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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION


WASHINGTON, DC 20549




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Form 10-KSB

|           |  |                                                                                                                                                         
|---------- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------
|(Mark One) |  |                                                                                                                                                         
|x          |  | ANNUAL REPORT UNDER SECTION 13 OR 15(d)
        OF THE SECURITIES EXCHANGE ACT OF 1934
        For the fiscal year ended December 31, 2001              
|          
|o          |  | TRANSITION REPORT UNDER SECTION 13 OR
        15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
        For the transition period
        from             to

Commission file number: 000-32891



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1st Constitution Bancorp

(Name of Small Business Issuer in Its
Charter)


|                                                                                       |  |                                                       
|-------------------------------------------------------------------------------------- |  | ------------------------------------------------------
|New Jersey(State or Other Jurisdiction of
        Incorporation or Organization)       |  | 22-3665653(IRS Employer
        Identification Number)
|                                                                                      
|2650 Route 130, P.O. Box 634, Cranbury(Address of Principal Executive
        Offices) |  | 08512(Zip Code)                                       

(609) 655-4500

(Issuers Telephone Number, Including
Area Code)


Securities registered under Section 12 (b) of
the Act:

|                    |  |                                          
|------------------- |  | -----------------------------------------
|Title of Each Class |  | Name of Each Exchange On Which Registered
|                    |  |                                          
|None                |  | None                                     

Securities registered under Section 12 (g) of
the Act:

Common Stock, No Par Value

(Title of Class)


Check whether the issuer: (1) filed all
reports required to be filed by Section 13 or 15 (d)
of the Exchange Act during the past 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 o

Check if there is no disclosure of delinquent
filers in response to Item 405 of Regulation S-B is
not contained in this form, and no disclosure will 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-KSB or any amendment to this
Form  10-KSB     o

The issuers revenues for the most recent
fiscal year were $16,301,207. The aggregate market value of
voting stock held by non affiliates of the registrant as of
March 7, 2002
was $25.7 million.

The number of outstanding shares of the registrants common
stock as of March 7, 2002 was
1,404,495.

The following documents are incorporated by
reference. The Annual Report to security holders for the fiscal
year ended December 31, 2001 is incorporated by reference
in Part II. The Proxy Statement for the annual meeting of
security holders May 16, 2002
is incorporated by reference in Part III.



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TABLE OF CONTENTS



|                                                |                                                                                               |  |  |  |  |  |  | 
|----------------------------------------------- | --------------------------------------------------------------------------------------------- |  |  |  |  |  |  | 
|PART I                                         
|                                                | Item 1. Description of Business.                                                             
|                                                | Item 2. Description of Property.                                                             
|                                                | Item 3. Legal Proceedings.                                                                   
|                                                | Item 4. Submission of Matters to a Vote of Security Holders.                                 
|PART II                                        
|                                                | Item 5. Market for Registrant's Common Equity and Related Shareholder Matters.               
|                                                | Item 6. Managements Discussion and Analysis of Financial Condition and Results of Operations
|                                                | Item 7. Financial Statements and Supplementary Data                                          
|                                                | Item 8. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure 
|Part III                                       
|                                                | Item 9. Directors and Executive Officers of the Registrant                                   
|                                                | Item 10. Executive Compensation                                                              
|                                                | Item 11. Security Ownership of Certain Beneficial Owners and Management                      
|                                                | Item 12. Certain Relationships and Related Transactions                                      
|                                                | Item 13. Exhibits, Financial Statements Schedules, and Reports on Form 8-K                   
|SIGNATURES                                     
|1ST CONSTITUTION BANCORP INDEX TO EXHIBITS     
|EX-4.1: SPECIMEN SHARE OF COMMON STOCK         
|EX-13.1: 2001 ANNUAL REPORT TO SECURITY HOLDERS
|EX-21: SUBSIDIARIES                            



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FORM 10-KSB

INDEX

|         |  |                                                                                                                               |  |      |    | 
|-------- |  | ----------------------------------------------------------------------------------------------------------------------------- |  | ---- | -- | 
|         |  |                                                                                                                               |  | Page
|         |  |                                                                                                                               |  |     
|PART I   |  |                                                                                                                               |  |      |    | 
|        
|Item 1.  |  | Business                                                                                                                      |  |      | 3  | 
|Item 2.  |  | Properties                                                                                                                    |  |      | 11 | 
|Item 3.  |  | Legal Proceedings                                                                                                             |  |      | 12 | 
|Item 4.  |  | Submission of Matters to a Vote of Security
        Holders                                                                   |  |      | 12 | 
|        
|PART II  |  |                                                                                                                               |  |      |    | 
|        
|Item 5.  |  | Market for Registrants Common Equity and
        Related Shareholder Matters                                                 |  |      | 12 | 
|Item 6.  |  | Managements Discussion and Analysis of
        Financial Condition and Results of Operations                                 |  |      | 13 | 
|Item 7.  |  | Financial Statements and Supplementary Data                                                                                   |  |      | 13 | 
|Item 8.  |  | Changes in and Disagreements with Accountants on
        Accounting and Financial Disclosures                                 |  |      | 13 | 
|        
|PART III |  |                                                                                                                               |  |      |    | 
|        
|Item 9.  |  | Directors and Executive Officers of the Registrant                                                                            |  |      | 13 | 
|Item 10. |  | Executive Compensation                                                                                                        |  |      | 13 | 
|Item 11. |  | Security Ownership of Certain Beneficial Owners
        and Management                                                        |  |      | 13 | 
|Item 12. |  | Certain Relationships and Related Transactions                                                                                |  |      | 13 | 
|        
|PART IV  |  |                                                                                                                               |  |      |    | 
|        
|Item 13. |  | Exhibits, Financial Statement Schedules, and
        Reports
        On Form 8-K
        Signatures
        Index to Exhibits |  |      | 13 | 



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PART I




Item
1.     Description of
Business

1st Constitution Bancorp

1st Constitution Bancorp (the
Company) is a New Jersey state chartered bank
holding company organized in February, 1999. The Company was
incorporated for the purpose of acquiring all of the issued and
outstanding stock of 1st Constitution Bank (the
Bank) and thereby enabling the Bank to operate
within a bank holding company structure. The Company became an
active bank holding company on July 1, 1999. The Bank is a
wholly-owned subsidiary of the Company. Other than its
investment in the Bank, the Company currently conducts no other
significant business activities.

As of December 31, 2001, the Company, on a
consolidated basis, had total assets of approximately $223.2
million, total deposits of approximately $184.3 million, total
loans of approximately $124.9 million and total
shareholders equity of approximately $17.4 million.

The main office of the Company and the Bank is
located at 2650 Route 130 North, Cranbury, New Jersey 08512, and
the telephone number is (609) 655-4500.

1st Constitution Bank

The Bank, a commercial bank formed under the laws
of the State of New Jersey, engages in the business of
commercial and retail banking. As a community bank, the Bank
offers a wide range of services (including demand, savings and
time deposits and commercial and consumer/installment loans) to
individuals, small businesses and not-for-profit organizations
principally in Middlesex, Mercer and Somerset Counties, New
Jersey. The Bank conducts its operations through its main office
located in Cranbury, New Jersey, and four branch offices in
downtown Cranbury, Hamilton Square, Plainsboro and Montgomery
Township, New Jersey. The Banks deposits are insured up to
applicable legal limits by the Federal Deposit Insurance
Corporation (FDIC).

The Bank began operations in August 1989 during a
period of slower economic expansion and a severe downturn in the
real estate market in New Jersey The Bank experienced modest
profitability in the early years of operation, but lagged behind
its competition in performance. In September 1996, the Board of
Directors designated a new management team to change the
direction of the Bank. Management efforts have focused on
positioning the Bank to meet the needs of the community in
Middlesex, Mercer and Somerset Counties and to provide financial
services to individuals, families, institutions and small
businesses. To achieve this goal, the Bank is focusing its
efforts on:



| |   |                                      
| | - | -------------------------------------
| |  | personal service;                    
|
| |  | expansion of its branch network;     
|
| |  | innovative product offerings; and    
|
| |  | technological advances and e-commerce

Personal Service.The Bank provides a wide range of commercial and consumer
banking services to individuals, families, institutions and
small businesses in central New Jersey. The Banks focus is
to understand the needs of the community and the customers and
tailor products, services and advance to meet those needs. The
Bank seeks to provide a high level of personalized banking
services, emphasizing quick and flexible responses to customer
demands.

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Expansion of Branch Banking. The Bank continually
evaluates opportunities for branch bank expansion, either mini
branches or full service banks, to continue to grow and meet
the needs of the community. During the first quarter of 2002,
the Bank is scheduled to open a sixth branch banking office
located at The Windrows at Princeton, New Jersey. Negotiations are
also underway to open a seventh office in
eastern Middlesex County, which, if
negotiations are successful, is projected to open in the last
half of 2002. The Company can provide no assurance that
negotiations will be successful or, if successful, will be
completed on the current schedule.

Significant bank merger activity has occurred in
recent years. During 2001, the states largest bank,
Summit, merged with Fleet, a Northeast super regional bank with
locations in New Jersey. This merger resulted in the closing of
several branch locations throughout the Banks market area.
Where appropriate, the Bank evaluates the potential acquisition
of one or more of these branches.

Innovative Product Offerings. During the fourth
quarter of 2001, the Bank entered into an agreement to provide
discount brokerage services to customers through AmeriVest
Online Brokerage Services. A link on the Banks website
will enable customers to carry out discounted securities
trading, with the Bank sharing in the commissions generated.
This added feature to the Banks website allows the Bank to
offer sophisticated financial services to its customers, thereby
adding value and convenience.

In 2000, the Bank introduced 1st Choice
Banking, a seamless cash management solution that links
checking and investments into one account for customers. With a
minimum balance of $10,000, customers enjoy all the flexibility
of a free checking account while earning an investment rate of
return which keeps pace with the current short-term money
markets.

Technological Advances and e-Commerce. The Bank
recognizes that customers want to receive service via their most
convenient delivery channel, be it the traditional branch
office, by telephone, ATM, or the Internet. For this reason, the
Bank continues to enhance e-Commerce capabilities. At
www.1stconstitution.com, customers have easy account access to
online banking and bill payment system. Consumers can apply
online for loans, execute trades through the Banks
brokerage affiliate, and interact with senior management through
the e-mail system. Business customers have access to cash
management information and transaction capability through the
Banks online Business Express, product offering. This
overall expansion in electronic banking offers the Banks
customers another means to access the Banks services
easily and at their own convenience.

COMPETITION

The Bank experiences substantial competition in
attracting and retaining deposits and in making loans. In
attracting deposits and borrowers, the Bank competes with
commercial banks, savings banks, and savings and loan
associations, as well as regional and national insurance companies
and non-bank banks, regulated small loan companies and local credit unions,
regional and national issuers of money market funds and
corporate and government borrowers. Within the direct market
area of the Bank, there are a significant number of offices of
competing financial institutions. In New Jersey generally, and
in the Banks local market specifically, large commercial
banks, as well as savings banks and savings and loan
associations, hold a dominant market share and there has been
significant merger activity in the last few years, creating even
larger competitors. Locally, the Banks most direct
competitors include Fleet Bank, PNC Bank and Sovereign Bank. The
Bank is at a competitive disadvantage compared with these larger
regional commercial and savings banks. By virtue of their larger
capital, asset size or reserves, many of such institutions have
substantially greater lending limits (ceilings on the amount of
credit a bank may provide to a single customer that are linked
to the institutions capital) and other resources than the
Bank. In addition, many such institutions are empowered to offer
a wider range of services, including trust services, than the
Bank and, in some

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cases have lower funding costs (the price a bank
must pay for deposits and other borrowed monies used to make
loans to customers) than the Bank.


In addition to having established deposit bases
and loan portfolios, these institutions, particularly the large
regional commercial and savings banks, have the ability to
finance extensive advertising campaigns and to allocate
considerable resources to locations and products perceived as
profitable.

Furthermore, in recent years non-bank financial
institutions have begun to offer services which compete for
deposits with the Bank, such as brokerage firms and insurance
companies offering such instruments as short-term money market
funds, corporate and government securities funds, mutual funds
and annuities. It is expected that competition in these areas
will continue to increase. Some of these competitors are not
subject to the same degree of regulation and supervision as the
Company and the Bank and therefore may be able to offer
customers more attractive products than the Bank.

However, management of the Bank believes that
loans to small and mid-sized businesses and professionals are
not always of primary importance to the larger banking
institutions, whereas they represent the main commercial loan
business of the Bank. The Bank competes for this segment of the
market by providing responsive personalized services, local
decision-making and knowledge of its customers and their
businesses.

Lending Activities

The Companys lending activities include
both commercial and consumer loans. Loan originations are
derived from a number of sources including real estate broker
referrals, mortgage loan companies, direct solicitation by the
Companys loan officers, existing depositors and borrowers,
builders, attorneys, walk-in customers and, in some instances,
other lenders. The Company has established disciplined and
systematic procedures for approving and monitoring loans that
vary depending on the size and nature of the loan.

Commercial
Lending

The Bank offers a variety of commercial loan
services including term loans, lines of credit, equipment and
receivable financing loans. A broad range of short-to-medium
term commercial loans, both secured and unsecured are made
available to businesses for working capital (including inventory
and receivables), business expansion (including acquisition and
development of real estate and improvements), and the purchase
of equipment and machinery. At times, the Company also makes
construction loans to real estate developers for the
acquisition, development and construction of residential
subdivisions.

Commercial loans are granted based on the
borrowers ability to generate cash flow to support its
debt obligations and other cash related expenses. A
borrowers ability to repay commercial loans is
substantially dependent on the success of the business itself
and on the quality of its management. As a general practice, the
Bank takes as collateral a security interest in any available
real estate, equipment, inventory, receivables or other personal
property of its borrowers, although occasionally the Bank makes
commercial loans on an unsecured basis. Generally, the Bank
requires personal guaranties of its commercial loans to offset
the risks associated with such loans.

Residential
Consumer Lending

A portion of the Banks lending activities
consists of the origination of fixed and adjustable rate
residential mortgage loans secured by owner-occupied property
located in the Banks primary market areas. Home mortgage
lending is unique in that a broad geographic territory may be
services by originators working from strategically

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placed offices either within the Bank's traditional banking facilities or from affordable
storefront locations in commercial buildings. In addition, the Bank offers construction loans,
second mortgage home improvement loans and home equity lines of credit.

The Bank finances the construction of individual, owner-occupied houses on the basis of written underwriting
and construction loan management guidelines. First mortgage construction loans are made to solvent
and competent contractors on both a pre-sold and a speculation basis. Such loans are also
made to qualified individual borrowers and are generally supported by a take-out commitment from a permanent
lender. The Bank makes residential construction loans to individuals who intend to erect owner occupied
housing on a purchased parcel of real estate. The construction phase of these loans have certain risks,
including the viability of the contractor, the contractors ability to complete the project and changes
in interest rates.

In most cases, the Bank will sell its mortgage loans with terms of 15 years or more in the secondary
market. The sale to the secondary market allows the Bank to hedge against the interest rate risks related
to such lending operations. This brokerage arrangement allows the Bank to accommodate its clients demands
while eliminating the interest rate risk for the 15 to 30 year period generally associated with such loans.

The Bank in most cases requires title, fire, extended casualty insurance, and where required by applicable
regulations, flood insurance to be obtained by the borrower. The Bank maintains its own errors and omissions
insurance policy to protect against loss in the event of failure of a mortgagor to pay premiums on fire and
other hazard insurance policies. Mortgage loans originated by the Bank customarily include a due on sale
clause giving the Bank the right to declare a loan immediately due and payable in the event, among other matters,
that the borrower sells or otherwise disposes of the real property subject to a mortgage. In general, the Bank
enforces due on sales clauses. Borrowers are typically permitted to refinance or repay loans at their option
without penalty.

Non-Residential Consumer Lending

Non-residential consumer loans made by the Bank include loans for automobiles,
recreation vehicles, boats, personal (secured and unsecured) and deposit account
secured loans. The Bank also conducts various indirect lending activities through
established retail companies in its market areas. Non-residential consumer loans are
attractive to the Bank because they typically have a shorter term and carry higher
interest rates than that charged on other types of loans. Non-residential consumer
loans, however, do pose additional risk of collectibility when compared to
traditional types of loans granted by commercial banks such as residential mortgage
loans.

Consumer loans are granted based on employment and financial information
solicited from prospective borrowers as well as credit records collected from various
reporting agencies. Stability of the borrower, willingness to pay and credit history
are the primary factors to be considered. The availability of collateral is also a factor
considered in making such a loan. The Bank seeks collateral that can be
assigned and has good marketability with a clearly adequate margin of value. The
geographic area of the borrower is another consideration, with preference given to
borrowers in the Bank's primary market areas.

Supervision and Regulation

Banking is a complex, highly regulated industry. The primary goals of the bank
regulatory scheme are to maintain a safe and sound banking system and to facilitate
the conduct of monetary policy. In furtherance of those goals, Congress has created
several largely autonomous regulatory agencies and enacted myriad legislation that
governs banks, bank holding companies and the banking industry. This regulatory

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framework is intended primarily for the
protection of depositors and not for the protection of the
Companys stockholders. Descriptions of and references to
the statutes and regulations below are brief summaries thereof,
and do not purport to be complete. The descriptions are
qualified in their entirety by reference to the specific
statutes and regulations discussed.


The Company

State and
Federal Bank Holding Company Regulations

The Company is a bank holding company within the
meaning of the Bank Holding Company Act of 1956, as amended (the
BHCA). As a bank holding company, the Company is
required to file with the Federal Reserve Board an annual report
and such additional information as the Federal Reserve Board may
require pursuant to the BHCA. The Federal Reserve Board may also
make examinations of the Company and its subsidiaries. In
addition, the Company is subject to capital standards similar
to, but separate from, those applicable to the Bank.

Under the BHCA, bank holding companies that are
not financial holding companies (as defined below) generally may
not acquire the ownership or control of more than 5% of the
voting shares, or substantially all the assets, of any company,
including a bank or another bank holding company, without the
Federal Reserve Boards prior approval. The Company is not
a financial holding company and did obtain such approval to
acquire the shares of the Bank. A bank holding company that does
not qualify as a financial holding company is generally limited
in the types of activities in which it may engage to those that
the Federal Reserve Board has recognized as permissible for bank
holding companies prior to the date of enactment of the
Gramm-Leach-Bliley Financial Services Modernization Act of 1999
(GLBA). At present, the Company does not engage in
any significant activity other than owning a bank.

A holding company and its banking subsidiary are
prohibited from engaging in certain tie-in arrangements in
connection with any extension of credit or lease or sale of any
property or the furnishing of services.

The GLBA was enacted in November 1999 and most
provisions of which became effective in March 2000, permits
greater affiliation among banks, securities firms, insurance
companies, and other companies under a new type of financial
services company known as financial holding company.
A financial holding company essentially is a bank holding
company with significantly expanded powers. The Company has not
elected to become a financial holding company. The Company
believes that the GLBA will not have a material adverse effect
on its operations in the near-term. However, to the extent that
it permits banks, securities firms and insurance companies to
affiliate, the financial services industry may experience
further consolidation. This could result in a growing number of
larger financial institutions that offer a wider variety of
financial services than the Company currently offers and that
can aggressively compete in the markets that the Company
currently serves.

In addition to Federal bank holding company
regulation, the Company is registered as a bank holding company
with the New Jersey Department of Banking and Insurance (the
Department). The Company is required to file with
the Department copies of the reports it files with the Federal
banking and securities regulators.

Capital
Adequacy

The Company is required to comply with minimum
capital adequacy standards established by the Federal Reserve.
There are two basic measures of capital adequacy for bank
holding companies and the depository institutions that they own: a
risk based measure and a leverage measure. All applicable
capital standards must be satisfied for a bank holding company
to be considered in compliance.

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The risk-based capital guidelines for bank
holding companies, such as the Company currently require a
minimum ratio of total capital to risk-weighted assets
(including off-balance sheet activities, such as standby letters
of credit) of 8%. At least half of the total capital is required
to be Tier 1 capital, consisting principally of common
shareholders equity, noncumulative perpetual preferred
stock, a limited amount of cumulative perpetual preferred stock
and minority interest in the equity accounts of consolidated
subsidiaries, less goodwill. The remainder (Tier 2 capital)
may consist of a limited amount of subordinated debt and
intermediate-term preferred stock, certain hybrid capital
instruments and other debt securities, perpetual preferred stock
and a limited amount of the general loan loss allowance. At
December 31, 2001, the Company maintained a Tier 1
capital ratio of 11.86% and total qualifying capital ratio of
12.82%.

In addition to the risk-based capital guidelines,
the Federal banking regulators established minimum leverage
ratio (Tier 1 capital to total assets) guidelines for bank
holding companies. These guidelines provide for a minimum
leverage ratio of 3% for those bank holding companies which have
the highest regulatory examination ratings and are not
contemplating or experiencing significant growth or expansion.
All other bank holding companies are required to maintain a
leverage ratio of at least 1% to 2% above the 3% stated minimum.
The Companys leverage ratio at December 31, 2001 was
7.57%.

Restrictions
on Dividends

The primary source of dividends paid to the
Companys stockholders is dividends paid to the Company by
the Bank. Dividend payments by the Bank to the Company are
subject to the New Jersey Banking Act of 1948 (the Banking
Act) and the Federal Deposit Insurance Act (the
FDIA). Under the Banking Act and the FDIA, the Bank
may not pay any dividends, if after paying the dividend, it
would be undercapitalized under applicable capital requirements.
In addition to these explicit limitations, the federal
regulatory agencies are authorized to prohibit a banking
subsidiary or bank holding company from engaging in an unsafe or
unsound banking practice. Depending upon the circumstances, the
agencies could take the position that paying a dividend would
constitute an unsafe or unsound banking practice.

It is the policy of the Federal Reserve Board
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 dividend that undermines the
bank holding companys ability to serve as a source of
strength to its banking subsidiary.

The Bank has never paid a cash dividend, and the
Banks Board of Directors does not plan to pay a cash
dividend in the foreseeable future. The Bank paid a stock
dividend every year from 1993 to 1999 when it was acquired by
the Company. The Company has paid a 5% stock dividend every year
since its formation in 1999, and anticipates the consideration
of stock dividends in the future.

Priority on
Liquidation

The Company is a legal entity separate and
distinct from the Bank. The rights of the Company as the sole
shareholder of the Bank, and therefore the rights of the
Companys creditors and shareholders, to participate in the
distributions and earnings of the Bank when the Bank is not in
bankruptcy, are subject to various state and federal law
restrictions as discussed above under the heading
Restrictions of Dividends. Under state corporation
and other laws and federal bankruptcy laws, the Companys
right as shareholder to participate in the distribution of
assets of the Bank upon the Banks liquidation or
reorganization will be subject to the prior claims of creditors
of the Bank. In the event of a liquidation or other resolution
of an insured depository institution such as the Bank, the
claims of depositors and other general or subordinated creditors
are entitled to a priority of payment over

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the claims of holders of an obligation of the
institution to its stockholders (the Company) or any stockholder
or creditor of the Company. The claims on the Bank by creditors
include obligations in respect of federal funds purchased and
certain other borrowings, as well as deposit liabilities.


The Bank

The Bank, a New Jersey-chartered commercial bank,
is subject to supervision and examination by the New Jersey
Department of Banking and Insurance. In addition, because the
deposits of the Bank are insured by the Federal Deposit
Insurance Corporation (the FDIC) the Bank is subject
to regulation by the FDIC.

The Bank must comply with various requirements
and restrictions under Federal and state law, including the
maintenance of reserves against deposits, restrictions on the
types and amounts of loans that may be granted and the interest
that may be charged thereon, limitations on the types of
investments that may be made and the services that may be
offered, and restrictions on dividends as described in the
preceding section. Consumer laws and regulations also affect the
operations of the Bank. In addition to the impact of regulation,
commercial banks are affected significantly by the actions of
the Federal Reserve Board which influence the money supply and
credit availability in the national economy.

Community
Reinvestment Act

Under the Community Reinvestment Act
(CRA), as implemented by FDIC regulations, a bank
has a continuing and affirmative obligation, consistent with its
safe and sound operation, to help meet the credit needs of its
entire community, including low- and moderate-income
neighborhoods. CRA does not establish specific lending
requirements or programs for financial institutions nor does it
limit an institutions discretion to develop the types of
products and services that it believes are best suited to its
particular community, consistent with CRA. CRA requires the FDIC
to assess an institutions record of meeting the credit
needs of its community and to take such record into account in
its evaluation of certain applications by the applicable
institution. The CRA requires public disclosure of an
institutions CRA rating and requires that the FDIC provide
a written evaluation of an institutions CRA performance
utilizing a four-tiered descriptive rating system. An
institutions CRA rating is considered in determining
whether to grant charters, branches and other deposit
facilities, relocations, mergers, consolidations and
acquisitions. Performance less than satisfactory may be the
basis for denying an application. The Bank is currently rated
satisfactory under CRA.

Insurance of
Deposits

The Banks deposits are insured up to a
maximum of $100,000 per depositor under the Bank Insurance Fund
(BIF). The Federal Deposit Insurance Corporation
Improvements Act of 1991 (FDICIA) is applicable to
depository institutions and deposit insurance. FDICIA requires
the FDIC to establish a risk-based assessment system for all
insured depository institutions. Under this legislation, the
FDIC is required to establish an insurance premium assessment
system based upon: (i) the probability that the insurance
fund will incur a loss with respect to the institution,
(ii) the likely amount of the loss, and (iii) the
revenue needs of the insurance fund. In compliance with this
mandate, the FDIC has developed a matrix that sets the
assessment premium for a particular institution in accordance
with its capital level and overall rating by the primary
regulator. Under the matrix as currently in effect, the
assessment rate ranges from 0 to 27 basis points of assessed
deposits. The Bank is also subject to a quarterly FICO
assessment.

Employees

The Company is a bank holding company and has two
paid employees. Banking operations are conducted by the Bank,
and as of December 31, 2001, the Bank had 48

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full-time employees and 9 part-time employees. The Banks employees are not
represented by any collective bargaining group. The Bank considers its relations with
such employees to be good.

Special Factors

The Common Stock of the Company is speculative in nature and involves a
significant degree of risk. The special factors below are not listed in order of
importance.

Competition

The Company faces significant competition from many other banks, savings
institutions and other financial institutions which have branch offices or otherwise
operate in the Companys market area. Non-bank financial institutions, such as
securities brokerage firms, insurance companies and money market funds, have also
recently been permitted to engage in activities which compete directly with
traditional bank business which has also led to greater competition. Many of these
competitors have substantially greater financial resources than the Company,
including larger capital bases that allow them to attract customers seeking larger
loans than the Company is able to accommodate and the ability to aggressively
advertise their products. There can be no assurance that the Company and the Bank
will be able to successfully compete in the future. See DESCRIPTION OF BUSINESSCompetition.

Economic Conditions and Related Uncertainties

Commercial banking is affected, directly and indirectly, by local, domestic,
and international economic and political conditions, and by government monetary and
fiscal policies. Conditions such as inflation, recession, unemployment, volatile
interest rates, tight money supply, scarce natural resources, real estate values,
international conflicts and other factors beyond the control of the Company may
adversely affect the potential profitability of the Company. Management does not
expect any particular factor to affect the Companys results of operations. However, a downtrend in several areas,
such as real estate, construction and consumer
spending, could have a material adverse impact on the Companys ability to maintain
or increase profitability.

Federal and State Government Regulation

The operations of the Company and the Bank are heavily regulated and will be
affected by present and future legislation and by the policies established from time
to time by various Federal and state regulatory authorities. In particular, the
monetary policies of the Federal Reserve Board have had a significant effect on the
operating results of banks in the past and are expected to continue to do so in the
future. Among the instruments of monetary policy used by the Federal Reserve Board to
implement its objectives is changes in the discount rate charged on bank borrowings.
It is not possible to predict what changes, if any, will be made to the monetary
policies of the Federal Reserve Board or to existing Federal and state legislation or
the effect that such changes may have on the future business and earnings prospects
of the Company.

The Company and the Bank are subject to examination, supervision and
comprehensive regulation by various federal and state agencies. Compliance with the
rules and regulations of these agencies may be costly and may limit growth and
restrict certain activities, including payment of dividends, investments, loans and
interest rate charges, interest rates paid on deposits, and location of offices. The
Bank is also subject to capitalization guidelines set forth in federal legislation.
See BUSINESS  Supervision and Regulation.

10



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##### Table of Contents



The laws and regulations applicable
to the banking industry could change at any time, and we cannot
predict the impact of these changes on our business and
profitability. Because government regulation greatly effects the
business and financial results of all commercial banks and bank
holding companies, the cost of compliance could adversely affect the
Companys ability to operate profitably.

Forward Looking Statements

When used in this and
in future filings by the Company with the Securities and Exchange
Commission, in the Companys press releases and in oral
statements made with the approval of an authorized executive officer
of the Company, the words or phrases will likely result,
expects, plans, will continue,
is anticipated, estimated,
project or outlook or similar expressions
(including confirmations by an authorized executive officer of the
Company of any such expressions made by a third party with respect to
the Company) are intended to identify forward-looking statements. The
Company wishes to caution readers not to place undue reliance on any
such forward-looking statements, each of which speak only as of the
date made. Such statements are subject to certain risks and
uncertainties that could cause actual results to differ materially
from historical earnings and those presently anticipated or
projected. Factors that may cause actual results to differ from those
results expressed or implied, include, but are not limited to, those
listed above under Special Factors, the overall economy
and the interest rate environment; the ability of customers to repay
their obligations; the adequacy of the allowance for loan losses;
competition; significant changes in accounting, tax or regulatory
practices and requirements; and technological changes. Although
management has taken certain steps to mitigate any negative effect of
the aforementioned items, significant unfavorable changes could
severely impact the assumptions used and have an adverse effect on
profitability. Such risks and other aspects of the Companys
business and operations are described in Description of the
Business and Managements Discussion and Analysis of
Financial Condition and Results of Operations. The Company has
no obligation to publicly release the result of any revisions which
may be made to any forward-looking statements to reflect anticipated
or unanticipated events or circumstances occurring after the date of
such statements.




Item 2.     Description of Property

General

The Companys
and the Banks principal office in Cranbury, New Jersey (the
Principal Office) which it occupies under a lease, was
sold in December 2000 by Constitution Center, LLC, a limited liability
company which includes certain Company and Bank directors as members,
to an unrelated third party. See Certain Relationships and
Related Transactions. The new building owner assumed the
existing lease and terms. The current lease provides for an aggregate
monthly rental of $17,428 subject to annual rental increases plus real
estate taxes and certain common space charges allocated by the
landlord and expires in December 2010. The Bank has 2 additional 5
year renewal periods. The Bank also has the right of first refusal to
purchase the premises of which the Principal Office is a part on the
same terms and conditions as contained in any bona fide offer.

The Bank also leases
approximately 2,400 square feet for its branch office in Montgomery
Township, New Jersey for an aggregate monthly rental of $5,362. This
lease expires on September 30, 2004.

The Bank also leases
approximately 3,780 square feet for its branch office in downtown
Cranbury, New Jersey for an aggregate monthly rental of $3,460 per
month. This lease expires on August 15, 2002 and the Bank may
renew the lease for two five (5) year periods at aggregate monthly
rental rates adjusted based on the consumer price index. The Bank has
the right of first refusal to purchase this branch office on the same
terms and conditions as contained in any bona fide offer.
Notwithstanding receipt of a bona fide offer, the Bank also has the
option to purchase this branch

11



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##### Table of Contents





In March 1998, the Bank entered into a lease for
the branch located in Plainsboro, New Jersey. This lease expires
on June 8, 2003 and provides for the rental of
approximately 2,000 square feet. The Bank has three
five (5) year renewal options for this space. The aggregate
monthly payment for this lease is $2,810 with annual escalations.

The Bank entered into a lease for the branch
located in Hamilton Square, New Jersey in April 1999. This
lease expires in July, 2014 and provides for a rental of
approximately 4,170 square feet. The Bank has two five year
renewal options for this space. The aggregate monthly rental
payment for this lease is $8,320 with annual escalations.

Management believes the foregoing facilities are
suitable for the Companys and the Banks present and
projected operations.




Item 3.     Legal Proceedings.

None.




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

No matters were submitted for a vote of the
Companys shareholders during the fourth quarter of 2001.




PART II




Item 5.     Market
for Registrants Common Equity and Related Shareholder
Matters.

The common stock of the Company commenced trading
on the NASDAQ national market system under the trading symbol
FCCY on December 28, 2001. Prior to that time, the
Companys common stock was traded in the over the counter
market and bid and ask prices were available from the OTC
Bulletin Board. Following are the high and low bid prices for
2000 and 2001, based on information obtained from the OTC
Bulletin Board. All such bid prices reflect inter-dealer prices,
without retail mark-up, mark-down or commissions and may not
necessarily represent actual transactions.

|               |  |          |       |         |  |          |       |         |  |   |       |  |  |   |       |       
|-------------- |  | -------- | ----- | ------- |  | -------- | ----- | ------- |  | - | ----- |  |  | - | ----- | ------
|               |  |          |       |        
|               |  | 2001     |       | 2000   
|               |  |          |       |        
|               |  | High Bid |       | Low Bid |  | High Bid |       | Low Bid
|               |  |          |       |         |  |          |       |        
|First Quarter  |  | $        | 15.60 |         |  | $        | 9.52  | (1)     |  | $ | 16.55 |  |  | $ | 14.29 | (1)(2)
|Second Quarter |  | $        | 13.57 |         |  | $        | 12.32 | (1)     |  | $ | 15.19 |  |  | $ | 10.20 | (1)(2)
|Third Quarter  |  | $        | 17.33 |         |  | $        | 13.23 | (1)     |  | $ | 11.33 |  |  | $ | 9.07  | (1)(2)
|Fourth Quarter |  | $        | 20.95 |         |  | $        | 15.38 | (1)     |  | $ | 10.77 |  |  | $ | 7.67  | (1)   






|    |                                                                                                 
|--- | ------------------------------------------------------------------------------------------------
|(1) | Prices have been retroactively adjusted for the
        5% stock dividend paid January 31, 2002.
|   
|(2) | Prices have been retroactively adjusted for the
        5% stock dividend paid January 31, 2001.

There are
approximately 421 registered
holders of the Companys common stock.

The Company paid a 5% stock dividend on
January 31, 2002 and January 31, 2001. The Company has
never paid a cash dividend and there are no plans to pay a cash
dividend at this time. The Company will retain its earnings in
order to provide capital for growth of the Bank.

12



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##### Table of Contents








|        |                                                                                              
|------- | ---------------------------------------------------------------------------------------------
|Item 6. | Managements Discussion and Analysis
        of Financial Condition and Results of Operations

This information is incorporated by reference
from the Companys 2001 Annual Report to Shareholders on
pages 21-35 under
the caption Managements Discussion and Analysis of
Financial Condition and Results of Operations.






|        |                                                    
|------- | ---------------------------------------------------
|Item 7. | Financial Statements and Supplementary
        Data

The Consolidated Financial Statements, Notes to
Consolidated Financial Statements and Independent Auditors
Report thereon is incorporated by reference from
pages 4-20 of
the 2001 Annual Report to Shareholders.






|        |                                                                                             
|------- | --------------------------------------------------------------------------------------------
|Item 8. | Changes in and Disagreements with
        Accountants on Accounting and Financial Disclosure

None.




Part III






|        |                                                           
|------- | ----------------------------------------------------------
|Item 9. | Directors and Executive Officers of the
        Registrant

The information required by this item is
incorporated by reference from
pages 3-5 under
the caption Directors and Executive
Officers of the Companys
Proxy Statement for its 2002 Annual Meeting of Shareholders.






|         |                       
|-------- | ----------------------
|Item 10. | Executive Compensation

The information required by this item is
incorporated by reference from
pages 6-8 under
the caption Executive Compensation of the
Companys Proxy Statement for its 2002 Annual Meeting of
Shareholders.






|         |                                                                       
|-------- | ----------------------------------------------------------------------
|Item 11. | Security Ownership of Certain Beneficial
        Owners and Management

The information required by this item is
incorporated by reference from
pages 4-5 under
the caption Stock Ownership of Management and Principal
Shareholders of the Companys Proxy Statement for its
2002 Annual Meeting of Shareholders.






|         |                                                       
|-------- | ------------------------------------------------------
|Item 12. | Certain Relationships and Related
        Transactions

This information required by this item is
incorporated by reference from
page 9 under the caption
Certain Transactions with Management of the
Companys Proxy Statement for its 2002 Annual Meeting of
Shareholders.






|         |                                                                          
|-------- | -------------------------------------------------------------------------
|Item 13. | Exhibits, Financial Statements Schedules,
        and Reports on Form 8-K

(a) Financial Statements and Financial
Statement Schedules

The following documents are filed as part of this
report:



| |    |                                                                                  
| | -- | ---------------------------------------------------------------------------------
| | 1. | Financial Statements of 1st Constitution
        Bancorp.                        
|
| |    | Consolidated Statements of Condition 
December 31, 2001 and 2000.               
|
| |    | Consolidated Statements of Income 
Years Ended December 31, 2001, 2000 and 1999.

13



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##### Table of Contents



Consolidated Statements of Changes in
Shareholders Equity  Years Ended
December 31, 2001, 2000 and 1999.

Consolidated Statements of Cash Flows 
Years Ended December 31, 2001, 2000, and 1999.

Independent Auditors Report.

These statements are incorporated by reference to
the Companys Annual Report to Shareholders for the year
ended December 31, 2001.



| |    |                                                                                                                                                                                                                            
| | -- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | 2. | All schedules are omitted because either they are
        inapplicable or not required, or because the information
        required therein is included in the Consolidated Financial
        Statements and Notes thereto.
|
| | 3. | Exhibits                                                                                                                                                                                                                   

|        |      |             |  |                                                                                               
|------- | ---- | ----------- |  | ----------------------------------------------------------------------------------------------
|Exhibit |      |            
|Number  |      | Description
|        |      |            
|        | 3.1  |             |  | Certificate of Incorporation of the Company(1)                                                
|        | 3.2  |             |  | Bylaws of the Company(1)                                                                      
|        | 4.1  |             |  | Specimen Share of Common Stock                                                                
|        | 10.1 |             |  | Amended and Restated 1990 Employees Stock Option
        Plan, as amended(1)                  
|        | 10.2 |             |  | 1996 Employee Stock Option Plan, as amended(1)                                                
|        | 10.3 |             |  | 2000 Employee Stock Option Plan (1)                                                           
|        | 10.4 |             |  | Stock Option Plan for Non-Employee Directors(1)                                               
|        | 10.5 |             |  | Employment Agreement between the Company and
        Robert F. Mangano dated April 22, 1999(1)
|        | 13.1 |             |  | 2001 Annual Report to Security Holders                                                        
|        | 21   |             |  | Subsidiaries of the Registrant                                                                



| | 
| | 
| | 



| |     |                                                                                                                                            
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------
| | (1) | Incorporated by reference to the Registrants
        Form 10-SB filed with the Securities and Exchange
        Commission on June 15, 2001.

14



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##### Table of Contents






SIGNATURES

Pursuant to the requirements of Section 13
or 15(d) of the Securities Exchange Act of 1934, the registrant
has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.



| |                                      
| | -------------------------------------
| | /s/ ROBERT F. MANGANO                
| |                                      
| | Robert F. Mangano                    
| | President and Chief Executive Officer

March 21, 2002

Pursuant to the requirements of the Securities
Exchange Act of 1934, this report has been signed below by the
following persons on behalf of the registrant and in the
capacities and on the dates indicated.

|                                             |  |                                                    |  |               
|-------------------------------------------- |  | -------------------------------------------------- |  | --------------
|Signature                                    |  | Capacity                                           |  | Date          
|                                             |  |                                                    |  |               
|/s/ EDWARD D. KNAPPEdward D. Knapp           |  | Director and Chairman of the Board                 |  | March 21, 2002
|                                            
|/s/ ROBERT F. MANGANORobert F. Mangano       |  | President and Chief Executive Officer and Director |  | March 21, 2002
|                                            
|/s/ CHARLES S. CROW, IIICharles S. Crow, III |  | Director                                           |  | March 21, 2002
|                                            
|/s/ WILLIAM M. RUEWilliam M. Rue             |  | Director                                           |  | March 21, 2002
|                                            
|/s/ FRANK E. WALSH, IIIFrank E. Walsh, III   |  | Director                                           |  | March 21, 2002
|                                            
|/s/ JOSEPH M. REARDONJoseph M. Reardon       |  | Principal Accounting Officer                       |  | March 21, 2002





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##### Table of Contents






1ST CONSTITUTION BANCORP

INDEX TO EXHIBITS

|        |      |             |  |                                                                                               
|------- | ---- | ----------- |  | ----------------------------------------------------------------------------------------------
|Exhibit |      |            
|Number  |      | Description
|        |      |            
|        | 3.1  |             |  | Certificate of Incorporation of the Company(1)                                                
|        | 3.2  |             |  | Bylaws of the Company(1)                                                                      
|        | 4.1  |             |  | Specimen Share of Common Stock                                                                
|        | 10.1 |             |  | Amended and Restated 1990 Employees Stock Option
        Plan, as amended(1)                  
|        | 10.2 |             |  | 1996 Employee Stock Option Plan, as amended(1)                                                
|        | 10.3 |             |  | 2000 Employee Stock Option Plan (1)                                                           
|        | 10.4 |             |  | Stock Option Plan for Non-Employee Directors(1)                                               
|        | 10.5 |             |  | Employment Agreement between the Company and
        Robert F. Mangano dated April 22, 1999(1)
|        | 13.1 |             |  | 2001 Annual Report to Security Holders                                                        
|        | 21   |             |  | Subsidiaries of the Registrant                                                                



---



|    |                                                                                                                                            
|--- | -------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Incorporated by reference to the Registrants
        Form 10-SB filed with the Securities and Exchange
        Commission on June 15, 2001.