,485   |   |                  |   | 7,625   |  
|Restricted investment in bank stocks                                                          |  |               | 2,024   |   |                  |   | 2,012   |  
|Investment in life insurance                                                                  |  |               | 4,552   |   |                  |   | 4,514   |  
|Other Assets                                                                                  |  |               | 3,078   |   |                  |   | 3,120   |  
|                                                                                              |  |               |         |   |                  |   |         |  
|TOTAL ASSETS                                                                                  |  | $             | 269,576 |   |                  | $ | 267,157 |  
|                                                                                              |  |               |         |   |                  |   |         |  
|LIABILITIES                                                                                   |  |               |         |   |                  |   |         |  
|Deposits:                                                                                     |  |               |         |   |                  |   |         |  
|Non-Interest Bearing                                                                          |  | $             | 24,285  |   |                  | $ | 25,508  |  
|Interest Bearing                                                                              |  |               | 192,442 |   |                  |   | 186,436 |  
|                                                                                              |  |               |         |   |                  |   |         |  
|Total Deposits                                                                                |  |               | 216,727 |   |                  |   | 211,944 |  
|Short-Term Borrowings                                                                         |  |               | 5,502   |   |                  |   | 8,937   |  
|Long-Term Borrowings                                                                          |  |               | 22,000  |   |                  |   | 21,000  |  
|Junior Subordinated Debt                                                                      |  |               | 5,155   |   |                  |   | 5,155   |  
|Other Liabilities                                                                             |  |               | 1,619   |   |                  |   | 1,789   |  
|                                                                                              |  |               |         |   |                  |   |         |  
|TOTAL LIABILITIES                                                                             |  |               | 251,003 |   |                  |   | 248,825 |  
|                                                                                              |  |               |         |   |                  |   |         |  
|SHAREHOLDERS EQUITY                                                                          |  |               |         |   |                  |   |         |  
|Preferred stock, without par value;10,000,000 shares authorized and unissued                  |  |               |        |   |                  |   |        |  
|Common stock, $5 par value;10,000,000 shares authorized;1,400,000 shares issued & outstanding |  |               | 7,000   |   |                  |   | 7,000   |  
|Capital in Excess of Par Value                                                                |  |               | 245     |   |                  |   | 245     |  
|Retained Earnings                                                                             |  |               | 11,770  |   |                  |   | 11,492  |  
|Accumulated Other Comprehensive Loss                                                          |  |               | (442    | ) |                  |   | (405    | )
|                                                                                              |  |               |         |   |                  |   |         |  
|TOTAL SHAREHOLDERS EQUITY                                                                    |  |               | 18,573  |   |                  |   | 18,332  |  
|                                                                                              |  |               |         |   |                  |   |         |  
|TOTAL LIABILITIES & SHAREHOLDERS EQUITY                                                      |  | $             | 269,576 |   |                  | $ | 267,157 |  
|                                                                                              |  |               |         |   |                  |   |         |  

See accompanying notes.



2



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PART I  FINANCIAL INFORMATION, CONTINUED



|Item 1. | Financial Statements, continued
|------- | -------------------------------

FIRST COMMUNITY
FINANCIAL CORPORATION

CONSOLIDATED STATEMENTS OF INCOME

(unaudited)

(Dollars In Thousands Except Per Share Data)



|                                                    |  |                             |       |      |   |      
|--------------------------------------------------- |  | --------------------------- | ----- | ---- | - | -----
|                                                    |  | Three Months EndedMarch 31,
|                                                    |  | 2006                        |       | 2005
|INTEREST INCOME                                     |  |                             |       |      |   |      
|Interest & Fees on Loans                            |  | $                           | 2,746 |      | $ | 2,417
|Interest on Taxable Securities                      |  |                             | 539   |      |   | 469  
|Interest on Tax-Exempt Securities                   |  |                             | 208   |      |   | 205  
|Other Interest & Dividends                          |  |                             | 73    |      |   | 45   
|                                                    |  |                             |       |      |   |      
|TOTAL INTEREST INCOME                               |  |                             | 3,566 |      |   | 3,136
|                                                    |  |                             |       |      |   |      
|INTEREST EXPENSE                                    |  |                             |       |      |   |      
|Interest on Deposits                                |  |                             | 1,406 |      |   | 1,161
|Interest on Short Term Borrowings                   |  |                             | 56    |      |   | 18   
|Interest on Long Term Borrowings                    |  |                             | 334   |      |   | 240  
|                                                    |  |                             |       |      |   |      
|TOTAL INTEREST EXPENSE                              |  |                             | 1,796 |      |   | 1,419
|                                                    |  |                             |       |      |   |      
|NET INTEREST INCOME                                 |  |                             | 1,770 |      |   | 1,717
|Provision for Loan Losses                           |  |                             |      |      |   | 10   
|                                                    |  |                             |       |      |   |      
|NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES |  |                             | 1,770 |      |   | 1,707
|NON-INTEREST INCOME                                 |  |                             |       |      |   |      
|Service Charges on Deposits                         |  |                             | 151   |      |   | 117  
|Fiduciary Activities                                |  |                             | 75    |      |   | 75   
|Earnings on Investment in Life Insurance            |  |                             | 48    |      |   | 47   
|ATM and Debit Card Fees                             |  |                             | 102   |      |   | 82   
|Net Realized Gains on Sales of Securities           |  |                             |      |      |   | 129  
|Other Income                                        |  |                             | 42    |      |   | 34   
|                                                    |  |                             |       |      |   |      
|TOTAL OTHER INCOME                                  |  |                             | 418   |      |   | 484  
|                                                    |  |                             |       |      |   |      
|NON-INTEREST EXPENSES                               |  |                             |       |      |   |      
|Employee Compensation & Benefits                    |  |                             | 872   |      |   | 856  
|Net Occupancy & Equipment                           |  |                             | 267   |      |   | 247  
|ATM Expense                                         |  |                             | 71    |      |   | 64   
|Professional & Regulatory Fees                      |  |                             | 58    |      |   | 61   
|Director & Advisory Boards Compensation             |  |                             | 72    |      |   | 69   
|Supplies & Postage                                  |  |                             | 77    |      |   | 48   
|Other Non-Interest Expense                          |  |                             | 257   |      |   | 229  
|                                                    |  |                             |       |      |   |      
|TOTAL NON-INTEREST EXPENSES                         |  |                             | 1,674 |      |   | 1,574
|                                                    |  |                             |       |      |   |      
|Income Before Income Taxes                          |  |                             | 514   |      |   | 617  
|Applicable income taxes                             |  |                             | 89    |      |   | 129  
|                                                    |  |                             |       |      |   |      
|NET INCOME                                          |  | $                           | 425   |      | $ | 488  
|                                                    |  |                             |       |      |   |      
|Basic Earnings Per Share                            |  | $                           | 0.30  |      | $ | 0.35 
|                                                    |  |                             |       |      |   |      

See accompanying notes.



3



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PART I  FINANCIAL INFORMATION, CONTINUED



|Item 1. | Financial Statements, continued
|------- | -------------------------------

FIRST COMMUNITY
FINANCIAL CORPORATION

CONSOLIDATED STATEMENTS OF SHAREHOLDERS EQUITY

For the Three Months Ended March 31, 2005

(Unaudited)

(Dollars In Thousands, Except Per Share Data)



|                                                                              |  |             |       |                             |   |                  |  |   |                                     |   |  |       |      |   |  |   |        |  
|----------------------------------------------------------------------------- |  | ----------- | ----- | --------------------------- | - | ---------------- |  | - | ----------------------------------- | - |  | ----- | ---- | - |  | - | ------ | -
|                                                                              |  | CommonStock |       | CapitalIn ExcessofPar Value |   | RetainedEarnings |  |   | AccumulatedOtherComprehensive(Loss) |   |  | Total |     
|Balance December 31, 2004                                                     |  | $           | 7,000 |                             | $ | 245              |  | $ | 9,967                               |   |  | $     | 196  |   |  | $ | 17,408 |  
|Comprehensive income:                                                         |  |             |       |                             |   |                  |  |   |                                     |   |  |       |      |   |  |   |        |  
|Net Income                                                                    |  |             |       |                             |   |                  |  |   | 488                                 |   |  |       |      |   |  |   | 488    |  
|Net change in unrealized gains on securities available for sale, net of taxes |  |             |       |                             |   |                  |  |   |                                     |   |  |       | (325 | ) |  |   | (325   | )
|                                                                              |  |             |       |                             |   |                  |  |   |                                     |   |  |       |      |   |  |   |        |  
|Total comprehensive income                                                    |  |             |       |                             |   |                  |  |   |                                     |   |  |       |      |   |  |   | 163    |  
|Cash dividends, $.095 per share                                               |  |             |       |                             |   |                  |  |   | (133                                | ) |  |       |      |   |  |   | (133   | )
|                                                                              |  |             |       |                             |   |                  |  |   |                                     |   |  |       |      |   |  |   |        |  
|Balance March 31, 2005                                                        |  | $           | 7,000 |                             | $ | 245              |  | $ | 10,322                              |   |  | $     | (129 | ) |  | $ | 17,438 |  
|                                                                              |  |             |       |                             |   |                  |  |   |                                     |   |  |       |      |   |  |   |        |  

FIRST COMMUNITY FINANCIAL CORPORATION

CONSOLIDATED STATEMENTS OF SHAREHOLDERS EQUITY

For the Three Months Ended March 31, 2006

(Unaudited)

(Dollars In Thousands, Except Per Share Data)



|                                                                              |  |             |       |                              |   |                  |  |   |                                     |   |  |       |      |   |  |   |        |  
|----------------------------------------------------------------------------- |  | ----------- | ----- | ---------------------------- | - | ---------------- |  | - | ----------------------------------- | - |  | ----- | ---- | - |  | - | ------ | -
|                                                                              |  | CommonStock |       | CapitalIn Excessof Par Value |   | RetainedEarnings |  |   | AccumulatedOtherComprehensive(Loss) |   |  | Total |     
|Balance December 31, 2005                                                     |  | $           | 7,000 |                              | $ | 245              |  | $ | 11,492                              |   |  | $     | (405 | ) |  | $ | 18,332 |  
|Comprehensive income:                                                         |  |             |       |                              |   |                  |  |   |                                     |   |  |       |      |   |  |   |        |  
|Net Income                                                                    |  |             |       |                              |   |                  |  |   | 425                                 |   |  |       |      |   |  |   | 425    |  
|Net change in unrealized gains on securities available for sale, net of taxes |  |             |       |                              |   |                  |  |   |                                     |   |  |       | (37  | ) |  |   | (37    | )
|                                                                              |  |             |       |                              |   |                  |  |   |                                     |   |  |       |      |   |  |   |        |  
|Total comprehensive income                                                    |  |             |       |                              |   |                  |  |   |                                     |   |  |       |      |   |  |   | 388    |  
|Cash dividends, $.105 per share                                               |  |             |       |                              |   |                  |  |   | (147                                | ) |  |       |      |   |  |   | (147   | )
|                                                                              |  |             |       |                              |   |                  |  |   |                                     |   |  |       |      |   |  |   |        |  
|Balance March 31, 2006                                                        |  | $           | 7,000 |                              | $ | 245              |  | $ | 11,770                              |   |  | $     | (442 | ) |  | $ | 18,573 |  
|                                                                              |  |             |       |                              |   |                  |  |   |                                     |   |  |       |      |   |  |   |        |  

See accompanying notes.



4



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PART I  FINANCIAL INFORMATION, CONTINUED



|Item 1. | Financial Statements, continued
|------- | -------------------------------

FIRST COMMUNITY
FINANCIAL CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

(Dollars In Thousands)



|                                                                                  |  |                             |        |   |      |   |        |  
|--------------------------------------------------------------------------------- |  | --------------------------- | ------ | - | ---- | - | ------ | -
|                                                                                  |  | Three Months EndedMarch 31, |       
|                                                                                  |  | 2006                        |        |   | 2005 |  
|CASH FLOWS FROM OPERATING ACTIVITIES                                              |  |                             |        |   |      |   |        |  
|Net income                                                                        |  | $                           | 425    |   |      | $ | 488    |  
|Adjustments to reconcile net income to net cash provided by operating activities: |  |                             |        |   |      |   |        |  
|Provision for loan losses                                                         |  |                             |       |   |      |   | 10     |  
|Depreciation and amortization                                                     |  |                             | 147    |   |      |   | 147    |  
|Net amortization of securities premium                                            |  |                             | 88     |   |      |   | 114    |  
|Net realized gains on sales of securities                                         |  |                             |       |   |      |   | (129   | )
|Earnings on life insurance                                                        |  |                             | (48    | ) |      |   | (47    | )
|Decrease (increase) in other assets                                               |  |                             | 73     |   |      |   | (163   | )
|Decrease in other liabilities                                                     |  |                             | (170   | ) |      |   | (78    | )
|                                                                                  |  |                             |        |   |      |   |        |  
|Net cash provided by operating activities                                         |  |                             | 515    |   |      |   | 342    |  
|CASH FLOWS FROM INVESTING ACTIVITIES                                              |  |                             |        |   |      |   |        |  
|Securities held to maturity:                                                      |  |                             |        |   |      |   |        |  
|Maturities, calls and principal repayments                                        |  |                             | 1,270  |   |      |   | 865    |  
|Purchases                                                                         |  |                             | (1,970 | ) |      |   | (2,874 | )
|Securities available for sale:                                                    |  |                             |        |   |      |   |        |  
|Maturities, calls and principal repayments                                        |  |                             | 3,015  |   |      |   | 2,395  |  
|Purchases                                                                         |  |                             | (2,834 | ) |      |   | (1,948 | )
|Proceeds from sales                                                               |  |                             |       |   |      |   | 145    |  
|Net increase in loans receivable                                                  |  |                             | (2,972 | ) |      |   | (58    | )
|Net decrease (increase) in Federal Home Loan Bank stock                           |  |                             | (12    | ) |      |   | 260    |  
|Purchases of premises and equipment                                               |  |                             | (7     | ) |      |   | (236   | )
|Proceeds from sale of foreclosed real estate                                      |  |                             |       |   |      |   | 2      |  
|                                                                                  |  |                             |        |   |      |   |        |  
|Net cash used in investing activities                                             |  |                             | (3,510 | ) |      |   | (1,449 | )
|CASH FLOWS FROM FINANCING ACTIVITIES                                              |  |                             |        |   |      |   |        |  
|Net decrease in non-interest bearing demand and savings deposits                  |  |                             | (1,223 | ) |      |   | (155   | )
|Net increase in time deposits                                                     |  |                             | 6,006  |   |      |   | 3,227  |  
|Net decrease in short-term borrowings                                             |  |                             | (3,435 | ) |      |   | (1,234 | )
|Proceeds from long-term borrowings                                                |  |                             | 5,000  |   |      |   |       |  
|Repayment of long-term borrowings                                                 |  |                             | (4,000 | ) |      |   |       |  
|Dividends paid                                                                    |  |                             | (147   | ) |      |   | (133   | )
|                                                                                  |  |                             |        |   |      |   |        |  
|Net cash provided by financing activities                                         |  |                             | 2,201  |   |      |   | 1,705  |  
|                                                                                  |  |                             |        |   |      |   |        |  
|Net increase (decrease) in cash and cash equivalents                              |  |                             | (794   | ) |      |   | 598    |  
|Cash and cash equivalents:                                                        |  |                             |        |   |      |   |        |  
|Beginning of year                                                                 |  |                             | 8,150  |   |      |   | 8,106  |  
|                                                                                  |  |                             |        |   |      |   |        |  
|End of period                                                                     |  | $                           | 7,356  |   |      | $ | 8,704  |  
|                                                                                  |  |                             |        |   |      |   |        |  
|SUPPLEMENTAL DISCLOSURES:                                                         |  |                             |        |   |      |   |        |  
|Cash payments for interest                                                        |  | $                           | 1,331  |   |      | $ | 1,398  |  
|                                                                                  |  |                             |        |   |      |   |        |  
|Cash payments for income taxes                                                    |  | $                           | 75     |   |      | $ |       |  
|                                                                                  |  |                             |        |   |      |   |        |  
|NON CASH INVESTING:                                                               |  |                             |        |   |      |   |        |  
|Transfer of loans to foreclosed real estate                                       |  | $                           |       |   |      | $ | 24     |  
|                                                                                  |  |                             |        |   |      |   |        |  

See accompanying notes.



5



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PART I  FINANCIAL INFORMATION, CONTINUED



|Item 1. | Financial Statements, continued
|------- | -------------------------------

FIRST COMMUNITY
FINANCIAL CORPORATION

NOTES TO FINANCIAL STATEMENTS

(Unaudited)

March 31, 2006

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-Q 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 ended March 31, 2006, are not necessarily indicative of the results that may be expected for the
year ending December 31, 2006.

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, 2005, included in the Corporations Form 10-K filed with the Securities and Exchange Commission on March 14, 2006.

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-K.



6



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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:



|                                                      |  |                             |     |   |      |   |      |  
|----------------------------------------------------- |  | --------------------------- | --- | - | ---- | - | ---- | -
|                                                      |  | Three Months EndedMarch 31, |    
|                                                      |  | 2006                        |     |   | 2005 |  
|Unrealized holding (losses) arising during the period |  | $                           | (58 | ) |      | $ | (374 | )
|Reclassification of gains realized in net income      |  |                             |    |   |      |   | (129 | )
|                                                      |  |                             |     |   |      |   |      |  
|                                                      |  |                             | (58 | ) |      |   | (503 | )
|Deferred income tax effect                            |  |                             | 21  |   |      |   | 178  |  
|                                                      |  |                             |     |   |      |   |      |  
|Change in accumulated other comprehensive loss        |  | $                           | (37 | ) |      | $ | (325 | )
|                                                      |  |                             |     |   |      |   |      |  

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 1,400,000 in all periods presented.

Note E  Guarantees

The Corporation does not issue any guarantees that would require liability recognition or disclosure, other than its standby letters of credit. Standby letters of credit
written are conditional commitments issued by the Company to guarantee the performance of a customer to a third party. Generally, all letters of credit, when issued have expiration dates within one year. The credit risk involved in issuing letters
of credit is essentially the same as those that are involved in extending loan facilities to customers. The Corporation, generally, holds collateral and/or personal guarantees supporting these commitments. The Corporation had $308,000 of standby
letters of credit as of March 31, 2006. Management believes that the proceeds obtained through a liquidation of collateral and the enforcement of guarantees would be sufficient to cover the potential amount of future payment required under the
corresponding guarantees. The current amount of the liability as of March 31, 2006 for guarantees under standby letters of credit issued is not material.

Note F  New Accounting Pronouncements

In February 2006, the FASB issued SFAS No. 155, Accounting for Certain Hybrid
Financial Instruments. SFAS No. 155 amends FASB Statement No. 133 and FASB Statement No. 140, and improves the financial reporting of certain hybrid financial instruments by requiring more consistent accounting that
eliminates exemptions and provides a means to simplify the accounting for these instruments. Specifically, SFAS No. 155



7



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allows financial instruments that have embedded derivatives to be accounted for as a whole (eliminating the need to bifurcate the derivative from its host)
if the holder elects to account for the whole instrument on a fair value basis. SFAS No. 155 is effective for all financial instruments acquired or issued after the beginning of an entitys first fiscal year that begins after
September 15, 2006. The Company is required to adopt the provisions of SFAS No. 155, as applicable, beginning in fiscal year 2007. Management does not believe the adoption of SFAS No. 155 will have a material impact on the
Companys financial position and results of operations.

In March 2006, the FASB issued SFAS No. 156, Accounting for Servicing of
Financial Assets  An Amendment of FASB Statement No. 140 (SFAS 156). SFAS 156 requires that all separately recognized servicing assets and servicing liabilities be initially measured at fair value, if
practicable. The statement permits, but does not require, the subsequent measurement of servicing assets and servicing liabilities at fair value. SFAS 156 is effective as of the beginning of an entitys first fiscal year that begins after
September 15, 2006, which for the Company will be as of the beginning of fiscal 2007. The Company does not believe that the adoption of SFAS 156 will have a significant effect on its financial statements.



|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, 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,



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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 for the year ended December 31, 2005). The Corporation believes that of its significant accounting policies, the allowance for loan losses involves a
higher degree of judgement 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 or assumptions could produce different provisions for loan losses. Additional information is provided in the discussion below about the provision for loan losses under Results of
Operations.

Financial Condition

Total assets of
the Corporation increased $2,419,000 or 0.9% during the first three months of 2006. Net loans increased $2,972,000 or 1.8% and securities increased by $373,000, partially offset by a decrease in cash and cash equivalents of $794,000 or 9.7% from
December 31, 2005 to March 31, 2006.

Total deposits increased by $4,783,000 or 2.3% since year-end 2005. Short-term borrowings decreased by
$3,435,000 or 38.4% during the same time period. The current rate environment contributed to the growth in deposits, along with the Corporations expansion and business development.



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Results of Operations

Net income for the three month period ending March 31, 2006 was $425,000 or $0.30 per share compared to $488,000 or $0.35 per share for the same period in 2005. Annualized return on average equity was 9.29% for the first three months
of 2006 and 11.43% for the same period in 2005. Annualized return on average assets was 0.65% for the first three months of 2006 and 0.80% for the same period in 2005.

Net interest income for the first three months of 2006 increased by $53,000 or 3.1% compared to the same period in 2005. For the first three months of 2006, the net interest margin on a fully tax equivalent (FTE)
basis was 3.11% compared to 3.28% for the same period in 2005. 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 increase in the cost of funds of 0.46% from 2.79% in 2005 to 3.25% in 2006.

The Corporation did not record a provision for loan losses for the first three months of 2006 compared to $10,000 for the first three months of 2005. As a percentage of loans, the allowance for loan losses was 0.77%
at March 31, 2006, compared to 0.78% at year-end 2005 and 0.84% at March 31, 2005. Impaired loans were $1,641,000 at March 31, 2006 compared to $1,336,000 at December 31, 2005, an increase of $305,000. The increase in impaired
loans is a loan that is adequately collateralized and a minor, if any, loss is anticipated. 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.

Non-interest income in the first three months of 2006 decreased by $66,000 or 13.6% compared to the same period in 2005. Gains on sales of securities decreased by $129,000 compared to the first three months of 2005, which was partially
offset by an increase in service charges on deposit accounts of $34,000 and an increase in ATM card fees of $20,000. The increase in service charges follows the introduction of our overdraft protection program which was instituted during the second
quarter of 2005 and an increase in ATM fees for non-customers during the third quarter of 2005.



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Total non-interest expense increased in the first three months of 2006 by $100,000 compared to the first three months of
2005. Employee compensation and benefits increased by $16,000 or 1.9% compared to the same period in 2005. Net occupancy and equipment expense increased $20,000, supplies and postage increase $29,000 and ATM expense increased $7,000. 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.

Income tax expense was $89,000 for the three month time period ending March 31, 2006 compared to $129,000 for
the same time period in 2005. Income tax expense as a percentage of income before income taxes was 17.3% for the period compared to 20.9% for 2005. 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. Tax exempt income comprised a larger portion of pre-tax income in 2006 than 2005 resulting in a lower effective tax rate.

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 liquidity is $216,727,000 in deposits at March 31, 2006, which increased $4,783,000 over total deposits of $211,944,000 at year-end 2005. Other sources of liquidity at March 31, 2006 are available from the
following: (1) investments in interest-bearing deposits with banks and federal funds sold, which totaled $986,000, (2) securities maturing in one year or less, which totaled $7,234,000, 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 $18,573,000 as of March 31, 2006, representing a $241,000
increase from December 31, 2005. The growth in capital was a result of net earnings retention of $278,000 offset by an increase in the accumulated other comprehensive loss of $37,000. The other comprehensive loss is due to the change in value
of the Corporations available for sale securities. Management does not believe that this decline in value of securities is other than temporary.



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At March 31, 2006, the Bank had a leverage ratio of 8.66%, a Tier I capital to risk-based assets ratio of 15.69% and
a total capital to risk-based assets ratio of 16.55%. These ratios indicate the Bank exceeds the federal regulatory minimum requirements for a well capitalized bank. The Corporations ratios are not materially different than those
of the Bank.



|Item 3. | Quantitative and Qualitative Disclosures about Market Risk
|------- | ----------------------------------------------------------

There
are no material changes in the Corporations interest rate risk exposure since December 31, 2005. Please refer to the Annual Report on Form 10-K of First Community Financial Corporation, filed with the Securities and Exchange Commission on
March 14, 2006.



|Item 4. | Controls and Procedures
|------- | -----------------------

We maintain a system of controls and
procedures designed to provide reasonable assurance as to the reliability of the financial statements and other disclosures included in this report, as well as to safeguard assets from unauthorized use or disposition. The Corporations
President (principal executive officer) and Chief Financial Officer (principal financial officer) have evaluated the effectiveness of our disclosure controls and procedures as of March 31, 2006. Based upon that evaluation, our President and
Chief Financial Officer concluded that our disclosure controls and procedures are effective in timely alerting them to information required to be included in our periodic Securities and Exchange Commission filings. There was no significant change in
our internal control over financial reporting that occurred during the quarter ended March 31, 2006, that 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 1A. | Risk Factors
|-------- | ------------

There are no material changes in the
Corporations risk factors since December 31, 2005. Please refer to the Annual Report on Form 10-K of First Community Financial Corporation, filed with the Securities and Exchange Commission on March 14, 2006.



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|Item 2. | Unregistered Sales of Equity 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
|------- | ---------------------------------------------------

Not Applicable



|Item 5. | Other Information
|------- | -----------------

Not Applicable



|Item 6. | Exhibits
|------- | --------

(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.)                                                                                                                                                                                                                                                                                      
|        | 
|4.1     |  | Certain instruments defining the rights of the holders of long-term debt of the Corporation and certain of its Subsidiaries, none of which authorize a total amount of indebtedness in excess
of 10% of the total assets of the Corporation and its Subsidiaries on a consolidated basis, have not been filed as Exhibits in accordance with Item 601(b)(4)(iii) of Regulation S-K. The Corporation hereby agrees to furnish a copy of any of these
instruments to the Commission upon request.
|        | 
|31.1    |  | Certification of Principal Executive Officer of First Community Financial Corporation Pursuant to Securities and Exchange Commission Rule 13a-14(a) / 15d-14(a).                                                                                                                                                                                                                                                                                                                               
|        | 
|31.2    |  | Certification of Chief Financial Officer of First Community Financial Corporation Pursuant to Securities and Exchange Commission Rule 13a-14(a) / 15d-14(a).                                                                                                                                                                                                                                                                                                                                   
|        | 
|32.1    |  | Certification of Principal Executive Officer of First Community Financial Corporation Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.                                                                                                                                                                                                                                                                                                                                               
|        | 
|32.2    |  | Certification of Chief Financial Officer of First Community Financial Corporation Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.                                                                                                                                                                                                                                                                                                                                                   



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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.



|      |  |              |  |                                       |  |     |  |                              
|----- |  | ------------ |  | ------------------------------------- |  | --- |  | -----------------------------
|      |  |              |  | FIRST COMMUNITY FINANCIAL CORPORATION
|      |  |              |  | (Registrant)                         
|      |  |              |  |                                      
|Date: |  | May 12, 2006 |  |                                       |  | BY: |  | /s/ Jody D. Graybill         
|      |  |              |  |                                       |  |     |  | Jody D. Graybill             
|      |  |              |  |                                       |  |     |  | President                    
|      |  |              |  |                                       |  |     |  | (Principal Executive Officer)
|      |  |              |  |                                      
|Date: |  | May 12, 2006 |  |                                       |  | BY: |  | /s/ Richard R. Leitzel       
|      |  |              |  |                                       |  |     |  | Richard R. Leitzel           
|      |  |              |  |                                       |  |     |  | Vice President and           
|      |  |              |  |                                       |  |     |  | Chief Financial Officer      
|      |  |              |  |                                       |  |     |  | (Principal Financial Officer)



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