<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 June 30, 2000

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 of                      (I.R.S. Employer
incorporation or organization)                    Identification Number)


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

1,786,758   common shares, no par value, were outstanding as of August 3, 2000.
<PAGE>

                      FIRST COMMUNITY FINANCIAL CORPORATION
                                 AND SUBSIDIARY

                                      INDEX

<TABLE>


<S> <C>

                                                                                           Page
  PART I     FINANCIAL INFORMATION                                                        Number

   Item 1     Financial Statements

              Condensed Consolidated Balance Sheets                                          1
              June 30, 2000 and December 31, 1999

              Condensed Consolidated Statements of Income                                    2
              Three and six months ended June 30, 2000 and 1999

              Condensed Consolidated Statements of Comprehensive Income                      3
              Three and six months ended June 30, 2000 and 1999

              Condensed Consolidated Statements of Cash Flow                                 4
              Six months ended June 30, 2000 and 1999

              Notes to Condensed Consolidated Financial Statements                         5 - 6

   Item 2     Management's Discussion and Analysis of Financial Condition                  7 - 16
              and Results of Operations

   PART II    OTHER INFORMATION

   Item 1     Legal Proceedings                                                              17

   Item 2     Changes in Securities and Use of Proceeds                                      17

   Item 3     Defaults Upon Senior Securities                                                17

   Item 4     Submission to Matters to a vote of Security Holders                            17

   Item 5     Other Information                                                              17

   Item 6     Exhibits and Reports on Form 8-K                                               17


</TABLE>
<PAGE>

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

First Community Financial Corporation
Condensed Consolidated Balance Sheets
(dollars in thousands)

<TABLE>
<CAPTION>


                                                                                       June 30, 2000
                                                                                        (unaudited)           December 31,1999
                                                                                        -----------           ----------------
<S> <C>
                                          Assets
Cash and cash equivalents                                                                  $9,576                  $6,583

Investment Securities:
  Available for sale                                                                       17,630                  24,623
Mortgaged-backed securities
  Available for sale                                                                       32,317                  39,126

FHLB, at cost which approximates market                                                     1,925                   1,600

Loans receivable held for sale                                                                377                     213
Loans receivable held for investment, net                                                 164,096                 150,530

Premisies and equipment                                                                     2,397                   2,483
Deferred income taxes                                                                       2,870                   2,792
Other assets                                                                                4,385                   2,791
                                                                                         --------                --------

                                       Total assets                                      $235,573                $230,741
                                                                                         --------                --------


                           Liabilities and Shareholders' Equity
Deposits:
    Noninterest-bearing demand                                                             $2,575                  $2,585
    Interest-bearing demand                                                                14,344                  14,247
    Savings                                                                                14,653                  15,612
    Certificates of deposits, $100,000 and over                                            21,781                  21,918
    Other time deposits                                                                   100,213                  93,178
                                                                                         --------                --------
                                      Total deposits                                      153,566                 147,540
                                                                                         --------                --------


Borrowed money                                                                             31,500                  32,000
Advance payments by borrowers for property taxes and insurance                                537                     225
Other liabilities                                                                           3,821                   3,708
                                                                                         --------                --------
                                    Total liabilities                                     189,424                 183,473
                                                                                         --------                --------


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;
        '1,786,758 shares issued and outstanding at June 30,2000 and
        1,880,798 shares issued and outstanding at December 31, 1999                       25,821                  27,335
    Unearned ESOP shares, 140,197 shares at June 30, 2000 and
        145,207 shares at December 31, 1999                                                (2,103)                 (2,178)
    Retained earnings, substantially restricted                                            23,849                  23,477
    Accumulated other comprehensive income (loss), net                                     (1,418)                 (1,366)
                                                                                         --------                --------
                                Total shareholders' equity                                 46,149                  47,268
                                                                                         --------                --------


                        Total liabilities and shareholders' equity                       $235,573                $230,741
                                                                                         --------                --------

</TABLE>


     See accompanying notes to condensed consolidated financial statements

                                        1
<PAGE>

Item 1. Continued
First Community Financial Corporation
Condensed Consolidated Statements of Income (Loss)
(unaudited)
(dollars in thousands)

<TABLE>
<CAPTION>


                                                                          Three Months Ended June 30,    Six Months Ended June 30,
                                                                              2000         1999           2000             1999
                                                                              ----         ----           ----             ----
<S> <C>
Interest income:
   Interest and fees on loans                                                $3,341       $2,680         $6,439           $5,298
   Interest and dividends on investments                                      1,026          527          2,141            1,042
                                                                             ------       ------         ------           ------
                       Total interest income                                  4,367        3,207          8,580            6,340

Interest expense:
   Interest on deposits                                                       1,858        1,502          3,539            3,072
   Interest on borrowed money                                                   507           63          1,028              131
                                                                             ------       ------         ------           ------
                      Total interest expense                                  2,365        1,565          4,567            3,203
                                                                             ------       ------         ------           ------
Net interest income before provision for loan losses                          2,002        1,642          4,013            3,137
Provision for loan losses                                                       105           90            200              180
                                                                             ------       ------         ------           ------
                        Net interest income                                   1,897        1,552          3,813            2,957
                                                                             ------       ------         ------           ------

Other income:
                   Total other operating income                                 198          190            383              448

General and administrative expenses:
    Compensation and fringe benefits                                          1,133          684          1,944            1,410
    Occupancy                                                                    72           63            128              125
    Furniture and fixtures                                                       81           86            174              171
    Advertising                                                                  38           33            103               60
    Data processing                                                              51           65             94              104
    Contributions                                                                 2        1,510              3            1,510
    Other                                                                       313          267            575              548
                                                                             ------       ------         ------           ------
             Total general and administrative expenses                        1,690        2,708          3,021            3,928
                                                                             ------       ------         ------           ------

Income before income taxes                                                      405         (966)         1,175             (523)

Income taxes                                                                    132         (253)           374             (144)
                                                                             ------       ------         ------           ------

Net income                                                                     $273        ($713)          $801            ($379)
                                                                             ------       ------         ------           ------

                 PER SHARE DATA, calculated from June 21, 1999, the
           date of the Company's initial public offering
                                          Earnings per share, basic           $0.16       ($0.16)         $0.47           ($0.16)
                                       Earnings per shared, diluted           $0.16       ($0.16)         $0.47           ($0.16)
                         Weighted average shares outstanding, basic       1,698,862    1,730,361      1,698,862        1,730,361
                       Weighted average shares outstanding, diluted       1,698,862    1,730,361      1,698,862        1,730,361

</TABLE>


     See accompanying notes to condensed consolidated financial statements


                                        2
<PAGE>

Item 1. Continued
First Community Financial Corporation
Condensed Consolidated Statements of Comprehensive Income (Loss)
(unaudited)
(dollars in thousands)

<TABLE>
<CAPTION>



                                                                  Three Months Ended June 30,      Six Months Ended June 30,
                                                                  2000          1999                  2000         1999
                                                                  ----          ----                  ----         ----

<S> <C>
Net income (loss)                                                  $273         ($713)                $801        ($379)
                                                                   ----         ------                ----        -----

Unrealized gain (loss) on available for sale securities            (128)         (558)                 (99)        (764)

Reclassification of net (gains) losses recognized in net income      (2)          (24)                  22         (136)

Income taxes relating to unrealized gain on available                44           198                   26          306
                                                                   ----          ----                 ----        -----
  for sale securities

Other comprehensive income (loss)                                   (86)         (384)                 (52)        (594)
                                                                   ----         -----                 ----        -----


Comprehensive income (loss)                                        $187       ($1,097)                $749        ($973)
                                                                   ----       -------                 ----        -----

</TABLE>


     See accompanying notes to condensed consolidated financial statements

                                        3
<PAGE>

Item 1. Continued
First Community Financial Corporation
Condensed Consolidated Statements of Cash Flows
(unaudited)
(dollars in thousands)

<TABLE>
<CAPTION>



                                                                                                         Six months ended
                                                                                                             June 30,
                                                                                                     2000               1999
                                                                                                     ----               ----
<S> <C>
Cash flows from operating activities:
  Net income (loss)                                                                                  $801               ($379)
  Adjustments to reconcile net income (loss) to net cash provided by operating activities
     Provision for loan losses                                                                        200                 180
     Depreciation                                                                                     159                 169
     ESOP Contribution                                                                                 75
     MRP Compensation                                                                                 297
     Loss (gain) on sale of securities                                                                 22                (136)
     (Gain) on sale of assets                                                                         (54)
     Accretion of discounts on securities, net                                                        (31)               (101)
     Provision for deferred income taxes                                                              (51)               (560)
     Originations of loans held for sale                                                             (580)             (4,426)
     Proceeds from sale of loans held for sale                                                        417               3,112
     Net loss (gains) on sale of loans                                                                 (1)                (16)
     Other operating activities                                                                      (629)               (177)
                                                                                                   ------              ------
     Net cash provided by (used in) operating activities                                              625              (2,334)
                                                                                                   ------              ------

Investing activities:
  Purchases of investment securities available for sale                                            (1,525)            (21,201)
  Proceeds from sales of securities available for sale                                              8,110                   0
  Proceeds from redemptions of securities available for sale                                        6,060              12,360
  Proceeds from principal repayment of mortgage-backed securities available for sale                  763                 908
  Net increase in loans held for investment                                                       (13,959)             (7,405)
  Addidtions to other real estate                                                                    (658)
  Proceeds from sale of premises and equipment                                                         68
  Purchases of premises and equipment                                                                 (73)               (366)
                                                                                                      ---                ----
                               Net cash used in investing activities                               (1,214)            (15,704)
                                                                                                   ------             -------

Financing activities:
  Net increase (decrease) in deposit accounts                                                       6,026              (2,505)
  Proceeds from issuance of stock                                                                                      25,206
  Repurchase of common stock                                                                       (1,514)
  Payment of dividends on common stock                                                               (430)
  Repayments of FHLB borrowings, net of proceeds                                                     (500)
                                                                                                     ----
                             Net cash provided by financing activities                              3,582              22,701
                                                                                                   ------              ------

Increase (decrease) in cash and cash equivalents                                                    2,993               4,663

Cash and cash equivalents, beginning of year                                                        6,583               6,907
                                                                                                   ------             -------

Cash and cash equivalents, end of  period                                                          $9,576             $11,570
                                                                                                   ------             -------


</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, 2000.

           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>

                                                                      Six months ended June 30,
                                                                      -------------------------
                                                                         2000            1999
                                                                         ----            ----
                                                                            (in thousands)


<S> <C>
              Beginning balance                                        $1,839           $1,331

              Provision for loan loss                                     200              180

              Net charge-offs                                            (193)             (15)

              Balance, end of period                                   $1,846           $1,496

              Ratio of net charge-offs to average loans
                          outstanding                                   0.12%            0.01%

              Ratio of allowance to total loans outstanding             1.09%            1.10%
                          at end of period

              Ratio of allowance to total nonperforming
                          assets at end of period                     127.57%          114.37%

</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) 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
              six month period ended June 30, 2000, the weighted average number
              of shares outstanding was 1,698,862. 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. 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 accrue 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 the shares to
              be issued from the public.


                                        6
<PAGE>

MANAGEMENT'S DISCUSSION & ANALYSIS
Bank Employee
Financial Printing Group
PART I. 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 June 30, 2000
Compared to December 31, 1999


Total assets  increased  2.1% to $235.6  million at June 30,  2000,  compared to
$230.7  million at December 31, 1999.  The increase in assets was  principally a
result of a $13.7 million increase in loans,  net of reserves,  and a $3 million
increase in cash and cash  equivalents,  offset by a $13.5  million  decrease in
debt and equity securities.

Loans,  net of reserves,  increased 9.1% at June 30, 2000 to $164.5 million from
the December 31, 1999 balance of $150.7 million. At June 30, 2000, approximately
62.9% of the Community Savings' gross loan portfolio  consisted of loans secured
by one- to- four family residential  properties.  At December 31, 1999, 64.7% 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 15.4% or $5 million,  since December 31,
1999 and the construction  loan portfolio  increased 12.5% or $1.9 million since
December 31, 1999.

Securities  decreased  13.8% at June 30, 2000 to $49.9  million  compared to the
December  31, 1999 balance of $63.7  million.  The  decrease in  securities  was
primarily  incurred  to  help  meet  loan  growth  not  funded  through  deposit


                                       7
<PAGE>

increases.  The six-month average balance of securities increased 88.4 % for the
period  ended  June 30,  2000 to $58.6  million  compared  to the $31.1  million
average  balance on  securities  for the six month  period  ended June 30, 1999,
reflecting the investment of proceeds  received from the initial public offering
completed June 21, 1999.

Deposits  increased  to $153.6  million at June 30, 2000 from $147.5  million at
December 31, 1999, an increase of 4.1%. Local deposit competition is very strong
causing upward pressure on deposit interest rates.

Borrowed funds,  collateralized  through an agreement with the Federal Home Loan
Bank  ("FHLB"),  decreased to $31.5 million at June 30, 2000 from $32 million at
December 31, 1999, a decrease of 1.6%. $25 million of the FHLB borrowings  float
with  one-month  LIBOR index and mature  bi-annually  on September 30, 2001. The
borrowings are matched with  Collateralized  Mortgage  Obligations  (CMO's) in a
structured,  leveraged,  match funded arbitrage. The CMO's reprice monthly at 80
basis points over the one-month LIBOR index.  The remaining $6.5 million of FHLB
borrowings  are  short-term  proceeds used to facilitate  normal loan growth and
deposit fluctuations.

Asset Quality

First  Community's  non-performing  assets (loans 90 days or more delinquent and
fore-closed real estate  and repossessed  assets) were $1.5 million, or 0.63% of
total  assets,  at June 30, 2000,  compared to $1.3  million,  or 0.58% of total
assets,  at December 31, 1999. Two loans totaling $218 thousand were charged off
against the  allowance  for loan  losses,  partially  off set by  recoveries  on
previously charged off loans of $25 thousand.  Net loans charged off against the
allowance  for loan  losses  totaled  $193  thousand  or .12% 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  or the  fair  market  value  of  available
collateral  for  collateral  dependent  loans.  There  were two  impaired  loans
aggregating  $661 thousand at June 30, 2000. An allowance for impaired loans was
established in the amount of $100 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 individual 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.

                                       8
<PAGE>

In the  opinion of  management,  the general  allowance  for loan losses of $1.7
million and the allowance  for impaired  loans in the amount of $100 thousand at
June 30, 2000 was adequate to cover probable losses.

Results of Operation for the three month periods ended June 30, 2000 and 1999

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 $272  thousand  was recorded for the three month period ended June
30,  2000,  compared to a net loss of $713  thousand  for the three month period
ended June 30, 1999, a $986 thousand improvement.  The increase in net income is
primarily due to a 21.9% increase in net interest income or $359 thousand,  a 4%
or $8 thousand  increase in other  operating  income,  and a 37.6% or $1 million
decrease in other operating  expense.  The decrease in other  operating  expense
reflects  the $1.5  million  contribution  to establish  the  Community  Savings
Charitable Foundation in 1999. A $297 thousand expense was incurred in June 2000
to recognize 25% vesting of stock grants  awarded to Officers and Directors as a
result of stockholders  approving a Management Recognition Plan during the first
annual meeting of the Company held on June 27, 2000.

INTEREST INCOME

Interest income  increased 36.2% or $1.2 million for the three months ended June
30, 2000 to $4.4 million compared to $3.2million for the three months ended June
30,  1999.  The  increase in interest  income is two fold.  Interest and fees on
loans  increased  24.7%  or  $661  thousand  reflecting  management's  continued
emphasis on developing commercial,  construction and consumer lending.  Interest
on securities  increased 95% resulting from the investment of proceeds  received
during the initial  public  offering dated June 21, 1999 and an arbitrage in the
amount of $25 million initiated July 15, 1999 and still active.

The average balance on total  interest-earning  assets  increased 30.9% or $52.5
million for the three months ended June 30, 2000 compared to average balances at
June 30, 1999,  resulting  primarily from a $23.4 million increase in investment
average  balances and a $30 million increase in net loan average  balances.  The
average annualized yield on total average  interest-earning  assets increased 28
basis  points from the 1999 three month  period,  reflecting  an increase in the
annualized yield on investments of 200 basis points and a increase in annualized
loan yields of 16 basis points.


                                       9
<PAGE>

INTEREST EXPENSE

Interest expense  increased 51.2% or $801 thousand to $2.4 million for the three
months  ended June 30, 2000  compared to $1.6 million for the three months ended
June 30,1999.  The increase in interest expense was a result of a 23.8% increase
in interest  expense on deposits  reflecting  the  competitiveness  of the local
deposit market.  A $444 thousand  increase in interest expense on FHLB borrowing
reflects a $26.5 million  balance  increase in  outstanding  borrowings  from $5
million at June 30,1999 to $31.5 million at June 30, 2000.

The average  balance of  interest-bearing  liabilities  increased 27.5% or $39.1
million for the three months ended June 30, 2000 compared to average balances at
June 30, 1999,  resulting  primarily  from an increase in Federal Home Loan Bank
(FHLB)  borrowings to facilitate an arbitrage.  The average  annualized  cost on
total average  interest-bearing  liabilities  increased 84 basis points from the
1999 three month period,  resulting from an increase in the  annualized  rate on
FHLB borrowings of 140 basis points and an increase in annualized  deposit costs
of 16 basis points.

NET INTEREST INCOME

Net interest  income before the provision for loan losses,  for the  three-month
period  ended June 30,  2000,  increased  21.9% or $359  thousand  to $2 million
compared to $1.6  million for the  three-month  period ended June  30,1999.  The
positive growth in net interest  income was due to the  significant  increase of
investable  assets resulting from the receipt of proceeds related to the initial
public offering completed June 21, 1999.

Comparable spreads and net interest margins were as follows:

<TABLE>
<CAPTION>

                  Annualized Yield     Annualized Cost
                     on Interest         of Interest       Annualized   Annualized
                   Earning Assets    Bearing Liabilities     Spread       Margin
                  -----------------  --------------------  -----------  -----------
<S> <C>
Three Months
    Ended
 June 30, 2000                7.84%                 5.24%        2.60%        3.60%

Three Months
    Ended
 June 30, 1999                7.56%                 4.40%        3.16%        3.88%
</TABLE>


PROVISION FOR LOAN LOSSES

A  provision  of $105  thousand  was  added to the  allowance  for loan  losses,
increasing the period end balance to $1.8 million or 1.09% of outstanding loans.
A provision of $90 thousand was added to the  allowance  for loan losses for the
three-month  period ending June 30, 1999. The increase to the allowance reflects
the significant change in the loan portfolio composition.

                                       10
<PAGE>

NON-INTEREST INCOME

Non-interest  income increased $8 thousand or 4% to $198 thousand for the three-
month period ended June 30, 2000 compared to $190  thousand for the  three-month
period ended June 30,1999.  Although management is encouraged by the increase in
non-interest income, continued emphasis will be placed on improving non-interest
income  revenue.  A  wholly-owned  subsidiary of the Bank,  Community  Financial
Services,  Inc., a retail securities broker and financial advisor, was formed in
the fourth  quarter of 1997,  for the sole  purpose  of  enhancing  non-interest
income.  This newly formed subsidiary  contributed $38 thousand or 19.4% of non-
interest income for the three-month period ended June 30, 2000.


NON-INTEREST EXPENSE

Non-interest expense decreased 37.6% or $1 million to $1.7 million for the three
months ended June 30, 2000 compared to $2.7 million for the  three-month  period
ended June 30,1999.  The decrease in other  operating  expense  reflects the one
time $1.5 million  contribution  to establish the Community  Savings  Charitable
Foundation in 1999. The 1999  contribution  expense was partially offset in 2000
by $297  thousand  expense  incurred  in June to reflect a 25%  vesting of stock
grants awarded to Officers and Directors.  Stockholders  authorized the awarding
of grants with the approval of the Management  Recognition Plan during the first
annual meeting of the Company held on June 27, 2000.  Salary  expense  increased
15.8% or $108 thousand  reflecting  the hiring of  experienced  commercial  bank
personnel required to transition to a commercial banking environment. A seasoned
Senior  Commercial  Credit  Officer  with 12 years of  commercial  lending  bank
experienced  was hired  during  June 2000.  A $43  thousand  increase in benefit
expense was incurred  associated  with the Employee stock Ownership Plan (ESOP).
Data processing  expenses  decreased $14 thousand or 21.8% for the quarter ended
June 30, 2000 compared to the same period for 1999.

INCOME TAXES

The income tax  provision for the three month period ended June 30,2000 was $132
thousand compared to a $253 thousand tax benefit for the three months ended June
30, 1999, an increase of $385 thousand from the prior year period.  The increase
in the tax provision is the result of increases in earnings before income taxes.
The effective tax rates for the respective  2000 and 1999 periods were 32.6% and
26.2%.

                                       11
<PAGE>

Results of Operation for the six month periods ended June 30, 2000 and 1999

NET INCOME

Net income for the six months ended June 30 2000 was $801 thousand,  an increase
of $1.2 million.  The loss for the six month period ended June 30, 1999 was $379
thousand.   Earnings  for  the  six  month  period  ended  June  30,  1999  were
significantly impacted by a $1.5 million non-recurring contribution to Community
Savings Charitable Foundation,  established as a component of the initial public
offering completed June 21, 1999.

INTEREST INCOME

Interest  income  increased  $2.2 million or 35.5% for the six months ended June
30, 2000 to $8.6  million at June 30, 2000  compared to $6.3 million for the six
months ended June 30, 1999.  The increase in interest  income can be principally
attributed  to a $55.4  million  increase  in the  average  balance of  interest
earning  assets from 1999 to 2000,  and an  increase  in the average  annualized
yield on interest earning assets from 7.58% to 7.72%.

INTEREST EXPENSE

Interest  expense  increased 42.6% or $1.4 million for the six months ended June
30, 2000 compared to the six months ended June 30,1999. The increase in interest
expense was  principally a result of a 14 basis point decrease in the annualized
cost on interest  bearing  deposits  reflecting  management's  efforts to refine
deposit-pricing  schemes,  and a  102  basis  point  increase  in  the  cost  of
borrowings  from the Federal Home Loan Bank.  The aggregate  annualized  cost of
interest  bearing  liabilities  increased 60 basis points.  The average  balance
outstanding  of interest  bearing  deposits  increased  $9.3 million from $138.4
million at June 30,  1999 to $147.7  million at June 30,  2000,  an  increase of
6.73%.  Average FHLB borrowings increased to $32.9 million at June 30, 2000 from
$5 million at June 30,1999 or 558%.

NET INTEREST INCOME

Net interest  income  before the  provision  for loan losses,  for the six month
period ended June 30, 2000, increased 27.9% or $876 thousand compared to the six
month period ended June 30,1999. The primary ingredients  affecting the positive
growth in net  interest  income were a 35.4%  increase in interest  income and a
42.6% increase in interest expense.


                                       12
<PAGE>

Comparable spreads and net interest margins were as follows:

<TABLE>
<CAPTION>

                  Annualized Yield     Annualized Cost
                     on Interest         of Interest       Annualized   Annualized
                   Earning Assets    Bearing Liabilities     Spread       Margin
                  -----------------  --------------------  -----------  -----------
<S> <C>
Six Months
    Ended
June 30, 2000              7.72%                 5.06%        2.66%        3.60%

Six Months
    Ended
 June 30, 1999             7.58%                 4.46%        3.12%        3.76%
</TABLE>

                                       13
<PAGE>

PROVISION FOR LOAN LOSSES

A  provision  of $200 thousand  was  added to the  allowance  for loan  losses,
increasing the period end balance to $1.8 million or 1.09% of outstanding  loans
at June 30, 2000. A provision of $180  thousand was added to the  allowance  for
loan losses for the period  ending June 30, 1999.  The increase to the allowance
reflects the significant change in the loan portfolio composition.

NON-INTEREST INCOME

Non-interest income decreased $64 thousand or 14.3% to $384 thousand for the six
month  period  ended June 30, 2000  compared to the six month  period ended June
30,1999.  Non-interest  income  excluding  gains  and  losses  on  the  sale  of
securities  and other assets  increased  12.9% for the six months ended June 30,
2000 compared to the same period for 1999.  Although management is encouraged by
the  increase  in  non-interest  income,  continued  emphasis  will be placed on
improving  non-interest  income revenue.  A wholly owned subsidiary of the Bank,
Community  Financial  Services,  Inc., a retail  securities broker and financial
advisor,  was formed in December  1997,  for the sole purpose of enhancing  non-
interest income. This newly formed subsidiary  contributed $85 thousand or 22.3%
of the current period non-interest income.

NON-INTEREST EXPENSE

Non-interest  expense  decreased 23.1% or $907 thousand for the six months ended
June 30, 2000 compared to the six month period ended June 30,1999.  The decrease
in  non-interest  expense  was due  primarily  to a $1.5  million  non-recurring
contribution to the Community Savings  Charitable  Foundation in 1999, offset by
increases in salary  expense of $152  thousand or 10.8% and $381 thousnad of new
stock grant expenses referenced earlier, for the six month period ended June 30,
2000.

INCOME TAXES

Income tax expense for the six month period ended June 30,2000 was $374 thousand
compared to a tax  benefit of $144  thousand  for the six months  ended June 30,
1999, an increase of $518 thousand from the prior year.  The increase in the tax
provision was  principally a result of a $1.2 million  increase in income before
income  tax.  The  average  tax rate for the six months  ended June 30, 2000 was
31.8% and 27.6% for the period ended June 30, 1999.


                                       14
<PAGE>

LIQUIDITY

The Company's policy is to maintain  adequate  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 primary cash management  liquidity  tools. The
investment portfolio provides secondary liquidity.

At June 30, 2000,  the  estimated  market  value of liquid  assets  (cash,  cash
equivalents,   and  marketable  securities)  was  approximately  $61.5  million,
representing  33.2%  of  deposits  and  borrowed  funds.  As  Community  Savings
continues to grow its loan portfolio, liquidity will continue to be leveraged.

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 June 30, 2000,  outstanding  off-balance  sheet commitments to
extend credit in the form of loan originations totaled $15.2 million.  Available
lines of credit totaled $13.2 million.  Management  considers  current liquidity
levels adequate to meet the Company's cash flow requirements.

CAPITAL

Shareholders'  equity at June 30,  2000 was $46.1  million,  a decrease  of $1.1
million or 2.3% from $47.3  million at December  31, 1999 and a decrease of $1.2
million or 2.6% from $47.4 million one year earlier.  The decrease in capital is
the result of repurchasing  94,040 shares of common stock during March and April
2000 at an average  cost of $16.16  per  common  share or 62.6% of book value at
June 30,  2000.  Included  in  shareholder's  equity  at June 30,  2000 was $1.4
million,  net of  tax,  of  accumulated  other  comprehensive  loss  related  to
unrealized losses on securities  available for sale compared to $447 thousand of
accumulated other  comprehensive loss related to unrealized losses on securities
available for sale one year earlier.  Also included in  shareholder's  equity at
June 30, 2000 was $2.1 million of unearned  common stock for the Employee  Stock
Ownership Plan, representing 140,197 shares of common stock.

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 30, 2000,  Community  Savings'  ratio of
Tier I capital to  average  assets was  13.8%.  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 June 30, 2000, Community Savings had
a ratio of qualifying total capital to net risk-weighted assets of 24.6%.

                                       15
<PAGE>

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.

Year 2000

The Company incurred no Y2K related  interruptions on January 1, 2000 and after,
even  though Y2K had become a worldwide  concern.  The  underlying  cause of the
concern rested with antiquated  computer programs  identifying dates of calendar
years with two  digits  rather  than four  digits.  It was feared  that most old
computer programs with date-sensitive  software would recognize the year 2000 as
"00" and misinterpret the year as 1900. This date  misinterpretation  could have
resulted  in  system  failures  or   miscalculations   causing   disruptions  of
operations,  to include  temporary  interruption of utilities,  telephone lines,
inability  to process  transactions,  generate  statements,  or engage in normal
business activities.

First Community  replaced nearly all existing  software and 100% of all hardware
with  year  2000   certified   compliant   systems.   Several   of  the   Bank's
telecommunications  systems were replaced with year 2000  compliant  systems.  A
Comprehensive  Business Resumption Plan had been developed which would have been
implemented in the event power failures or failures in communications  equipment
prevented  use of  computer  systems  serving  Community  Savings  or  otherwise
impaired  the  operations  of  Community  Savings.  System-wide  testing  of the
Business Resumption Plan was conducted September 21, 1999 for the Accounting and
Operations  departments.  On October 4, 1999, the plan was tested for the retail
branches  and the Loan  Department.  Although  both tests were  successful,  the
Bank's Y2K team  continued to verify  off-line and alternate  manual  procedures
through the end of the 1999 calendar  year.  Management  identified  clients who
posed  Y2K  risks  to  the   institution,   and.  has  developed  the  necessary
capabilities  to  continuously  monitor  and  adequately  respond  to the  risks
identified.  To date, to the best of management's knowledge,  there have been no
customers of the Bank significantly impacted by year 2000

The cost to bring all  systems up to Y2K  specifications  totaled  approximately
$428,000.


                                       16
<PAGE>

Recent Events
None


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.


                                       17
<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   August 7, 2000              /s/Christopher B. Redcay
                 --------------              ------------------------
                                              Christopher B. Redcay
                                             Sr. Vice President, Treasurer
                                             and Chief Financial Officer