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UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C.
20549

FORM 10-QSB

|(Mark One)                       
|---------------------------------
|                                 
|x                                
|                                 
|                                 
|                                 
|or                               
|                                 
|o                                
|                                 
|                                 
|                                 
|Commission file Number: 000-32891

|1ST CONSTITUTION BANCORP                                      
|--------------------------------------------------------------
|                                                              
|(Name of Small business Issuer in Its Charter)                
|                                                              
|New Jersey                                                    
|                                                              
|(State of Other Jurisdiction of Incorporation or Organization)
|                                                              
|2650 Route 130, P.O. Box 634, Cranbury, NJ                    
|                                                              
|(Address of Principal Executive Offices)                      

|(609) 655-4500                                                                    
|----------------------------------------------------------------------------------
|                                                                                  
|(Issuers Telephone Number, Including Area Code)                                  
|                                                                                  
|                                                                                  
|                                                                                  
|(Former name, former address and former fiscal year, if changed since last report)

As of August 6, 2003 there were 1,488,367 shares of common stock, no par value, outstanding.

Transitional Small Business Disclosures Format (check one):

|Yes o | No x
|----- | ----

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##### Table of Contents

1ST CONSTITUTION BANCORP

FORM 10-QSB

INDEX

|           |                       |                                                                                                                                     | Page
|---------- | --------------------- | ----------------------------------------------------------------------------------------------------------------------------------- | ----
|           |                       |                                                                                                                                     |     
|PART I.    | FINANCIAL INFORMATION |                                                                                                                                    
|           |                       |                                                                                                                                     |     
|           | Item 1.               | Financial Statements                                                                                                                | 1   
|           |                       |                                                                                                                                     |     
|           |                       | Consolidated Statements of Condition as of June 30, 2003 (unaudited) and December 31, 2002                                          | 1   
|           |                       |                                                                                                                                     |     
|           |                       | Consolidated Statements of Income for the Three Months and Six Months Ended June 30, 2003 (unaudited) and June 30, 2002 (unaudited) | 2   
|           |                       |                                                                                                                                     |     
|           |                       | Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2003 (unaudited) and June 30, 2002 (unaudited)              | 3   
|           |                       |                                                                                                                                     |     
|           |                       | Notes to Consolidated Financial Statements (unaudited)                                                                              | 4   
|           |                       |                                                                                                                                     |     
|           | Item 2.               | Managements Discussion and Analysis or Plan of Operation                                                                           | 6   
|           |                       |                                                                                                                                     |     
|           | Item 3.               | Controls and Procedures                                                                                                             | 19  
|           |                       |                                                                                                                                     |     
|PART II    | OTHER INFORMATION     |                                                                                                                                    
|           |                       |                                                                                                                                     |     
|           | Item 4.               | Submission of Matters to a Vote of Security Holders                                                                                 | 19  
|           |                       |                                                                                                                                     |     
|           | Item 6.               | Exhibits and Reports on Form 8-K                                                                                                    | 20  
|           |                       |                                                                                                                                     |     
|SIGNATURES | 21                   



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##### Table of Contents

PART I.   FINANCIAL INFORMATION

Item 1.          Financial Statements

1st Constitution
Bancorp and SubsidiariesConsolidated Statements of Condition (unaudited)

|                                                                                                                                                                                                |  | June 30, 2003 |             | December 31, 2002 |  
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ------------- | ----------- | ----------------- | -
|                                                                                                                                                                                                |  |               |             |                   |  
|ASSETS                                                                                                                                                                                          |  |               |             |                   |  
|CASH AND DUE FROM BANKS                                                                                                                                                                         |  | $             | 4,927,725   |                   | $
|FEDERAL FUNDS SOLD / SHORT-TERM INVESTMENTS                                                                                                                                                     |  |               | 5,512       |                   |  
|                                                                                                                                                                                                |  |               |             |                   |  
|Total cash and cash equivalents                                                                                                                                                                 |  |               | 4,933,237   |                   |  
|                                                                                                                                                                                                |  |               |             |                   |  
|SECURITIES:                                                                                                                                                                                     |  |               |             |                   |  
|Available for sale, at market value                                                                                                                                                             |  |               | 84,982,845  |                   |  
|Held to maturity (market value of $7,048,980 and $7,434,716 in 2003 and 2002, respectively)                                                                                                     |  |               | 6,626,980   |                   |  
|                                                                                                                                                                                                |  |               |             |                   |  
|Total securities                                                                                                                                                                                |  |               | 91,609,825  |                   |  
|                                                                                                                                                                                                |  |               |             |                   |  
|LOANS HELD FOR SALE                                                                                                                                                                             |  |               | 7,459,741   |                   |  
|                                                                                                                                                                                                |  |               |             |                   |  
|LOANS                                                                                                                                                                                           |  |               | 171,187,668 |                   |  
|Less- Allowance for loan losses                                                                                                                                                                 |  |               | (1,784,988  | )                 |  
|                                                                                                                                                                                                |  |               |             |                   |  
|Net loans                                                                                                                                                                                       |  |               | 169,402,680 |                   |  
|                                                                                                                                                                                                |  |               |             |                   |  
|PREMISES AND EQUIPMENT, net                                                                                                                                                                     |  |               | 1,283,528   |                   |  
|ACCRUED INTEREST RECEIVABLE                                                                                                                                                                     |  |               | 1,362,185   |                   |  
|BANK OWNED LIFE INSURANCE                                                                                                                                                                       |  |               | 6,209,068   |                   |  
|OTHER ASSETS                                                                                                                                                                                    |  |               | 770,653     |                   |  
|                                                                                                                                                                                                |  |               |             |                   |  
|Total assets                                                                                                                                                                                    |  | $             | 283,030,917 |                   | $
|                                                                                                                                                                                                |  |               |             |                   |  
|LIABILITIES AND SHAREHOLDERS EQUITY                                                                                                                                                            |  |               |             |                   |  
|LIABILITIES:                                                                                                                                                                                    |  |               |             |                   |  
|Deposits                                                                                                                                                                                        |  |               |             |                   |  
|Non-interest bearing                                                                                                                                                                            |  | $             | 43,203,972  |                   | $
|Interest bearing                                                                                                                                                                                |  |               | 168,827,765 |                   |  
|                                                                                                                                                                                                |  |               |             |                   |  
|Total deposits                                                                                                                                                                                  |  |               | 212,031,737 |                   |  
|SECURITIES SOLD UNDER AGREEMENTS TO REPURCHASE                                                                                                                                                  |  |               | 2,265,000   |                   |  
|OTHER BORROWINGS                                                                                                                                                                                |  |               | 38,500,000  |                   |  
|REDEEMABLE TRUST PREFERRED SECURITIES                                                                                                                                                           |  |               | 5,000,000   |                   |  
|ACCRUED INTEREST PAYABLE                                                                                                                                                                        |  |               | 1,020,016   |                   |  
|ACCRUED EXPENSES AND OTHER LIABILITIES                                                                                                                                                          |  |               | 2,064,270   |                   |  
|                                                                                                                                                                                                |  |               |             |                   |  
|Total liabilities                                                                                                                                                                               |  |               | 260,881,023 |                   |  
|                                                                                                                                                                                                |  |               |             |                   |  
|COMMITMENTS AND CONTINGENCIES                                                                                                                                                                   |  |               |             |                   |  
|SHAREHOLDERS EQUITY:                                                                                                                                                                           |  |               |             |                   |  
|Common stock, no par value; 15,000,000 shares authorized; 1,489,367 and 1,480,539 shares issued and 1,488,367 and 1,472,368 outstanding as of
June 30, 2003 and December 31, 2002, respectively |  |               | 17,608,149  |                   |  
|Retained earnings                                                                                                                                                                               |  |               | 4,053,332   |                   |  
|Treasury Stock, shares at cost (1,000 shares at June 30, 2003 and 8,171 shares at December 31, 2002, respectively)                                                                              |  |               | (28,368     | )                 |  
|Accumulated other comprehensive income                                                                                                                                                          |  |               | 516,781     |                   |  
|                                                                                                                                                                                                |  |               |             |                   |  
|Total shareholders equity                                                                                                                                                                      |  |               | 22,149,894  |                   |  
|                                                                                                                                                                                                |  |               |             |                   |  
|Total liabilities and shareholders equity                                                                                                                                                      |  | $             | 283,030,917 |                   | $
|                                                                                                                                                                                                |  |               |             |                   |  
|                                                                                                                                                                                                |  |               |             |                   |  

See accompanying notes to consolidated financial statements.

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1st Constitution Bancorp and SubsidiariesConsolidated Statements of Income (Unaudited)

|                                                                                                           |  | Three months ended June 30, |           | Six months ended June 30, |  
|---------------------------------------------------------------------------------------------------------- |  | --------------------------- | --------- | ------------------------- | -
|                                                                                                           |  |                             |           |                           |  
|                                                                                                           |  | 2003                        |           | 2002                      |  
|                                                                                                           |  |                             |           |                           |  
|INTEREST INCOME                                                                                            |  |                             |           |                           |  
|Interest on loans                                                                                          |  | $                           | 2,849,250 |                           | $
|Interest on securities                                                                                     |  |                             |           |                           |  
|Taxable                                                                                                    |  |                             | 600,720   |                           |  
|Tax-exempt                                                                                                 |  |                             | 82,015    |                           |  
|Interest on Federal funds sold and short-term investments                                                  |  |                             | 1,931     |                           |  
|                                                                                                           |  |                             |           |                           |  
|Total interest income                                                                                      |  |                             | 3,533,916 |                           |  
|                                                                                                           |  |                             |           |                           |  
|INTEREST EXPENSE                                                                                           |  |                             |           |                           |  
|Interest on deposits                                                                                       |  |                             | 815,259   |                           |  
|Interest on Federal funds purchased securities sold under agreement to repurchase and other borrowed funds |  |                             | 235,113   |                           |  
|Interest on redeemable trust preferred securities                                                          |  |                             | 64,438    |                           |  
|                                                                                                           |  |                             |           |                           |  
|Total interest expense                                                                                     |  |                             | 1,114,810 |                           |  
|                                                                                                           |  |                             |           |                           |  
|Net interest income                                                                                        |  |                             | 2,419,106 |                           |  
|Provision for loan losses                                                                                  |  |                             | 60,000    |                           |  
|                                                                                                           |  |                             |           |                           |  
|Net interest income after provision for loan losses                                                        |  |                             | 2,359,106 |                           |  
|                                                                                                           |  |                             |           |                           |  
|NON-INTEREST INCOME                                                                                        |  |                             |           |                           |  
|Service charges on deposit accounts                                                                        |  |                             | 158,333   |                           |  
|Gain on sale of loans held for sale                                                                        |  |                             | 503,518   |                           |  
|Other income                                                                                               |  |                             | 148,395   |                           |  
|                                                                                                           |  |                             |           |                           |  
|Total other income                                                                                         |  |                             | 810,246   |                           |  
|                                                                                                           |  |                             |           |                           |  
|NON-INTEREST EXPENSE                                                                                       |  |                             |           |                           |  
|Salaries and employee benefits                                                                             |  |                             | 1,137,630 |                           |  
|Occupancy expense                                                                                          |  |                             | 204,334   |                           |  
|Other operating expenses                                                                                   |  |                             | 623,924   |                           |  
|                                                                                                           |  |                             |           |                           |  
|Total other expense                                                                                        |  |                             | 1,965,888 |                           |  
|                                                                                                           |  |                             |           |                           |  
|Income before income taxes                                                                                 |  |                             | 1,203,464 |                           |  
|Income taxes                                                                                               |  |                             | 425,449   |                           |  
|                                                                                                           |  |                             |           |                           |  
|Net income                                                                                                 |  | $                           | 778,015   |                           | $
|                                                                                                           |  |                             |           |                           |  
|NET INCOME PER SHARE                                                                                       |  |                             |           |                           |  
|Basic                                                                                                      |  | $                           | 0.52      |                           | $
|Diluted                                                                                                    |  | $                           | 0.50      |                           | $
|WEIGHTED AVERAGE SHARES OUTSTANDING                                                                        |  |                             |           |                           |  
|Basic                                                                                                      |  |                             | 1,488,977 |                           |  
|Diluted                                                                                                    |  |                             | 1,556,005 |                           |  

See accompanying notes to consolidated financial statements

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1st Constitution Bancorp and SubsidiariesConsolidated Statements Of Cash Flows (Unaudited)

|                                                                                            |  | Six months ended June 30, |            
|------------------------------------------------------------------------------------------- |  | ------------------------- | -----------
|                                                                                            |  |                           |            
|                                                                                            |  | 2003                      |            
|                                                                                            |  |                           |            
|OPERATING ACTIVITIES:                                                                       |  |                           |            
|Net income                                                                                  |  | $                         | 1,502,884  
|Adjustments to reconcile net income to net cash provided by (used in) operating activities- |  |                           |            
|Provision for loan losses                                                                   |  |                           | 120,000    
|Depreciation and amortization                                                               |  |                           | 164,870    
|Net amortization on securities                                                              |  |                           | 672,346    
|Gain on sale of loans held for sale                                                         |  |                           | (893,960   
|Originations of loans held for sale                                                         |  |                           | (42,893,085
|Proceeds from sales of loans held for sale                                                  |  |                           | 47,472,310 
|Increase in accrued interest receivable                                                     |  |                           | (99,182    
|Income on Bank-owned life insurance                                                         |  |                           | 139,363    
|Increase in other assets                                                                    |  |                           | (151,038   
|Decrease in accrued interest payable                                                        |  |                           | (191,886   
|Increase in accrued expenses and other liabilities                                          |  |                           | 112,950    
|                                                                                            |  |                           |            
|Net cash provided by operating activities                                                   |  |                           | 5,955,572  
|                                                                                            |  |                           |            
|INVESTING ACTIVITIES:                                                                       |  |                           |            
|Purchases of securities -                                                                   |  |                           |            
|Available for sale                                                                          |  |                           | (32,666,261
|Held to maturity                                                                            |  |                           | (198,102   
|Proceeds from maturities and prepayments of securities -                                    |  |                           |            
|Available for sale                                                                          |  |                           | 28,579,944 
|Held to maturity                                                                            |  |                           | 735,068    
|Net increase in loans                                                                       |  |                           | (20,142,826
|Capital expenditures                                                                        |  |                           | (171,456   
|                                                                                            |  |                           |            
|Net cash used in investing activities                                                       |  |                           | (23,863,633
|                                                                                            |  |                           |            
|FINANCING ACTIVITIES:                                                                       |  |                           |            
|Net (decrease) increase in demand, savings and time deposits                                |  |                           | (6,963,261 
|Net (decrease) increase in securities sold under agreements to repurchase                   |  |                           | (289,815   
|Proceeds from issuance of trust preferred securities                                        |  |                           |           
|Net increase in other borrowings                                                            |  |                           | 20,500,000 
|                                                                                            |  |                           |            
|Net cash provided by financing activities                                                   |  |                           | 13,246,924 
|                                                                                            |  |                           |            
|Decrease in cash and cash equivalents                                                       |  |                           | (4,661,137 
|CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD                                            |  |                           | 9,594,374  
|                                                                                            |  |                           |            
|CASH AND CASH EQUIVALENTS AT END OF PERIOD                                                  |  | $                         | 4,933,237  
|                                                                                            |  |                           |            
|SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:                                          |  |                           |            
|Cash paid during the period for -                                                           |  |                           |            
|Interest                                                                                    |  | $                         | 2,447,293  
|Income taxes                                                                                |  | $                         | 896,209    
|                                                                                            |  |                           |            
|                                                                                            |  |                           |            

See accompanying notes to consolidated financial statements.

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1st Constitution Bancorp and SubsidiariesNotes To Consolidated Financial Statements June 30, 2003 (Unaudited)

|(1) | Summary of Significant Accounting Policies                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|    | The accompanying unaudited Consolidated Financial Statements herein have been prepared by 1st Constitution Bancorp (the Company), in accordance with accounting principles
generally accepted in the United States of America and pursuant to the rules and regulations of the Securities and Exchange Commission (the SEC).  Certain information and footnote disclosures normally included in financial
statements have been condensed or omitted pursuant to such rules and regulations.  These consolidated Financial Statements should be read in conjunction with the audited financial statements and the notes thereto included in the Companys
Form 10-KSB for the year ended December 31, 2002, filed with the SEC on March 20, 2003.
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|    | In the opinion of the Company, all adjustments (consisting only of normal recurring accruals) which are necessary for a fair presentation of the operating results for the interim periods
have been included.  The results of operations for periods of less than a year are not necessarily indicative of results for the full year.                                                                                                                                                                                                                                                                                                                                                                                                              
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|    | Certain reclassifications have been made to the prior years financial statements to conform with the classifications used in 2003.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|    | Net Income Per Common Share                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|    | Basic net income per common share is computed by dividing net income by the weighted average number of shares outstanding during each period.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|    | Diluted net income per common share is computed by dividing net income by the weighted average number of shares outstanding, as adjusted for the assumed exercise of potential common stock
options, using the treasury stock method.  Potential shares of common stock resulting from stock option agreements totaled 67,028 and 68,102 for the three months ended June 30, 2003 and June 30, 2002, respectively and 73,964 and 68,102 for the
six months ended June 30, 2003 and June 30, 2002, respectively.  All share amounts have been restated for the effect of a 5% stock dividend declared in 2002.                                                                                                                                       
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|    | Stock-Based Compensation                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|    | Stock-based compensation is accounted for under the intrinsic value based method as prescribed by Accounting Principals Board (APB) Opinion No. 25, Accounting for Stock Issued to
Employees.  Included below are the pro forma disclosures required by SFAS No. 123, Accounting for Stock-Based Compensation, as amended by SFAS No. 148, Accounting for Stock-Based Compensation-Transaction and
Disclosure which assumes the fair value based method of accounting had been adopted.                                                                                                                                                                                                                                                       

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|                                                                                                                                  |  | Three months ended June 30, |        
|--------------------------------------------------------------------------------------------------------------------------------- |  | --------------------------- | -------
|                                                                                                                                  |  |                             |        
|                                                                                                                                  |  | 2003                        |        
|                                                                                                                                  |  |                             |        
|Net income -                                                                                                                      |  |                             |        
|As reported                                                                                                                       |  | $                           | 778,015
|Deduct:  Stock-based employee compensation determined under fair value based method for stock options, net of related tax
effects |  |                             | (4,387 
|                                                                                                                                  |  |                             |        
|Pro forma                                                                                                                         |  | $                           | 773,628
|Net income per share -                                                                                                            |  |                             |        
|As reported -                                                                                                                     |  |                             |        
|Basic                                                                                                                             |  | $                           | 0.52   
|Diluted                                                                                                                           |  | $                           | 0.50   
|Pro forma -                                                                                                                       |  |                             |        
|Basic                                                                                                                             |  | $                           | 0.52   
|Diluted                                                                                                                           |  | $                           | 0.50   

|                                                                                                                                  |  | Six months ended June 30, |          
|--------------------------------------------------------------------------------------------------------------------------------- |  | ------------------------- | ---------
|                                                                                                                                  |  |                           |          
|                                                                                                                                  |  | 2003                      |          
|                                                                                                                                  |  |                           |          
|Net income -                                                                                                                      |  |                           |          
|As reported                                                                                                                       |  | $                         | 1,502,884
|Deduct:  Stock-based employee compensation determined under fair value based method for stock options, net of related tax
effects |  |                           | (8,774   
|                                                                                                                                  |  |                           |          
|Pro forma                                                                                                                         |  | $                         | 1,494,110
|                                                                                                                                  |  |                           |          
|Net income per share -                                                                                                            |  |                           |          
|As reported -                                                                                                                     |  |                           |          
|Basic                                                                                                                             |  | $                         | 1.01     
|Diluted                                                                                                                           |  | $                         | 0.97     
|Pro forma -                                                                                                                       |  |                           |          
|Basic                                                                                                                             |  | $                         | 1.01     
|Diluted                                                                                                                           |  | $                         | 0.97     

|(2) | New Accounting Pronouncements                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|    | Statement of Financial Accounting Standards No. 150, Accounting for Certain Financial Instruments with Characteristics of both Liabilities and Equity, was issued in May
2003.  Statement 150 requires instruments within its scope to be classified as a liability (or, in some cases, as an asset).  Statement 150 is generally effective for financial instruments entered into or modified after May 31, 2003, and
otherwise is effective at the beginning of the first interim period beginning after June 15, 2003 (i.e. July 1, 2003 for calendar year entities). For financial instruments created before June 1, 2003 and still existing at the beginning of the
interim period of adoption, transition generally should be applied by reporting the cumulative effect of a change in an accounting principle by initially measuring the financial instruments at fair value or other measurement attributes of the
Statement. The adoption of Statement 150 did not have a significant effect on the Companys consolidated financial statements.
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|    | Statement of Financial Accounting Standards No. 149, Amendment of Statement 133 on Derivative Instruments and Hedging Activities, was issued on April 30, 2003. The Statement
amends and clarifies accounting for derivative instruments, including certain derivative instruments embedded in other contracts, and for hedging activities under Statement 133. This Statement is effective for contracts entered into or modified
after June 30, 2003.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    

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| | The adoption of this Statement did not have a significant effect on the Companys consolidated financial statements.
| | --------------------------------------------------------------------------------------------------------------------

Item 2.     Managements Discussion and Analysis or Plan of Operation

The following discussion
of the operating results and financial condition at June 30, 2003 is intended to help readers analyze the accompanying financial statements, notes and other supplemental information contained in this document.  Results of operations for the
three and six month periods ended June 30, 2003 are not necessarily indicative of results to be attained for any other period.

This discussion and analysis should be read in conjunction
with Part II, Item 6 of the Companys Form 10-KSB (Managements Discussion and Analysis or Plan of Operation) for the year ended December 31, 2002, as filed with the Securities and Exchange Commission on March 20, 2003.

General

1st Constitution Bancorp (the Company), a bank holding company, was incorporated in February 1999 for the purpose of becoming
the parent holding company of 1st Constitution Bank (the Bank), a full service commercial bank which began operations in August 1989.  1st Constitution Capital Trust I, a subsidiary of the Company, was created
to issue trust preferred securities to assist the Company to raise additional regulatory capital.  The Bank operates six branches, and has two subsidiaries, 1st Constitution Investment Company, which manages an investment portfolio,
and FCB Assets Holdings, Inc., which is used by the Bank to manage and dispose of repossessed real estate.

Forward-Looking Statements

This
report contains forward-looking statements within the meaning of The Private Securities Litigation Reform Act of 1995.  Such statements are not historical facts and include expressions about our confidence and strategies and our expectations
about new and existing programs and products, relationships, opportunities, technology and market conditions.  These statements may be identified by such forward-looking terminology as expect, believe,
anticipate, or by expressions of confidence such as continuing or strong or similar statements or variations of such terms.  Such forward-looking statements involve certain risks and uncertainties. 
These include, but are not limited to, expected cost savings not being realized or not being realized within the expected time frame; income or revenues being lower than expected or operating costs higher; competitive pressures in the banking or
financial services industries increasing significantly; business disruption related to program implementation or methodologies; weakening of general economic conditions nationally or in New Jersey; changes in legal and regulatory barriers and
structures; and unanticipated occurrences delaying planned programs or initiatives or increasing their costs or decreasing their benefits, as well as other risks and uncertainties detailed from time to time in filings of the Company with the U.S.
Securities and Exchange Commission.  Actual results may differ materially from such forward-looking statements.  These forward-looking statements speak only as of the date of this document.

6



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##### Table of Contents

RESULTS OF OPERATIONS

Three Months Ended June 30, 2003 and June 30, 2002

Summary

The Company realized net income of $778,015 for the three months ended June 30, 2003 as compared to $623,390 reported for the same period in 2002.  Net income
per diluted share was $0.50 for the three months ended June 30, 2003 compared to $0.40 per diluted share for the three months ended June 30, 2002.

Earnings Analysis

Interest Income

Interest income for the three months ended June 30, 2003 was $3,533,916, increasing modestly from the $3,531,988 reported in the three months ended
June 30, 2002.  This is primarily attributable to the declining interest rate environment that existed throughout 2002 and continued into the second quarter of 2003.  For the three months ended June 30, 2003, average interest earning
assets increased $29,628,173 or 13.5%, compared to the three months ended June 30, 2002.  The increase in interest income resulting from increases in earning asset volume was nearly offset by a decrease in the average yield earned on these
assets.  For the three months ended June 30, 2003, the average yield on earning assets decreased 74 basis points to 5.76% from 6.50% for the same period last year.

Interest Expense

Interest expense for the three months ended June 30, 2003 was $1,114,810, a decrease of $151,081 from $1,265,891 reported in the three months ended June 30, 2002.  The average cost of interest bearing
liabilities decreased 76 basis points to 2.23% for the three months ended June 30, 2003 from 2.99% for the three months ended June 30, 2002, primarily as a result of a decrease in rates paid on deposits and short-term borrowed funds.  Total
average interest bearing liabilities increased by $30,300,375 to $200,261,685 for the three months ended June 30, 2003 from $169,961,310 for the three months ended June 30, 2002.

Net Interest
Income

The net effect of the changes in interest income and interest expense for the three months ended June 30, 2003 compared to the three months ended June 30, 2002 was an increase of $153,009
in net interest income.  The net interest margin, on a fully taxable equivalent basis, decreased 21 basis points to 3.97% for the three months ended June 30, 2003 from 4.18% for the three months ended June 30, 2002.  The decrease in the
net interest margin was primarily the result of interest earning assets repricing faster than interest bearing liabilities in the decreasing rate environment that has continued through the first six months of 2003.

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##### Table of Contents

Provision for Loan Losses

For each of the three months ended June 30, 2003 and June 30, 2002, the provision for loan
losses was $60,000.  The comparable provisions were the result of stable loan portfolio growth combined with consistent levels of non-performing loans.  The amount of the loan loss provisions and the level of the allowance for loan losses
are critical accounting policies of the Company and are based upon a number of factors including Managements evaluation of potential losses in the portfolio after consideration of appraised collateral values, financial conditions and past
credit history of the borrowers as well as prevailing economic conditions.

Non-Interest Income

Total non-interest income increased $370,736, or
84.4%, to $810,246 for the three months ended June 30, 2003 from $439,510 for the three months ended June 30, 2002.  The increase was due primarily to increases of $248,963 in gains on sale of loans held for sale and $85,987 in other
income.  The declining interest rate environment that existed in 2002 and continues in 2003 greatly fueled the volume of mortgage loan originations and refinancing and subsequent secondary market mortgage loan sales.

Non-Interest Expense

Non-interest expense increased $296,272, or 17.7%, to $1,965,888 for the three months ended June 30, 2003, from $1,669,616 for the three months
ended June 30, 2002.  Salaries and employee benefits increased $304,417 for the three months ended June 30, 2003 compared to the three months ended June 30, 2002, primarily due to (a) increased commission levels as a result of the significant
increase in secondary mortgage loan sales plus (b) normal employee salary increases.  Occupancy expense increased $16,633 and other expenses decreased $24,778.  Other expenses for 2002 included additional professional fee expenses
associated with the Companys issuance of trust preferred securities during April 2002.

An important industry productivity measure is the efficiency ratio.  The efficiency ratio is
calculated by dividing total operating expenses by net interest income and other income.  An increase in the efficiency ratio indicates that more resources are being utilized to generate the same or greater volume of income, while a decrease
would indicate a more efficient allocation of resources.  The Companys efficiency ratio decreased for the quarter ended June 30, 2003 to 60.9% compared to 61.7% for the quarter ended June 30, 2002.

Six Months Ended June 30, 2003 and June 30, 2002

Summary

The Company realized net income of $1,502,884 for the
six months ended June 30, 2003, an increase of 23.0% over the $1,222,282 realized for the six months ended June 30, 2002.  Net income per diluted share was $0.97 for the six months ended June 30, 2003 compared to $0.79 per diluted share for the
six months ended June 30, 2002.

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Earnings Analysis

Interest Income

For the first six months of
2003, total interest income was $7,060,844, an increase of 2.1% compared to total interest income of $6,915,151 for the first six months of 2002.  The following table sets forth the Companys consolidated average balances of assets,
liabilities and shareholders equity as well as interest income and expense on related items, and the Companys average rate for the six month periods ended June 30, 2003 and 2002.

|Average Balance Sheets with Resultant Interest and Rates        | 
|--------------------------------------------------------------- | 
|(yields on a tax-equivalent basis)                              | 
|                                                                | 
|                                                                | 
|                                                                | 
|                                                                | 
|Assets:                                                         | 
|Federal Funds Sold/Short-Term Investments                       | 
|Securities:                                                     | 
|Collateralized Mortgage Obligations/ Mortgage Backed Securities | 
|States and Political Subdivisions                               | 
|                                                                | 
|Total                                                           | 
|Loan Portfolio:                                                 | 
|Commercial                                                      | 
|Installment                                                     | 
|Commercial Mortgages and Construction Wholesale                 | 
|Residential Mortgages and Construction Retail                   | 
|All Other Loans                                                 | 
|                                                                | 
|Total                                                           | 
|Total Interest-Earning Assets                                   | 
|                                                                | 
|Allowance for Loan Losses                                       | 
|Cash and Due From Bank                                          | 
|Other Assets                                                    | 
|                                                                | 
|Total Assets                                                    | 
|                                                                | 
|Interest-Bearing Liabilities:                                   | 
|Money Market and NOW Accounts                                   | 
|Savings Accounts                                                | 
|Certificates of Deposit                                         | 
|Certificates of Deposit of $100,000 and Over                    | 
|Federal Funds Purchased/Other Borrowed Funds                    | 
|Trust Preferred Securities                                      | 
|                                                                | 
|Total Interest-Bearing Liabilities                              | 
|                                                                | 
|Net Interest Spread                                             | 
|                                                                | 
|Demand Deposits                                                 | 
|Other Liabilities                                               | 
|                                                                | 
|Total Liabilities                                               | 
|Shareholders Equity                                            | 
|                                                                | 
|Total Liabilities and Shareholders Equity                      | 
|                                                                | 
|Net Interest Margin                                             | 
|                                                                | 

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The current year increase in interest income resulted from higher average balances in the securities and loan portfolios which were partially offset by lower average yields
earned on these portfolios.  Average loans increased $31,972,506, or 24.4%, to $162,779,322 for the six months ended June 30, 2003 from $130,806,816 for the six months ended June 30, 2002, while the yield on the portfolio decreased 67 basis
points to 6.94% for the six months ended June 30, 2003 from 7.61% for the six months ended June 30, 2002.  The lower loan yield reflected the lower interest rate environment that existed throughout 2002 and continued into the second quarter of
2003.

Average securities increased $11,775,097, or 16.4%, from $71,788,671 for the six months ended June 30, 2002 to $83,563,768 for the six months ended June 30, 2003, while the yield on the
securities portfolio decreased 165 basis points to 3.64% for the six months ended June 30, 2003 from 5.29% for the six months ended June 30, 2002.

Overall, the yield on the Companys total
interest-earning assets decreased 69 basis points to 5.81% for the six months ended June 30, 2003 from 6.50% for the six months ended June 30, 2002.

Interest Expense

Total interest expense for the six months ended June 30, 2003 was $2,255,407, a decrease of 10.8% compared to $2,528,643 for the six months ended June 30, 2002.  The decrease in interest expense for the current period
resulted primarily from the impact of higher levels of interest-bearing liabilities priced at a significantly lower market interest rate level.  The average rate paid on interest bearing liabilities for the six months ended June 30, 2003
decreased 74 basis points to 2.28% from 3.02% for the six months ended June 30, 2002.

Net Interest Income

The Companys net interest
income for the six months ended June 30, 2003 was $4,805,437, an increase of 9.6% compared to $4,386,508 for the six months ended June 30, 2002.  For the first six months of 2003, interest income increased by $145,693 compared to the first six
months of 2002, while interest expense decreased by $273,236 for the first six months of 2003 compared to the first six months of 2002.

The net interest margin (on a tax-equivalent basis), which is
net interest income divided by average interest-earning assets, was 3.97% for the first six months of 2003 compared to 4.14% for the first six months of 2002.  The principal factor causing the decline in the net interest margin was the lower
interest rate environment that existed throughout 2002 and continued into the second quarter of 2003.

Provision for Loan Losses

The provision
for loan losses for the six months ended June 30, 2003 and 2002 was $120,000.  The comparable provisions were the result of stable loan portfolio growth combined with consistent levels of non-performing loans.

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##### Table of Contents

Non-Interest Income

Total non-interest income for the six months ended June 30, 2003 was $1,470,349, an increase of 58.0%
over non-interest income of $930,558 for the six months ended June 30, 2002.  The increase was due primarily to increases in gains on loans held for sale, and in other non-interest income.

Gain on sale of loans held for sale represents the largest single source on non-interest income. Gain on sale of loans held for sale for the six months ended June 30, 2003 was $893,960 compared to $567,683 for the six months
ended June 30, 2002.  The declining interest rate environment that existed in 2002 and continues in 2003 greatly fueled the volume of mortgage loan originations and refinancing and subsequent secondary market mortgage loan sales.

Service charges on deposit accounts were $303,975 for the six months ended June 30, 2003 compared to $243,481 for the six months ended June 30, 2002.  Service charge income increased in 2003 principally due
to increases in income from overdraft fees and wire transfer service fees.

The other income component of non-interest income amounted to $272,414 for the six months ended June 30, 2003 compared to
$119,394 for the six months ended June 30, 2002.  This component includes income from Bank Owned Life Insurance (BOLI) which amounted to $139,363 for the six months ended June 30, 2003.  In April 2001, the Company purchased
$6.0 million in tax-free BOLI assets which offset the cost of deferred compensation plans and reduced the overall effective tax rate.

The Company also generates non-interest income from a variety
of other fee-based services. These fees are monitored closely by management to reflect current charges amid the Companys competitive market.

Non-Interest Expense

Total non-interest expense for the six months ended June 30, 2003 was $3,833,757, an increase of 17.0% compared to non-interest expense of $3,277,470 for the six months ended June 30, 2002.

The following table presents the major components of non-interest expense for the six months ended June 30, 2003 and 2002.

|                                        |  | Six months ended June 30, |          
|--------------------------------------- |  | ------------------------- | ---------
|                                        |  |                           |          
|                                        |  | 2003                      |          
|                                        |  |                           |          
|Non-interest Expenses                   |  |                           |          
|Salaries and employee benefits          |  | $                         | 2,221,190
|Occupancy expense                       |  |                           | 404,629  
|Equipment expense                       |  |                           | 228,472  
|Marketing                               |  |                           | 121,277  
|Computer services                       |  |                           | 241,234  
|Regulatory, professional and other fees |  |                           | 316,218  
|Office expense                          |  |                           | 156,921  
|All other expenses                      |  |                           | 143,816  
|                                        |  |                           |          
|                                        |  | $                         | 3,833,757
|                                        |  |                           |          

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Salaries and employee benefits increased 30.5% to $2,221,190 for the six months ended June 30, 2003 compared to $1,702,169 for the six months ended June 30, 2002.  This
increase reflects the increase in commission levels due to the significant increase in secondary market mortgage loan sales plus normal employee salary increases.

The Companys ratio of
non-interest expense to average assets remained consistent at 2.94% for the six months ended June 30, 2003 compared to 2.94% for the six months ended June 30, 2002.  The Companys efficiency ratio decreased to 61.1% for the six months
ended June 30, 2003 compared to a ratio of 61.6% for the six months ended June 30, 2002.

Financial Condition

June 30, 2003 Compared
with December 31, 2002

Total consolidated assets at June 30, 2003 totaled $283,030,917, an increase of $14,323,040, or 5.3%, compared to $268,707,877 at December 31, 2002.  The growth in
the Companys asset base was primarily due to increases in the loan and securities portfolios.

The following discussion addresses the major components of the Companys balance
sheet.

Cash and Cash Equivalents

Cash and Cash Equivalents at June 30, 2003 totaled $4,933,237 compared to $9,594,374 at December 31,
2002.  Cash and cash equivalents at June 30, 2003 consisted of cash and due from banks of $4,927,725 and Federal funds sold/short term investments of $5,512.  The corresponding balances at December 31, 2002 were $9,542,010 and $52,364,
respectively.  The balance of cash and cash equivalents at June 30, 2003 decreased primarily due to managements efforts to optimize the use of available cash for funding loan and securities portfolio growth.

Securities

Securities represented 32.5% of total assets at June 30, 2003 and 33.2% at December 31, 2002.  Total securities increased $2,409,046 or 2.7% at June 30, 2003
to $91,609,825 compared to $89,200,779 at December 31, 2002.

Securities available for sale totaled $84,982,845 at June 30, 2003, an increase of $2,953,979 or 3.6% from December 31, 2002. 
During the first six months of 2003, $32,666,261 of securities available for sale were purchased (predominantly mortgage backed securities) and funded by calls and maturities of securities held to maturity, securities available for sale and
short-term investments.

Securities held to maturity totaled $6,626,980 at June 30, 2003, a decrease of $544,933 or 7.6% from December 31, 2002.

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##### Table of Contents

Loans

The loan portfolio, which represents the Companys largest asset, is a significant source of both interest and
fee income.  Elements of the loan portfolio are subject to differing levels of credit and interest rate risk.  The Companys primary lending focus continues to be commercial loans, owner-occupied commercial mortgage loans and tenanted
commercial real estate loans.

The following table sets forth the classification of loans by major category at June 30, 2003 and December 31, 2002.

Loan Portfolio Composition

|                                |  | June 30, 2003 |             | December 31, 2002 | 
|------------------------------- |  | ------------- | ----------- | ----------------- | 
|                                |  |               |             |                   | 
|Component                       |  | Amount        |             | % of total        | 
|                                |  |               |             |                   | 
|Construction loans              |  | $             | 47,134,385  |                   | 
|Residential real estate loans   |  |               | 8,615,297   |                   | 
|Commercial and industrial loans |  |               | 97,113,168  |                   | 
|Loans to individuals            |  |               | 14,491,705  |                   | 
|Lease financing                 |  |               | 3,167,778   |                   | 
|All other loans                 |  |               | 665,335     |                   | 
|                                |  |               |             |                   | 
|                                |  | $             | 171,187,668 |                   | 
|                                |  |               |             |                   | 

The loan portfolio increased at June 30, 2003 to $171,187,668 from $151,049,736 at December 31,
2002.  The ability of the Company to enter into larger loan relationships and managements philosophy of relationship banking are key factors in the Companys strategy for loan growth.  Strong competition from both bank and
non-bank competitors could result in comparatively lower yields on new and established lending relationships.  The ultimate collectability of the loan portfolio and the recovery of the carrying amount of real estate are subject to changes in
the economic environment of the Companys marketplace and the real estate market.

Non-Performing Assets

Non-performing assets consist of
non-performing loans and other real estate owned.  Non-performing loans are composed of (1) loans on a non-accrual basis, (2) loans which are contractually past due 90 days or more as to interest and principal payments but have not been
classified as non-accrual, and (3) loans whose terms have been restructured to provide a reduction or deferral of interest on principal because of a deterioration in the financial position of the borrower.

The Companys policy with regard to non-accrual loans varies by the type of loan involved.  Generally, commercial loans are placed on a non-accrual status when they are 90 days past due unless these loans are well
secured and in the process of collection or, regardless of the past due status of the loan, when management determines that the complete recovery of principal or interest is in doubt.  Consumer loans are generally charged off after they become
90 days past due.  Residential mortgage loans are not generally placed on a non-accrual status unless the value of the real estate has deteriorated to the point that a potential loss of principal or interest exists.  Subsequent payments
are credited to income only if collection of principal is not in doubt.

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Nonaccrual loans amounted to $728,036 at June 30, 2003, an increase of $571,880 from $156,156 at December 31, 2002.  As the table below demonstrates, despite the increase
in non-performing assets at June 30, 2003, loan quality and ratios remain strong.  This was accomplished through quality loan underwriting, a proactive approach to loan monitoring and aggressive workout strategies.

Non-Performing Assets and Loans

|                                                  |  | June 30,  2003 |         | December 31, 2002 |  
|------------------------------------------------- |  | -------------- | ------- | ----------------- | -
|                                                  |  |                |         |                   |  
|Non-Performing loans:                             |  |                |         |                   |  
|Loans 90 days or more past due and still accruing |  | $              | 0       |                   | $
|Non-accrual loans                                 |  |                | 728,036 |                   |  
|                                                  |  |                |         |                   |  
|Total non-performing loans                        |  |                | 728,036 |                   |  
|Other real estate owned                           |  |                | 59,073  |                   |  
|                                                  |  |                |         |                   |  
|Total non-performing assets                       |  | $              | 787,109 |                   | $
|                                                  |  |                |         |                   |  
|Non-performing loans to total loans               |  |                | 0.43    | %                 |  
|Non-performing assets to total assets             |  |                | 0.28    | %                 |  

The Company had no restructured loans at June 30, 2003 and December 31, 2002.  Impaired loans totaled
$543,016 at June 30, 2003 and $151,114 at December 31, 2002.

Allowance for Loan Losses

The allowance for loan losses is maintained at a
level sufficient to absorb estimated credit losses in the loan portfolio as of the date of the financial statements.  The allowance for loan losses is a valuation reserve available for losses incurred or inherent in the loan portfolio and other
extensions of credit.  The determination of the adequacy of the allowance for loan losses is a critical accounting policy of the Company.

Management utilizes a systematic and documented
allowance adequacy methodology for loan losses that requires specific allowance assessment for all loans, including real estate mortgages and consumer loans.  This methodology assigns reserves based upon credit risk ratings for all loans. 
The reserves are based upon various factors, including historical performance, and the current economic environment.  Management continually reviews the process used to determine the adequacy of the allowance for loan losses.  Allocations
to the allowance for loan losses, both specific and general, are determined after this review.  Loans are classified based on internal reviews and evaluations performed by the lending staff.  These evaluations are, in turn, examined by the
Companys internal loan review specialist.  A formal loan review function, independent of loan origination, is used to identify and monitor risk classifications.

The allowance for
loan losses amounted to $1,784,988 at June 30, 2003, an increase of $115,106 from December 31, 2002.  The ratio of the allowance for loan losses to total loans was 1.04% at June 30, 2003 and 1.11% at December 31, 2002, respectively.  The
quality of the loan portfolio remained strong and it is managements belief that the allowance for loan losses is adequate in relation to credit risk exposure levels.

The following table
presents, for the periods indicated, an analysis of the allowance for loan losses and other related data.

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Allowance for Loan Losses

|                                             |  | June 30,  2003 |             | June 30,  2002 |  
|-------------------------------------------- |  | -------------- | ----------- | -------------- | -
|                                             |  |                |             |                |  
|Balance, beginning of period                 |  | $              | 1,669,882   |                | $
|Provision charged to operating expenses      |  |                | 120,000     |                |  
|Loans charged off                            |  |                | (4,894      | )              |  
|Recoveries                                   |  |                | 0           |                |  
|                                             |  |                |             |                |  
|Net (charge offs) / recoveries               |  |                | (4,894      | )              |  
|                                             |  |                |             |                |  
|Balance, end of period                       |  | $              | 1,784,988   |                | $
|                                             |  |                |             |                |  
|Loans:                                       |  |                |             |                |  
|At period end                                |  | $              | 171,187,668 |                | $
|Average during the period                    |  |                | 162,779,322 |                |  
|Net charge offs to average loans outstanding |  |                | 0.00        | %              |  
|Allowance for loan losses to:                |  |                |             |                |  
|Total loans at period end                    |  |                | 1.04        | %              |  
|Non-performing loans                         |  |                | 245.18      | %              |  

Deposits

Deposits, which include demand deposits
(interest bearing and non-interest bearing), savings and time deposits, are a fundamental and cost-effective source of funding.  The Company offers a variety of products designed to attract and retain customers, with the Companys primary
focus being on building and expanding long-term relationships.

Total deposits decreased $6,963,261 or 3.2% to $212,031,737 at June 30, 2003 from $218,994,998 at December 31, 2002.  This
decrease in total deposits was primarily the result of a $10,357,482 decrease in interest bearing deposits to $168,827,765, as management believes that depositors with maturing time deposits migrated from the Company searching for higher rates
during the current period of financial market volatility and economic uncertainty.  This was partially offset by a $3,394,221 increase in non-interest bearing deposits to $43,203,972.

Other
Borrowings

Other Borrowings are mainly comprised of fixed rate convertible advances from the Federal Home Loan Bank (FHLB) and overnight funds purchased.  These borrowings are
primarily used to fund asset growth not supported by deposit generation.  FHLB advances are fully secured by marketable securities and qualifying one-to-four family mortgage loans.  The balance of other borrowings at June 30, 2003
consisted of fixed rate term FHLB borrowings of $32,000,000 and overnight funds purchased of $6,500,000.  The balance of other borrowings at December 31, 2002 was $18,000,000 consisting of FHLB borrowings of $15,500,000 and overnight funds
purchased of $2,500,000.

Trust Preferred Securities

On April 12, 2002, the Company, through its wholly owned subsidiary, 1ST
Constitution Capital Trust I, a statutory business trust, issued $5.0 million of floating rate Trust Preferred Securities in a pooled institutional placement transaction.  The Trust has no independent assets or operations, and exists for the
sole purpose of issuing the Trust Preferred Securities and investing the proceeds thereof in an equivalent amount of junior subordinated debentures issued by the Company.  The junior subordinated debentures, which are the sole assets of the
Trust, are unsecured obligations of the Company, and are subordinate and junior in right of payment to all present and future senior and subordinated indebtedness and certain other financial obligations of

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##### Table of Contents

the Company.  The principal amount of subordinated debentures held by the Trust equals the aggregate liquidation amount of its Trust Preferred Securities and its common
securities.  The junior subordinated debentures bear interest at the same rate, and will mature on the same date, as the corresponding Trust Preferred Securities.  The Company fully and unconditionally guarantees the Trusts
obligations under the Trust Preferred Securities.  The Trust Preferred Securities mature April 22, 2032 and have a current rate of 4.99%.  The Trust Preferred Securities are redeemable in whole or in part prior to maturity after April 22,
2007.

Shareholders Equity And Dividends

Shareholders equity at June 30, 2003 totaled $22,149,894, an increase of $1,155,052,
or 5.5%, compared to December 31, 2002.  Book value per common share rose to $14.88 at June 30, 2003 compared to $14.26 at December 31, 2002.

The Companys stock is listed for trading
on the Nasdaq National Market System, under the symbol FCCY.

The table below presents the actual capital amounts and ratios of the Company for the periods indicated:

Capital Ratios

|                                       |  | Amount |            | Ratio | 
|-------------------------------------- |  | ------ | ---------- | ----- | 
|                                       |  |        |            |       | 
|As of June 30, 2003 -                  |  |        |            |       | 
|Total capital to risk weighted assets  |  | $      | 28,418,101 |       | 
|Tier 1 capital to risk weighted assets |  |        | 26,633,113 |       | 
|Tier 1 capital to average assets       |  |        | 26,633,113 |       | 
|As of December 31, 2002 -              |  |        |            |       | 
|Total capital to risk weighted assets  |  | $      | 26,849,002 |       | 
|Tier 1 capital to risk weighted assets |  |        | 25,179,120 |       | 
|Tier 1 capital to average assets       |  |        | 25,179,120 |       | 

The minimum regulatory capital requirements for financial institutions require institutions to have a Tier 1
capital to average assets ratio of 4.0%, a Tier 1 capital to risk weighted assets ratio of 4.0% and a total capital to risk weighted assets ratio of 8.0%.  To be considered well capitalized, an institution must have a minimum Tier 1
leverage ratio of 5.0%.  At June 30, 2003, the ratios of the Company exceeded the ratios required to be considered well capitalized.  It is managements goal to monitor and maintain adequate capital levels to continue to support asset
growth and continue its status as a well-capitalized institution.

Liquidity

At June 30, 2003, the amount of liquid assets remained at a level
management deemed adequate to ensure that contractual liabilities, depositors withdrawal requirements, and other operational and customer credit needs could be satisfied.

Liquidity measures the
ability to satisfy current and future cash flow needs as they become due.  Liquidity management refers to the Companys ability to support asset growth while satisfying the borrowing needs and deposit withdrawal requirements of
customers.  In addition to

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maintaining liquid assets, factors such as capital position, profitability, asset quality and availability of funding affect a banks ability to meet its liquidity
needs.  On the asset side, liquid funds are maintained in the form of cash and cash equivalents, Federal funds sold, investment securities held to maturity maturing within one year, securities available for sale and loans held for sale. 
Additional asset-based liquidity is derived from scheduled loan repayments as well as investment repayments of principal and interest from mortgage-backed securities.  On the liability side, the primary source of liquidity is the ability to
generate core deposits.  Short-term borrowings are used as supplemental funding sources when growth in the core deposit base does not keep pace with that of earnings assets.

The Company has
established a borrowing relationship with the FHLB and its correspondent banks which further supports and enhances liquidity.

The Consolidated Statements of Cash Flows present the changes in cash
from operating, investing and financing activities.  At June 30, 2003, the balance of cash and cash equivalents was $4,993,237.

Net cash provided by operating activities totaled $5,955,573
for the six months ended June 30, 2003 compared to $6,929,583 in 2002.  The primary sources of funds are net income from operations adjusted for provision for loan losses, depreciation expenses, and net proceeds from sales of loans held for
sale.

Net cash used in investing activities totaled $23,863,634 for the six months ended June 30, 2003 compared to $17,685,963 used in investing activities in 2002.  The increase of
$6,177,671 was the result of a higher volume of securities purchases and loan portfolio growth for the six months ended June 30, 2003.

Net cash provided by financing activities amounted to
$13,246,924 for the six months ended June 30, 2003 compared to $9,997,792 in 2002.  The current period amount resulted primarily from an increase in other borrowings partially offset by a modest decrease in deposits during the six months ended
June 30, 2003 compared to the six months ended June 30, 2003.

The securities portfolio is also a source of liquidity, providing cash flows from maturities and periodic repayments of
principal.  During the first six months of 2003, maturities of investment securities totaled $29,315,012.  Another source of liquidity is the loan portfolio, which provides a steady flow of payments and maturities.

Interest Rate Sensitivity Analysis

The largest component of the Companys total income is net interest income, and the majority of the Companys financial
instruments are composed of interest rate-sensitive assets and liabilities with various terms and maturities.  The primary objective of management is to maximize net interest income while minimizing interest rate risk.  Interest rate risk
is derived from timing differences in the repricing of assets and liabilities, loan prepayments, deposit withdrawals, and differences in lending and funding rates.  Management actively seeks to monitor and control the mix of interest
rate-sensitive assets and interest rate-sensitive liabilities.

The Company continually evaluates interest rate risk management opportunities, including the use of derivative financial
instruments.  Management believes that hedging instruments currently

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available are not cost-effective, and therefore has focused its efforts on increasing the Companys spread by attracting lower-cost retail deposits.

Market Risk Analysis

To measure the impacts of longer-term asset and liability mismatches beyond two years, the Company utilizes Modified Duration of Equity
and Economic Value of Portfolio Equity (EVPE) models.  The modified duration of equity measures the potential price risk of equity to changes in interest rates.  A longer modified duration of equity indicates a greater degree
of risk to rising interest rates.  Because of balance sheet optionality, an EVPE analysis is also used to dynamically model the present value of asset and liability cash flows, with rates ranging up or down 200 basis points.  The economic
value of equity is likely to be different as interest rates change.  Results falling outside prescribed ranges require action by management.  At June 30, 2003 and December 31, 2002, the Companys variance in the economic value equity
as a percentage of assets with an instantaneous and sustained parallel shift of 200 basis points is within the negative 3.00% guideline, as shown in the tables below.

The market capitalization of
the Company should not be equated to the EVPE, which only deals with the valuation of balance sheet cash flows using conservative assumptions.  Calculated core deposit premiums may be less than what is available in an outright sale.  The
model does not consider potential premiums on floating rate loan sales, the impact of overhead expense, non-interest income, taxes, industry market price multiples and other factors reflected in the market capitalization of a company.

The following table sets forth certain information relating to the Companys financial instruments that are sensitive to changes in interest rates, categorized by expected maturity or repricing and the
instruments fair value at June 30, 2003 and December 31, 2002.

Market Risk Analysis

|                                   |  |  |  | June 30, 2003 |            |  |   | December 31, 2002 |   
|---------------------------------- |  |  |  | ------------- | ---------- |  | - | ----------------- | --
|                                   |  |  |  |               |            |  |   |                   |   
|Change in Rates                    |  |  |  |               | Flat       |  |   | -200bp            |   
|                                   |  |  |  |               |            |  |   |                   |   
|Economic Value of Portfolio Equity |  |  |  | $             | 26,711,000 |  | $ | 23,510,000        |   
|Change                             |  |  |  |               |            |  |   | (3,201,000        | ) 
|Change as a % of assets            |  |  |  |               |            |  |   | (1.13             | )%

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Item 3.           Controls and Procedures.

The Companys Chief
Executive Officer and Chief Financial Officer, with the assistance of other members of the Companys management, have evaluated the effectiveness of the Companys disclosure controls and procedures as of the end of the period covered by
this Quarterly Report on Form 10-QSB.  Based on such evaluation, the Companys Chief Executive Officer and Chief Financial Officer have concluded that the Companys disclosure controls and procedures are effective.

The Companys Chief Executive Officer and Chief Financial Officer have also concluded that there have not been any changes in the Companys internal control over financial reporting that has materially
affected, or is reasonably likely to materially affect, the Companys internal control over financial reporting.

PART II.   OTHER INFORMATION

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

The Companys Annual
Meeting of Shareholders (the Annual Meeting) was held on May 15, 2003.

There were present at the Annual Meeting in person or by proxy shareholders holding an aggregate of
1,367,726 shares of common stock of a total number of 1,489,367 shares of common stock issued, outstanding and entitled to vote at the Annual Meeting.

At the Annual Meeting, Charles S. Crow, III
was re-elected as a Class I director of the Company, with 1,239,417 shares votes cast for and 128,309 shares withheld. There were no broker non-votes.  Directors whose term of office continued following the meeting were Robert F. Mangano,
Edward D. Knapp, William M. Rue, and Frank E. Walsh, III.

A vote of the shareholders was taken at the Annual Meeting on the proposal to approve and ratify the appointment of KPMG LLP as the
Companys independent auditor for the year ending December 31, 2003.  The proposal was approved by the shareholders, with 1,356,126 shares voting in favor of the proposal, 9,037 shares voting against the proposal, and 2,563 shares
abstaining.  There were no broker non-votes.

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Item 6.     Exhibits and Reports on Form 8-K.

| | (a)     Exhibits           
| | ---------------------------
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| |                            
| | (b)     Reports on Form 8-K

During
the period covered by this report, no Current Reports on Form 8-K were filed by the Company with the Commission. On April 15, 2003, the Company furnished the Commission with information regarding earnings and other financial results for the quarter
ended March 31, 2003, pursuant to Items 9 and 12 of Form 8-K.

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SIGNATURES

Pursuant to the requirements of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

|                       | 1ST CONSTITUTION BANCORP |                                                                                       
|---------------------- | ------------------------ | --------------------------------------------------------------------------------------
|                       |                          |                                                                                       
|Date:  August 12, 2003 | By:                      | /s/ ROBERT F. MANGANO                                                                 
|                       |                          |                                                                                       
|                       |                          | Robert F. Mangano  President and Chief Executive Officer (Principal Executive Officer)
|                       |                          |                                                                                       
|Date:  August 12, 2003 | By:                      | /s/ JOSEPH M. REARDON                                                                 
|                       |                          |                                                                                       
|                       |                          | Joseph M. Reardon  Senior Vice President and Treasurer (Principal Accounting Officer) 

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