<PAGE>

                       Securities and Exchange Commission

                             Washington, D.C. 20549



                                  Form 10 - QSB



QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT
               0F 1934 FOR THE QUARTERLY PERIOD ENDED March 31, 2001



Commission file number:    000-26117



                      FIRST COMMUNITY FINANCIAL CORPORATION

--------------------------------------------------------------------------------
             (Exact name of registrant as specified in its charter)



         NORTH CAROLINA                                  56-2119954

---------------------------------        ---------------------------------------
  (State or other jurisdiction           (I.R.S. Employer Identification Number)
of incorporation or organization)





                 708 SOUTH CHURCH STREET, BURLINGTON, N.C. 27215

--------------------------------------------------------------------------------
                    (Address of principal executive offices)





                                  336-229-2744

--------------------------------------------------------------------------------
              (Registrant's telephone number, including area code)



                                 NOT APPLICABLE

--------------------------------------------------------------------------------
              (Former name, former address and former fiscal year,

                         if changed since last report)







Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by section 13 or 15 (d) of the Securities Exchange Act of 1934

during the preceding 12 months (or for such shorter period that the registrant

was required to file such reports), and (2) has been subject to such filing

requirements for the past 90 days.



           Yes      X                   No

               ------------                -------------



1,608,883 common shares, no par value, were outstanding as of May 8, 2001.

<PAGE>

                      FIRST COMMUNITY FINANCIAL CORPORATION

                                 AND SUBSIDIARY



                                      INDEX

                                                                           Page

                                                                          Number
PART I    FINANCIAL INFORMATION



Item 1    Financial Statements



          Condensed Consolidated Balance Sheets                             1

          March 31, 2001 and December 31, 2000



          Condensed Consolidated Statements of Income                       2

          Three months ended March 31, 2001 and 2000



          Condensed Consolidated Statements of Comprehensive Income         3

          Three months ended March 31, 2001 and 2000



          Condensed Consolidated Statements of Cash Flow                    4

          Three months ended March 31, 2001 and 2000



          Notes to Condensed Consolidated Financial Statements            5 - 6



Item 2    Management's Discussion and Analysis of Financial Condition    7 - 12

          and Results of Operations



PART II   OTHER INFORMATION



Item 1    Legal Proceedings                                                13



Item 2    Changes in Securities and Use of Proceeds                        13



Item 3    Defaults Upon Senior Securities                                  13



Item 4    Submission to Matters to a vote of Security Holders              13



Item 5    Other Information                                                13



Item 6    Exhibits and Reports on Form 8-K                                 13

<PAGE>

PART I. FINANCIAL INFORMATION



Item 1. Financial Statements



<TABLE>

<CAPTION>

First Community Financial Corporation

Condensed Consolidated Balance Sheets

(dollars in thousands)

                                                                              March 31, 2001    December 31, 2000

                                                                              --------------    -----------------

<S>                                                                             <C>                  <C>

                                          Assets

Cash and cash equivalents                                                         $4,799              $5,379



Investment Securities:

  Available for sale                                                               9,490              11,924

Mortgaged-backed securities

  Available for sale                                                              14,439               8,728



FHLB, at cost which approximates market                                            1,925               1,925



Loans receivable held for sale                                                     3,135



Loans receivable held for investment, net                                        163,935             166,180



Premisies and equipment                                                            4,317               4,355

Deferred income taxes                                                              2,335               2,429

Other assets                                                                       3,908               3,785

                                                                                --------            --------

                                        Total assets                            $208,283            $204,705

                                                                                ========            ========





                            Liabilities and Shareholders' Equity

Deposits:

    Noninterest-bearing demand                                                    $2,402              $2,482

    Interest-bearing demand                                                       13,511              13,825

    Savings                                                                       14,547              14,952

    Certificates of deposits, $100,000 and over                                   26,801              23,509

    Other time deposits                                                           97,563             102,554

                                                                                --------            --------

                                       Total deposits                            154,824             157,322

                                                                                --------            --------



Borrowed money                                                                     5,000                   0

Other liabilities                                                                  4,704               3,945

                                                                                --------            --------

                                     Total liabilities                           164,528             161,267

                                                                                --------            --------



Shareholders' equity:

    Preferred stock, no par value, 5,000,000 shares authorized;

       no shares issued or outstanding

    Common stock, no par value, 20,000,000 shares authorized;

        1,608,083 shares issued and outstanding at March 31,2001 and
        December 31, 2000
                                                        22,434              22,428
    Unearned ESOP shares, 132,682 shares at March 31, 2001 and
        135,187 shares at December 31, 2000
                                      (1,990)             (2,028)
    Deferred stock award - MRP                                                      (812)               (851)

    Retained earnings, substantially restricted                                   24,172              24,142

    Accumulated other comprehensive income (loss), net                               (49)               (253)

                                                                                --------            --------

                                 Total shareholders' equity                       43,755              43,438

                                                                                --------            --------

                         Total liabilities and shareholders' equity             $208,283            $204,705

                                                                                ========            ========

</TABLE>



See accompanying notes to condensed consolidated financial statements


                                       1
<PAGE>

Item 1. Continued



<TABLE>

<CAPTION>

First Community Financial Corporation

Condensed Consolidated Statements of Income

(dollars in thousands)

                                                                                Three Months Ended March 31,

                                                                                -----------------------------

                                                                                     2001               2000

                                                                                -------------- --------------

<S>                                                                             <C>            <C>

Interest income:

   Interest and fees on loans                                                      $3,460              $3,098

   Interest and dividends on investments                                              388               1,115

                                                                                ---------           ---------

                       Total interest income                                        3,848               4,213





Interest expense:

   Interest on deposits                                                             2,054               1,681

   Interest on borrowed money                                                          13                 521

                                                                                ---------           ---------

                       Total interest expense                                       2,067               2,202

                                                                                ---------           ---------

Net interest income before provision for loan losses                                1,781               2,011

Provision for loan losses                                                             105                  95

                                                                                ---------           ---------

                        Net interest income                                         1,676               1,916

                                                                                ---------           ---------



Other income:

                    Total other operating income                                      145                 186



General and administrative expenses:

    Compensation and fringe benefits                                                  865                 811

    Occupancy                                                                          83                  56

    Furniture and fixtures                                                            107                  92

    Advertising                                                                        12                  43

    Data processing                                                                    94                  44

    Other                                                                             349                 285

                                                                                ---------           ---------

             Total general and administrative expenses                              1,510               1,331

                                                                                ---------           ---------



Income before income taxes                                                            311                 771



Income taxes                                                                          120                 242

                                                                                ---------           ---------



Net income                                                                         $  191              $  529

                                                                                =========           =========



            PER SHARE DATA

                                           Earnings per share, basic                $0.13               $0.30

                                        Earnings per shared, diluted                $0.13               $0.30

                          Weighted average shares outstanding, basic            1,425,851           1,736,454

                        Weighted average shares outstanding, diluted            1,437,783           1,736,454

</TABLE>





See accompanying notes to condensed consolidated financial statements


                                       2
<PAGE>

Item 1. Continued
<TABLE>

<CAPTION>

First Community Financial Corporation

Condensed Consolidated Statements of Comprehensive Income

(dollars in thousands)

                                                                                 Three Months Ended March 31,

                                                                                ------------------------------

                                                                                   2001                2000

                                                                                ---------           ----------

<S>                                                                             <C>                 <C>

Net income                                                                           $191                $529

                                                                                ---------           ---------



Unrealized gain (loss) on available for sale securities                               311                  29



Reclassification of net (gains) losses recognized in net income                        (1)                 23



Income taxes relating to unrealized gain on available                                (106)                (18)

 for sale securities                                                            ---------           ---------



Other comprehensive income (loss)                                                     204                  34

                                                                                ---------           ---------

Comprehensive income                                                                 $395                $563

                                                                                =========           =========

</TABLE>



See accompanying notes to condensed consolidated financial statements


                                       3
<PAGE>

Item 1. Continued
<TABLE>

<CAPTION>

First Community Financial Corporation

Condensed Consolidated Statements of Cash Flows

(dollars in thousands)

                                                                                                          Three months ended

                                                                                                                March 31,

                                                                                                        2001                2000

                                                                                                        ----                ----

<S>                                                                                                    <C>                 <C>

Cash flows from operating activities:

  Net income                                                                                            $191                $529

  Adjustments to reconcile net income to net cash provided by operating activities

     Provision for loan losses                                                                           105                  95

     Depreciation                                                                                        108                  25

     ESOP Contribution                                                                                    37                  37

     MRP Contribution                                                                                     38

     Loss (gain) on sale of securities                                                                    (1)                 23

     Gain on sale of assets                                                                                0                 (53)

     Accretion of discounts on securities, net                                                            (9)                (10)

     Provision for deferred income taxes                                                                  23                 (84)

     Originations of loans held for sale                                                              (3,418)               (467)

     Proceeds from sale of loans held for sale                                                           284                 302

     Net loss (gains) on sale of loans                                                                     1

     Other operating activities                                                                          576                (517)

                                                                                                      ------              ------

     Net cash provided by operating activities                                                        (2,065)               (120)

                                                                                                      ------              ------



Investing activities:

  Purchases of investment securities available for sale                                               (9,682)             (1,526)

  Proceeds from sales of securities and mortgagebacked securities available for sale                   6,174               8,094

  Proceeds from maturities of securities available for sale                                                                1,474

  Proceeds from principal repayment of mortgagebacked securities available for sale                      551                 371

  Net increase in loans held for investment                                                            2,172             (10,413)

  Proceeds from sale of premises and equipment                                                                                66

  Purchases of premises and equipment                                                                    (71)

                                                                                                      ------              ------

                              Net cash used in investing activities                                     (856)             (1,934)

                                                                                                      ------              ------

Financing activities:

  Net increase (decrease) in deposit accounts                                                         (2,498)              3,002

  Repurchase of common stock                                                                                                (643)

  Payment of dividends on common stock                                                                  (161)               (282)

  Proceeds (repayments) of FHLB borrowings, net of proceeds                                            5,000                (500)

                                                                                                      ------              ------

                            Net cash provided by financing activities                                  2,341               1,577

                                                                                                      ------              ------



Increase (decrease) in cash and cash equivalents                                                        (580)               (477)



Cash and cash equivalents, beginning of period                                                         5,379               6,583

                                                                                                      ------              ------

Cash and cash equivalents, end of  period                                                             $4,799              $6,106

                                                                                                      ======              ======

</TABLE>

See accompanying notes to condensed consolidated financial statements


                                       4
<PAGE>

     Item 1. Continued
     First Community Financial Corporation

     Notes to Condensed Consolidated Financial Statements



1.   Basis of Presentation



     The accompanying unaudited condensed consolidated financial statements have
     been prepared in accordance with generally accepted accounting principles

     for interim information and with the instructions to FORM 10-Q SB.

     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 only

     of normal recurring accruals) considered necessary for a fair presentation

     have been included. Operating results for the periods presented are not

     necessarily indicative of the results that may be expected for the year

     ended December 31, 2001.



2.   Conversion from Mutual to Stock form of Ownership



     On June 14, 1999, members of Community Savings Bank, SSB eligible to vote

     at a a special meeting, voted to approve the conversion of Community

     Savings Bank, SSB. The conversion involved the transformation of Community

     Savings Bank, SSB from mutual to stock form, First Community's acquisition

     of all of the outstanding capital stock of Community Savings Bank, SSB and

     First Community's sale of its common stock to the depositors and borrowers

     of Community Savings Bank, SSB and other persons who had the right to

     purchase shares. The sale was completed June 21,1999, and First Community

     Financial Corporation began trading on June 21,1999 on the NASDAQ national

     markets exchange under the symbol "FCFN". 1,880,798 shares of no par common
     stock were issued raising $25.2 million of net proceeds.



3.   Analysis of Allowance for Loan Loss



<TABLE>

<CAPTION>

                                                    Three months ended March 31,

                                                    ----------------------------

                                                        2001            2000

                                                    -----------      -----------

                                                           (in thousands)

<S>                                                  <C>               <C>

     Beginning balance                                $2,353           $1,839



     Provision for loan loss                            $105              $95



     Net (charge-offs) recoveries                        (35)              13



     Balance, end of period                           $2,423           $1,947



     Ratio of net charge-offs to average loans

       outstanding                                      0.02%           -0.01%



     Ratio of allowance to total loans outstanding      1.43%            1.19%

       at end of period



     Ratio of allowance to total nonperforming        122.68%          127.01%

       assets at end of period

</TABLE>


                                       5
<PAGE>

     Item 1. Continued
     First Community Financial Corporation

     Notes to Condensed Consolidated Financial Statements



4.   Net Income (Loss) Per Share of Common Stock



     Basic income (loss) per share of common stock is computed by dividing net

     income (loss) by the weighted average number of common shares outstanding

     (less unearned ESOP shares and unearned stock grants) during the period.

     Diluted net income (loss) per share of common stock is computed by dividing
     net income (loss) by the weighted average number of common shares and

     common stock equivalents outstanding during the period. For loss periods,

     diluted net loss per share is the same as basic net loss per share. The

     inclusion of common stock equivalents in loss periods would be anti

     dilutive. For the three month period ended March 31, 2001, the weighted

     average number of shares outstanding was 1,425,851. The effect, if any, on

     diluted earnings per share of future periods of the stock awards described

     in note 5 will be computed under the treasury stock method.



5.   Stock Grant Awards



     On June 27, 2000, the Company awarded 75,232 shares of stock to directors

     and employees under the Community Savings Bank, Inc., Management

     Recognition Plan and Trust, approved by shareholders on June 27, 2000. In

     accordance with the provision of Accounting Principles Board Opinion No.

     25, the Company will recognize the cost of the awards over the vesting

     period. One-fourth of the shares were immediately vested upon award, and

     the remainder will vest over the following 36 months. The Company acquired

     75,232 shares from the public for an aggregate amount of $1,297,752. The

     results for the three months ended March 31, 2001 included expense of

     $36,424 related to their award.


                                       6
<PAGE>

PART 1. FINANCIAL INFORMATION
Item 2. Management's Discussion and Analysis of Financial Condition and Results

of Operations



Forward Looking Statements



Information set forth below contains certain forward-looking statements, which

are based on assumptions, and describes future plans, strategies and

expectations of First Community Financial Corporation ("First Community" or "the
Company"). These forward-looking statements are generally identified by use of

the words "believe", "expect", "intend", "anticipate", "estimate", "project", or
similar expressions. First Community's ability to predict results or the actual

effect of future plans and strategies is inherently uncertain. Factors which

could have a materially adverse effect on the operations of First Community and

its wholly owned subsidiary, Community Savings Bank, SSB ("Community Savings")

include, but are not limited to, changes in: interest rates, general economic

conditions, legislation and regulation, monetary and fiscal policies of the U.S.
Government including policies of the U.S. Treasury and the Federal Reserve

Board, the quality or composition of the loan or investment portfolios, demand

for loan products, deposit flows, competition, demand for financial services in

its market area and accounting principles and guidelines. These risks and

uncertainties should be considered in evaluating forward-looking statements and

undue reliance should not be placed on such statements.



Financial Condition At March 31, 2001

Compared to December 31, 2000



Total assets increased 1.7% to $208.3 million at March 31, 2001, compared to

$204.7 million at December 31, 2000. The increase in assets was principally a

result of a $3.1 million dollar increase in loans held for sale and a $3.3

million increase in debt securities, offset by a $2.2 million decrease in loans

held for investment, net of reserves.



At March 31, 2001, approximately 57.2% of the Community Savings' gross loan

portfolio held for investment consisted of loans secured by one- to- four family
residential properties. At December 31, 2000, 58.1% of gross loans were secured

by 1-4 family residential properties. Loan production continued to emphasize

commercial and consumer credits in an effort to diversify the loan portfolio and
reduce the reliance on single family 1-4 residential loans. Commercial loans

have increased 0.5% or $204 thousand since December 31, 2000 and the

construction loan portfolio has increased 1.9% or $417 thousand since December

31, 2000.



Securities increased 15.9% at March 31, 2001 to $23.9 million compared to the

December 31, 2000 balance of $20.7 million.


                                       7
<PAGE>

Deposits decreased to $154.8 million at March 31, 2001 from $157.3 million at
December 31, 2000, a decrease of 1.6%. Local deposit competition is very strong

causing upward pressure on deposit interest rates.



The balance of borrowed funds, collateralized through an agreement with the

Federal Home Loan Bank ("FHLB"), was $5 million at March 31, 2001. There were no
borrowings with the FHLB at December 31, 2000. The borrowings facilitate a match
funded securities transaction.



Asset Quality



First Community's non-performing assets (loans 90 days or more delinquent and

foreclosed real estate and repossessed assets) were $2 million, or 0.95% of

total assets, at March 31, 2001, compared to $2.4 million, or 1.16% of total

assets, at December 31, 2000. Loans previously charged-off against the allowance
for loan losses, net of recoveries for the three-month period ended March 31,

2001, totaled $35 thousand or .02% of average loans outstanding.



Management performs a four-step procedure in determining the appropriate level

for the allowance for loan losses. First, at the end of each quarter, loan

department personnel perform a review of the bank's loan portfolio. Individual

loans are assigned an internal classification designation of unclassified,

substandard, doubtful, or loss based on historical performance and specific

circumstances known to the Bank regarding the financial situation of the

customer. Next, impaired loans are identified and a determination is made as to

the necessity of creating a specific allowance.  Any impairment allowance is

based on the expected cash flows and the collateral available. There was one

impaired loan totaling $477 thousand at March 31, 2001. A specific impairment

allowance was established in the amount of $400 thousand. Next, the substandard

and doubtful classifications are analyzed and a risk percentage is determined

considering each type of loan and the severity of any probable loss. All loans

categorized as "loss" are fully reserved. The final procedure is to assign risk

percentages to unclassified loans based on historical and industry information

regarding probable, yet unidentifiable, losses inherent in the portfolio.

Industry factors are adjusted to reflect Bank circumstances. Since First

Community is entering new lines of business with little past experience to draw

on in the areas of commercial, construction and consumer lending, an entry

period of higher than industry norm loss is reflected in the risk percentages

assigned these loan categories.



In the opinion of management, the specific reserve of $400 thousand and the

general allowance for loan losses of $2.0 million at March 31, 2001 were

adequate to cover probable losses.


                                       8
<PAGE>

Results of Operation for the three month periods ended March 31, 2001 and 2000

Net income is influenced significantly by the performance of net interest

income.  Net interest income is the difference between interest income (derived

from revenues generated from loans, investments and other earning-assets), and

interest expense (consisting principally of interest paid on deposits and

borrowings).  Operations may be materially affected by national and

international economic conditions, monetary and fiscal policies of the Federal

government, and policies of regulatory authorities.



NET INCOME



Net income of $191 thousand was recorded for the three-month period ended March

31, 2001, compared to net income of $529 thousand for the three-month period

ended March 31, 2000, a decrease of $338 thousand or 63.9%. The decrease in net

income is primarily due to a 12.5% decrease in net interest income after the

provision for loan losses or $240 thousand, and general and administrative

expense increase of 13.4% or $179 thousand.  General and administrative

increases reflect a 6.7% or $54 thousand increase in compensation and fringe

benefits, $50 thousand or 113.6% increase in data processing expense and $64

thousand or 22.4% increase in other expense.



INTEREST INCOME



Interest income decreased 8.7% or $365 thousand for the three months ended March
31, 2001 to $3.8 million compared to $4.2 million for the three months ended

March 31, 2000. The decrease in interest income is two fold. Interest and fees

on loans increased 11.7% or $362 thousand reflecting managements continued

emphasis on developing commercial, construction and consumer lending.  Interest

and dividends on investments decreased 65.2% or $727 thousand, resulting from

the dissolution of a $25 million structured, match funded investment transaction
during the forth quarter of 2000.



The average balance of total interest-earning assets decreased 13.2% or $29.4

million for the three months ended March 31, 2001 compared to average balances

at March 31, 2000, resulting primarily from a $40 million decrease in investment
average balances and a $8.7 million increase in net loan average balances. The

average annualized yield on total average interest-earning assets increased 40

basis points from the 2000 three month period, reflecting an increase in

annualized loan yields of 44 basis points offset by a decrease in the annualized
yield on investments of 80 basis points.



INTEREST EXPENSE



Interest expense decreased 6.1% or $135 thousand to $2.1 million for the three

months ended March 31, 2001 compared to $2.2 million for the three months ended

March 31, 2000. The decrease in interest expense was a result of $373 thousand,

or 22.2% increase in interest expense on deposits reflecting the competitiveness
of the local deposit market. A $508 thousand, or 97.5% decrease in interest

expense on FHLB borrowing reflects the dissolution of a $25 million structured,

match funded leveraged bond transaction during


                                       9
<PAGE>

the fourth quarter of 2000. The average balance on outstanding FHLB borrowings
decreased from $34.3 million for the three months ended March 31, 2000 to $1

million for the three months ended March 31, 2001.



The average balance of total interest-bearing liabilities decreased 14.7% or

$26.5 million for the three months ended March 31, 2001 compared to average

balances for the three months ended March 31, 2000, resulting primarily from

Federal Home Loan Bank (FHLB) borrowings to facilitate the dissolution of the

previously mentioned leveraged bond transaction. The average annualized cost on

total average interest-bearing liabilities increased 48 basis points from the

2000 three month period, resulting from an increase in the annualized rate on

Certificates of Deposit of 88 basis points and a decrease in annualized

borrowing costs of 88 basis points.



NET INTEREST INCOME



Net interest income before the provision for loan losses, for the three-month

period ended March 31, 2001, decreased 11.4% or $230 thousand to $1.8 million

compared to $2 million for the three-month period ended March 31,2000. The

change in net interest income was due to a $365 thousand decrease in the net

rate/volume change on interest-earning assets and a $135 thousand decrease in

the net rate/volume change on interest-bearing liabilities.



Comparable spreads and net interest margins were as follows:

<TABLE>

<CAPTION>

                   Annualized Yield     Annualized Yield

                      on Interest         on Interest       Annualized   Annualized

                    Earning Assets    Bearing Liabilities     Spread       Margin

                   -----------------  --------------------  -----------  -----------

<S>                <C>                <C>                   <C>          <C>

Three Months

  Ended

  March 31, 2001         7.96%              5.36%              2.60%        3.68%



Three Months

  Ended

  March 31, 2000         7.56%              4.88%              2.68%        3.60%

</TABLE>



PROVISION FOR LOAN LOSSES



A provision of $105 thousand was added to the allowance for loan losses,

increasing the period end balance to $2.4 million or 1.43% of outstanding loans.
A provision of $95 thousand was added to the allowance for loan losses for the

three-month period ending March 31, 2000. The increase to the allowance reflects
the significant change in the loan portfolio composition.


                                       10
<PAGE>

NON-INTEREST INCOME

Non-interest income decreased $41 thousand or 22% to $145 thousand for the

three-month period ended March 31, 2001 compared to $186 thousand for the three-
month period ended March 31, 2000. Non-interest income excluding one-time gains
and losses on the sale of securities and other assets increased 2.4% or
$4
thousand for the period ending March 31, 2001 compared to the three-month
period ended March 31, 2000. Although management is encouraged by the increase
in
recurring non-interest income, continued emphasis will be placed on
improving
non-interest income revenue.



NON-INTEREST EXPENSE



Non-interest expense increased 6.7% or $179 thousand to $1.5 million for the

three months ended March 31, 2001 compared to $1.3 million for the three-month

period ended March 31,2000. The increase in non-interest expense is due

primarily to a 6.6% or $54 thousand increase in compensation and fringe benefits
expense, a $50 thousand or 113.6% increase in data processing expense related to
computer conversion expenses and $64 thousand increase or 13.5% in all other

expenses.



INCOME TAXES



The income tax provision for the three month period ended March 31, 2001 was

$120 thousand compared to $242 thousand for the three months ended March 31,

2000, an decrease of $122 thousand from the prior year period. The decrease in

the tax provision was the result of decreases in earnings before income taxes.

The effective tax rates for the respective 2001 and 2000 periods were 38.6% and

31.3%.



LIQUIDITY



The Company's policy is to maintain sufficient liquidity to meet continuing loan
demand and withdrawal requirements while paying normal operating expenses and

satisfying regulatory liquidity guidelines.  Maturing securities, principal

repayments of loans and securities, deposits, income from operations and

borrowings are the main sources of liquidity. Short-term investments (overnight

investments with the Federal Home Loan Bank and Federal Funds Sold) and short-

term borrowings (Federal Home Loan Bank advances, Repurchase Agreements and

Federal Funds Purchased) are the Bank's primary cash management liquidity tools.
The investment portfolio provides secondary liquidity.



At March 31, 2001, the estimated market value of liquid assets (cash, cash

equivalents, and marketable securities) was approximately $32 million,

representing 20% of deposits and borrowed funds. As Community Savings continues

to grow its loan portfolio, liquidity will continue to be leveraged.


                                       11
<PAGE>

The primary uses of liquidity are to fund loans, provide for deposit
fluctuations and invest in other non-loan earning assets when excess liquidity

is available.  At March 31, 2001, outstanding off-balance sheet commitments to

extend credit in the form of loan originations totaled $9.5 million. Available

lines of credit totaled $15.8 million.  Management considers current liquidity

levels adequate to meet the Company's cash flow requirements.



CAPITAL



Shareholders' equity at March 31, 2001 was $43.8 million, an increase of $317

thousand or 0.7% from $43.4 million at December 31, 2000 and a decrease of $3.2

million or 6.8% from $46.9 million at March 31, 2000. The decrease from March

31, 2000 is the result of repurchasing 232,000 shares of common stock between

the months of April 2000 through October 2000. The average price per common

share repurchased was $18.45. Included in shareholder's equity at March 31, 2001
was $49 thousand, net of tax, of accumulated other comprehensive loss related

to unrealized losses on securities available for sale compared to $253 thousand

of accumulated other comprehensive loss related to unrealized losses on

securities available for sale at December 31, 2000.



FDIC regulations require banks to maintain certain capital adequacy ratios,

leverage ratios and risk-based capital ratios.  Banks supervised by the FDIC

must maintain a minimum leverage ratio of core (Tier I) capital to average

adjusted assets ranging from 3% to 5%.  At March 31, 2000, Community Savings'

ratio of Tier I capital to average assets was 13.7%.  The FDIC's risk-based

capital guidelines require banks to maintain risk-based capital to risk-weighted
assets of at least 8%.  Risk-based capital for Community Savings is defined as

Tier I capital and the reserve for loan losses.  At March 31, 2000, Community

Savings had a ratio of qualifying total capital to net risk-weighted assets of

25.54%.



First Community is also subject to capital adequacy guidelines of the Board of

Governors of the Federal Reserve (the "Federal Reserve Board").  Capital

requirements of the Federal Reserve Board are similar to those of the FDIC.



First Community significantly exceeds regulatory capital requirements.

Management anticipates that the Company will continue to exceed capital adequacy
requirements without altering current operations or strategies.


                                       12
<PAGE>
Recent Events
None



Recent Accounting Developments

In April 2000, the Financial Accounting Standards Board issued FFASB

Interpretation No. 44 ("FIN44") which clarifies the application of Accounting

Principles Board Opinion 25 for certain transactions. The interpretation

addresses many issues related to granting or modifying stock options including

changes in accounting for modifications of awards (increased like, reduction of

exercise price, etc.) It was effective July 1, 2000 but certain conclusions

cover specific events that occurred after either December 15, 1998 or January

12, 2000. The effects of applying the interpretations are to be recognized on a

prospective basis from July 1, 2000. FIN 44 is not expected to have a material

impact on the Company.



Part II - Other Information



Item 1

Legal proceedings.

        None.



Item 2

Changes in Securities and Use of Proceeds.

        (a) Not applicable

        (b) Not applicable

        (c) Not applicable

        (d) Not applicable



Item 3

Defaults upon Senior Securities

        Not applicable.



Item 4

Submission of Matters to a vote of securities holders.

        None.



Item 5

Other information.

        Not applicable.



Item 6

Exhibits and reports on form 8-K.

        (a) Exhibits



            27.01.1 Financial Data Schedule



        (b) Reports on Form 8-K.

            None.


                                       13
<PAGE>

                                   SIGNATURES



In accordance with the requirements of the Exchange Act, the registrant caused

this report to be signed on its behalf by the undersigned, thereunto duly

authorized.



       First Community Financial Corporation

       -------------------------------------

                   Registrant











       Date        May 11, 2001                     /s/ Christopher B. Redcay

                   --------------------        ---------------------------------
                                                      Christopher B. Redcay

                                               Sr. Vice President, Treasurer and
                                                     Chief Financial Officer