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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

For the fiscal year ended December 31, 2004

OR

Commission File Number: 0-32609

FIRST COMMUNITY CAPITAL CORPORATION

(Exact name of Registrant as specified in its charter)

14200 Gulf Freeway

Houston, Texas 77034

(Address of principal executive offices including zip code)

(281) 996-1000

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

None

Securities registered pursuant to Section 12(g) of the Act:

Common Stock, $0.01 par value

(Title of each class)

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 ¨.

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained in this form, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. ¨

Indicate by check mark whether the registrant is an accelerated filer (as defined in Exchange Act Rule 12b-2). Yes ¨    No x

As of March 15, 2005, the number of outstanding shares of Common Stock, par value $0.01 per share, was 3,183,619. The aggregate market value of the voting and non-voting common equity held by non-affiliates based on the book value on June 30, 2004, the last business day of the registrant’s most recently completed second fiscal quarter, of $10.23 per share, was approximately $22,808,501.

Item 1.    Business

General

First Community Capital Corporation (the “Company”) was incorporated as a business corporation under the laws of the State of Texas in January 2001 to serve as a bank holding company for First Community Bank, N.A. (the “Bank”). In January 2004, the Company acquired Grimes County Capital Corporation and its wholly-owned subsidiary, Community State Bank located in Houston, Texas. On May 10, 2004 the Company completed its plans to convert Community State Bank to a national bank and operate it as a separate subsidiary of the Company headquartered in San Antonio, Texas, known as First Community Bank San Antonio, N.A. The Company owns the Bank and First Community Bank San Antonio, N.A. (the “San Antonio Bank”) (together with First Community Bank, N.A., the “Banks”), through its wholly owned Delaware subsidiary, First Community Capital Corporation of Delaware, Inc. (the “Delaware Company”). The Company, through the Banks, provides a diversified range of commercial banking products and services to small and medium-sized businesses, public and governmental organizations and consumers through 17-full-service banking locations in or near Houston, Texas and 4-full-service banking locations in San Antonio, Texas. The Company’s headquarters are located in Houston, Texas. The Company has grown through a combination of internal growth, including the opening of two de novo branches and the acquisition of Grimes County Capital Corporation. At December 31, 2004, the Company had total assets of $599.3 million, total loans and leases of $423.4 million, total deposits of $478.6 million and total shareholders’ equity of $41.4 million. The Company’s headquarters are located at 14200 Gulf Freeway, Houston, Texas 77034, and its telephone number at that location is (281) 996-1000.

Bank Activities

The Company conducts substantially all of its activities through and derives substantially all of its income from its indirect wholly owned subsidiaries, the Banks. The First Community Bank, N.A. is a commercial bank, which was chartered as a national banking association and opened for business in August 1995. First Community Bank San Antonio, N.A. is a commercial bank that was chartered as a national banking association and opened for business in May 2004. The Company offers a diversified range of commercial banking services for business, industry; public and governmental organizations and individuals located principally in the Harris, Brazoria, Galveston and Bexar County, Texas areas.

Services include the usual deposit functions of commercial banks, safe deposit facilities, commercial and personal banking services, and the making of commercial, interim construction, consumer, real estate, industrial loans, SBA loans and lease financing. When the borrowing needs of a customer exceed applicable lending limits, the Company will participate with other banks in making the loan. Similarly, other services are provided for customers through correspondent and other relationships with other financial institutions. Non-deposit product services such as securities brokerage, insurance and retirement plans are provided through the First Community Bank’s subsidiary, First Community Advisors, Inc., known as First Community Financial Group, and arrangements with third party providers of such products.

The Company is an independent, responsive and locally owned community banking organization that focuses on serving the banking needs of locally owned small to mid-sized businesses and individuals within the Houston and San Antonio areas and surrounding markets. The Company places substantial emphasis on “relationship banking” (i.e., assisting with all banking needs of a customer and seeking to maintain a personal relationship with that customer) in marketing products and serving the banking needs of the customer. Each location is staffed, to the extent feasible, with officers and other personnel who have direct experience in the market area served by the particular banking office facility. The Company’s officers and employees are also often involved in community charitable and civic events in the areas they serve. Forging relationships through the interaction of an experienced and dedicated group of officers, directors and employees within the communities has been an important factor in the Company’s growth and performance.

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Recent Developments

The Company and Wells Fargo & Company, a Delaware corporation (“Wells Fargo”), entered into an Agreement and Plan of Reorganization dated as of September 1, 2004 (the “Merger Agreement”) whereby a wholly owned subsidiary of Wells Fargo will merge with and into the Company (the “Merger”). The Merger Agreement provides, among other things, for the conversion of the shares of Common Stock and Series A Preferred Stock and Series B Preferred Stock of the Company outstanding immediately prior to the time the Merger becomes effective in accordance with the provisions of the Merger Agreement into the right to receive shares of common stock of Wells Fargo valued at an aggregate of $123,655,000. It is expected that the proposed acquisition will exclude First Community Bank San Antonio, N.A. with $26.4 million in assets and four locations. A management led investor group has proposed to acquire the San Antonio operation for cash prior to the closing of the Wells Fargo transaction. The merger, which will require the approval of the Federal Reserve Board and the Company’s shareholders, is expected to be completed in the second quarter of 2005.

Competition

The banking business is highly competitive, and the profitability of the Company will depend principally upon the Company’s ability to compete in its market areas. The Company experiences competition in both lending, leasing and attracting funds from other banks and non-bank financial institutions located in its market areas.

The Company is subject to vigorous competition in all aspects of its business from banks and other financial institutions, including savings and loan associations, savings banks, finance companies, credit unions and other providers of financial services, such as money market mutual funds, brokerage firms, consumer finance companies, asset-based non-bank lenders, insurance companies and certain other nonfinancial entities, including retail stores which may maintain their own credit programs and certain governmental organizations which may offer more favorable financing than the Company.

Many of the banks and other financial institutions with which the Company competes have greater financial strength, marketing capability and name recognition than the Company and operate on a statewide, regional or nationwide basis. The institutions are also likely to have legal loan limits substantially in excess of those maintained by the Company. Such institutions can perform certain functions for their customers, including trust, securities brokerage and international banking services, which the Company presently does not offer directly. Although the Company may offer these services through correspondent banks, the inability to provide such services directly may be a competitive disadvantage.

In addition, recent developments in technology and mass marketing have permitted larger companies to market loans and other products and services more aggressively to the Company’s small business customers. Such advantages may enable competitors of the Company to realize greater economies of scale and operating efficiencies than the Company can. Further, some of the nonbank competitors are not subject to the same extensive regulations that govern the Company. Various legislative acts in recent years have led to increased competition among financial institutions and competition from both financial and nonfinancial institutions is expected to continue.

The Company has been able to compete effectively with other financial institutions by providing a high level of personalized banking service to professionals and owner-operated businesses and by emphasizing quick and flexible responses to customer demands; establishing long-term customer relationships and building customer loyalty; and by products and services designed to address the specific needs of its customers. The Company relies heavily on the efforts of its officers, directors and shareholders for the solicitation and referral of potential customers and expects this to continue for the foreseeable future.

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Employees

The Company primarily conducts its operations through the Banks. The Company does not have any paid employees. As of December 31, 2004, the Banks employ 234 full-time equivalent employees, 14 of whom were executive officers. The Banks provides medical insurance and other benefits to its full-time employees. The employees are not represented by any collective bargaining group. Management believes that the Company’s relationship with employees is satisfactory.

Supervision and Regulation

The business of the Company and the Banks are subject to extensive regulation and supervision under federal banking laws and other federal and state laws and regulations. The supervision and regulation of bank holding companies and their subsidiaries is intended primarily for the protection of depositors, the deposit insurance funds of the FDIC and the banking system as a whole, and not for the protection of the bank holding company shareholders or creditors. The banking agencies have broad enforcement power over bank holding companies and banks including the power to impose substantial fines and other penalties for violations of laws and regulations.

The following description summarizes some of the laws to which the Company and the Banks are subject. References herein to applicable statutes and regulations are brief summaries thereof, do not purport to be complete, and are qualified in their entirety by reference to such statutes and regulations.

The Company

The Company is a bank holding company registered under the Bank Holding Company Act of 1956, as amended (the “BHC Act”), and is subject to supervision, regulation and examination by the Federal Reserve. The BHC Act and other Federal laws subject bank holding companies to particular restrictions on the types of activities in which they may engage, and to a range of supervisory requirements and activities, including regulatory enforcement actions for violations of laws and regulations.

Scope of Permissible Activities.    Except as provided below, the Company is prohibited, with certain limited exceptions, from acquiring a direct or indirect interest in or control of more than 5% of the voting shares of any company which is not a bank or bank holding company and from engaging directly or indirectly in activities other than those of banking, managing or controlling banks or furnishing services to its subsidiary banks, except the Company may engage in and may own shares of companies engaged in certain activities found by the Federal Reserve to be so closely related to banking or managing and controlling banks as to be a proper incident thereto. These activities include, among others, operating a mortgage, finance, credit card or factoring company; performing certain data processing operations; providing investment and financial advice; acting as an insurance agent for certain types of credit-related insurance; leasing personal property on a full-payout, non-operating basis; and providing certain stock brokerage and investment advisory services. In approving acquisitions by bank holding companies of companies engaged in banking-related activities, the Federal Reserve considers a number of factors and weighs the expected benefits to the public (such as greater convenience, increased competition or gains in efficiency) against the risks of possible adverse effects (such as undue concentration of resources, decreased or unfair competition, conflicts of interest or unsound banking practices). The Federal Reserve is also empowered to differentiate between activities commenced de novo and activities commenced through acquisition of a going concern.

The Gramm-Leach-Bliley Act, effective March 11, 2000, amended the BHC Act and eliminated the barriers to affiliations among banks, securities firms, insurance companies and other financial service providers. The Gramm-Leach-Bliley Act permits bank holding companies to become financial holding companies and thereby affiliate with securities firms and insurance companies and engage in other activities that are financial in nature. The Gramm-Leach-Bliley Act defines “financial in nature” to include securities underwriting, dealing and market

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making; sponsoring mutual funds and investment companies; insurance underwriting and agency; merchant banking activities; and activities that the Federal Reserve has determined to be closely related to banking. No regulatory approval will be required for a financial holding company to acquire a company, other than a bank or savings association, engaged in activities that are financial in nature or incidental to activities that are financial in nature, as determined by the Federal Reserve.

Safe and Sound Banking Practices.    Bank holding companies are not permitted to engage in unsafe and unsound banking practices. The Federal Reserve’s Regulation Y, for example, generally requires a holding company to give the Federal Reserve prior notice of any redemption or repurchase of its own equity securities, if the consideration to be paid, together with the consideration paid for any repurchases or redemptions in the preceding year, is equal to 10% or more of its consolidated net worth. The Federal Reserve may oppose the transaction if it believes that the transaction would constitute an unsafe or unsound practice or would violate any law or regulation. Depending upon the circumstances, the Federal Reserve could take the position that paying a dividend would constitute an unsafe or unsound banking practice.

The Federal Reserve has broad authority to prohibit activities of bank holding companies and their nonbanking subsidiaries which represent unsafe and unsound banking practices or which constitute violations of laws or regulations, and can assess civil money penalties for certain activities conducted on a knowing and reckless basis, if those activities caused a substantial loss to a depository institution. The penalties can be as high as $1.0 million for each day the activity continues.

Regulatory Restrictions on Dividends; Source of Strength.    It is the policy of the Federal Reserve that bank holding companies should pay cash dividends on common stock only out of income available over the past year and only if prospective earnings retention is consistent with the organization’s expected future needs and financial condition. The policy provides that bank holding companies should not maintain a level of cash dividends that undermines the bank holding company’s ability to serve as a source of strength to its banking subsidiaries.

Under Federal Reserve policy, a bank holding company is expected to act as a source of financial strength to each of its banking subsidiaries and commit resources to their support. Such support may be required at times when, absent this Federal Reserve policy, a holding company may not be inclined to provide it. As discussed below, a bank holding company in certain circumstances could be required to guarantee the capital plan of an undercapitalized banking subsidiary.

In the event of a bank holding company’s bankruptcy under Chapter 11 of the U.S. Bankruptcy Code, the trustee will be deemed to have assumed and is required to cure immediately any deficit under any commitment by the debtor holding company to any of the federal banking agencies to maintain the capital of an insured depository institution, and any claim for breach of such obligation will generally have priority over most other unsecured claims.

Anti-Tying Restrictions.    Bank holding companies and their affiliates are prohibited from tying the provision of certain services, such as extensions of credit, to other nonbanking services offered by a holding company or its affiliates.

Capital Adequacy Requirements.    The Federal Reserve has adopted a system using risk-based capital guidelines to evaluate the capital adequacy of bank holding companies. Under the guidelines, specific categories of assets are assigned different risk weights, based generally on the perceived credit risk of the asset. These risk weights are multiplied by corresponding asset balances to determine a “risk-weighted” asset base. The guidelines require a minimum total risk-based capital ratio of 8.0% (of which at least 4.0% is required to consist of Tier 1 capital elements). Total capital is the sum of Tier 1 and Tier 2 capital.

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In addition to the risk-based capital guidelines, the Federal Reserve uses a leverage ratio as an additional tool to evaluate the capital adequacy of bank holding companies. The leverage ratio is a company’s Tier 1 capital divided by its average total consolidated assets. Certain highly rated bank holding companies may maintain a minimum leverage ratio of 3.0%, but other bank holding companies are required to maintain a leverage ratio of at least 4.0%.

The federal banking agencies’ risk-based and leverage ratios are minimum supervisory ratios generally applicable to banking organizations that meet certain specified criteria. The federal bank regulatory agencies may set capital requirements for a particular banking organization that are higher than the minimum ratios when circumstances warrant. Federal Reserve guidelines also provide that banking organizations experiencing internal growth or making acquisitions will be expected to maintain strong capital positions substantially above the minimum supervisory levels, without significant reliance on intangible assets.

Imposition of Liability for Undercapitalized Subsidiaries.    Bank regulators are required to take “prompt corrective action” to resolve problems associated with insured depository institutions whose capital declines below certain levels. In the event an institution becomes “undercapitalized,” it must submit a capital restoration plan. The capital restoration plan will not be accepted by the regulators unless each company having control of the undercapitalized institution guarantees the subsidiary’s compliance with the capital restoration plan up to a certain specified amount. Any such guarantee from a depository institutions holding company is entitled to a priority of payment in bankruptcy.

The aggregate liability of the holding company of an undercapitalized bank is limited to the lesser of 5.0% of the institution’s assets at the time it became undercapitalized or the amount necessary to cause the institution to be adequately capitalized. The bank regulators have greater power in situations where an institution becomes significantly or critically undercapitalized or fails to submit a capital restoration plan. For example, a bank holding company controlling such an institution can be required to obtain prior Federal Reserve approval of proposed dividends, or might be required to consent to a consolidation or to divest the troubled institution or other affiliates.

Acquisitions by Bank Holding Companies.    The BHC Act requires every bank holding company to obtain the prior approval of the Federal Reserve before it may acquire all or substantially all of the assets of any bank, or ownership or control of any voting shares of any bank, if after such acquisition it would own or control, directly or indirectly, more than 5% of the voting shares of such bank. In approving bank acquisitions by bank holding companies, the Federal Reserve is required to consider the financial and managerial resources and future prospects of the bank holding company and the banks concerned, the convenience and needs of the communities to be served, and various competitive factors.

Control Acquisitions.    The Change in Bank Control Act prohibits a person or group of persons from acquiring “control” of a bank holding company unless the Federal Reserve has been notified and has not objected to the transaction. The statute and regulations set forth standards and certain presumptions concerning acquisition of control.

In addition, any entity is required to obtain the approval of the Federal Reserve under the BHC Act before acquiring 25% (5% in the case of an acquirer that is a bank holding company) or more of the Company’s outstanding common stock, or otherwise obtaining control or a controlling influence over the Company.

Sarbanes-Oxley Act of 2002.    The Sarbanes-Oxley Act is intended to increase corporate responsibility, to provide for enhanced penalties for accounting and auditing improprieties at publicly traded companies and to protect investors by improving the accuracy and reliability of corporation disclosures pursuant to securities laws. The Sarbanes-Oxley Act generally applies to all domestic and foreign companies that file or are required to file periodic reports with the Securities and Exchange Commission (“SEC”) under the Exchange Act such as the Company.

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The Sarbanes-Oxley Act includes additional disclosure requirements and new corporate governance rules, requires the SEC and securities exchanges to adopt extensive additional disclosure, corporate governance and other related rules and mandates further studies of certain issues by the SEC.

The Sarbanes-Oxley Act addresses, among other matters:

The Securities and Exchange Commission’s (SEC) regulations implementing Section 404 take effect for the Company in the fiscal year ending December 31, 2006.

First Community Bank, N.A. and First Community Bank San Antonio, N.A.

As national banks, the First Community Bank, N.A. and First Community Bank San Antonio, N.A., are principally supervised, examined and regulated by the Office of the Comptroller of the Currency (“OCC”). Because the Banks are also members of the Federal Reserve System and because their deposits are insured by the Federal Deposit Insurance Corporation (“FDIC”), the Bank’s are also subject to regulation pursuant to the Federal Reserve Act and the Federal Deposit Insurance Act. The aspects of their business which are regulated under federal law include security requirements, reserve requirements, investments, transactions with affiliates, amounts it may lend to a single customer, business activities in which it may engage and minimum capital requirements. The Banks are also subject to applicable provisions of state law insofar as they do not conflict with and are not preempted by federal law, including laws relating to usury, various consumer and commercial loans and the operation of branch offices.

Financial Modernization.    The Gramm-Leach-Bliley Act, which eliminated the barriers to affiliations among banks, securities firms, insurance companies and other financial service providers, permits banks meeting certain criteria to engage in activities that are financial in nature. The Gramm-Leach-Bliley Act defines “financial in nature” to include securities underwriting, dealing and market making; sponsoring mutual funds and investment companies; insurance underwriting and agency; merchant banking activities; and activities that the Federal Reserve has determined to be closely related to banking.

As national banks, the Banks may establish a financial subsidiary and engage, subject to limitations on investment, in activities that are financial in nature, other than insurance underwriting as principal, insurance

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company portfolio investment, real estate development, real estate investment, annuity issuance and merchant banking activities. To do so, a bank must be well capitalized, well managed and have a CRA rating of satisfactory or better. National banks with financial subsidiaries must remain well capitalized and well managed in order to continue to engage in activities that are financial in nature without regulatory actions or restrictions. These actions or restrictions could include divestiture of the financial in nature subsidiary or subsidiaries.

Restrictions on Transactions with Affiliates and Insiders.    Transactions between the Banks and their non-banking affiliates, including the Company and any of its future nonbanking subsidiaries, are subject to Section 23A of the Federal Reserve Act. In general, Section 23A imposes limits on the amount of such transactions, and also requires certain levels of collateral for loans to affiliated parties. It also limits the amount of advances to third parties, which are collateralized by any of the Company’s securities or obligations or the securities or obligations of any of the Company’s nonbanking subsidiaries.

Affiliate transactions are also subject to Section 23B of the Federal Reserve Act which generally requires that certain transactions between the Banks and their affiliates be on terms substantially the same, or at least as favorable to the Banks, as those prevailing at the time for comparable transactions with or involving other nonaffiliated persons. The Federal Reserve has also issued Regulation W which codifies prior regulations under Sections 23A and 23B of the Federal Reserve Act and interpretive guidance with respect to affiliate transactions.

The restrictions on loans to directors, executive officers, principal shareholders and their related interests (collectively referred to herein as “insiders”) contained in the Federal Reserve Act and Federal Reserve Regulation O apply to all insured institutions and their subsidiaries and holding companies. These restrictions include limits on loans to one borrower and conditions that must be met before such a loan can be made. There is also an aggregate limitation on all loans to insiders and their related interests. Insiders are subject to enforcement actions for knowingly accepting loans in violation of applicable restrictions.

Restrictions on Distribution of Subsidiary Bank Dividends and Assets.    It is anticipated that dividends paid by the Banks to the Company will continue to be its principal source of operating funds. Capital adequacy requirements serve to limit the amount of dividends that may be paid by the Banks. In addition, the National Bank Act and various regulations promulgated by the OCC, as well as the Federal Deposit Insurance Act, also restrict dividend payments by the Banks to the Company.

The National Bank Act provides that a national banking association may not pay dividends: (i) which impair its capital; (ii) if losses have been sustained equal to or exceeding its undivided profits then on hand; (iii) in an amount greater than its undivided profits, subject to other applicable provisions of law; (iv) unless the surplus fund is equal to or greater than its capital stock, or unless there has been added to the surplus fund not less than 1/10 of its net income of the preceding half year in the case of quarterly or semi-annual dividends or not less than 1/10 of its net income of the preceding two consecutive half-year periods in the case of annual dividends; and (v) without the approval of the OCC if dividends declared in any calendar year should exceed the total of net income for that year combined with the retained net income for the preceding two years, less any required transfers to surplus.

Because the Company is a legal entity separate and distinct from its subsidiaries, the Company’s right to participate in the distribution of assets of any subsidiary upon the subsidiary’s liquidation or reorganization will be subject to the prior claims of the subsidiary’s creditors. In the event of a liquidation or other resolution of an insured depository institution, the claims of depositors and other general or subordinated creditors are entitled to a priority of payment over the claims of holders of any obligation of the institution to its shareholders, including any depository institution holding company (such as the Company) or any shareholder or creditor thereof.

Examinations.    The OCC regularly examines and evaluates national banks. These examinations review areas such as capital adequacy, reserves, loan portfolio quality and management, consumer and other compliance issues, investments and management practices. In addition to these regular exams, the Banks are required to

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furnish quarterly and annual reports to the OCC. The OCC may exercise cease and desist or other supervisory powers over a national bank if its actions represent unsafe or unsound practices or violations of law. Further, any proposed addition of any individual to the Board of Directors of the Banks or the employment of any individual as a senior executive officer of the Banks, or the change in responsibility of such an officer, will be subject to 90 days prior written notice to the OCC if the Bank is not in compliance with the applicable minimum capital requirements, is otherwise a troubled institution or the OCC determines that such prior notice is appropriate for the Banks. The OCC then has the opportunity to disapprove any such appointment.

Capital Adequacy Requirements.    The OCC has adopted regulations establishing minimum requirements for the capital adequacy of national banks. The OCC’s regulations require national banks to have and maintain a “Tier 1 risk-based capital” ratio of at least 4.0% and a “total risk-based capital” ratio of at least 8.0% of total risk-adjusted assets. Total risk-based capital represents the sum of Tier 1 capital and Tier 2 capital, as those terms are defined in the regulations.

The OCC also requires national banks to meet a minimum “leverage ratio” of Tier 1 capital to total assets of not less than 3.0% for a bank that is not anticipating or experiencing significant growth and is highly rated (i.e., has a composite rating of 1 on a scale of 1 to 5). Banks that the OCC determines are anticipating or experiencing significant growth or that are not highly rated must meet a minimum leverage ratio of 4.0%.

The OCC may establish minimum capital ratios above those set forth in the preceding paragraphs if deemed appropriate by the OCC, in its discretion, in light of the circumstances of a particular bank.

Corrective Measures for Capital Deficiencies.    The prompt corrective action regulations, which were promulgated to implement certain provisions of the Federal Deposit Insurance Corporation Improvement Act of 1991 (“FDICIA”), also effectively impose capital requirements on national banks, by subjecting banks with less capital to increasingly stringent supervisory actions. For purposes of the prompt corrective action regulations, a bank is “undercapitalized” if it has a total risk-based capital ratio of less than 8.0%; a Tier 1 risk-based capital ratio of less than 4.0%; or a leverage ratio of less than 4.0% (or less than 3.0% if the bank has received a composite rating of 1 in its most recent examination report and is not experiencing significant growth). A bank is “adequately capitalized” if it has a total risk-based capital ratio of 8.0% or higher; a Tier 1 risk-based capital ratio of 4.0% or higher; a leverage ratio of 4.0% or higher (3.0% or higher if the bank was rated a composite 1 in its most recent examination report and is not experiencing significant growth); and does not meet the criteria for a “well capitalized” bank. A bank is “well capitalized” if it has a total risk-based capital ratio of 10.0% or higher; a Tier 1 risk-based capital ratio of 6.0% or higher; a leverage ratio of 5.0% or higher; and is not subject to any written requirement to meet and maintain any higher capital level(s).

Under the provisions of FDICIA and the prompt corrective action regulations, for example, an “undercapitalized” bank is subject to a limit on the interest it may pay on deposits. Also, an undercapitalized bank cannot make any capital distribution, including paying a dividend (with some exceptions), or pay any management fee (other than compensation to an individual in his or her capacity as an officer or employee of the bank). Such a bank also must submit a capital restoration plan to the OCC for approval, restrict total asset growth and obtain regulatory approval prior to making any acquisition, opening any new branch office or engaging in any new line of business. An undercapitalized bank may also be subject to other, discretionary, regulatory actions. Additional mandatory and discretionary regulatory actions apply to “significantly undercapitalized” and “critically undercapitalized” banks. Failure of a bank to maintain the required capital could result in such bank being declared insolvent and closed.

Deposit Insurance Assessments.    The deposits held by the Banks are insured by the FDIC through the Bank Insurance Fund (“BIF”) to the extent provided by law and the Banks must pay assessments to the FDIC for such deposit insurance protection. The FDIC has implemented a risk-based assessment system under which FDIC-insured depository institutions pay annual premiums at rates based on their risk classification. A bank’s risk classification is based on its capital levels and the level of supervisory concern the bank poses to the regulators.

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Institutions assigned to higher risk classifications (that is, institutions that pose a greater risk of loss to their respective deposit insurance funds) pay assessments of higher rates than institutions that pose a lower risk. A decrease in the Banks’ capital ratios or the occurrence of events that have an adverse effect on the Banks’ asset quality, management, earnings or liquidity could result in a substantial increase in deposit insurance premiums paid by the Banks, which would adversely affect the Banks’ earnings. In addition, the FDIC can impose special assessments in certain instances. The current range of BIF assessments is between 0% and 0.27% of deposits.

Federal law aimed at recapitalizing the Savings Association Insurance Fund (“SAIF”) requires, among other things, that banks insured under the BIF pay a portion of the interest due on bonds that were issued to help shore up the ailing Federal Savings and Loan Insurance Corporation in 1987. With respect to the assessment of the bond obligations, the BIF rate is $0.0144 per $100 of deposits for the first quarter of 2005 and is adjusted quarterly to reflect changes in the assessment bases of the respective funds based on quarterly Call Report submissions.

Bank Holding Company Regulation.    Under the BHC Act and regulations promulgated thereunder by the Federal Reserve, no company may acquire control of a bank without prior approval of the Federal Reserve. The ownership, control or power to vote 25.0% or more of any class of voting securities is presumed to be a controlling interest under the BHC Act and, depending on the circumstances, control may exist below this level. Any company acquiring such control would become a bank holding company under such act and would be subject to restrictions on its operations as well as registration, examination and regulation by the Federal Reserve.

Federal Deposit Insurance Act.    Section 36 of the Federal Deposit Insurance Act (FDI Act) and Part 363 of the FDIC’s regulations impose annual audit and reporting requirements on insured depository institutions with $500 million or more in total assets. The Company, with total assets in excess of $500 million at December 31, 2004, will be required to comply with the FDI Act for the year ending December 31, 2005. The annual report that the Company will file with the FDIC and other federal and state supervisors, as appropriate, will include a statement of management’s responsibilities for establishing and maintaining an adequate internal control structure and procedures for financial reporting. For purposes of Part 363, financial reporting encompasses both financial statements prepared in accordance with generally accepted accounting principles and those prepared for regulatory reporting purposes. In addition, the Company’s annual report must contain an assessment by management of the effectiveness of internal control over financial reporting as of year-end as well as a report by the Company’s independent auditor on management’s assertion concerning internal control.

Cross-Guarantee Provisions.    The Financial Institutions Reform, Recovery and Enforcement Act of 1989 contains a cross-guarantee provision which generally makes commonly controlled insured depository institutions liable to the FDIC for any losses incurred in connection with the failure of a commonly controlled depository institution.

Community Reinvestment Act.    The CRA and the corresponding regulations are intended to encourage banks to help meet the credit needs of their service area, including low and moderate income neighborhoods, consistent with the safe and sound operations of the banks. These regulations also provide for regulatory assessment of a bank’s record in meeting the needs of its service area when considering applications to acquire the assets and assume the liabilities of another bank. Federal banking agencies are required to make public a rating of a bank’s performance under the CRA. In the case of a bank holding company, the CRA performance record of the banks involved in the transaction are reviewed in connection with the filing of an application to acquire ownership or control of shares or assets of a bank or to merge with any other bank holding company. An unsatisfactory record can substantially delay or block the transaction.

Consumer Laws and Regulations.    In addition to the laws and regulations discussed herein, the Banks are also subject to certain consumer laws and regulations that are designed to protect consumers in transactions with banks. While the list set forth herein is not exhaustive, these laws and regulations include the Truth in Lending Act, the Truth in Savings Act, the Electronic Funds Transfer Act, the Expedited Funds Availability Act, the

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Equal Credit Opportunity Act and the Fair Housing Act, among others. These laws and regulations mandate certain disclosure requirements and regulate the manner in which financial institutions must deal with customers when taking deposits or making loans to such customers. The Banks must comply with the applicable provisions of these consumer protection laws and regulations as part of its ongoing customer relations.

Privacy.    In addition to expanding the activities in which banks and bank holding companies may engage, the Gramm-Leach-Bliley Act also imposed new requirements on financial institutions with respect to customer privacy. The Gramm-Leach-Bliley Act generally prohibits disclosure of customer information to non-affiliated third parties unless the customer has been given the opportunity to object and has not objected to such disclosure. Financial institutions are further required to disclose their privacy policies to customers annually. Financial institutions, however, will be required to comply with state law if it is more protective of customer privacy than the Gramm-Leach-Bliley Act.

The USA Patriot Act of 2001.    The Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001 (“USA Patriot Act”) was enacted in October 2001. The USA Patriot Act is intended to strengthen U.S. law enforcement’s and the intelligence communities’ ability to work cohesively to combat terrorism on a variety of fronts. The potential impact of the USA Patriot Act on financial institutions of all kinds is significant and wide ranging. The USA Patriot Act contains sweeping anti-money laundering and financial transparency laws and requires various regulations, including: (i) due diligence requirements for financial institutions that administer, maintain, or manage private bank accounts or correspondent accounts for non-U.S. persons; (ii) standards for verifying customer identification at account opening; (iii) rules to promote cooperation among financial institutions, regulators and law enforcement entities in identifying parties that may be involved in terrorism or money laundering; (iv) reports by nonfinancial trades and business filed with the Treasury Department’s Financial Crimes Enforcement Network for transactions exceeding $10,000; and (v) filing of suspicious activities reports involving securities by brokers and dealers if they believe a customer may be violating U.S. laws and regulations.

Instability of Regulatory Structure

Various legislation, such as the Gramm-Leach-Bliley Act, which expanded the powers of banking institutions and their holding companies, and proposals to overhaul the bank regulatory system and limit the investments that a depository institution may make with insured funds, is from time to time introduced in Congress. Such legislation may change banking statutes and the environment in which the Company and its banking subsidiaries operate in substantial and unpredictable ways. The Company cannot determine the ultimate effect that such potential legislation, if enacted, or implementing regulations with respect thereto, would have upon the financial condition or results of operations of the Company or its subsidiaries.

Expanding Enforcement Authority

One of the major additional burdens imposed on the banking industry by FDICIA is the increased ability of banking regulators to monitor the activities of banks and their holding companies. In addition, the Federal Reserve, FDIC and OCC have extensive authority to police unsafe or unsound practices and violations of applicable laws and regulations by depository institutions and their holding companies. For example, the FDIC may terminate the deposit insurance of any institution which it determines has engaged in an unsafe or unsound practice. The agencies can also assess civil money penalties, issue cease and desist or removal orders, seek injunctions, appoint conservators and receivers and publicly disclose such actions. FDICIA and other laws have expanded the agencies’ authority in recent years, and the agencies have not yet fully tested the limits of their powers.

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Monetary Policy

The policies of regulatory authorities, including the monetary policy of the Federal Reserve, have a significant effect on the operating results of banks and bank holding companies. Among the means available to the Federal Reserve to regulate the supply of bank credit are open market purchases and sales of U.S. government securities, changes in the discount rate on borrowings from the Federal Reserve System and changes in reserve requirements with respect to deposits. These activities are used in varying combinations to influence overall growth and distribution of bank loans, investments and deposits on a national basis, and their use may affect interest rates charged on loans or paid for deposits.

Federal Reserve monetary policies and the fiscal policies of the federal government have materially affected the operating results of commercial banks in the past and are expected to continue to do so in the future. The Company cannot predict the nature of future monetary and fiscal policies and the effect of such policies on the future business and earnings of the Company or its subsidiaries.

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Item 2.    Properties

The Company currently conducts business operations through its two subsidiary banks. First Community Bank, N.A. has its main office and 17 branch office locations in and around the greater Houston metropolitan area and First Community Bank San Antonio, N.A. has its main office and four branch office locations in San Antonio, Texas. A description of each of the properties, whether owned or leased, is presented below:

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Item 3.    Legal Proceedings

The Company and the Banks from time to time are involved in routine litigation which has arisen in the normal course of business. Management believes that neither the Company nor the Banks are party to, nor any of their property the subject of, any material pending or threatened legal proceedings which, if determined adversely, would have a material adverse effect upon the consolidated financial condition, results of operations or cash flows of the Company.

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

No matters were submitted to a vote of security holders during the fourth quarter of 2004.

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PART II.

Market Information

The Company’s Common Stock is not listed on an exchange or quoted on the NASDAQ Stock Market or any automated services, and there is no established trading market for the Common Stock. Trades in shares of Common Stock are often privately negotiated between the buyer and the seller and management of the Company may not know the prices at which some or all of such transactions took place. During the three year period ended December 31, 2004, management is aware of trades in the Common Stock at prices ranging from $11.50 to $15.50 per share.

Holders

As of March 15, 2005, there were approximately 759 holders of record of the Company’s Common Stock. The number of beneficial owners is unknown to the Company at this time.

Dividends

Holders of Common Stock are entitled to receive dividends when, as and if declared by the Company’s Board of Directors out of funds legally available therefore. The Company has occasionally paid a cash dividend on the Common Stock. Although the Company paid a dividend of $0.10 per share in December 2004, the Company cannot predict if or when it will pay dividends on the Common Stock in the future. The payment of dividends on shares of Common Stock may be subject to the prior rights of holders of any outstanding shares of preferred stock of the Company. The holders of the Company’s Series A Preferred Stock are entitled to receive non-cumulative dividends out of funds legally available therefore, if, as and when properly declared by the Board of Directors, payable semi-annually, equal to 7% per annum of the liquidation price ($13.00 per share), although the Company is not required to declare and pay such dividends. In 2004, $350,350 in dividends were paid to holders of the Company’s Series A Preferred Stock. No dividends will be paid with respect to shares of Series B Preferred Stock.

For a foreseeable period of time, the principal source of cash revenues to the Company will be dividends paid by the Banks with respect to their respective capital stock. There are certain restrictions on the payment of these dividends imposed by federal and state banking laws, regulations and authorities.

Further, the dividend policy of the Banks are subject to the discretion of the respective boards of directors of the Banks and will depend upon such factors as future earnings, financial conditions, cash needs, capital adequacy and general business conditions.

In the future, the declaration and payment of dividends on the Common Stock will depend upon the Company’s earnings and financial condition, liquidity and capital requirements, the general economic and regulatory climate, the Company’s ability to service any equity or debt obligations senior to the Common Stock and other factors deemed relevant by the Board of Directors. As of December 31, 2004, an aggregate of approximately $4.3 million was available for the payment of dividends by the Banks to the Company under applicable restrictions, without regulatory approval. Regulatory authorities could impose administratively stricter limitations on the ability of the Bank to pay dividends to the Company if such limits were deemed appropriate to preserve certain capital adequacy requirements.

Securities Authorized for Issuance Under Equity Compensation Plans

The Company currently has stock options outstanding. The following table provides information as of December 31, 2004 regarding the Company’s equity compensation plans under which the Company’s equity securities are authorized for issuance.

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EQUITY COMPENSATION PLAN INFORMATION

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Item 6.     Selected Financial Data

The following consolidated selected financial data should be read in conjunction with the Consolidated Financial Statements of the Company and the Notes thereto, appearing elsewhere in this annual report on Form 10-K, and the information contained in “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.” The selected historical consolidated financial data as of the end of and for each of the five years in the period ended December 31, 2004 are derived from the Company’s Consolidated Financial Statements which have been audited by independent accountants.

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Item 7.    Management’s Discussion and Analysis of Financial Condition and Results of Operations

SPECIAL CAUTIONARY NOTICE REGARDING FORWARD-LOOKING STATEMENTS

Certain of the matters discussed in this document and in documents incorporated by reference herein, including under the caption “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” may constitute forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements describe the Company’s future plans, strategies and expectations, are based on assumptions and involve a number of risks and uncertainties, many of which are beyond the Company’s control. The use of any of the words “believe,” “expect,” “anticipate,” “estimate,” “continue,” “intend,” “may,” “will,” “should,” or similar expressions identifies these forward-looking statements. The Company cautions you that a number of important factors or events could cause actual results to differ materially from those currently anticipated in any forward-looking statements. Those possible events or factors without limitation:

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A forward-looking statement may include a statement of the assumptions or bases underlying the forward-looking statement. The Company believes it has chosen these assumptions or bases in good faith and that they are reasonable. However, the Company cautions you that assumptions or bases almost always vary from actual results, and the differences between assumptions or bases and actual results can be material.

The Company undertakes no obligation to publicly update or otherwise revise any forward-looking statements, whether as a result of new information, future events or otherwise unless the securities laws require the Company to do so.

Management’s Discussion and Analysis of Financial Condition and Results of Operations analyzes the major elements of the consolidated balance sheets and statements of earnings of the Company. This section should be read in conjunction with the Company’s consolidated financial statements and notes thereto and other detailed information included elsewhere in this document.

The financial position and results of operations as of and for the years ended December 31, 2004, 2003 and 2002 represent the Company, the First Community Bank, N.A. and the First Community Bank San Antonio, N.A., on a consolidated basis and include the Company and the Delaware Company as bank holding companies for the Banks.

For the Years Ended December 31, 2004, 2003 and 2002

Overview

The Company generates the majority of its revenues from interest income on loans, service charges on customer accounts and income from investment in securities. The revenues are offset by interest expense paid on deposits and other borrowings and non-interest expenses such as administrative and occupancy expenses. Net interest income is the difference between interest income on earning assets such as loans and securities and interest expense on liabilities such as deposits and borrowings which are used to fund those assets. Net interest income is the Company’s largest source of revenue, representing 62.2% of total revenue during 2004.

Net income was $1.0 million, $2.1 million and $2.2 million for the years ended December 31, 2004, 2003 and 2002, respectively, and diluted earnings per share were $0.20, $0.56 and $0.73, respectively, for these same periods. The Company posted returns on average assets of 0.18%, 0.46% and 0.62% and returns on average equity of 2.6%, 5.8% and 8.2% for the years ended December 31, 2004, 2003 and 2002, respectively. The acquisition of Community State Bank, and conversion related costs, amortization of the core deposit intangible asset, the Baybrook branch opening, the opening of our newest San Antonio branch and the associated additional overhead expense were major contributors to the reduced earnings.

Total assets at December 31, 2004, 2003 and 2002 were $599.3 million, $469.2 million, and $421.4 million, respectively. Total deposits were $478.6 million, $367.3 million, and $338.3 million at December 31, 2004, 2003 and 2002, respectively. Included in the deposit increase in 2004 was $47.7 million resulting from The Community State Bank acquisition. Total loans and leases, net of unearned discount and fees and allowance for possible credit losses, were $419.4 million, $284.5 million and $257.7 million at December 31, 2004, 2003, and 2002. Included in the increase in loans for 2004 was $34.8 million resulting from The Community State Bank acquisition. Shareholders’ equity was $41.4 million, $38.5 million, and $32.3 million at December 31, 2004, 2003 and 2002, respectively.

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Critical Accounting Policies

The Company’s accounting policies are integral to understanding the results reported. The Company’s accounting policies are described in detail in Note A to the consolidated financial statements. The Company believes that of its significant accounting policies, the allowance for credit losses may involve a higher degree of judgment and complexity.

Allowance for Possible Credit Losses—The allowance for possible credit losses is a reserve established through charges to earnings in the form of a provision for possible credit losses. Management has established an allowance for possible credit losses, which it believes is adequate for estimated losses in the Company’s loan and lease portfolio. Based on an evaluation of the loan and lease portfolio, management presents a quarterly review of the allowance for possible credit losses to the Company’s Board of Directors, indicating any change in the allowance since the last review and any recommendations as to adjustments in the allowance. In making its evaluation, management considers factors such as historical loan loss experience, industry diversification of the Company’s commercial loan portfolio, the amount of non-performing assets and related collateral, the volume, growth and composition of the Company’s loan and lease portfolio, current economic changes that may affect the borrower’s ability to pay and the value of collateral, the evaluation of the Company’s loan and lease portfolio through its internal and external loan review process and other relevant factors. Charge-offs occur when loans are deemed to be un-collectible.

Stock–based Compensation—The Company accounts for stock-based employee compensation plans using the intrinsic value-based method. Because the exercise price of the Company’s employee stock options equals the market price of the underlying stock on the date of grant, no compensation expense is recognized on options granted. Pro forma disclosures of net income and earnings per share assuming the fair value-based accounting method are set forth in Note O to the Company’s Consolidated Financial Statements.

Statement of Financial Accounting Standards No. 123, Share-Based Payment (“SFAS No. 123R”) requires that stock-based compensation be recognized as compensation expense in the income statement based on their fair values on the date of the grant. The provisions of this statement become effective for all equity awards granted after July 1, 2005.

The Company established deferred compensation plans (the “Plans”) whereby eligible executive officers and directors of the Banks and Company (the “Participants”) earn retirement benefits during their tenure as employees or directors of the Bank and Company, subject to certain provisions contained in the Plans. Benefits are provided over future periods of time subsequent to the Participants’ termination of employment from the Bank or at such time that the Participants are no longer directors of the Company as defined by the Plans. The Plan benefits are indexed to earnings generated by single premium Bank Owned Life Insurance (BOLI). This insurance provides cash values, earnings, and death benefits of varying amounts as defined in the insurance policies.

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Goodwill and Other Intangible Assets

The Banks have recorded goodwill that is not subject to a amortization in accordance with SFAS No. 142 in the amount of $13,872,690 at December 31, 2004. The changes in the carrying amount of core deposit intangibles and goodwill and the associated accumulated amortization for the years ended December 31, 2002 and 2003 and 2004 is as follows:

Results of Operations

Earnings

For the year ended December 31, 2004, the Company earned $1.0 million or $0.20 per diluted share, compared with $2.1 million or $0.56 per diluted share, for the year ended December 31, 2003. The acquisition of Community State Bank and conversion related costs, the Baybrook branch opening, the opening of our newest San Antonio branch and the associated additional overhead and acquisition related costs were major contributors to the reduced earnings.

For the year ended December 31, 2003, the Company earned $2.1 million, or $0.56 per diluted share, compared with $2.2 million or $0.73 per diluted share for the year ended December 31, 2002. Continued focus on expanding the franchise with entry into San Antonio, early redemption of mortgage backed securities resulting in accelerated premium amortization and additional accruals combined to contribute to the reduced earnings in 2003 compared with 2002.

Net Interest Income

Net interest income represents the amount by which interest income on interest-earning assets, including securities and loans and leases, exceeds interest expense incurred on interest-bearing liabilities, including deposits and other borrowed funds. Net interest income is the principal source of the Company’s earnings. Interest rate fluctuations, as well as changes in the amount and type of earning assets and liabilities, combine to affect net interest income. The Company’s net interest income is affected by changes in the amount and mix of interest-earning assets and interest-bearing liabilities, referred to as a “volume change.” It is also affected by changes in yields earned on interest-earning assets and rates paid on interest-bearing deposits, trust preferred securities, and other borrowed funds, referred to as a “rate change.”

The Company has an asset and liability management strategy designed to provide a proper balance between rate sensitive assets and rate sensitive liabilities, in an attempt to maximize interest margins and to provide adequate liquidity for anticipated needs. Approximately 30.5% of the Company’s deposits consists of non-interest bearing deposits and approximately 20.6% are in low cost savings deposits, as compared to higher cost

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certificates of deposit. These lower cost deposits have contributed to both a lower cost of funds and the Company’s ability to maintain a strong net interest margin in the low interest rate environment of the last two years.

2004 versus 2003.    Net interest income increased to $21.2 million in 2004 from $16.9 million in 2003, a $4.3 million or 25.4% increase. The increase is primarily attributable to the increase in earning assets related to the acquisition of Community State Bank, and lower interest rates paid on liabilities during this period, offset partially by an increase in interest expense as the result of interest on debentures being treated as interest expense rather than non-interest expense and additional debentures issued in the fourth quarter of 2003. In periods prior to July 1, 2003, interest paid on debentures was included as a component of non-interest expense. This change in presentation resulted in a $1.1 million increase in interest expense for the year ended December 31, 2004. The Banks were successful in maintaining a stable net interest margin of 4.4%, 4.3% and 4.8% and the net interest spread was 4.0%, 3.8% and 4.2% for 2004, 2003 and 2002, respectively.

2003 versus 2002.    Net interest income increased to $16.9 million in 2003 from $15.2 million in 2002, a $1.7 million or 11.8% increase, primarily due to continued loan growth, an increase in investment securities, and attention to pricing and interest rate management as well as the full year effect of The Express Bank acquisition completed in May 2002. Net interest income for 2003 was partially offset by an increase in interest expense as a result of interest on debentures being treated as interest expense rather than non-interest expense. The Bank was successful in maintaining a stable net interest margin was 4.3% and 4.8% and the net interest spread was 3.8% and 4.2% for 2003 and 2002, respectively.

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The following table presents for the periods indicated an analysis of net interest income by each major category of interest-earning assets and interest-bearing liabilities, the average amounts outstanding and the interest earned or paid on such amounts. The table also sets forth the average rate earned on interest-earning assets, the average rate paid on interest-bearing liabilities, and the net interest margin on average total interest-earnings assets for the same periods. No tax-equivalent adjustments were made and all average balances are yearly average balances. Non-accruing loans have been included in the table as loans carrying a zero yield.

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The following table compares the dollar amount of changes in interest income and interest expense for the major components of interest-earning assets and interest-bearing liabilities and distinguishes between the increase (decrease) related to higher outstanding balances and the volatility of interest rates. For purposes of these tables, changes attributable to both rate and volume which cannot be segregated have been allocated to rate.