UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549





FORM 10-Q





(Mark One)

|x | Quarterly report under Section 13 or 15(d) of the Securities Exchange Act of 1934
|- | ---------------------------------------------------------------------------------

For the quarterly period ended June 30, 2009



| ̈ | Transition report under Section 13 or l5(d) of the Exchange Act
|- | ---------------------------------------------------------------

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 of incorporation or organization) |  | (I.R.S. Employer Identification No.)

2 N. Main St., Mifflintown, PA 17059

(Address of Principal Executive Offices)

(717) 436-2144

(Registrants telephone number, including area code)





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

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

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



|                        |  |                                                  |  |                           |  |  
|----------------------- |  | ------------------------------------------------ |  | ------------------------- |  | -
|Large accelerated filer |  |  ̈                                                |  | Accelerated filer         |  |  ̈
|                        |  |                                                  | 
|Non-accelerated filer   |  |  ̈  (Do not check if a smaller reporting company) |  | Smaller reporting company |  | x

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

Indicate the number of shares outstanding of each class of issuers classes of common stock, as of the last practicable date:



|                              |  |                             
|----------------------------- |  | ----------------------------
|Class                         |  | Outstanding at July 30, 2009
|Common Stock, par value $5.00 |  | 1,399,368 Shares            









---

PART I  FINANCIAL INFORMATION



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





FIRST COMMUNITY FINANCIAL CORPORATION

CONSOLIDATED BALANCE SHEETS (Unaudited)

(Dollars In Thousands, Except Share Data)



|                                                                                                                                                                    |  |               |         |   |                   |   |         |  
|------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ------------- | ------- | - | ----------------- | - | ------- | -
|                                                                                                                                                                    |  | June 30, 2009 |         |   | December 31, 2008 |  
|ASSETS                                                                                                                                                              |  |               |         |   |                   |   |         |  
|Cash & due from banks                                                                                                                                               |  | $             | 6,935   |   |                   | $ | 6,278   |  
|Interest bearing deposits with banks                                                                                                                                |  |               | 4,655   |   |                   |   | 586     |  
|Federal funds sold                                                                                                                                                  |  |               | 3,845   |   |                   |   |        |  
|                                                                                                                                                                    |  |               |         |   |                   |   |         |  
|Cash & cash equivalents                                                                                                                                             |  |               | 15,435  |   |                   |   | 6,864   |  
|Time certificates of deposit                                                                                                                                        |  |               | 396     |   |                   |   | 396     |  
|Securities available for sale                                                                                                                                       |  |               | 69,194  |   |                   |   | 66,376  |  
|Securities held to maturity, fair value 2009 $ 26,292; 2008 $ 23,248                                                                                                |  |               | 27,245  |   |                   |   | 24,127  |  
|Loans - net of allowance for loan losses 2009 $ 1,826; 2008 $ 1,633                                                                                                 |  |               | 214,828 |   |                   |   | 212,377 |  
|Premises & equipment, net                                                                                                                                           |  |               | 6,370   |   |                   |   | 6,397   |  
|Restricted investment in bank stocks                                                                                                                                |  |               | 2,661   |   |                   |   | 2,661   |  
|Investment in life insurance                                                                                                                                        |  |               | 5,017   |   |                   |   | 4,933   |  
|Other assets                                                                                                                                                        |  |               | 3,508   |   |                   |   | 2,583   |  
|                                                                                                                                                                    |  |               |         |   |                   |   |         |  
|                                                                                                                                                                    |  |              
|TOTAL ASSETS                                                                                                                                                        |  | $             | 344,654 |   |                   | $ | 326,714 |  
|                                                                                                                                                                    |  |               |         |   |                   |   |         |  
|                                                                                                                                                                    |  |              
|LIABILITIES                                                                                                                                                         |  |               |         |   |                   |   |         |  
|Deposits:                                                                                                                                                           |  |               |         |   |                   |   |         |  
|Non-interest bearing                                                                                                                                                |  | $             | 27,722  |   |                   | $ | 29,192  |  
|Interest bearing                                                                                                                                                    |  |               | 258,580 |   |                   |   | 233,414 |  
|                                                                                                                                                                    |  |               |         |   |                   |   |         |  
|Total deposits                                                                                                                                                      |  |               | 286,302 |   |                   |   | 262,606 |  
|Short-term borrowings                                                                                                                                               |  |               | 3,829   |   |                   |   | 10,613  |  
|Long-term borrowings                                                                                                                                                |  |               | 22,000  |   |                   |   | 22,000  |  
|Junior subordinated debt                                                                                                                                            |  |               | 5,155   |   |                   |   | 5,155   |  
|Other liabilities                                                                                                                                                   |  |               | 2,738   |   |                   |   | 2,927   |  
|                                                                                                                                                                    |  |               |         |   |                   |   |         |  
|                                                                                                                                                                    |  |              
|TOTAL LIABILITIES                                                                                                                                                   |  |               | 320,024 |   |                   |   | 303,301 |  
|                                                                                                                                                                    |  |               |         |   |                   |   |         |  
|                                                                                                                                                                    |  |              
|SHAREHOLDERS EQUITY                                                                                                                                                |  |               |         |   |                   |   |         |  
|Preferred stock, without par value;10,000,000 shares authorized and unissued                                                                                        |  |               |        |   |                   |   |        |  
|Common stock, $ 5.00 par value;Shares authorized - 10,000,000Shares issued - 2009 -1,403,019; 2008 - 1,401,918Shares outstanding -
2009 -1,399,368; 2008 -1,399,868 |  |               | 7,015   |   |                   |   | 7,010   |  
|Capital in excess of par value                                                                                                                                      |  |               | 321     |   |                   |   | 293     |  
|Retained earnings                                                                                                                                                   |  |               | 16,371  |   |                   |   | 15,406  |  
|Treasury stock, at cost 2009-3,651 shares; 2008-2,050 shares                                                                                                        |  |               | (110    | ) |                   |   | (62     | )
|Accumulated other comprehensive income                                                                                                                              |  |               | 1,033   |   |                   |   | 766     |  
|                                                                                                                                                                    |  |               |         |   |                   |   |         |  
|TOTAL SHAREHOLDERS EQUITY                                                                                                                                          |  |               | 24,630  |   |                   |   | 23,413  |  
|                                                                                                                                                                    |  |               |         |   |                   |   |         |  
|                                                                                                                                                                    |  |              
|TOTAL LIABILITIES & SHAREHOLDERS EQUITY                                                                                                                            |  | $             | 344,654 |   |                   | $ | 326,714 |  
|                                                                                                                                                                    |  |               |         |   |                   |   |         |  

See accompanying notes.



2



---

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 EndedJune 30, |       | Six Months EndedJune 30,
|                                                   |  | 2009                       |       | 2008                     |   | 2009  |  | 2008
|INTEREST INCOME                                    |  |                            |       |                          |   |       |  |      |       |  |   |      
|Interest & fees on loans                           |  | $                          | 3,576 |                          | $ | 3,404 |  | $    | 7,155 |  | $ | 6,792
|Interest on taxable securities                     |  |                            | 755   |                          |   | 871   |  |      | 1,556 |  |   | 1,695
|Interest on tax-exempt securities                  |  |                            | 279   |                          |   | 209   |  |      | 529   |  |   | 413  
|Other interest & dividends                         |  |                            | 14    |                          |   | 50    |  |      | 25    |  |   | 125  
|                                                   |  |                            |       |                          |   |       |  |      |       |  |   |      
|TOTAL INTEREST INCOME                              |  |                            | 4,624 |                          |   | 4,534 |  |      | 9,265 |  |   | 9,025
|                                                   |  |                            |       |                          |   |       |  |      |       |  |   |      
|                                                   |  |                            |       |                         
|INTEREST EXPENSE                                   |  |                            |       |                          |   |       |  |      |       |  |   |      
|Interest on deposits                               |  |                            | 1,893 |                          |   | 2,012 |  |      | 3,754 |  |   | 4,079
|Interest on short term borrowings                  |  |                            | 10    |                          |   | 26    |  |      | 26    |  |   | 94   
|Interest on long term borrowings                   |  |                            | 312   |                          |   | 335   |  |      | 625   |  |   | 684  
|                                                   |  |                            |       |                          |   |       |  |      |       |  |   |      
|TOTAL INTEREST EXPENSE                             |  |                            | 2,215 |                          |   | 2,373 |  |      | 4,405 |  |   | 4,857
|                                                   |  |                            |       |                          |   |       |  |      |       |  |   |      
|                                                   |  |                            |       |                         
|NET INTEREST INCOME                                |  |                            | 2,409 |                          |   | 2,161 |  |      | 4,860 |  |   | 4,168
|Provision for loan losses                          |  |                            | 22    |                          |   | 75    |  |      | 202   |  |   | 75   
|                                                   |  |                            |       |                          |   |       |  |      |       |  |   |      
|NET INTEREST INCOME AFTERPROVISION FOR LOAN LOSSES |  |                            | 2,387 |                          |   | 2,086 |  |      | 4,658 |  |   | 4,093
|                                                   |  |                            |       |                          |   |       |  |      |       |  |   |      
|                                                   |  |                            |       |                         
|NON-INTEREST INCOME                                |  |                            |       |                          |   |       |  |      |       |  |   |      
|Service charges on deposits                        |  |                            | 200   |                          |   | 217   |  |      | 390   |  |   | 413  
|Fiduciary activities                               |  |                            | 142   |                          |   | 100   |  |      | 259   |  |   | 200  
|Earnings on investment in life insurance           |  |                            | 54    |                          |   | 52    |  |      | 107   |  |   | 103  
|ATM card fees                                      |  |                            | 146   |                          |   | 141   |  |      | 278   |  |   | 266  
|Realized gains on sales of securities              |  |                            |      |                          |   |      |  |      | 289   |  |   |     
|Other income                                       |  |                            | 124   |                          |   | 70    |  |      | 183   |  |   | 119  
|                                                   |  |                            |       |                          |   |       |  |      |       |  |   |      
|TOTAL OTHER INCOME                                 |  |                            | 666   |                          |   | 580   |  |      | 1,506 |  |   | 1,101
|                                                   |  |                            |       |                          |   |       |  |      |       |  |   |      
|                                                   |  |                            |       |                         
|NON-INTEREST EXPENSES                              |  |                            |       |                          |   |       |  |      |       |  |   |      
|Employee compensation & benefits                   |  |                            | 1,071 |                          |   | 920   |  |      | 2,161 |  |   | 1,905
|Net occupancy & equipment                          |  |                            | 302   |                          |   | 294   |  |      | 594   |  |   | 578  
|ATM expense                                        |  |                            | 97    |                          |   | 93    |  |      | 191   |  |   | 177  
|Professional fees                                  |  |                            | 93    |                          |   | 76    |  |      | 228   |  |   | 182  
|Director & advisory boards compensation            |  |                            | 87    |                          |   | 83    |  |      | 149   |  |   | 174  
|Supplies & postage                                 |  |                            | 72    |                          |   | 70    |  |      | 157   |  |   | 139  
|FDIC and OCC assessments                           |  |                            | 285   |                          |   | 47    |  |      | 391   |  |   | 76   
|Other non-interest expenses                        |  |                            | 288   |                          |   | 299   |  |      | 572   |  |   | 556  
|                                                   |  |                            |       |                          |   |       |  |      |       |  |   |      
|TOTAL NON-INTEREST EXPENSES                        |  |                            | 2,295 |                          |   | 1,882 |  |      | 4,443 |  |   | 3,787
|                                                   |  |                            |       |                          |   |       |  |      |       |  |   |      
|                                                   |  |                            |       |                         
|Income before income taxes                         |  |                            | 758   |                          |   | 784   |  |      | 1,721 |  |   | 1,407
|Income tax expense                                 |  |                            | 143   |                          |   | 173   |  |      | 365   |  |   | 292  
|                                                   |  |                            |       |                          |   |       |  |      |       |  |   |      
|NET INCOME                                         |  | $                          | 615   |                          | $ | 611   |  | $    | 1,356 |  | $ | 1,115
|                                                   |  |                            |       |                          |   |       |  |      |       |  |   |      
|                                                   |  |                            |       |                         
|Basic earnings per share                           |  | $                          | 0.44  |                          | $ | 0.44  |  | $    | 0.97  |  | $ | 0.80 
|                                                   |  |                            |       |                          |   |       |  |      |       |  |   |      
|Dividends per share                                |  | $                          | 0.140 |                          | $ | 0.125 |  | $    | 0.28  |  | $ | 0.25 
|                                                   |  |                            |       |                          |   |       |  |      |       |  |   |      

See accompanying notes.



3



---

PART I  FINANCIAL INFORMATION, CONTINUED



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







FIRST COMMUNITY FINANCIAL CORPORATION

CONSOLIDATED STATEMENTS OF SHAREHOLDERS EQUITY

For the Six Months Ended
June 30, 2009 and 2008

(Unaudited)

(Dollars In Thousands, Except Per Share Data)



|                                                                                                                    |  |             |       |                             |   |                  |  |   |               |   |  |                                     |      |   |       |   |       |   |  |   |        |  
|------------------------------------------------------------------------------------------------------------------- |  | ----------- | ----- | --------------------------- | - | ---------------- |  | - | ------------- | - |  | ----------------------------------- | ---- | - | ----- | - | ----- | - |  | - | ------ | -
|                                                                                                                    |  | CommonStock |       | CapitalIn ExcessofPar Value |   | RetainedEarnings |  |   | TreasuryStock |   |  | AccumulatedOtherComprehensiveIncome |      |   | Total |  
|                                                                                                                    |  |             |       |                             |   |                 
|Balance - January 1, 2008                                                                                           |  | $           | 7,000 |                             | $ | 245              |  | $ | 13,993        |   |  | $                                   |     |   |       | $ | 295   |   |  | $ | 21,533 |  
|                                                                                                                    |  |             |       |                             |   |                  |  |   |               |   |  |                                     |      |   |       |   |       |   |  |   |        |  
|                                                                                                                    |  |             |       |                             |   |                 
|Cumulative effect adjustment upon change in accounting principle                                                    |  |             |       |                             |   |                  |  |   | (195          | ) |  |                                     |      |   |       |   |       |   |  |   | (195   | )
|                                                                                                                    |  |             |       |                             |   |                 
|Comprehensive income:                                                                                               |  |             |       |                             |   |                  |  |   |               |   |  |                                     |      |   |       |   |       |   |  |   |        |  
|Net income                                                                                                          |  |             |       |                             |   |                  |  |   | 1,115         |   |  |                                     |      |   |       |   |       |   |  |   | 1,115  |  
|Change in net unrealized losses on securities available for sale, net of deferred income taxes                      |  |             |       |                             |   |                  |  |   |               |   |  |                                     |      |   |       |   | (8    | ) |  |   | (8     | )
|                                                                                                                    |  |             |       |                             |   |                  |  |   |               |   |  |                                     |      |   |       |   |       |   |  |   |        |  
|Total comprehensive income                                                                                          |  |             |       |                             |   |                  |  |   |               |   |  |                                     |      |   |       |   |       |   |  |   | 1,107  |  
|                                                                                                                    |  |             |       |                             |   |                  |  |   |               |   |  |                                     |      |   |       |   |       |   |  |   |        |  
|                                                                                                                    |  |             |       |                             |   |                 
|Issuance of stock in connection with Dividend reinvestment plan - 486 shares                                        |  |             | 2     |                             |   | 13               |  |   |               |   |  |                                     |      |   |       |   |       |   |  |   | 15     |  
|                                                                                                                    |  |             |       |                             |   |                 
|Cash dividends, $0.25 per share                                                                                     |  |             |       |                             |   |                  |  |   | (350          | ) |  |                                     |      |   |       |   |       |   |  |   | (350   | )
|                                                                                                                    |  |             |       |                             |   |                  |  |   |               |   |  |                                     |      |   |       |   |       |   |  |   |        |  
|                                                                                                                    |  |             |       |                             |   |                 
|Balance, June 30, 2008                                                                                              |  | $           | 7,002 |                             | $ | 258              |  | $ | 14,563        |   |  | $                                   |     |   |       | $ | 287   |   |  | $ | 22,110 |  
|                                                                                                                    |  |             |       |                             |   |                  |  |   |               |   |  |                                     |      |   |       |   |       |   |  |   |        |  
|                                                                                                                    |  |             |       |                             |   |                 
|Balance - January 1, 2009                                                                                           |  | $           | 7,010 |                             | $ | 293              |  | $ | 15,406        |   |  | $                                   | (62  | ) |       | $ | 766   |   |  | $ | 23,413 |  
|                                                                                                                    |  |             |       |                             |   |                  |  |   |               |   |  |                                     |      |   |       |   |       |   |  |   |        |  
|                                                                                                                    |  |             |       |                             |   |                 
|Comprehensive income:                                                                                               |  |             |       |                             |   |                  |  |   |               |   |  |                                     |      |   |       |   |       |   |  |   |        |  
|Net income                                                                                                          |  |             |       |                             |   |                  |  |   | 1,356         |   |  |                                     |      |   |       |   |       |   |  |   | 1,356  |  
|Change in net unrealized gains on securities available for sale, net of deferred income taxes and reclassifications |  |             |       |                             |   |                  |  |   |               |   |  |                                     |      |   |       |   | 267   |   |  |   | 267    |  
|                                                                                                                    |  |             |       |                             |   |                  |  |   |               |   |  |                                     |      |   |       |   |       |   |  |   |        |  
|Total comprehensive income                                                                                          |  |             |       |                             |   |                  |  |   |               |   |  |                                     |      |   |       |   |       |   |  |   | 1,623  |  
|                                                                                                                    |  |             |       |                             |   |                  |  |   |               |   |  |                                     |      |   |       |   |       |   |  |   |        |  
|                                                                                                                    |  |             |       |                             |   |                 
|Issuance of stock in connection with dividend reinvestment plan - 1,101 shares                                      |  |             | 5     |                             |   | 28               |  |   |               |   |  |                                     |      |   |       |   |       |   |  |   | 33     |  
|Treasury stock acquired-1,601shares                                                                                 |  |             |       |                             |   |                  |  |   |               |   |  |                                     | (48  | ) |       |   |       |   |  |   | (48    | )
|Cash dividends, $0.28 per share                                                                                     |  |             |       |                             |   |                  |  |   | (391          | ) |  |                                     |      |   |       |   |       |   |  |   | (391   | )
|                                                                                                                    |  |             |       |                             |   |                  |  |   |               |   |  |                                     |      |   |       |   |       |   |  |   |        |  
|                                                                                                                    |  |             |       |                             |   |                 
|Balance, June 30, 2009                                                                                              |  | $           | 7,015 |                             | $ | 321              |  | $ | 16,371        |   |  | $                                   | (110 | ) |       | $ | 1,033 |   |  | $ | 24,630 |  
|                                                                                                                    |  |             |       |                             |   |                  |  |   |               |   |  |                                     |      |   |       |   |       |   |  |   |        |  

See accompanying notes.



4



---

PART I  FINANCIAL INFORMATION, CONTINUED



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







FIRST COMMUNITY FINANCIAL CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

(Dollars In Thousands)



|                                                                                  |  |                          |         |   |      |   |         |  
|--------------------------------------------------------------------------------- |  | ------------------------ | ------- | - | ---- | - | ------- | -
|                                                                                  |  | Six Months EndedJune 30, |        
|                                                                                  |  | 2009                     |         |   | 2008 |  
|CASH FLOWS FROM OPERATING ACTIVITIES                                              |  |                          |         |   |      |   |         |  
|Net income                                                                        |  | $                        | 1,356   |   |      | $ | 1,115   |  
|Adjustments to reconcile net income to net cash provided by operating activities: |  |                          |         |   |      |   |         |  
|Provision for loan losses                                                         |  |                          | 202     |   |      |   | 75      |  
|Depreciation and amortization                                                     |  |                          | 273     |   |      |   | 274     |  
|Net accretion of securities premium                                               |  |                          | (146    | ) |      |   | (142    | )
|Other-than temporary impairment charge                                            |  |                          | 15      |   |      |   |        |  
|Net realized gains on sales of securities                                         |  |                          | (289    | ) |      |   |        |  
|Earnings on life insurance                                                        |  |                          | (107    | ) |      |   | (103    | )
|Increase in other assets                                                          |  |                          | (918    | ) |      |   | (895    | )
|Increase (decrease) in other liabilities                                          |  |                          | (189    | ) |      |   | 51      |  
|                                                                                  |  |                          |         |   |      |   |         |  
|Net cash provided by operating activities                                         |  |                          | 197     |   |      |   | 375     |  
|                                                                                  |  |                          |         |   |      |   |         |  
|CASH FLOWS FROM INVESTING ACTIVITIES                                              |  |                          |         |   |      |   |         |  
|Securities held to maturity:                                                      |  |                          |         |   |      |   |         |  
|Maturities, calls and principal repayments                                        |  |                          | 1,790   |   |      |   | 2,370   |  
|Purchases                                                                         |  |                          | (4,722  | ) |      |   | (1,796  | )
|Securities available for sale:                                                    |  |                          |         |   |      |   |         |  
|Maturities, calls and principal repayments                                        |  |                          | 9,048   |   |      |   | 11,397  |  
|Purchases                                                                         |  |                          | (16,591 | ) |      |   | (18,696 | )
|Proceeds from sales                                                               |  |                          | 5,364   |   |      |   |        |  
|Net increase in loans receivable                                                  |  |                          | (2,775  | ) |      |   | (12,728 | )
|Net increase in restricted investment in bank stocks                              |  |                          |        |   |      |   | (206    | )
|Purchases of premises and equipment                                               |  |                          | (246    | ) |      |   | (136    | )
|Net maturities of interest bearing time deposits                                  |  |                          |        |   |      |   | 99      |  
|                                                                                  |  |                          |         |   |      |   |         |  
|Net cash used in investing activities                                             |  |                          | (8,132  | ) |      |   | (19,696 | )
|                                                                                  |  |                          |         |   |      |   |         |  
|CASH FLOWS FROM FINANCING ACTIVITIES                                              |  |                          |         |   |      |   |         |  
|Net increase (decrease) in non-interest bearing demand and savings deposits       |  |                          | (1,470  | ) |      |   | 1,095   |  
|Net increase in time deposits                                                     |  |                          | 25,166  |   |      |   | 15,604  |  
|Net decrease in short-term borrowings                                             |  |                          | (6,784  | ) |      |   | (3,718  | )
|Proceeds from long-term borrowings                                                |  |                          |        |   |      |   | 5,000   |  
|Repayment of long-term borrowings                                                 |  |                          |        |   |      |   | (1,000  | )
|Proceeds from issuance of common stock                                            |  |                          | 33      |   |      |   | 15      |  
|Acquisition of treasury stock                                                     |  |                          | (48     | ) |      |   |        |  
|Dividends paid                                                                    |  |                          | (391    | ) |      |   | (350    | )
|                                                                                  |  |                          |         |   |      |   |         |  
|Net cash provided by financing activities                                         |  |                          | 16,506  |   |      |   | 16,646  |  
|                                                                                  |  |                          |         |   |      |   |         |  
|Net increase (decrease) in cash and cash equivalents                              |  |                          | 8,571   |   |      |   | (2,675  | )
|Cash and cash equivalents:                                                        |  |                          |         |   |      |   |         |  
|Beginning of year                                                                 |  |                          | 6,864   |   |      |   | 10,082  |  
|                                                                                  |  |                          |         |   |      |   |         |  
|End of period                                                                     |  | $                        | 15,435  |   |      | $ | 7,407   |  
|                                                                                  |  |                          |         |   |      |   |         |  
|SUPPLEMENTAL DISCLOSURES:                                                         |  |                          |         |   |      |   |         |  
|Cash payments for interest                                                        |  | $                        | 4,495   |   |      | $ | 4,896   |  
|                                                                                  |  |                          |         |   |      |   |         |  
|Cash payments for income taxes                                                    |  | $                        | 522     |   |      | $ | 303     |  
|                                                                                  |  |                          |         |   |      |   |         |  
|NON CASH INVESTING:                                                               |  |                          |         |   |      |   |         |  
|Transfer of loans to foreclosed real estate                                       |  | $                        | 122     |   |      | $ |        |  
|                                                                                  |  |                          |         |   |      |   |         |  

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)

June 30, 2009

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
United States 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 six months ended June 30, 2009, are not necessarily indicative of the results that may be expected for the year ending December 31, 2009.

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, 2008, included in the Corporations Form 10-K filed with the Securities and Exchange Commission on February 28, 2009.

The Corporation has evaluated events and transactions occurring subsequent to the balance sheet date of June 30, 2009, for items that should potentially be recognized or disclosed in these financial statements. The evaluation was
conducted through August 14, 2009, the date these financial statements were issued.

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 (Loss)

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 MonthsEnded June 30, |     |   | Six MonthsEnded June 30, |  
|                                                                |  | 2009                       |     |   | 2008                     |   |      | 2009 |  |   | 2008 |  
|                                                                |  | (Dollars in Thousands)     |    
|Unrealized holding gains (losses) arising during the period     |  | $                          | 72  |   |                          | $ | (521 | )    |  | $ | 679  |   |  | $ | (14 | )
|Reclassification of gains realized in net income                |  |                            |    |   |                          |   |     |      |  |   | (289 | ) |  |   |    |  
|Other than temporary impairment charge recognized in net income |  |                            | 15  |   |                          |   |     |      |  |   | 15   |   |  |   |    |  
|                                                                |  |                            |     |   |                          |   |      |      |  |   |      |   |  |   |     |  
|                                                                |  |                            | 87  |   |                          |   | (521 | )    |  |   | 405  |   |  |   | (14 | )
|Income tax effect                                               |  |                            | (33 | ) |                          |   | 178  |      |  |   | (138 | ) |  |   | 6   |  
|                                                                |  |                            |     |   |                          |   |      |      |  |   |      |   |  |   |     |  
|Change in accumulated other comprehensive income (loss)         |  | $                          | 54  |   |                          | $ | (343 | )    |  | $ | 267  |   |  | $ | (8  | )
|                                                                |  |                            |     |   |                          |   |      |      |  |   |      |   |  |   |     |  

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. The weighted average number of common shares
outstanding was 1,399,181 for the six months ended June 30, 2009 and 1,398,836 for the three months ended June 30, 2009. The weighted average number of shares outstanding was 1,400,011 for the six months ended June 30, 2008 and
1,400,021 for the three months ended June 30, 2008.

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 Corporation 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 $206,000 of standby letters of credit as of June 30, 2009.
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 June 30, 2009 for guarantees under standby letters of credit issued is not material.



7



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Note F  Securities

Management determines the appropriate classification of debt securities at the time of purchase and re-evaluates such designation as of each balance sheet date. Securities available for sale are those securities that the Corporation intends
to hold for an indefinite period of time, but not necessarily to maturity. Any decision to sell an available for sale security would be based on various factors. These securities are stated at fair value. Unrealized gains (losses) are reported as
changes in other comprehensive income, a component of shareholders equity, net of the related deferred tax effect. Premiums and discounts are recognized as interest income over the estimated lives of the securities, using the interest method.
Securities held to maturity are those securities that the Corporation has the intent and ability to hold to maturity. These securities are stated at cost adjusted for amortization of premiums and accretion of discounts, which is recognized as
interest income over their estimated lives, using the interest method.

Management evaluates securities for other-than-temporary impairment at least on a
quarterly basis, and more frequently when economic or market concerns warrant such evaluation. Consideration is given to (1) the length of time and the extent to which the fair value has been less than cost, (2) the financial condition and
near-term prospects of the issuer, and (3) the intent and ability of the Corporation to retain its investment in the issuer for a period of time sufficient to allow for any anticipated recovery in fair value. Gains and losses on the sale of
securities are recorded on the trade date and are determined using the specific identification method.

In April 2009, the Financial Accounting Standards
Board (FASB) issued FASB Staff Position (FSP) No. FAS 115-2 and FAS 124-2, Recognition and Presentation of Other-Than-Temporary Impairments(FSP FAS 115-2 and FAS 124-2). FSP FAS 115-2 and FAS 124-2 clarifies the interaction of the
factors that should be considered when determining whether a debt security is other-than-temporarily impaired. For debt securities, management must assess whether (a) it has the intent to sell the security and (b) it is more likely than
not that it will be required to sell the security prior to its anticipated recovery. These steps are done before assessing whether the entity will recover the cost basis of the investment. Previously, this assessment required management to assert it
has both the intent and the ability to hold a security for a period of time sufficient to allow for an anticipated recovery in fair value to avoid recognizing an other-than-temporary impairment. This change does not affect the need to forecast
recovery of the value of the security through either cash flows or market price.



8



---

In instances when a determination is made that an other-than-temporary impairment exists but the investor does not intend
to sell the debt security and it is not more likely than not that it will be required to sell the debt security prior to its anticipated recovery, FSP FAS 115-2 and FAS 124-2 changes the presentation and amount of the other-than-temporary impairment
recognized in the income statement. The other-than-temporary impairment is separated into (a) the amount of the total other-than-temporary impairment related to a decrease in cash flows expected to be collected from the debt security (the
credit loss) and (b) the amount of the total other-than-temporary impairment related to all other factors. The amount of the total other-than-temporary impairment related to the credit loss is recognized in earnings. The amount of the total
other-than-temporary impairment related to all other factors is recognized in other comprehensive income. This FSP is effective for the Corporation for interim and annual reporting periods June 30, 2009 and after. The adoption of this FSP did
not impact the Corporations financial condition or results of operations.

Amortized cost and fair value at June 30, 2009 and December 31,
2008 were as follows:



|                               |  |                |        |                      |   |                       |  |   |           |   |  |   |       
|------------------------------ |  | -------------- | ------ | -------------------- | - | --------------------- |  | - | --------- | - |  | - | ------
|                               |  | AmortizedCost  |        | GrossUnrealizedGains |   | GrossUnrealizedLosses |  |   | FairValue
|                               |  | (In Thousands)
|                               |  |                |        |                     
|SECURITIES AVAILABLE FOR SALE: |  |                |        |                      |   |                       |  |   |           |   |  |   |       
|June 30, 2009:                 |  |                |        |                      |   |                       |  |   |           |   |  |   |       
|U.S. agencies securities       |  | $              | 8,101  |                      | $ | 49                    |  | $ | (42       | ) |  | $ | 8,108 
|Mortgage-backed securities     |  |                | 58,832 |                      |   | 1,296                 |  |   | (77       | ) |  |   | 60,051
|Equity securities              |  |                | 661    |                      |   | 374                   |  |   |          |   |  |   | 1,035 
|                               |  |                |        |                      |   |                       |  |   |           |   |  |   |       
|                               |  |                |        |                     
|                               |  | $              | 67,594 |                      | $ | 1,719                 |  | $ | (119      | ) |  | $ | 69,194
|                               |  |                |        |                      |   |                       |  |   |           |   |  |   |       
|                               |  |                |        |                     
|December 31, 2008:             |  |                |        |                      |   |                       |  |   |           |   |  |   |       
|U.S. agencies securities       |  | $              | 6,590  |                      | $ | 134                   |  | $ |          |   |  | $ | 6,724 
|Mortgage-backed securities     |  |                | 58,084 |                      |   | 883                   |  |   | (205      | ) |  |   | 58,762
|Equity securities              |  |                | 507    |                      |   | 387                   |  |   | (4        | ) |  |   | 890   
|                               |  |                |        |                      |   |                       |  |   |           |   |  |   |       
|                               |  |                |        |                     
|                               |  | $              | 65,181 |                      | $ | 1,404                 |  | $ | (209      | ) |  | $ | 66,376
|                               |  |                |        |                      |   |                       |  |   |           |   |  |   |       
|                               |  |                |        |                     
|SECURITIES HELD TO MATURITY:   |  |                |        |                      |   |                       |  |   |           |   |  |   |       
|June 30, 2009:                 |  |                |        |                      |   |                       |  |   |           |   |  |   |       
|U.S. agencies securities       |  | $              | 250    |                      | $ | 14                    |  | $ |          |   |  | $ | 264   
|State and municipal securities |  |                | 26,995 |                      |   | 188                   |  |   | (1,155    | ) |  |   | 26,028
|                               |  |                |        |                      |   |                       |  |   |           |   |  |   |       
|                               |  |                |        |                     
|                               |  | $              | 27,245 |                      | $ | 202                   |  | $ | (1,155    | ) |  | $ | 26,292
|                               |  |                |        |                      |   |                       |  |   |           |   |  |   |       
|                               |  |                |        |                     
|December 31, 2008:             |  |                |        |                      |   |                       |  |   |           |   |  |   |       
|U.S. agencies securities       |  | $              | 250    |                      | $ | 17                    |  | $ |          |   |  | $ | 267   
|State and municipal securities |  |                | 23,877 |                      |   | 186                   |  |   | (1,082    | ) |  |   | 22,981
|                               |  |                |        |                      |   |                       |  |   |           |   |  |   |       
|                               |  |                |        |                     
|                               |  | $              | 24,127 |                      | $ | 203                   |  | $ | (1,082    | ) |  | $ | 23,248
|                               |  |                |        |                      |   |                       |  |   |           |   |  |   |       



9



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The following table shows the Corporations investments gross unrealized losses and fair value, aggregated by
investment category and length of time that individual securities have been in a continuous unrealized loss position, at June 30, 2009 and December 31, 2008:



|                               |  |                     |        |                   |   |           |  |                  |       |           |   |                  |  |   |        |  |   |      
|------------------------------ |  | ------------------- | ------ | ----------------- | - | --------- |  | ---------------- | ----- | --------- | - | ---------------- |  | - | ------ |  | - | -----
|                               |  | Less than 12 Months |        | 12 Months or More |   | Total    
|                               |  | FairValue           |        | UnrealizedLosses  |   | FairValue |  | UnrealizedLosses |       | FairValue |   | UnrealizedLosses
|                               |  | (In Thousands)     
|June 30, 2009                  |  |                     |       
|                               |  |                     |        |                   |   |          
|SECURITIES AVAILABLE FOR SALE: |  |                     |        |                   |   |           |  |                  |       |           |   |                  |  |   |        |  |   |      
|                               |  |                     |        |                   |   |          
|U. S agency securities         |  | $                   | 2,787  |                   | $ | 42        |  | $                |      |           | $ |                 |  | $ | 2,787  |  | $ | 42   
|Mortgage-backed securities     |  |                     | 5,792  |                   |   | 30        |  |                  | 3,270 |           |   | 47               |  |   | 9,062  |  |   | 77   
|                               |  |                     |        |                   |   |           |  |                  |       |           |   |                  |  |   |        |  |   |      
|                               |  |                     |        |                   |   |          
|                               |  |                     | 8,579  |                   |   | 72        |  |                  | 3,270 |           |   | 47               |  |   | 11,849 |  |   | 119  
|                               |  |                     |        |                   |   |           |  |                  |       |           |   |                  |  |   |        |  |   |      
|                               |  |                     |        |                   |   |          
|SECURITIES HELD TO MATURITY:   |  |                     |        |                   |   |           |  |                  |       |           |   |                  |  |   |        |  |   |      
|                               |  |                     |        |                   |   |          
|State and municipal securities |  |                     | 9,988  |                   |   | 205       |  |                  | 5,977 |           |   | 950              |  |   | 15,965 |  |   | 1,155
|                               |  |                     |        |                   |   |           |  |                  |       |           |   |                  |  |   |        |  |   |      
|                               |  |                     |        |                   |   |          
|Total                          |  | $                   | 18,567 |                   | $ | 277       |  | $                | 9,247 |           | $ | 997              |  | $ | 27,814 |  | $ | 1,274
|                               |  |                     |        |                   |   |           |  |                  |       |           |   |                  |  |   |        |  |   |      
|                               |  |                     |       
|                               |  | Less than 12 Months |        | 12 Months or More |   | Total    
|                               |  | FairValue           |        | UnrealizedLosses  |   | FairValue |  | UnrealizedLosses |       | FairValue |   | UnrealizedLosses
|                               |  | (In Thousands)     
|December 31, 2008              |  |                     |       
|                               |  |                     |        |                   |   |          
|SECURITIES AVAILABLE FOR SALE: |  |                     |        |                   |   |           |  |                  |       |           |   |                  |  |   |        |  |   |      
|                               |  |                     |        |                   |   |          
|Mortgage-backed securities     |  | $                   | 10,812 |                   | $ | 84        |  | $                | 5,207 |           | $ | 121              |  | $ | 16,019 |  | $ | 205  
|Equity securities              |  |                     | 16     |                   |   | 4         |  |                  |      |           |   |                 |  |   | 16     |  |   | 4    
|                               |  |                     |        |                   |   |           |  |                  |       |           |   |                  |  |   |        |  |   |      
|                               |  |                     |        |                   |   |          
|                               |  |                     | 10,828 |                   |   | 88        |  |                  | 5,207 |           |   | 121              |  |   | 16,035 |  |   | 209  
|                               |  |                     |        |                   |   |           |  |                  |       |           |   |                  |  |   |        |  |   |      
|                               |  |                     |        |                   |   |          
|SECURITIES HELD TO MATURITY:   |  |                     |        |                   |   |           |  |                  |       |           |   |                  |  |   |        |  |   |      
|                               |  |                     |        |                   |   |          
|State and municipal securities |  |                     | 11,408 |                   |   | 818       |  |                  | 1,025 |           |   | 264              |  |   | 12,433 |  |   | 1,082
|                               |  |                     |        |                   |   |           |  |                  |       |           |   |                  |  |   |        |  |   |      
|                               |  |                     |        |                   |   |          
|Total                          |  | $                   | 22,236 |                   | $ | 906       |  | $                | 6,232 |           | $ | 385              |  | $ | 28,468 |  | $ | 1,291
|                               |  |                     |        |                   |   |           |  |                  |       |           |   |                  |  |   |        |  |   |      

At June 30, 2009, three U. S. agency securities have unrealized losses. The aggregate depreciation from the
Corporations amortized cost basis on these securities is 1.5%. In managements opinion, these unrealized losses relate to changes in interest rates.

At June 30, 2009, thirty mortgage-backed securities have unrealized losses. The aggregate depreciation from the Corporations amortized cost basis on these securities is 0.8%. In managements opinion, these unrealized losses
relate to changes in interest rates. The Corporations mortgage backed security portfolio consists of only government sponsored agencies, and contains no private label securities.



10



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At June 30, 2009, sixty-two state and municipal securities have unrealized losses with aggregate depreciation of
6.7% from the Corporations amortized cost basis. In managements opinion, these unrealized losses relate primarily to changes in interest rates. In analyzing the issuers financial condition, management considers the issuers
bond rating as well as the financial performance of the respective municipality.

At June 30, 2009, one equity security, a regional bank holding
company, was deemed to be other-than-temporarily impaired, and a $15,000 charge was recorded for the three months ended June 30, 2009. This equity security has depreciated in fair value 76% during the last year, its dividend has been
significantly reduced, and a near term recovery of value is not expected.

Note G: Fair Value of Financial Instruments

Management uses its best judgment in estimating the fair value of the Corporations consolidated financial instruments; however, there are inherent weaknesses in any
estimation technique. Therefore, for substantially all financial instruments, the fair value estimates herein are not necessarily indicative of the amounts the Bank could have realized in a sales transaction on the dates indicated. The estimated
fair value amounts have been measured as of their respective period-ends and have not been re-evaluated or updated for purposes of these financial statements subsequent to those respective dates. As such, the estimated fair values of these financial
instruments subsequent to the respective reporting dates may be different than the amounts reported at each period-end.

In September 2006, the FASB issued
Statement No. 157, Fair Value Measurements (SFAS 157), which defines fair value, establishes a framework for measuring fair value under GAAP, and expands disclosures about fair value measurements. SFAS 157 applies to
other accounting pronouncements that require or permit fair value measurements. The Bank adopted SFAS 157 effective for its fiscal year beginning January 1, 2008.

In December 2007, the FASB issued FSP 157-2, Effective Date of FASB Statement No. 157 (FSP 157-2). FSP 157-2 delayed the effective date of SFAS 157 for all non-financial assets and
liabilities, except those that are recognized or disclosed at fair value on a recurring basis (at least annually) to fiscal years beginning after November 15, 2008 and interim periods within those fiscal years. As such, the Corporation
only partially adopted the provisions of SFAS #157, and began to account and report for non-financial assets and liabilities in 2009. In October 2008, the FASB issued FASB Staff Position 157-3,



11



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Determining the Fair Value of a Financial Asset When the Market for that Asset is Not Active(FSP 157-3), to clarify the application
of the provisions of SFAS 157 in an inactive market and how an entity would determine fair value in an inactive market. FSP 157-3 was effective immediately and applied to the Corporations December 31, 2008, consolidated
financial statements. The adoption of SFAS 157 and FSP 157-3 had no impact on the amounts reported in the financial statements.

In April
2009, the FASB issued FSP No. FAS 157-4, Determining Fair Value When the Volume and Level of Activity for the Asset or Liability Have Significantly Decreased and Identifying Transactions That Are Not Orderly(FSP FAS 157-4).
FASB Statement 157, Fair Value Measurements, defines fair value as the price that would be received to sell the asset or transfer the liability in an orderly transaction (that is, not a forced liquidation or distressed sale) between market
participants at the measurement date under current market conditions. FSP FAS 157-4 provides additional guidance on determining when the volume and level of activity for the asset or liability has significantly decreased. The FSP also includes
guidance on identifying circumstances when a transaction may not be considered orderly.

FSP FAS 157-4 provides a list of factors that a reporting entity
should evaluate to determine whether there has been a significant decrease in the volume and level of activity for the asset or liability in relation to normal market activity for the asset or liability. When the reporting entity concludes there has
been a significant decrease in the volume and level of activity for the asset or liability, further analysis of the information from that market is needed and significant adjustments to the related prices may be necessary to estimate fair value in
accordance with Statement 157.

This FSP clarifies that when there has been a significant decrease in the volume and level of activity for the asset or
liability, some transactions may not be orderly. In those situations, the entity must evaluate the weight of the evidence to determine whether the transaction is orderly. The FSP provides a list of circumstances that may indicate that a transaction
is not orderly. A transaction price that is not associated with an orderly transaction is given little, if any, weight when estimating fair value. This FSP is effective for the Corporation for interim and annual reporting periods June 30, 2009
and after. The adoption of this FSP did not impact the Corporations financial condition or results of operations.

SFAS 157 establishes a fair value
hierarchy that prioritizes the inputs to valuation methods used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the
lowest priority to unobservable inputs (Level 3 measurements). The three levels of the fair value hierarchy under SFAS 157 are as follows:

Level
1: Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities.



12



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Level 2:Quoted prices in markets that are not active, or inputs that are observable either directly or
indirectly, for substantially the full term of the asset or liability.

Level 3:Prices or valuation techniques that require inputs that are both
significant to the fair value measurement and unobservable (i.e., supported with little or no market activity).

An assets or liabilitys level
within the fair value hierarchy is based on the lowest level of input that is significant to the fair value measurement.

For financial assets measured at
fair value on a recurring basis, the fair value measurements by level within the fair value hierarchy used at June 30, 2009 and December 31, 2008 are as follows (in thousands):



|                              |  |                  |        |                                                            |   |                                           |  |                                        |        |  |   |    
|----------------------------- |  | ---------------- | ------ | ---------------------------------------------------------- | - | ----------------------------------------- |  | -------------------------------------- | ------ |  | - | ---
|Description                   |  | June 30, 2009    |        | (Level 1)Quoted Prices inActive
Marketsfor IdenticalAssets |   | (Level 2)SignificantOtherObservableInputs |  | (Level 3)SignificantUnobservableInputs
|                              |  |                  |        |                                                           
|Securities available for sale |  | $                | 69,194 |                                                            | $ | 440                                       |  | $                                      | 68,159 |  | $ | 595
|                              |  |                  |        |                                                           
|Description                   |  | December 31,2008 |        | (Level 1)Quoted Prices inActive Marketsfor
IdenticalAssets |   | (Level 2)SignificantOtherObservableInputs |  | (Level 3)SignificantUnobservableInputs
|                              |  |                  |        |                                                           
|Securities available for sale |  | $                | 66,376 |                                                            | $ | 465                                       |  | $                                      | 65,486 |  | $ | 425

The table below presents a reconciliation and income statement of gains and losses for available for sale
securities measured at fair value on a recurring basis using significant unobservable inputs (level 3) for the periods ending June 30, 2009.



13



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|                                                            |  |                                 |     |                               |   |    
|----------------------------------------------------------- |  | ------------------------------- | --- | ----------------------------- | - | ---
|                                                            |  | Three Months EndedJune 30, 2009 |     | Six Months EndedJune 30, 2009
|Fair Value, beginning of period                             |  | $                               | 425 |                               | $ | 425
|Total gains (losses) included in earnings                   |  |                                 | 0   |                               |   | 0  
|Total gains (losses) included in other comprehensive income |  |                                 | 0   |                               |   | 0  
|Purchases, issuances, and settlements                       |  |                                 | 170 |                               |   | 170
|Transfers in and/or out of Level 3                          |  |                                 | 0   |                               |   | 0  
|                                                            |  |                                 |     |                               |   |    
|Fair Value, June 30, 2009                                   |  | $                               | 595 |                               | $ | 595
|                                                            |  |                                 |     |                               |   |    

Assets measured at fair value on a non-recurring basis as June 30, 2009 and December 31, 2008 are
summarized below:



|                       |  |                  |     |                                                            |   |                                           |  |                                        |   |  |   |    
|---------------------- |  | ---------------- | --- | ---------------------------------------------------------- | - | ----------------------------------------- |  | -------------------------------------- | - |  | - | ---
|Description            |  | June 30,2009     |     | (Level 1)Quoted Prices inActive Marketsfor
IdenticalAssets |   | (Level 2)SignificantOtherObservableInputs |  | (Level 3)SignificantUnobservableInputs
|                       |  |                  |     |                                                           
|Impaired loans         |  | $                | 299 |                                                            | $ |                                          |  | $                                      |  |  | $ | 299
|Foreclosed real estate |  |                  | 122 |                                                            |   |                                          |  |                                        |  |  |   | 122
|                       |  |                  |     |                                                           
|Description            |  | December 31,2008 |     | (Level 1)Quoted Prices inActive Marketsfor
IdenticalAssets |   | (Level 2)SignificantOtherObservableInputs |  | (Level 3)SignificantUnobservableInputs
|                       |  |                  |     |                                                           
|Impaired loans         |  | $                | 36  |                                                            | $ |                                          |  | $                                      |  |  | $ | 36 

Total impaired loans, which are measured for impairment using the fair value of the collateral for
collateral-dependent loans, had a carrying amount of $328,000 and $72,000, net of the valuation allowances of $29,000 and $36,000 as of June 30, 2009 and December 31, 2008, respectively. This resulted in additional provision for loan
losses of $0 for the periods ending June 30, 2009 and December 31, 2008.

Foreclosed real estate is valued at its estimated fair market value,
net of selling costs, at the time of foreclosure.

In April 2009, the FASB issued FSP No. FAS 107-1 and APB 28-1, Interim Disclosures about Fair
Value of Financial Instruments(FSP FAS 107-1 and APB 28-1). FSP FAS 107-1 and APB 28-1 amends FASB Statement No. 107, Disclosures about Fair Value of Financial Instruments, to require disclosures about fair value of financial
instruments for interim reporting periods of publicly traded companies as well as in annual financial statements. This FSP also amends APB Opinion No. 28, Interim Financial Reporting, to require those disclosures in summarized financial
information at interim reporting periods.This FSP is effective for the Corporation for interim and annual reporting periods ending June 30, 2009 and after. The adoption of this FSP did not impact the Corporations financial
condition or results of operations.



14



---

The following information should not be interpreted as an estimate of the fair value of the entire Corporation since a
fair value calculation is only provided for a limited portion of the Corporations assets and liabilities. Due to a wide range of valuation techniques and the degree of subjectivity used in making the estimates, comparisons between the
Corporations disclosures and those of other companies may not be meaningful. The following methods and assumptions were used to estimate the fair values of the Corporations financial instruments at June 30, 2009 and
December 31, 2008.

Cash and cash equivalents (carried at cost):

The carrying amounts reported in the balance sheet for cash and short-term instruments approximate those assets fair values.

Time certificates of deposit (carried at cost):

The carrying amount of time certificates of deposit approximates its fair value.

Securities:

The fair value of securities
available for sale are determined by obtaining quoted market prices on nationally recognized securities exchanges (Level 1), or matrix pricing (Level 2), which is a mathematical technique used widely in the industry to value debt securities without
relying exclusively on quoted market prices for the specific securities but rather by relying on the securities relationship to other benchmark quoted prices. For certain securities which are not traded in active markets or are subject to
transfer restrictions, valuations are adjusted to reflect illiquidy and/or non-transferability, and such adjustments are generally based on available market evidence (Level 3). The Corporation has one level 3 security, which is a local, closely
held, community bank equity security with limited trading activity.

Loans receivable (carried at cost):

For variable rate loans that reprice frequently and with no significant change in credit risk, fair values are based on carrying values. The fair values of fixed rate
loans are estimated using discounted cash flow analyses, using interest rates currently being offered in the market for loans with similar terms to borrowers of similar credit quality.

Impaired loans (generally carried at fair value):

Impaired loans are those that are accounted for under FASB Statement No. 114,Accounting by Creditors for Impairment of a Loan(SFAS 114),in which the Corporation has measured
impairment generally based on the fair value of the loans collateral. Fair value is generally



15



---

determined based upon independent third-party appraisals of the properties, or discounted cash flows based upon the expected proceeds. These assets are
included as Level 3 fair values, based upon the lowest level of input that is significant to the fair value measurements.

Restricted investment in
bank stock (carried at cost):

The carrying amount of restricted investment in bank stock approximates fair value.

Accrued interest receivable and payable (carried at cost):

The carrying amount of accrued interest receivable and accrued interest payable approximates its fair value.

Deposit liabilities (carried
at cost):

The fair values disclosed for demand deposits (e.g., interest and noninterest checking, passbook savings and money market accounts) are,
by definition, equal to the amount payable on demand at the reporting date (i.e., their carrying amounts). Fair values for fixed-rate certificates of deposit are estimated using a discounted cash flow calculation that applies interest rates
currently being offered in the market on certificates to a schedule of aggregated expected monthly maturities on time deposits.

Short-term
borrowings (carried at cost):

The carrying amounts of short-term borrowings approximate their fair values.

Long-term debt (carried at cost):

Fair values of long-term
debt are estimated using discounted cash flow analysis, based on rates currently available to the Corporation for advances from the FHLB with similar terms and remaining maturities

Junior Subordinated debt (carried at cost):

Fair values of junior subordinated debt are estimated using
discounted cash flow analysis, based on rates currently offered on such debt, with similar terms and remaining maturities. As the Corporation has the ability to redeem the junior subordinated debt at any time, the fair value approximates its
carrying value.

Off-balance sheet financial instruments (disclosed at cost):

Fair values for the Corporations off-balance sheet financial instruments (lending commitments and letters of credit) are based on fees currently charged to enter into similar agreements, taking into account, the
remaining terms of the agreements and the counterparties credit standing.

The estimated fair values of the Corporations financial instruments
were as follows at June 30, 2009 and December 31, 2008.



16



---

|                                        |  |                |         |                   |   |                |  |           |         |  |   |        
|--------------------------------------- |  | -------------- | ------- | ----------------- | - | -------------- |  | --------- | ------- |  | - | -------
|                                        |  | June 30, 2009  |         | December 31, 2008
|                                        |  | CarryingAmount |         | FairValue         |   | CarryingAmount |  | FairValue
|                                        |  | (In Thousands)
|Financial assets:                       |  |                |         |                   |   |                |  |           |         |  |   |        
|Cash and cash equivalents               |  | $              | 15,435  |                   | $ | 15,435         |  | $         | 6,864   |  | $ | 6,864  
|Time certificates of deposit            |  |                | 396     |                   |   | 396            |  |           | 396     |  |   | 396    
|Investment securities:                  |  |                |         |                   |   |                |  |           |         |  |   |        
|Available for sale                      |  |                | 69,194  |                   |   | 69,194         |  |           | 66,376  |  |   | 66,376 
|Held to maturity                        |  |                | 27,245  |                   |   | 26,292         |  |           | 24,127  |  |   | 23,248 
|Loans, less allowance for loan losses   |  |                | 214,828 |                   |   | 215,551        |  |           | 212,377 |  |   | 213,544
|Accrued interest receivable             |  |                | 1,391   |                   |   | 1,391          |  |           | 1,241   |  |   | 1,241  
|Restricted investment in bank stocks    |  |                | 2,661   |                   |   | 2,661          |  |           | 2,661   |  |   | 2,661  
|                                        |  |                |         |                  
|Financial liabilities:                  |  |                |         |                   |   |                |  |           |         |  |   |        
|Deposits                                |  |                | 286,302 |                   |   | 291,086        |  |           | 262,606 |  |   | 263,790
|Short-term borrowings                   |  |                | 3,829   |                   |   | 3,829          |  |           | 10,613  |  |   | 10,613 
|Long-term borrowings                    |  |                | 22,000  |                   |   | 23,602         |  |           | 22,000  |  |   | 24,281 
|Junior subordinated debt                |  |                | 5,155   |                   |   | 5,155          |  |           | 5,155   |  |   | 5,155  
|Accrued interest payable                |  |                | 480     |                   |   | 480            |  |           | 570     |  |   | 570    
|                                        |  |                |         |                  
|Off-balance sheet financial instruments |  |                |        |                   |   |               |  |           |        |  |   |       

Note H  New and Recently Adopted Accounting Pronouncements

In June 2009, the FASB issued SFAS No. 166, Accounting for Transfers of Financial Assets, an amendment of FASB Statement No. 140.This statement
prescribes the information that a reporting entity must provide in its financial reports about a transfer of financial assets; the effects of a transfer on its financial position, financial performance and cash flows; and a transferors
continuing involvement in transferred financial assets. Specifically, among other aspects, SFAS 166 amends Statement of Financial Standard No. 140, Accounting for Transfers and Servicing of Financial Assets and Extinguishments of
Liabilities, or SFAS 140, by removing the concept of a qualifying special-purpose entity from SFAS 140 and removes the exception from applying FIN 46(R) to variable interest entities that are qualifying special-purpose entities.
It also modifies the financial-components approach used in SFAS 140. SFAS 166 is effective for fiscal years beginning after November 15, 2009. The Corporation does not anticipate the adoption of this new pronouncement will have a
material impact on its consolidated financial statements.

In June 2009, the FASB issued SFAS No. 167, Amendments to FASB Interpretation
No. 46(R).This statement amends FASB Interpretation No. 46, Consolidation of Variable Interest Entities (revised December 2003)  an interpretation of ARB No. 51, or FIN 46(R), to require an enterprise to
determine



17



---

whether its variable interest or interests give it a controlling financial interest in a variable interest entity. The primary beneficiary of a
variable interest entity is the enterprise that has both (1) the power to direct the activities of a variable interest entity that most significantly impact the entitys economic performance and (2) the obligation to absorb losses of
the entity that could potentially be significant to the variable interest entity or the right to receive benefits from the entity that could potentially be significant to the variable interest entity. SFAS 167 also amends FIN 46(R) to
require ongoing reassessments of whether an enterprise is the primary beneficiary of a variable interest entity. SFAS 167 is effective for fiscal years beginning after November 15, 2009. The Corporation does not anticipate the adoption of
this new pronouncement will have a material impact on its consolidated financial statements.

In June 2009, the FASB issued SFAS No. 168, The FASB
Accounting Standards Codification and the Hierarchy of Generally Accepted Accounting Principles, a replacement of FASB Statement No. 162.SFAS 168 replaces SFAS No. 162, The Hierarchy of Generally Accepted Accounting
Principles,to establish the FASB Accounting Standards Codificationas the source of authoritative accounting principles recognized by the FASB to be applied by nongovernmental entities in preparation of financial statements in conformity
with generally accepted accounting principles in the United States. SFAS 168 is effective for interim and annual periods ending after September 15, 2009. We do not expect the adoption of this standard to have an impact on our financial
position or results of operations.

In November 2008, the SEC released a proposed roadmap regarding the potential use by U.S. issuers of financial
statements prepared in accordance with International Financial Reporting Standards (IFRS). IFRS is a comprehensive series of accounting standards published by the International Accounting Standards Board (IASB). Under the proposed
roadmap, the Corporation may be required to prepare financial statements in accordance with IFRS as early as 2014. The SEC will make a determination in 2011 regarding the mandatory adoption of IFRS. The Corporation is currently assessing the impact
that this potential change would have on its consolidated financial statements, and it will continue to monitor the development of the potential implementation of IFRS.



|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



18



---

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, 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 (vi) other external developments which could
materially affect the Corporations business and operations.

Critical Accounting Policies

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 included in form 10-K for the year ended December 31, 2008). The Corporation believes that of its significant accounting estimates, the allowance for
loan losses and valuation of its securities 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 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.

Declines in the fair value of securities held to maturity and available for sale
securities below their cost that are deemed to be other-than-temporary are reflected in earnings as realized losses. In estimating



19



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other-than-temporary impairment losses, management considers (1) the length of time and the extent to which the fair value has been less than cost,
(2) the financial condition and near-term prospects of the issuer, and (3) the intent and ability of the Corporation to retain its investment in the issuer for a period of time sufficient to allow for any anticipated recovery in fair
value.

Impairment charges for the period ending June 30, 2009, consist of one equity security, a regional bank holding company, and a $15,000 charge
was recorded for the three months ended June 30, 2009. This equity security has depreciated in fair value 76% during the last year, its dividend has been significantly reduced, and a near term recovery of value is not expected.

Financial Condition

Total assets of the Corporation increased
$17,940,000 or 5.5% during the first six months of 2009. Net loans increased $2,451,000 or 1.2%, securities increased by $5,936,000 or 6.6% and cash and cash equivalents increased $8,571,000 or 124.9% from December 31, 2008 to June 30,
2009.

Total deposits increased by $23,696,000 or 9.0% from December 31, 2008. Short-term borrowings decreased $6,784,000 or 63.9% during the same
time period. The growth in deposits can be attributed to the Corporations continuing business development endeavors as well as depositors search for a safe and stable return in light of the instability in the financial markets over the
past year.

Results of Operations

Net income for the
six months ending June 30, 2009 was $1,356,000 or $0.97 per share compared to $1,115,000 or $0.80 per share for the same period in 2008. Annualized return on average equity was 11.38% for the first six months of 2009 and 10.26% for the same
period in 2008. Annualized return on average assets was 0.82% for the first six months of 2009 and 0.72% for the same period in 2008.

Net income for the
quarter ending June 30, 2009 was $615,000 or $0.44 per share compared to $611,000 or $0.44 per share for the same period in 2008. Annualized return on average equity was 10.14% for the second quarter of 2009 and 11.10% for the same period in
2008. Annualized return on average assets was 0.72% for the second quarter of 2009 and 0.77% for the same period in 2008.

Net interest income for the
first six months of 2009 increased by $692,000 or 16.6% compared to the same period in 2008. The reasons for the increase in net interest income were an increase in interest earning assets and an increase in net interest margin. For the first six
months of 2009, the net interest margin on a fully tax equivalent (FTE) basis was 3.34% compared to 3.04% for the same period in 2008. The FTE basis is calculated by grossing up the yield on tax-exempt securities and loans by the federal tax rate of



20



---

34%, in order that the yield on tax-exempt assets may be comparable to interest earned on taxable assets. The primary drivers of the increase in the net
interest margin was the decrease in the cost of funds of 0.51% from 3.34% during the first six months of 2008 to 2.83% during the same period in 2009, which was offset by a decrease in the yield on earning assets of 0.21% from 6.38% in 2008 to 6.17%
in 2009.

Net interest income for the quarter ended June 30, 2009 increased by $248,000 compared to the same period in 2008. Net interest margin for
the quarter ended June 30, 2009 was 3.25% compared to 3.10% during the same period in 2008. The decrease in the yield on earning assets from 6.31% in the first six months of 2008 to 6.04% in 2009 was more than offset by the decrease in the cost
of funds from 3.21% during 2008 to 2.79% during 2009.

Provisions for loan losses are charged to income to bring the allowance for loan losses to a level
deemed appropriate by management. The Corporation recorded a $202,000 provision for loan losses for the first six months of 2009 compared to $75,000 in 2008. The increase in the provision in 2009 compared to 2008 is a result of the growth
experienced in the loan portfolio, combined with a slight change in managements assessment of qualitative factors in light of the slight downturn in local economic and market conditions. As a percentage of loans, the allowance for loan losses
was 0.84% at June 30, 2009, compared to 0.76% at year-end 2008 and 0.66% at June 30, 2008. Impaired loans were $2,961,000 at June 30, 2009 compared to $635,000 at December 31, 2008. At this time management feels impaired loans
are adequately collateralized and loss is not anticipated. 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 six months of 2009 increased by $405,000 or 36.8% compared to the same period in 2008. Income from fiduciary activities
increased by $59,000 due to several estate settlements, increased activity led to ATM card fees increasing by $12,000, realized gains on sales of securities increased $289,000, and other non-interest income increased $64,000 during the first six
months of 2009 compared to the same period in 2008.

Non-interest income for the quarter ending June 30, 2009 was $666,000 compared to $580,000 in
2008. This increase is primarily related to the increase in income from fiduciary activities of $42,000 due to several estate settlements, an increase in other non-interest of $54,000, offset by a decrease in service charges on deposit accounts of
$17,000.



21



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Total non-interest expense increased in the first six months of 2009 by $656,000 compared to the first six months of
2008. Employee compensation and benefits increased $256,000 in the first 6 months of 2009 compared to 2008. The increase in salaries and wages are the result of merit increases as well as additional staff positions added to support recent loan and
deposit growth. The FDIC/OCC assessments increased $315,000. An increase in FDIC insurance costs coupled with a significant special FDIC insurance assessment led to the dramatic increase in FDIC/OCC expenses. Director and advisory board compensation
decreased $25,000, supplies and postage increased $18,000, professional fees increased $46,000 and other operating expenses increased $16,000. As the Corporation continues to add new loan and deposit accounts, as well as new 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, 2009, total non-interest expense increased $413,000 compared to the second quarter of 2008. The primary reason for this increase
are the increases in employee compensation and benefits of $151,000, professional fees of $17,000, and FDIC/OCC expense of $238,000. As stated above, the increase in FDIC/OCC assessment is the result of an FDIC insurance increase as well as a
special assessment during the quarter.

Income tax expense was $365,000 for the six month time period ending June 30, 2009 compared to $292,000 for
the same time period in 2008. Income tax expense as a percentage of income before income taxes was 21.2% for the period compared to 20.8% for 2008. The reason for the increase in the effective tax rate is tax-exempt income as a percentage of income
before taxes was lower in 2009 than 2008. 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.

Income tax expense was $143,000 for the three month time period ending June 30, 2009 compared to $173,000 for the same time period in 2008. Income tax expense as a
percentage of income before income taxes was 18.9% for the period compared to 22.1% for 2008. The reason for the decrease in the effective tax rate is tax-exempt income as a percentage of income before taxes was higher during the quarter in 2009
than 2008



22



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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 $286,302,000 in deposits at June 30, 2009, which increased $23,696,000 over total deposits of $262,606,000 at December 31, 2008. Other sources of liquidity
at June 30, 2009 are available from the following: (1) investments in interest-bearing deposits with banks and federal funds sold, which totaled $8,500,000, (2) securities and time certificates of deposit maturing in one year or less,
which totaled $2,274,000, 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
$24,630,000 as of June 30, 2009, representing a $1,217,000 increase from December 31, 2008. The growth in capital was a result of net earnings retention of $965,000, an increase in the accumulated other comprehensive income of $267,000, an
increase in common stock and surplus of $33,000 as a result of our dividend reinvestment plan, partially offset by purchases of treasury stock of $48,000. The increase in accumulated other comprehensive income is due to the change in value of the
Corporations available for sale securities.

At June 30, 2009, the Bank had a leverage ratio of 8.17%, a Tier I capital to risk-based assets
ratio of 14.44% and a total capital to risk-based assets ratio of 15.44%. 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 Disclosure about Market Risk
|------- | ---------------------------------------------------------

(Not required of a smaller reporting company)



|Item 4T. | 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)



23



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and Chief Financial Officer (Principal Financial Officer) have evaluated the effectiveness of our disclosure controls and procedures as of June 30,
2009. Based upon that evaluation, our President and Chief Financial Officer concluded that our disclosure controls and procedures are effective in timely alerting management 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, 2009, 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
|-------- | ------------

(Not required of a smaller reporting
company)



|Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds
|------- | -----------------------------------------------------------



| | (a) | On January 8, 2008, the Board of Directors of the Company authorized a stock repurchase program pursuant to which the Company is authorized to purchase up to 7.1% of its
outstanding shares or 100,000 shares. Share repurchases will be made from time to time and may be effected through open market purchases, block trades, or in privately negotiated transactions.
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (b) | The table below sets forth the information with respect to purchases made by or on behalf of First Community Financial Corporation or any affiliated purchaser as defined in Rule
240-10b-18(a) (3) under Regulation S-K of common stock during the quarter ended June 30, 2009.
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|                         |  |                               |  |                           |      |                                                                             |   |                                                                            |       
|------------------------ |  | ----------------------------- |  | ------------------------- | ---- | --------------------------------------------------------------------------- | - | -------------------------------------------------------------------------- | ------
|                         |  | TotalNumberof SharesPurchased |  | AveragePricePaidPer Share |      | Total Number ofShares Purchased asPartof a PubliclyAnnounced Plan orProgram |   | Maximum Number of SharesThat May Yet be Purchased Underthe Plan or Program
|April 1 through April 30 |  | 0                             |  | $                         | 0.00 |                                                                             | 0 |                                                                            | 96,349
|                         |  |                               |  |                          
|May 1 through May 31     |  | 0                             |  | $                         | 0.00 |                                                                             | 0 |                                                                            | 96,349
|                         |  |                               |  |                          
|June 1 through June 30   |  | 0                             |  | $                         | 0.00 |                                                                             | 0 |                                                                            | 96,349
|                         |  |                               |  |                           |      |                                                                             |   |                                                                            |       
|                         |  |                               |  |                          
|Total for the period     |  | 0                             |  |                           |      |                                                                             | 0 |                                                                            |       
|                         |  |                               |  |                           |      |                                                                             |   |                                                                            |       



24



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|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 14, 2009 the following directors were elected to Class C for a term of three years as follows:



|                    |  |           |  |         |  |                                
|------------------- |  | --------- |  | ------- |  | -------------------------------
|                    |  | FOR       |  | AGAINST |  | ABSTENTIONS ANDBROKER NON VOTES
|Samuel G. Kint      |  | 1,166,012 |  | 2,205   |  | -0-                            
|                    |  |           | 
|Roger Shallenberger |  | 1,166,012 |  | 2,205   |  | -0-                            
|                    |  |           | 
|Lowell M. Shearer   |  | 1,165,602 |  | 2,615   |  | -0-                            
|                    |  |           | 
|David L. Swartz     |  | 1,166,012 |  | 2,205   |  | -0-                            

The term of office of each of the following other directors continued after the meeting:

Class A Directors  Term expiring 2010

John P. Henry, III

James R. McLaughlin

Frank L. Wright

Class B Directors 
Term expiring 2011

Nancy S. Bratton

Jody D. Graybill

David M. McMillen

Charles C. Saner



25



---

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

Not Applicable



|Item 6. | 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 Principal Financial Officer of First Community Financial Corporation Pursuant to Securities and Exchange Commission Rule 13a-14(a) / 15d-14(a).                                                                                                                                                                                                                                                                                                                               
|        | 
|32.1    |  | Certification of Principal Executive Officer of First Community Financial Corporation Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.                                                                                                                                                                                                                                                                                                                                               
|        | 
|32.2    |  | Certification of Principal Financial Officer of First Community Financial Corporation Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.                                                                                                                                                                                                                                                                                                                                               



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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: August 14, 2009 |  |  |  | BY:                                   |  | /s/ Jody D. Graybill                      
|                      |  |  |  |                                       |  | Jody D. Graybill                          
|                      |  |  |  |                                       |  | President                                 
|                      |  |  |  |                                       |  | (Principal Executive Officer)             
|                      |  |  | 
|Date: August 14, 2009 |  |  |  | BY:                                   |  | /s/ Richard R. Leitzel                    
|                      |  |  |  |                                       |  | Richard R. Leitzel                        
|                      |  |  |  |                                       |  | Vice President and Chief Financial Officer
|                      |  |  |  |                                       |  | (Principal Financial Officer)             



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