----

----

| x      | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934  |   |
|--------|-------------------------------------------------------------------------------------------|--------|
|   |                                                                                      |   |
|   | For the quarterly period ended June 30, 2010                                              |   |
|   | or                                                                                        |   |
|   |                                                                                      |   |
| o      | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 |   |
|   |                                                                                      |   |
|   | For the transition period from _____ to _____                                             |   |

|   | 1ST CONSTITUTION BANCORP                               |   |
|--------|--------------------------------------------------------|--------|
|   | (Exact Name of Registrant as Specified in Its Charter) |   |

| New Jersey                                                    |   | 22-3665653                           |
|---------------------------------------------------------------|--------|--------------------------------------|
| (State of Other Jurisdictionof Incorporation or Organization) |   | (I.R.S. Employer Identification No.) |

| 2650 Route 130, P.O. Box 634, Cranbury, NJ |   | 08512      |
|--------------------------------------------|--------|------------|
| (Address of Principal Executive Offices)   |   | (Zip Code) |

|   | (609) 655-4500                                         |   |
|--------|--------------------------------------------------------|--------|
|   | (Issuer’s Telephone Number, Including Area Code) |   |

|                                                                               |
|------------------------------------------------------------------------------------|
| (Former name, former address and former fiscal year, if changed since last report) |

| Large accelerated filer                                            | o | Accelerated filer         | o |
|--------------------------------------------------------------------|---|---------------------------|---|
| Non-accelerated filer(Do not check if a smaller reporting company) | o | Smaller reporting company | x |

----

----

----

1ST CONSTITUTION BANCORP

|       |                                                              | Page   |
|------------|-------------------------------------------------------------------|--------|
|       |                                                              |   |
| PART I.    | FINANCIAL INFORMATION                                             |   |
|       |                                                              |   |
| Item 1.    | Financial Statements                                              | 1      |
|       |                                                              |   |
|       | Consolidated Balance Sheets                                       |   |
|       | (unaudited) at June 30, 2010                                      |   |
|       | and December 31, 2009                                             | 1      |
|       |                                                              |   |
|       | Consolidated Statements of Income                                 |   |
|       | (unaudited) for the Three Months and Six Months Ended             |   |
|       | June 30, 2010 and June 30, 2009                                   | 2      |
|       |                                                              |   |
|       | Consolidated Statements of Changes in Shareholders’ Equity  |   |
|       | (unaudited) for the Six Months Ended                              |   |
|       | June 30, 2010 and June 30, 2009                                   | 3      |
|       |                                                              |   |
|       | Consolidated Statements of Cash Flows                             |   |
|       | (unaudited) for the Six Months Ended                              |   |
|       | June 30, 2010 and June 30, 2009                                   | 4      |
|       |                                                              |   |
|       | Notes to Consolidated Financial Statements (unaudited)            | 5      |
|       |                                                              |   |
| Item 2.    | Management’s Discussion and Analysis of Financial Condition |   |
|       | and Results of Operations                                         | 19     |
|       |                                                              |   |
| Item 3.    | Quantitative and Qualitative Disclosures About Market Risk        | 38     |
|       |                                                              |   |
| Item 4.    | Controls and Procedures                                           | 39     |
|       |                                                              |   |
| PART II.   | OTHER INFORMATION                                                 |   |
|       |                                                              |   |
| Item 2.    | Unregistered Sales of Equity Securities and Use of Proceeds       | 39     |
|       |                                                              |   |
| Item 6.    | Exhibits                                                          | 40     |
|       |                                                              |   |
| SIGNATURES |                                                              | 41     |

----

Table of Contents

Item 1.           Financial Statements.

1st Constitution Bancorp and Subsidiaries

|                                                                                                                                                                                                                       |   | June 30, 2010 |                            |   | December 31, 2009 |   |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|---------------|---------------------------------|--------|-------------------|--------|
| ASSETS                                                                                                                                                                                                                     |   |          |                            |   |              |   |
| CASH AND DUE FROM BANKS                                                                                                                                                                                                    |   | $             | 15,874,607                      |   |              | $      | 25,842,901 |   |
|                                                                                                                                                                                                                       |   |          |                            |   |              |   |   |   |
| FEDERAL FUNDS SOLD / SHORT-TERM INVESTMENTS                                                                                                                                                                                |   |          | 11,388                          |   |              |   | 11,384 |   |
|                                                                                                                                                                                                                       |   |          |                            |   |              |   |   |   |
| Total cash and cash equivalents                                                                                                                                                                                            |   |          | 15,885,995                      |   |              |   | 25,854,285 |   |
|                                                                                                                                                                                                                       |   |          |                            |   |              |   |   |   |
| INVESTMENT SECURITIES:                                                                                                                                                                                                     |   |          |                            |   |              |   |   |   |
| Available for sale, at fair value                                                                                                                                                                                          |   |          | 136,081,634                     |   |              |   | 204,118,850 |   |
| Held to maturity (fair value of $92,210,226 and $24,215,530 at June 30, 2010 and December 31, 2009, respectively)                                                                                                          |   |          | 91,062,786                      |   |              |   | 23,608,980 |   |
|                                                                                                                                                                                                                       |   |          |                            |   |              |   |   |   |
| Total investment securities                                                                                                                                                                                                |   |          | 227,144,420                     |   |              |   | 227,727,830 |   |
|                                                                                                                                                                                                                       |   |          |                            |   |              |   |   |   |
| LOANS HELD FOR SALE                                                                                                                                                                                                        |   |          | 14,866,298                      |   |              |   | 21,514,785 |   |
|                                                                                                                                                                                                                       |   |          |                            |   |              |   |   |   |
| LOANS                                                                                                                                                                                                                      |   |          | 433,271,445                     |   |              |   | 379,945,735 |   |
| Less- Allowance for loan losses                                                                                                                                                                                            |   |          | (4,937,891                      | )      |              |   | (4,505,387 | ) |
|                                                                                                                                                                                                                       |   |          |                            |   |              |   |   |   |
| Net loans                                                                                                                                                                                                                  |   |          | 428,333,554                     |   |              |   | 375,440,348 |   |
| PREMISES AND EQUIPMENT, net                                                                                                                                                                                                |   |          | 6,091,208                       |   |              |   | 4,899,091 |   |
| ACCRUED INTEREST RECEIVABLE                                                                                                                                                                                                |   |          | 2,200,112                       |   |              |   | 2,274,087 |   |
| BANK-OWNED LIFE INSURANCE                                                                                                                                                                                                  |   |          | 11,270,750                      |   |              |   | 10,319,055 |   |
| OTHER REAL ESTATE OWNED                                                                                                                                                                                                    |   |          | 1,713,502                       |   |              |   | 1,362,621 |   |
| OTHER ASSETS                                                                                                                                                                                                               |   |          | 7,291,715                       |   |              |   | 8,604,378 |   |
|                                                                                                                                                                                                                       |   |          |                            |   |              |   |   |   |
| Total assets                                                                                                                                                                                                               |   | $             | 714,797,554                     |   |              | $      | 677,996,480 |   |
|                                                                                                                                                                                                                       |   |          |                            |   |              |   |   |   |
| LIABILITIES AND SHAREHOLDERS’ EQUITY                                                                                                                                                                                 |   |          |                            |   |              |   |   |   |
| LIABILITIES:                                                                                                                                                                                                               |   |          |                            |   |              |   |   |   |
| Deposits                                                                                                                                                                                                                   |   |          |                            |   |              |   |   |   |
| Non-interest bearing                                                                                                                                                                                                       |   | $             | 87,950,592                      |   |              | $      | 82,473,328 |   |
| Interest bearing                                                                                                                                                                                                           |   |          | 445,519,416                     |   |              |   | 489,682,026 |   |
|                                                                                                                                                                                                                       |   |          |                            |   |              |   |   |   |
| Total deposits                                                                                                                                                                                                             |   |          | 533,470,008                     |   |              |   | 572,155,354 |   |
|                                                                                                                                                                                                                       |   |          |                            |   |              |   |   |   |
| BORROWINGS                                                                                                                                                                                                                 |   |          | 97,100,000                      |   |              |   | 22,500,000 |   |
| REDEEMABLE SUBORDINATED DEBENTURES                                                                                                                                                                                         |   |          | 18,557,000                      |   |              |   | 18,557,000 |   |
| ACCRUED INTEREST PAYABLE                                                                                                                                                                                                   |   |          | 1,486,171                       |   |              |   | 1,757,151 |   |
| ACCRUED EXPENSES AND OTHER LIABILITIES                                                                                                                                                                                     |   |          | 4,260,783                       |   |              |   | 5,625,922 |   |
|                                                                                                                                                                                                                       |   |          |                            |   |              |   |   |   |
| Total liabilities                                                                                                                                                                                                          |   |          | 654,873,962                     |   |              |   | 620,595,427 |   |
|                                                                                                                                                                                                                       |   |          |                            |   |              |   |   |   |
| COMMITMENTS AND CONTINGENCIES                                                                                                                                                                                              |   |          | -                               |   |              |   | - |   |
|                                                                                                                                                                                                                       |   |          |                            |   |              |   |   |   |
| SHAREHOLDERS’ EQUITY:                                                                                                                                                                                                |   |          |                            |   |              |   |   |   |
|                                                                                                                                                                                                                       |   |          |                            |   |              |   |   |   |
| Preferred Stock, no par value; 5,000,000 shares authorized, of which 12,000 shares of Series B, $1,000 liquidation preference, 5% cumulative increasing to 9% cumulative on February 15, 2014, were issued and outstanding |   |          |       11,527,230 |   |              |   |      11,473,262 |   |
| Common stock, no par value; 30,000,000 shares authorized; 4,541,585 and 4,526,827 shares issued and 4,530,682 and 4,515,924 shares outstanding at June 30, 2010 and December 31, 2009, respectively                        |   |          |   36,894,428               |   |              |   |  36,774,621 |   |
| Retained earnings                                                                                                                                                                                                          |   |          | 11,448,180                      |   |              |   | 10,307,331 |   |
| Treasury Stock, at cost, 10,903 shares                                                                                                                                                                                     |   |          | (73,492                         | )      |              |   | (73,492 | ) |
| Accumulated other comprehensive income (loss)                                                                                                                                                                              |   |          | 127,246                         |   |              |   | (1,080,669 | ) |
|                                                                                                                                                                                                                       |   |          |                            |   |              |   |   |   |
| Total shareholders’ equity                                                                                                                                                                                           |   |          | 59,923,592                      |   |              |   | 57,401,053 |   |
|                                                                                                                                                                                                                       |   |          |                            |   |              |   |   |   |
| Total liabilities and shareholders’ equity                                                                                                                                                                           |   | $             | 714,797,554                     |   |              | $      | 677,996,480 |   |

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Table of Contents

1st Constitution Bancorp and Subsidiaries

|                                                                           |   | Three months ended June 30, |      |   | Six months ended June 30, |   |
|--------------------------------------------------------------------------------|--------|-----------------------------|-----------|--------|---------------------------|--------|
| INTEREST INCOME                                                                |   | 2010                        |      |   | 2009                      |   |   | 2010 |   |   | 2009 |   |
| Loans, including fees                                                          |   | $                           | 5,736,377 |   |                      | $      | 6,261,650 |   |   | $ | 11,065,242 |   |   | $ | 12,301,251 |   |
| Securities                                                                     |   |                        |      |   |                      |   |   |   |   |   |   |   |   |   |   |   |
| Taxable                                                                        |   |                        | 1,219,755 |   |                      |   | 1,181,655 |   |   |   | 2,613,641 |   |   |   | 2,419,310 |   |
| Tax-exempt                                                                     |   |                        | 106,241   |   |                      |   | 123,963 |   |   |   | 214,171 |   |   |   | 252,518 |   |
| Federal funds sold and short-term investments                                  |   |                        | 12,910    |   |                      |   | 24,071 |   |   |   | 32,619 |   |   |   | 32,665 |   |
| Total interest income                                                          |   |                        | 7,075,283 |   |                      |   | 7,591,339 |   |   |   | 13,925,673 |   |   |   | 15,005,744 |   |
|                                                                           |   |                        |      |   |                      |   |   |   |   |   |   |   |   |   |   |   |
| INTEREST EXPENSE                                                               |   |                        |      |   |                      |   |   |   |   |   |   |   |   |   |   |   |
| Deposits                                                                       |   |                        | 1,681,345 |   |                      |   | 2,443,432 |   |   |   | 3,562,013 |   |   |   | 5,028,383 |   |
| Borrowings                                                                     |   |                        | 278,007   |   |                      |   | 361,967 |   |   |   | 544,422 |   |   |   | 725,197 |   |
| Redeemable subordinated debentures                                             |   |                        | 267,540   |   |                      |   | 266,740 |   |   |   | 531,690 |   |   |   | 532,975 |   |
| Total interest expense                                                         |   |                        | 2,226,892 |   |                      |   | 3,072,139 |   |   |   | 4,638,125 |   |   |   | 6,286,555 |   |
| Net interest income                                                            |   |                        | 4,848,391 |   |                      |   | 4,519,200 |   |   |   | 9,287,548 |   |   |   | 8,719,189 |   |
| Provision for loan losses                                                      |   |                        | 550,000   |   |                      |   | 325,000 |   |   |   | 850,000 |   |   |   | 788,000 |   |
| Net interest income after provision for loan losses                            |   |                        | 4,298,391 |   |                      |   | 4,194,200 |   |   |   | 8,437,548 |   |   |   | 7,931,189 |   |
|                                                                           |   |                        |      |   |                      |   |   |   |   |   |   |   |   |   |   |   |
| NON-INTEREST INCOME                                                            |   |                        |      |   |                      |   |   |   |   |   |   |   |   |   |   |   |
| Service charges on deposit accounts                                            |   |                        | 188,672   |   |                      |   | 216,235 |   |   |   | 365,028 |   |   |   | 454,754 |   |
| Gain on sales of loans                                                         |   |                        | 392,577   |   |                      |   | 340,993 |   |   |   | 713,121 |   |   |   | 613,186 |   |
| Income on bank-owned life insurance                                            |   |                        | 105,056   |   |                      |   | 102,305 |   |   |   | 201,695 |   |   |   | 193,327 |   |
| Other income                                                                   |   |                        | 320,715   |   |                      |   | 293,391 |   |   |   | 676,022 |   |   |   | 538,709 |   |
| Total non-interest income                                                      |   |                        | 1,007,020 |   |                      |   | 952,924 |   |   |   | 1,955,866 |   |   |   | 1,799,976 |   |
|                                                                           |   |                        |      |   |                      |   |   |   |   |   |   |   |   |   |   |   |
| NON-INTEREST EXPENSE                                                           |   |                        |      |   |                      |   |   |   |   |   |   |   |   |   |   |   |
| Salaries and employee benefits                                                 |   |                        | 2,417,234 |   |                      |   | 2,294,066 |   |   |   | 4,793,934 |   |   |   | 4,521,395 |   |
| Occupancy expense                                                              |   |                        | 452,838   |   |                      |   | 443,007 |   |   |   | 898,765 |   |   |   | 895,672 |   |
| Data processing expenses                                                       |   |                        | 272,391   |   |                      |   | 276,197 |   |   |   | 531,198 |   |   |   | 535,880 |   |
| FDIC insurance expenses                                                        |   |                        | 247,568   |   |                      |   | 704,025 |   |   |   | 495,251 |   |   |   | 803,783 |   |
| Other operating expenses                                                       |   |                        | 889,059   |   |                      |   | 1,084,394 |   |   |   | 1,693,888 |   |   |   | 2,065,572 |   |
| Total non-interest expenses                                                    |   |                        | 4,279,090 |   |                      |   | 4,801,689 |   |   |   | 8,413,036 |   |   |   | 8,822,302 |   |
|        Income before income taxes (benefit) |   |                        | 1,026,321 |   |                      |   | 345,435 |   |   |   | 1,980,378 |   |   |   | 908,863 |   |
|                                                                           |   |                        |      |   |                      |   |   |   |   |   |   |   |   |   |   |   |
| INCOME TAXES (Benefit)                                                         |   |                        | 230,762   |   |                      |   | (189,175 | ) |   |   | 485,561 |   |   |   | (102,437 | ) |
| Net income                                                                     |   |                        | 795,559   |   |                      |   | 534,610 |   |   |   | 1,494,817 |   |   |   | 1,011,300 |   |
| Dividends and accretion on preferred stock                                     |   |                        | 176,984   |   |                      |   | 176,985 |   |   |   | 353,968 |   |   |   | 365,635 |   |
| Net income available to common shareholders                                    |   | $                           | 618,575   |   |                      | $      | 357,625 |   |   | $ | 1,140,849 |   |   | $ | 645,665 |   |
|                                                                           |   |                        |      |   |                      |   |   |   |   |   |   |   |   |   |   |   |
| NET INCOME PER COMMON SHARE                                                    |   |                        |      |   |                      |   |   |   |   |   |   |   |   |   |   |   |
| Basic                                                                          |   | $                           | 0.14      |   |                      | $      | 0.08 |   |   | $ | 0.25 |   |   | $ | 0.15 |   |
| Diluted                                                                        |   | $                           | 0.14      |   |                      | $      | 0.08 |   |   | $ | 0.25 |   |   | $ | 0.15 |   |

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Table of Contents

1st Constitution Bancorp and Subsidiaries

|                                                                                                                                                                        |   |    PreferredStock |       |   |    CommonStock |   |       |    RetainedEarnings |   |   |    TreasuryStock |   |   | AccumulatedOtherComprehensiveIncome (Loss) |    |   |   TotalShareholders’Equity |   |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-----------------------------|------------|--------|--------------------------|--------|------------|-------------------------------|--------|--------|----------------------------|--------|--------|--------------------------------------------|---------|--------|---------------------------------------|--------|
|                                                                                                                                                                        |   |                        |       |   |                     |   |       |                          |   |   |                       |   |   |                                       |    |   |                                  |   |   |   |   |   |   |   |
| BALANCE, January 1, 2009                                                                                                                                                    |   | $                           | 11,387,828 |   |                     | $      | 35,180,433 |                          |   | $      | 9,653,923                  |   |   | $                                          | (53,331 | )      |                                  | $      | (549,201 | ) |   | $ | 55,619,652 |   |
| Share-based compensation                                                                                                                                                    |   |                        |       |   |                     |   | 41,050     |                          |   |   |                       |   |   |                                       |    |   |                                  |   |   |   |   |   | 41,050 |   |
| Treasury stock purchased (10,870 shares)                                                                                                                                    |   |                        |       |   |                     |   |       |                          |   |   |                       |   |   |                                       | (67,226 | )      |                                  |   |   |   |   |   | (67,226 | ) |
| Exercise of stock options and issuance     of vested shares under benefit program (76,395 shares)                                                  |   |                        |       |   |                     |   | 205,323    |                          |   |   |                       |   |   |                                       | 58,305  |   |                                  |   |   |   |   |   | 263,628 |   |
| Dividends on preferred stock                                                                                                                                                |   |                        |       |   |                     |   |       |                          |   |   | (311,668                   | )      |   |                                       |    |   |                                  |   |   |   |   |   | (311,668 | ) |
| Preferred stock issuance costs                                                                                                                                              |   |                        | (22,500    | )      |                     |   |       |                          |   |   |                       |   |   |                                       |    |   |                                  |   |   |   |   |   | (22,500 | ) |
| Accretion of discount on preferred stock                                                                                                                                    |   |                        | 53,967     |   |                     |   |       |                          |   |   | (53,967                    | )      |   |                                       |    |   |                                  |   |   |   |   |   | -- |   |
| Comprehensive Income:                                                                                                                                                       |   |                        |       |   |                     |   |       |                          |   |   |                       |   |   |                                       |    |   |                                  |   |   |   |   |   |   |   |
|     Net Income for the six months   ended June 30, 2009                                                                                  |   |                        |       |   |                     |   |       |                          |   |   | 1,011,300                  |   |   |                                       |    |   |                                  |   |   |   |   |   | 1,011,300 |   |
|     Minimum pension liability, net of tax                                                                                                               |   |                        |       |   |                     |   |       |                          |   |   |                       |   |   |                                       |    |   |                                  |   | 35,971 |   |   |   | 35,971 |   |
|     Unrealized gain on securities available for sale,net of tax                                                                                         |   |                        |       |   |                     |   |       |                          |   |   |                       |   |   |                                       |    |   |                                  |   | 67,091 |   |   |   | 67,091 |   |
|        Unrealized gain on interest rate swap contract,            net of tax |   |                        |       |   |                     |   |       |                          |   |   |                       |   |   |                                       |    |   |                                  |   | 66,453 |   |   |   | 66,453 |   |
| Comprehensive Income                                                                                                                                                        |   |                        |       |   |                     |   |       |                          |   |   |                       |   |   |                                       |    |   |                                  |   |   |   |   |   | 1,180,815 |   |
| Balance, June 30, 2009                                                                                                                                                      |   | $                           | 11,419,295 |   |                     | $      | 35,426,806 |                          |   | $      | 10,299,588                 |   |   | $                                          | (62,252 | )      |                                  | $      | (379,686 | ) |   | $ | 56,703,751 |   |
| Balance, January 1, 2010                                                                                                                                                    |   | $                           | 11,473,262 |   |                     | $      | 36,774,621 |                          |   | $      | 10,307,331                 |   |   | $                                          | (73,492 | )      |                                  | $      | (1,080,669 | ) |   | $ | 57,401,053 |   |
| Issuance of vested shares under employee            benefit program (14,758 shares)                             |   |                        |       |   |                     |   | 89,565     |                          |   |   |                       |   |   |                                       |    |   |                                  |   |   |   |   |   | 89,565 |   |
| Share-based compensation                                                                                                                                                    |   |                        |       |   |                     |   | 30,242     |                          |   |   |                       |   |   |                                       |    |   |                                  |   |   |   |   |   | 30,242 |   |
| Dividends on preferred stock                                                                                                                                                |   |                        |       |   |                     |   |       |                          |   |   | (300,000                   | )      |   |                                       |    |   |                                  |   |   |   |   |   | (300,000 | ) |
| Accretion of discount on preferred stock                                                                                                                                    |   |                        | 53,968     |   |                     |   |       |                          |   |   | (53,968                    | )      |   |                                       |    |   |                                  |   |   |   |   |   | -- |   |
| Comprehensive Income:                                                                                                                                                       |   |                        |       |   |                     |   |       |                          |   |   |                       |   |   |                                       |    |   |                                  |   |   |   |   |   |   |   |
|     Net Income for the six months   ended June 30, 2010                                                                                  |   |                        |       |   |                     |   |       |                          |   |   | 1,494,817                  |   |   |                                       |    |   |                                  |   |   |   |   |   | 1,494,817 |   |
|     Minimum pension liability, net of tax                                                                                                               |   |                        |       |   |                     |   |       |                          |   |   |                       |   |   |                                       |    |   |                                  |   | 137,381 |   |   |   | 137,381 |   |
|     Unrealized gain on securities available forsale, net of tax                                                                                         |   |                        |       |   |                     |   |       |                          |   |   |                       |   |   |                                       |    |   |                                  |   | 924,682 |   |   |   | 924,682 |   |
|    Unrealized gain on interest rate swap contract,net of tax                                                                                                 |   |                        |       |   |                     |   |       |                          |   |   |                       |   |   |                                       |    |   |                                  |   | 145,852 |   |   |   | 145,852 |   |
| Comprehensive Income                                                                                                                                                        |   |                        |       |   |                     |   |       |                          |   |   |                       |   |   |                                       |    |   |                                  |   |   |   |   |   | 2,702,732 |   |
| Balance, June 30, 2010                                                                                                                                                      |   | $                           | 11,527,230 |   |                     | $      | 36,894,428 |                          |   | $      | 11,448,180                 |   |   | $                                          | (73,492 | )      |                                  | $      | 127,246 |   |   | $ | 59,923,592 |   |

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Table of Contents

1st Constitution Bancorp and Subsidiaries

|                                                                                                                                  |   | Six Months Ended June 30, |        |
|---------------------------------------------------------------------------------------------------------------------------------------|--------|---------------------------|-------------|
|                                                                                                                                  |   | 2010                      |        |   | 2009 |   |
| OPERATING ACTIVITIES:                                                                                                            |   |                      |        |   |   |   |
|      Net income                                                                                                   |   | $                         | 1,494,817   |   |   | $ | 1,011,300 |   |
|            Adjustments to reconcile net income                                                     |   |                      |        |   |   |   |   |   |
|                 to net cash provided by (used in) operating activities-   |   |                      |        |   |   |   |   |   |
|            Provision for loan losses                                                               |   |                      | 850,000     |   |   |   | 788,000 |   |
|            Depreciation and amortization                                  |   |                      | 283,856     |   |   |   | 331,769 |   |
|            Net amortization of premiums and discounts on securities       |   |                      | 449,067     |   |   |   | 32,564 |   |
|            Gains on sales of loans held for sale                               |   |                      | (713,121    | ) |   |   | (613,186 | ) |
|            Originations of loans held for sale                            |   |                      | (55,441,982 | ) |   |   | (85,249,642 | ) |
|            Proceeds from sales of loans held for sale                     |   |                      | 62,803,590  |   |   |   | 67,078,485 |   |
|            Income on Bank – owned life insurance                    |   |                      | (201,695    | ) |   |   | (193,327 | ) |
|            Share-based compensation expense                                    |   |                      | 110,242     |   |   |   | 121,050 |   |
|            Decrease in accrued interest receivable                        |   |                      | 73,975      |   |   |   | 317,159 |   |
|            (Increase) decrease in other assets                            |   |                      | 630,503     |   |   |   | (318,581 | ) |
|            (Decrease) increase in accrued interest payable                |   |                      | (270,980    | ) |   |   | 1,700 |   |
|            (Decrease) increase in accrued expenses and other liabilities  |   |                      | (974,451    | ) |   |   | 1,028,197 |   |
|                                                                                                                                  |
| Net cash provided by (used in) operating activities                                                                              |   |                      | 9,093,821   |   |   |   | (15,664,512 | ) |
| INVESTING ACTIVITIES:                                                                                                                 |   |                      |        |   |   |   |   |   |
|      Purchases of securities -                                                                                    |   |                      |        |   |   |   |   |   |
|            Available for sale                                                                      |   |                      | (32,936,864 | ) |   |   | (23,737,730 | ) |
|            Held to maturity                                                                        |   |                      | (69,325,000 | ) |   |   | (1,619,834 | ) |
|      Proceeds from maturities and prepayments of securities -                                                     |   |                      |        |   |   |   |   |   |
|            Available for sale                                                                      |   |                      | 101,957,520 |   |   |   | 28,217,044 |   |
|            Held to maturity                                                                        |   |                      | 1,839,718   |   |   |   | 2,707,480 |   |
|      Net increase in loans                                                                                        |   |                      | (54,642,352 | ) |   |   | (28,123,625 | ) |
|      Purchase of bank-owned life insurance                                                                             |   |                      | (750,000    | ) |   |   | -- |   |
|      Capital expenditures                                                                                         |   |                      | (1,457,617  | ) |   |   | (129,532 | ) |
|      Additional investment in other real estate owned                                                                  |   |                      | (42,051     | ) |   |   | (296,468 | ) |
|      Proceeds from sales of other real estate owned                                                                    |   |                      | 590,316     |   |   |   | 2,390,489 |   |
|                                                                                                                                  |
| Net cash used in investing activities                                                                                            |   |                      | (54,766,330 | ) |   |   | (20,592,176 | ) |
|                                                                                                                                  |
| FINANCING ACTIVITIES:                                                                                                            |   |                      |        |   |   |   |   |   |
|      Exercise of stock options and issuance of vested shares                                                           |   |                      | 89,565      |   |   |   | 263,628 |   |
|      Purchase of Treasury Stock                                                                                        |   |                      | 0           |   |   |   | (67,226 | ) |
|      Dividend paid on preferred stock                                                                                  |   |                      | (300,000    | ) |   |   | (236,668 | ) |
|      Preferred stock issuance costs paid                                                                               |   |                      | 0           |   |   |   | (22,500 | ) |
|     Net increase (decrease) in demand, savings and time deposits                                                       |   |                      | (38,685,346 | ) |   |   | 91,076,793 |   |
|      Net increase (decrease) in short-term borrowings                                                                  |   |                      | 74,600,000  |   |   |   | (21,000,000 | ) |
|                                                                                                                                  |
| Net cash provided by financing activities                                                                                        |   |                      | 35,704,219  |   |   |   | 70,014,027 |   |
|                                                                                                                                  |
| Increase (decrease)  in cash and cash equivalents                                                                      |   |                      | (9,968,290  | ) |   |   | 33,757,339 |   |
|                                                                                                                                  |
| CASH AND CASH EQUIVALENTS                                                                                                        |   |                      |        |   |   |   |   |   |
|      AT BEGINNING OF PERIOD                                                                                            |   |                      | 25,854,285  |   |   |   | 14,333,119 |   |
|                                                                                                                                  |
| CASH AND CASH EQUIVALENTS                                                                                                        |   |                      |        |   |   |   |   |   |
|      AT END OF PERIOD                                                                                                  |   | $                         | 15,885,995  |   |   | $ | 48,090,458 |   |
|                                                                                                                                  |
| SUPPLEMENTAL DISCLOSURES                                                                                                         |   |                      |        |   |   |   |   |   |
|      OF CASH FLOW INFORMATION:                                                                                    |   |                      |        |   |   |   |   |   |
|            Cash paid during the period for -                                                       |   |                      |        |   |   |   |   |   |
| Interest                                                                                                                         |   | $                         | 4,909,105   |   |   | $ | 6,284,855 |   |
| Income taxes                                                                                                                     |   |                      | 1,035,000   |   |   |   | 325,000 |   |
| Non-cash investing activities                                                                                                         |   |                      |        |   |   |   |   |   |
| Real estate acquired in full satisfaction of loans in foreclosure                                                                     |   | $                         | 899,146     |   |   | $ | 1,031,527 |   |

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Table of Contents

1st Constitution Bancorp and Subsidiaries

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Table of Contents

|                                                                                               |   | Three Months Ended June 30, 2010 |     |
|----------------------------------------------------------------------------------------------------|--------|----------------------------------|----------|
|                                                                                               |   |    Income              |     |   | Weighted-averageShares |   |   |   Per ShareAmount |   |
| Basic Earnings Per Common Share                                                                    |   |                             |     |   |   |   |   |   |   |
| Net income                                                                                         |   | $                                | 795,559  |   |   |   |   |   |   |   |
| Preferred stock dividends and accretion                                                            |   |                             | (176,984 | ) |   |   |   |   |   |   |
| Income available to common shareholders                                                            |   |                             | 618,575  |   |   |   | 4,526,811 |   |   | $ | 0.14 |   |
|                                                                                               |   |                             |     |   |   |   |   |   |   |   |   |   |
| Effect of dilutive securities                                                                      |   |                             |     |   |   |   |   |   |   |   |   |   |
| Stock options and unvested stock awards                                                            |   |                             |     |   |   |   | 23,734 |   |   |   |   |   |
|                                                                                               |   |                             |     |   |   |   |   |   |   |   |   |   |
| Diluted Earnings Per Common Share                                                                  |   |                             |     |   |   |   |   |   |   |   |   |   |
| Income available to common shareholders      plus assumed conversion |   | $                                | 618,575  |   |   |   | 4,550,545 |   |   | $ | 0.14 |   |

|                                                                                                   |   | Three Months Ended June 30, 2009 |     |
|--------------------------------------------------------------------------------------------------------|--------|----------------------------------|----------|
|                                                                                                   |   |    Income              |     |   | Weighted-averageShares |   |   |   Per ShareAmount |   |
| Basic Earnings Per Common Share                                                                        |   |                             |     |   |   |   |   |   |   |
| Net income                                                                                             |   | $                                | 534,610  |   |   |   |   |   |   |   |
| Preferred stock dividends and accretion                                                                |   |                             | (176,985 | ) |   |   |   |   |   |   |
| Income available to common shareholders                                                                |   |                             | 357,625  |   |   |   | 4,467,766 |   |   | $ | 0.08 |   |
|                                                                                                   |   |                             |     |   |   |   |   |   |   |   |   |   |
| Effect of dilutive securities                                                                          |   |                             |     |   |   |   |   |   |   |   |   |   |
| Stock options and unvested stock awards                                                                |   |                             |     |   |   |   | 3,591 |   |   |   |   |   |
|                                                                                                   |   |                             |     |   |   |   |   |   |   |   |   |   |
| Diluted Earnings Per Common Share                                                                      |   |                             |     |   |   |   |   |   |   |   |   |   |
| Net income available to common shareholders      plus assumed conversion |   | $                                | 357,625  |   |   |   | 4,471,357 |   |   | $ | 0.08 |   |

|                                                                                               |   | Six Months Ended June 30, 2010 |      |
|----------------------------------------------------------------------------------------------------|--------|--------------------------------|-----------|
|                                                                                               |   |    Income            |      |   | Weighted-averageShares |   |   |   Per ShareAmount |   |
| Basic Earnings Per Common Share                                                                    |   |                           |      |   |   |   |   |   |   |
| Net income                                                                                         |   | $                              | 1,494,817 |   |   |   |   |   |   |   |
| Preferred stock dividends and accretion                                                            |   |                           | (353,968  | ) |   |   |   |   |   |   |
| Income available to common shareholders                                                            |   |                           | 1,140,849 |   |   |   | 4,528,001 |   |   | $ | 0.25 |   |
|                                                                                               |   |                           |      |   |   |   |   |   |   |   |   |   |
| Effect of dilutive securities                                                                      |   |                           |      |   |   |   |   |   |   |   |   |   |
| Stock options and unvested stock awards                                                            |   |                           |      |   |   |   | 19,108 |   |   |   |   |   |
|                                                                                               |   |                           |      |   |   |   |   |   |   |   |   |   |
| Diluted Earnings Per Common Share                                                                  |   |                           |      |   |   |   |   |   |   |   |   |   |
| Income available to common shareholders      plus assumed conversion |   | $                              | 1,140,849 |   |   |   | 4,547,109 |   |   | $ | 0.25 |   |

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Table of Contents

|                                                                                                   |   | Six Months Ended June 30, 2009 |      |
|--------------------------------------------------------------------------------------------------------|--------|--------------------------------|-----------|
|                                                                                                   |   |    Income            |      |   | Weighted-averageShares |   |   |   Per ShareAmount |   |
| Basic Earnings Per Common Share                                                                        |   |                           |      |   |   |   |   |   |   |
| Net income                                                                                             |   | $                              | 1,011,300 |   |   |   |   |   |   |   |
| Preferred stock dividends and accretion                                                                |   |                           | (365,635  | ) |   |   |   |   |   |   |
| Income available to common shareholders                                                                |   |                           | 645,665   |   |   |   | 4,448,805 |   |   | $ | 0.15 |   |
|                                                                                                   |   |                           |      |   |   |   |   |   |   |   |   |   |
| Effect of dilutive securities                                                                          |   |                           |      |   |   |   |   |   |   |   |   |   |
| Stock options and unvested stock awards                                                                |   |                           |      |   |   |   | 3,297 |   |   |   |   |   |
|                                                                                                   |   |                           |      |   |   |   |   |   |   |   |   |   |
| Diluted Earnings Per Common Share                                                                      |   |                           |      |   |   |   |   |   |   |   |   |   |
| Net income available to common shareholders      plus assumed conversion |   | $                              | 645,665   |   |   |   | 4,452,102 |   |   | $ | 0.15 |   |

|                                                                                                             |   |      |        |   | Gross      |   |      | Gross      |   |   |     |   |
|------------------------------------------------------------------------------------------------------------------|--------|-----------|-------------|--------|------------|--------|-----------|------------|--------|--------|----------|--------|
|                                                                                                             |   | Amortized |        |   | Unrealized |   |      | Unrealized |   |   | Fair     |   |
| June 30, 2010                                                                                               |   | Cost      |        |   | Gains      |   |      | Losses     |   |   | Value    |   |
|                                                                                                             |   |      |        |   |       |   |      |       |   |   |     |   |
| Available for sale-                                                                                              |   |      |        |   |       |   |      |       |   |   |     |   |
| U. S. Treasury securities and                                                                                    |   |      |        |   |       |   |      |       |   |   |     |   |
| obligations of U.S. Government                                                                                   |   |      |        |   |       |   |      |       |   |   |     |   |
| Sponsored corporations and agencies                                                                              |   | $         | 75,076,807  |   |       | $      | 328,725   |       |   | $      | (3,330   | )      |   | $ | 75,402,202 |   |
|    Residential collateralized        mortgage obligations |   |      | 29,956,717  |   |       |   | 558,808   |       |   |   | (133,354 | )      |   |   | 30,382,171 |   |
| Residential mortgage     backed securities                                              |   |      | 20,512,887  |   |       |   | 1,593,639 |       |   |   | 0        |   |   |   | 22,106,526 |   |
| Obligations of State and                                                                                         |   |      |        |   |       |   |      |       |   |   |     |   |   |   |   |   |
| Political subdivisions                                                                                           |   |      | 2,450,410   |   |       |   | 49,756    |       |   |   | (78,183  | )      |   |   | 2,421,983 |   |
|     Trust preferred debt securities – single issuer                                    |   |      | 2,458,938   |   |       |   | 0         |       |   |   | (659,286 | )      |   |   | 1,799,652 |   |
|     Restricted stock                                                                         |   |      | 3,944,100   |   |       |   | 0         |       |   |   | 0        |   |   |   | 3,944,100 |   |
|     Mutual fund                                                                              |   |      | 25,000      |   |       |   | 0         |       |   |   | 0        |   |   |   | 25,000 |   |
|                                                                                                             |   |      |        |   |       |   |      |       |   |   |     |   |   |   |   |   |
|                                                                                                             |   | $         | 134,424,859 |   |       | $      | 2,530,928 |       |   | $      | (874,153 | )      |   | $ | 136,081,634 |   |

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Table of Contents

|                  June 30, 2010    |   |      Amortized Cost |       |   | Other-Than-Temporary Impairment Recognized InAccumulated Other ComprehensiveIncome (Loss) |   |     |      CarryingValue |   |   |     GrossUnrealizedGains |   |   |     GrossUnrealizedLosses |      |   |      FairValue |   |
|------------------------------------------------------------------------------------------------------------------------|--------|----------------------------------------------|------------|--------|-------------------------------------------------------------------------------------------|--------|----------|---------------------------------------------|--------|--------|----------------------------------------------|--------|--------|-----------------------------------------------|-----------|--------|-----------------------------------------|--------|
| Held to maturity-                                                                                                      |   |                                         |       |   |                                                                                      |   |     |                                        |   |   |                                         |   |   |                                          |      |   |                                    |   |
|     U. S. Treasury securities and                                                                  |   |                                         |       |   |                                                                                      |   |     |                                        |   |   |                                         |   |   |                                          |      |   |                                    |   |
|          obligations of U.S. Government                                   |   |                                         |       |   |                                                                                      |   |     |                                        |   |   |                                         |   |   |                                          |      |   |                                    |   |
|          sponsored corporations and agencies                              |   | $                                            | 70,475,000 |   |                                                                                      | $      | -        |                                        |   | $      | 70,475,000                                   |   |   | $                                             | 382,998   |   |                                    | $      | 0 |   |   | $ | 70,857,998 |   |
|     Residential collateralized        mortgage obligations |   |                                         | 3,481,031  |   |                                                                                      |   | -        |                                        |   |   | 3,481,031                                    |   |   |                                          | 121,978   |   |                                    |   | 0 |   |   |   | 3,603,009 |   |
|     Residential mortgage backed securities                                                         |   |                                         | 5,620,174  |   |                                                                                      |   | -        |                                        |   |   | 5,620,174                                    |   |   |                                          | 223,060   |   |                                    |   | 0 |   |   |   | 5,843,234 |   |
| Obligations of State and                                                                                               |   |                                         |       |   |                                                                                      |   |     |                                        |   |   |                                         |   |   |                                          |      |   |                                    |   |   |   |   |   |   |   |
|       Political subdivisions                                                             |   |                                         | 8,477,506  |   |                                                                                      |   | -        |                                        |   |   | 8,477,506                                    |   |   |                                          | 313,266   |   |                                    |   | (1,377 | ) |   |   | 8,789,395 |   |
| Trust preferred debt securities - pooled                                                                               |   |                                         | 637,812    |   |                                                                                      |   | (500,944 | )                                           |   |   | 136,868                                      |   |   |                                          | 35,004    |   |                                    |   | 0 |   |   |   | 171,872 |   |
| Corporate debt securities                                                                                              |   |                                         | 2,872,207  |   |                                                                                      |   | -        |                                        |   |   | 2,872,207                                    |   |   |                                          | 72,511    |   |                                    |   | 0 |   |   |   | 2,944,718 |   |
|                                                                                                                   |   |                                         |       |   |                                                                                      |   |     |                                        |   |   |                                         |   |   |                                          |      |   |                                    |   |   |   |   |   |   |   |
|                                                                                                                   |   | $                                            | 91,563,730 |   |                                                                                      | $      | (500,944 | )                                           |   | $      | 91,062,786                                   |   |   | $                                             | 1,148,817 |   |                                    | $      | (1,377 | ) |   | $ | 92,210,226 |   |

|                                                                                                                                                             |   |      |        | Gross      |   |   | Gross      |   |   |   |       |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-----------|-------------|------------|--------|--------|------------|--------|--------|--------|------------|
|                                                                                                                                                             |   | Amortized |        | Unrealized |   |   | Unrealized |   |   | Fair   |       |
| December 31, 2009                                                                                                                                                |   | Cost      |        | Gains      |   |   | Losses     |   |   | Value  |       |
|                                                                                                                                                             |   |      |        |       |   |   |       |   |   |   |       |
| Available for sale-                                                                                                                                              |   |      |        |       |   |   |       |   |   |   |       |
| U. S. Treasury securities and                                                                                                                                    |   |      |        |       |   |   |       |   |   |   |       |
| obligations of U.S. Government                                                                                                                                   |   |      |        |       |   |   |       |   |   |   |       |
| sponsored corporations and agencies                                                                                                                              |   | $         | 138,351,028 |       |   | $      | 291,906    |   |   | $      | (673,252   | ) |   | $ | 137,969,682 |   |
|        Residential collateralized mortgage            obligations |   |      | 34,749,123  |       |   |   | 172,698    |   |   |   | (252,023   | ) |   |   | 34,669,798 |   |
| Residential mortgage backed     securities                                                                                              |   |      | 24,182,584  |       |   |   | 1,449,071  |   |   |   | 0          |   |   |   | 25,631,655 |   |
| Obligations of State and                                                                                                                                         |   |      |        |       |   |   |       |   |   |   |       |   |   |   |   |   |
| Political subdivisions                                                                                                                                           |   |      | 2,633,210   |       |   |   | 45,644     |   |   |   | (91,212    | ) |   |   | 2,587,642 |   |
|         Trust preferred debt securities          – single issuer |   |      | 2,457,262   |       |   |   | 0          |   |   |   | (687,089   | ) |   |   | 1,770,173 |   |
|         Restricted Stock                                                                                                 |   |      | 1,464,900   |       |   |   | 0          |   |   |   | 0          |   |   |   | 1,464,900 |   |
|         Mutual Fund                                                                                                      |   |      | 25,000      |       |   |   | 0          |   |   |   | 0          |   |   |   | 25,000 |   |
|                                                                                                                                                             |   |      |        |       |   |   |       |   |   |   |       |   |   |   |   |   |
|                                                                                                                                                             |   | $         | 203,863,107 |       |   | $      | 1,959,319  |   |   | $      | (1,703,576 | ) |   | $ | 204,118,850 |   |
|                                                                                                                                                             |   |      |        |       |   |   |       |   |   |   |       |   |   |   |   |   |

| December 31, 2009                                                                                                      |   |      Amortized Cost |       |   | Other-Than-Temporary Impairment Recognized InAccumulated Other ComprehensiveIncome (Loss) |   |     |      CarryingValue |   |   |     GrossUnrealizedGains |   |   |     GrossUnrealizedLosses |    |   |      FairValue |   |
|------------------------------------------------------------------------------------------------------------------------|--------|----------------------------------------------|------------|--------|-------------------------------------------------------------------------------------------|--------|----------|---------------------------------------------|--------|--------|----------------------------------------------|--------|--------|-----------------------------------------------|---------|--------|-----------------------------------------|--------|
| Held to maturity-                                                                                                      |   |                                         |       |   |                                                                                      |   |     |                                        |   |   |                                         |   |   |                                          |    |   |                                    |   |
|     Residential collateralized        mortgage obligations |   | $                                            | 4,881,475  |   |                                                                                      | $      | -        |                                        |   | $      | 4,881,475                                    |   |   | $                                             | 150,055 |   |                                    | $      | 0 |   |   | $ | 5,031,530 |   |
|     Residential mortgage backed securities                                                         |   |                                         | 6,111,131  |   |                                                                                      |   | -        |                                        |   |   | 6,111,131                                    |   |   |                                          | 97,782  |   |                                    |   | (29,521 | ) |   |   | 6,179,392 |   |
| Obligations of State and                                                                                               |   |                                         |       |   |                                                                                      |   |     |                                        |   |   |                                         |   |   |                                          |    |   |                                    |   |   |   |   |   |   |   |
|       Political subdivisions                                                             |   |                                         | 8,600,596  |   |                                                                                      |   | -        |                                        |   |   | 8,600,596                                    |   |   |                                          | 270,947 |   |                                    |   | 0 |   |   |   | 8,871,543 |   |
| Trust preferred debt securities - pooled                                                                               |   |                                         | 633,998    |   |                                                                                      |   | (500,944 | )                                           |   |   | 136,054                                      |   |   |                                          | 0       |   |                                    |   | 0 |   |   |   | 133,054 |   |
| Corporate debt securities                                                                                              |   |                                         | 3,882,724  |   |                                                                                      |   | -        |                                        |   |   | 3,882,724                                    |   |   |                                          | 117,287 |   |                                    |   | 0 |   |   |   | 4,000,011 |   |
|                                                                                                                   |   |                                         |       |   |                                                                                      |   |     |                                        |   |   |                                         |   |   |                                          |    |   |                                    |   |   |   |   |   |   |   |
|                                                                                                                   |   | $                                            | 24,109,924 |   |                                                                                      | $      | (500,944 | )                                           |   | $      | 23,608,980                                   |   |   | $                                             | 636,071 |   |                                    | $      | (29,521 | ) |   | $ | 24,215,530 |   |

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Table of Contents

|                                                                 |   | AmortizedCost |        |   | FairValue |   |
|----------------------------------------------------------------------|--------|---------------|-------------|--------|-----------|--------|
| Available for sale-                                                  |   |          |        |
|      Due in one year or less                |   | $             | 45,224,410  |   |      | $      | 45,338,103 |   |
|      Due after one year through five years  |   |          | 18,860,948  |   |      |   | 18,975,174 |   |
|      Due after five years through ten years |   |          | 7,515,688   |   |      |   | 7,980,840 |   |
|      Due after ten years                    |   |          | 62,823,812  |   |      |   | 63,787,517 |   |
| Total                                                                |   | $             | 134,424,858 |   |      | $      | 136,081,634 |   |
|                                                                 |   |          |        |   |      |   |   |   |
| Held to maturity-                                                    |   |          |        |   |      |   |   |   |
|      Due in one year or less                |   | $             | 3,114,556   |   |      | $      | 3,133,016 |   |
|      Due after one year through five years  |   |          | 52,170,253  |   |      |   | 52,551,661 |   |
|      Due after five years through ten years |   |          | 27,601,048  |   |      |   | 28,020,186 |   |
|      Due after ten years                    |   |          | 8,677,873   |   |      |   | 8,505,363 |   |
| Total                                                                |   | $             | 91,563,730  |   |      | $      | 92,210,226 |   |

| June 30, 2010                                                                                                                                                                                 |   |                |   |   | Less than 12 months |   |       | 12 months or longer |   |   | Total            |   |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|---------------------|--------|--------|---------------------|--------|------------|---------------------|--------|--------|------------------|--------|
|                                                                                                                                                                                          |   | Number ofSecurities |   |   |  Fair Value    |   |       | Unrealized Losses   |   |   |  Fair Value |   |   | Unrealized Losses |   |   |  Fair Value |   |   | Unrealized Losses |   |
| U.S. Treasury securities and obligations      of U.S. Government sponsored          corporations and agencies |   |                | 6      |   |                | $      | 9,171,480  |                |   | $      | (3,330           | )      |   | $ | - |   |   | $ | - |   |   | $ | 9,171,480 |   |   | $ | (3,330 | ) |
|                                                                                                                                                                                          |   |                |   |   |                |   |       |                |   |   |             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Residential collateralized mortgage obligations                                                                                                                                               |   |                | 2      |   |                |   | 2,061,737  |                |   |   | (105,321         | )      |   |   | 460,480 |   |   |   | (28,033 | ) |   |   | 2,522,217 |   |   |   | (133,354 | ) |
|                                                                                                                                                                                          |   |                |   |   |                |   |       |                |   |   |             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Obligations of State and Political    Subdivisions                                                                                                                        |   |                | 2      |   |                |   | 1,286,756  |                |   |   | (79,560          | )      |   |   | - |   |   |   | - |   |   |   | 1,286,756 |   |   |   | (79,560 | ) |
|                                                                                                                                                                                          |   |                |   |   |                |   |       |                |   |   |             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Trust preferred debt securities – single issuer                                                                                                                                         |   |                | 4      |   |                |   | -          |                |   |   | -                |   |   |   | 1,799,652 |   |   |   | (659,286 | ) |   |   | 1,799,652 |   |   |   | (659,286 | ) |
|                                                                                                                                                                                          |   |                |   |   |                |   |       |                |   |   |             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Trust preferred debt securities – pooled                                                                                                                                                |   |                | 1      |   |                |   | -          |                |   |   | -                |   |   |   | 171,872 |   |   |   | (500,944 | ) |   |   | 171,872 |   |   |   | (500,944 | ) |
|                                                                                                                                                                                          |   |                |   |   |                |   |       |                |   |   |             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|   Total temporarily impaired securities                                                                                                                                             |   |                | 15     |   |                | $      | 12,519,973 |                |   | $      | (188,211         | )      |   | $ | 2,432,804 |   |   | $ | (1,188,263 | ) |   | $ | 14,951,977 |   |   | $ | (1,376,747 | ) |

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| December 31, 2009                                                                |   |                |   |   | Less than 12 months |   |       | 12 months or longer     |   |   | Total            |   |
|----------------------------------------------------------------------------------|--------|---------------------|--------|--------|---------------------|--------|------------|-------------------------|--------|--------|------------------|--------|
|                                                                             |   | Number ofSecurities |   |   | Fair Value     |   |       | Unrealized Losses  |   |   | Fair Value  |   |   | Unrealized Losses  |   |   | Fair Value  |   |   | Unrealized Losses  |   |
| U.S. Government sponsored     corporations and agencies |   |                | 33     |   |                | $      | 73,177,106 |                    |   | $      | (673,252         | )      |   | $ | - |   |   | $ | - |   |   | $ | 73,177,106 |   |   | $ | (673,252 | ) |
|                                                                             |   |                |   |   |                |   |       |                    |   |   |             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Residential collateralized mortgage obligations                                  |   |                | 5      |   |                |   | 9,399,574  |                    |   |   | (158,696         | )      |   |   | 428,264 |   |   |   | (93,327 | ) |   |   | 9,827,838 |   |   |   | (252,023 | ) |
|                                                                             |   |                |   |   |                |   |       |                    |   |   |             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Residential mortgage backed securities                                           |   |                | 1      |   |                |   | 2,885,660  |                    |   |   | (29,521          | )      |   |   | - |   |   |   | - |   |   |   | 2,885,660 |   |   |   | (29,521 | ) |
|                                                                             |   |                |   |   |                |   |       |                    |   |   |             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Obligations of State and Political     Subdivisions     |   |                | 1      |   |                |   | 924,549    |                    |   |   | (91,212          | )      |   |   | - |   |   |   | - |   |   |   | 924,549 |   |   |   | (91,212 | ) |
|                                                                             |   |                |   |   |                |   |       |                    |   |   |             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Trust preferred debt securities – single issuer                            |   |                | 4      |   |                |   | -          |                    |   |   | -                |   |   |   | 1,770,172 |   |   |   | (687,089 | ) |   |   | 1,770,172 |   |   |   | (687,089 | ) |
|                                                                             |   |                |   |   |                |   |       |                    |   |   |             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Trust preferred debt securities – pooled                                   |   |                | 1      |   |                |   | -          |                    |   |   | -                |   |   |   | 133,054 |   |   |   | (500,944 | ) |   |   | 133,054 |   |   |   | (500,944 | ) |
|                                                                             |   |                |   |   |                |   |       |                    |   |   |             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|   Total temporarily impaired securities                                |   |                | 45     |   |                | $      | 86,386,889 |                    |   | $      | (952,681         | )      |   | $ | 2,331,490 |   |   | $ | (1,281,360 | ) |   | $ | 88,718,379 |   |   | $ | (2,234,041 | ) |

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|                           |   | Three and six months endedJune 30, 2010 |   |
|--------------------------------|--------|-----------------------------------------|--------|
| Balance at beginning of period |   | $                                       | 364    |   |
| Change during the period       |   |                                    | -      |   |
| Balance at end of period       |   | $                                       | 364    |   |

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| Stock Options                                   |   | Number ofShares |    |   | WeightedAverageExercise Price |   |   | WeightedAverageRemainingContractualTerm (years) |   |   | AggregateIntrinsicValue |   |
|-------------------------------------------------|--------|-----------------|---------|--------|-------------------------------|--------|--------|-------------------------------------------------|--------|--------|-------------------------|--------|
| Outstanding at January 1, 2010                  |   |            | 154,710 |   |                          | $      | 11.04  |                                            |   |   |                    |   |   |   |
|      Options Granted   |   |            | --      |   |                          |   | --     |                                            |   |   |                    |   |   |   |
|      Options Exercised |   |            | --      |   |                          |   | --     |                                            |   |   |                    |   |   |   |
|      Options Forfeited |   |            | (1,969  | )      |                          |   | 9.86   |                                            |   |   |                    |   |   |   |
|      Options Expired   |   |            | --      |   |                          |   | --     |                                            |   |   |                    |   |   |   |
| Outstanding at June 30, 2010                    |   |            | 152,741 |   |                          | $      | 11.07  |                                            |   |   | 5.6                     |   |   | $ | 63,206 |   |
|                                            |   |            |    |   |                          |   |   |                                            |   |   |                    |   |   |   |   |   |
| Exercisable at June 30, 2010                    |   |            | 111,248 |   |                          | $      | 11.49  |                                            |   |   | 4.6                     |   |   | $ | 63,206 |   |

| Nonvested shares                           |   | Number ofShares |   |   | Average Grant Date Fair Value |   |
|--------------------------------------------|--------|-----------------|--------|--------|-------------------------------|--------|
| Non-vested stock awards at January 1, 2010 |   |            | 75,769 |   |                          | $      | 9.53 |   |
| Shares granted                             |   |            | 12,075 |   |                          |   | 5.25 |   |
| Shares vested                              |   |            | (5,565 | )      |                          |   | 10.00 |   |
| Shares forfeited                           |   |            | (2,941 | )      |                          |   | 10.11 |   |
| Non-vested stock awards at June 30, 2010   |   |            | 79,338 |   |                          | $      | 8.82 |   |

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|                          |   | Three months endedJune 30, |    |   | Six months endedJune 30, |   |
|-------------------------------|--------|----------------------------|---------|--------|--------------------------|--------|
|                          |   | 2010                       |    |   | 2009                     |   |   | 2010 |   |   | 2009 |   |
|                          |   |                       |    |   |                     |   |   |   |   |   |   |   |
| Service cost                  |   | $                          | 56,514  |   |                     | $      | 79,544 |   |   | $ | 113,028 |   |   | $ | 140,638 |   |
| Interest cost                 |   |                       | 48,435  |   |                     |   | 45,630 |   |   |   | 96,870 |   |   |   | 91,260 |   |
| Actuarial loss recognized     |   |                       | 38,517  |   |                     |   | 21,744 |   |   |   | 77,034 |   |   |   | 43,488 |   |
| Prior service cost recognized |   |                       | 24,858  |   |                     |   | 24,750 |   |   |   | 49,716 |   |   |   | 49,608 |   |
|                          |   | $                          | 168,324 |   |                     | $      | 171,668 |   |   | $ | 336,648 |   |   | $ | 324,994 |   |

|                                                                                       |   | June 30, |      |   | December 31, |   |
|--------------------------------------------------------------------------------------------|--------|----------|-----------|--------|--------------|--------|
|                                                                                       |   | 2010     |      |   | 2009         |   |
| Unrealized holding gains on                                                                |   |     |      |   |         |   |
| securities available for sale                                                              |   | $        | 1,656,775 |   |         | $      | 255,744 |   |
| Related income tax effect                                                                  |   |     | (563,302  | )      |         |   | (86,953 | ) |
|                                                                                       |   |     | 1,093,473 |   |         |   | 168,791 |   |
|                                                                                       |   |     |      |   |         |   |   |   |
| Unrealized impairment loss      On held to maturity security |   |     | (500,944  | )      |         |   | (500,944 | ) |
| Related income tax effect                                                                  |   |     | 170,321   |   |         |   | 170,321 |   |
|                                                                                       |   |     | (330,623  | )      |         |   | (330,623 | ) |
| Unrealized loss on interest rate swap contract                                             |   |     | (640,963  | )      |         |   | (883,806 | ) |
| Related income tax effect                                                                  |   |     | 256,781   |   |         |   | 353,772 |   |
|                                                                                       |   |     | (384,182  | )      |         |   | (530,034 | ) |
|                                                                                       |   |     |      |   |         |   |   |   |
| Pension liability                                                                          |   |     | (419,383  | )      |         |   | (647,228 | ) |
| Related income tax effect                                                                  |   |     | 167,961   |   |         |   | 258,425 |   |
|                                                                                       |   |     | (251,422  |   |         |   | (388,803 | ) |
|                                                                                       |   |     |      |   |         |   |   |   |
| Accumulated other comprehensive income (loss)                                              |   | $        | 127,246   |   |         | $      | (1,080,669 | ) |

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|                        |   | Net Unrealized Gains (Losses)on Available forSale Securities |      |   | Net Unrealized Impairment Loss On Held toMaturity Security |   |     | Net Change inFair Value ofInterest RateSwap Contract |   |   | Net Change Related to Defined Benefit Pension Plans |   |   | AccumulatedOther Comprehensive Income (Loss) |     |
|-----------------------------|--------|-------------------------------------------------------------------|-----------|--------|----------------------------------------------------------------------|--------|----------|------------------------------------------------------|--------|--------|-----------------------------------------------------|--------|--------|----------------------------------------------|----------|
| Balances, December 31, 2009 |   | $                                                                 | 168,791   |   |                                                                 | $      | (330,623 | )                                                    |   | $      | (530,034                                            | )      |   | $                                            | (388,803 | ) |   | $ | (1,080,669 | ) |
|                        |   |                                                              |      |   |                                                                 |   |     |                                                 |   |   |                                                |   |   |                                         |     |   |   |   |   |   |
| Net change                  |   |                                                              | 924,682   |   |                                                                 |   | -        |                                                 |   |   | 145,852                                             |   |   |                                         | 137,381  |   |   |   | 1,207,915 |   |
|                        |   |                                                              |      |   |                                                                 |   |     |                                                 |   |   |                                                |   |   |                                         |     |   |   |   |   |   |
| Balance, June 30, 2010      |   | $                                                                 | 1,093,473 |   |                                                                 | $      | (330,623 | )                                                    |   | $      | (384,182                                            | )      |   | $                                            | (251,182 | ) |   | $ | 127,246 |   |

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| Level 1: | Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities. |
|----------|-------------------------------------------------------------------------------------------------------------------------------------------|

| Level 2: | Quoted prices in markets that are not active, or inputs that are observable either directly or indirectly, for substantially the full term of the asset or liability. |
|----------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| Level 3: | Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (i.e., supported with little or no market activity). |
|----------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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|                                      |   | Level 1 Inputs |   |   | Level 2 Inputs |   |        | Level 3 Inputs |   |   | Total Fair Value |   |
|-------------------------------------------|--------|----------------|--------|--------|----------------|--------|-------------|----------------|--------|--------|------------------|--------|
| June 30, 2010:                            |   |           |   |   |           |   |        |           |   |   |             |   |
|   Securities available for sale |   | $              | -      |   |           | $      | 136,081,634 |           |   | $      | -                |   |   | $ | 136,081,634 |   |
|   Derivative liabilities        |   |           | -      |   |           |   | (640,963    | )              |   |   | -                |   |   |   | (640,963 | ) |
|                                      |   |           |   |   |           |   |        |           |   |   |             |   |   |   |   |   |
| December 31, 2009:                        |   |           |   |   |           |   |        |           |   |   |             |   |   |   |   |   |
|   Securities available for sale |   | $              | -      |   |           | $      | 204,118,850 |           |   | $      | -                |   |   | $ | 204,118,850 |   |
|   Derivative liabilities        |   |           | -      |   |           |   | (883,806    | )              |   |   | -                |   |   |   | (883,806 | ) |

|                      |   | Level 1 Inputs |   |   | Level 2 Inputs |   |    | Level 3 Inputs |   |   | Total Fair Value |   |
|---------------------------|--------|----------------|--------|--------|----------------|--------|---------|----------------|--------|--------|------------------|--------|
| June 30, 2010:            |   |           |   |   |           |   |    |           |   |   |             |   |
| Impaired loans            |   | $              | -      |   |           | $      | -       |           |   | $      | 2,571,735        |   |   | $ | 2,571,735 |   |
| Other real estate owned   |   |           | -      |   |           |   | -       |           |   |   | 922,352          |   |   |   | 922,352 |   |
|                      |   |           |   |   |           |   |    |           |   |   |             |   |   |   |   |   |
| December 31, 2009:        |   |           |   |   |           |   |    |           |   |   |             |   |   |   |   |   |
| Impaired loans            |   | $              | -      |   |           | $      | -       |           |   | $      | 1,116,129        |   |   | $ | 1,116,129 |   |
| Other real estate owned   |   |           | -      |   |           |   | -       |           |   |   | 1,362,621        |   |   |   | 1,362,621 |   |
| Security held to maturity |   |           | -      |   |           |   | 133,054 |           |   |   | -                |   |   |   | 133,054 |   |

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|                                     |   | June 30, 2010 |         |   | December 31, 2009 |   |
|------------------------------------------|--------|---------------|--------------|--------|-------------------|--------|
|                                     |   | Carrying      |         |   | Estimated         |   |   | Carrying |   |   | Estimated |   |
|                                     |   | Value         |         |   | Fair Value        |   |   | Value |   |   | Fair Value |   |
|                                     |   |          |         |   |              |   |   |   |   |   |   |   |
| Cash and cash equivalents                |   | $             | 15,885,995   |   |              | $      | 15,885,995 |   |   | $ | 25,854,285 |   |   | $ | 25,854,285 |   |
| Securities available for sale       |   |          | 136,081,634  |   |              |   | 136,081,634 |   |   |   | 204,118,850 |   |   |   | 204,118,850 |   |
| Securities held to maturity         |   |          | 91,062,786   |   |              |   | 92,210,226 |   |   |   | 23,608,980 |   |   |   | 24,215,530 |   |
| Loans held for sale                 |   |          | 14,866,298   |   |              |   | 14,866,298 |   |   |   | 21,514,785 |   |   |   | 21,514,785 |   |
| Gross loans                         |   |          | 433,271,445  |   |              |   | 432,678,000 |   |   |   | 379,945,735 |   |   |   | 379,617,000 |   |
| Accrued interest receivable              |   |          | 2,200,112    |   |              |   | 2,200,112 |   |   |   | 2,274,087 |   |   |   | 2,274,087 |   |
| Deposits                            |   |          | (533,470,008 | )      |              |   | (535,086,000 | ) |   |   | (572,155,354 | ) |   |   | (573,596,000 | ) |
| Other borrowings                    |   |          | (97,100,000  | )      |              |   | (99,566,000 | ) |   |   | (22,500,000 | ) |   |   | (25,321,000 | ) |
| Redeemable subordinated debentures  |   |          | (18,557,000  | )      |              |   | (18,557,000 | ) |   |   | (18,557,000 | ) |   |   | (18,557,000 | ) |
| Accrued interest payable                 |   |          | (1,486,171   | )      |              |   | (1,486,171 | ) |   |   | (1,757,151 | ) |   |   | (1,757,151 | ) |
| Interest rate swap contract         |   |          | (640,963     | )      |              |   | (640,963 | ) |   |   | (883,806 | ) |   |   | (883,806 | ) |

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|  Maturity |  Hedged Liability | NotionalAmounts | Swap FixedInterest Rates | Swap VariableInterest Rates        |
|----------------|------------------------|-----------------|--------------------------|------------------------------------|
|           |                   |            |                     |                               |
| June 15, 2011  | Subordinated Debenture | $18,000,000     | 5.87%                    | 3 month LIBOR plus165 basis points |

Item 2.    Management’s Discussion and Analysis of Financial Condition and Results of Operations

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|  Non-interest Expenses             |   | Three months ended June 30, |      |
|-----------------------------------------|--------|-----------------------------|-----------|
|                                    |   | 2010                        |      |   | 2009 |   |
| Salaries and employee benefits          |   | $                           | 2,417,234 |   |   | $ | 2,294,066 |   |
| Occupancy expenses                      |   |                        | 452,841   |   |   |   | 443,007 |   |
| Data processing services                |   |                        | 272,391   |   |   |   | 276,197 |   |
| Equipment expense                       |   |                        | 167,895   |   |   |   | 167,358 |   |
| Marketing                               |   |                        | 42,672    |   |   |   | 42,773 |   |
| Regulatory, professional and other fees |   |                        | 268,557   |   |   |   | 333,547 |   |
| Office expense                          |   |                        | 180,189   |   |   |   | 142,999 |   |
| FDIC insurance expense                  |   |                        | 247,568   |   |   |   | 704,025 |   |
| Directors’ fees                   |   |                        | 27,000    |   |   |   | 25,000 |   |
| Other real estate owned expenses        |   |                        | 28,447    |   |   |   | 50,495 |   |
| All other expenses                      |   |                        | 174,297   |   |   |   | 322,222 |   |
|                                    |   | $                           | 4,279,090 |   |   | $ | 4,801,689 |   |

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| Average Balance Sheets with Resultant Interest and Rates                                  |   |
|-------------------------------------------------------------------------------------------|--------|
| (interest and yields on a tax-equivalent basis)                                           |   | Six months ended June 30, 2010 |   |   | Six months ended June 30, 2009 |   |
|                                                                                      |   | AverageBalance |   |   | Interest |   |   | AverageRate |   |   | AverageBalance |   |   | Interest |   |   | AverageRate |   |
| Assets:                                                                                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Federal Funds Sold/Short-Term Investments                                                 |   | $ | 28,523,656 |   |   | $ | 32,619 |   |   |   | 0.23 | % |   | $ | 1,930,829 |   |   | $ | 32,665 |   |   |   | 3.41 | % |
|  Investment Securities:                                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Taxable                                                                                   |   |   | 209,676,859 |   |   |   | 2,613,641 |   |   |   | 2.51 | % |   |   | 108,255,221 |   |   |   | 2,419,310 |   |   |   | 4.51 | % |
| Tax-exempt                                                                                |   |   | 11,021,570 |   |   |   | 316,974 |   |   |   | 5.80 | % |   |   | 12,915,459 |   |   |   | 373,725 |   |   |   | 5.84 | % |
| Total                                                                                     |   |   | 220,698,429 |   |   |   | 2,930,615 |   |   |   | 2.68 | % |   |   | 121,170,680 |   |   |   | 2,793,035 |   |   |   | 4.65 | % |
|                                                                                      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Loan Portfolio:                                                                           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Construction                                                                              |   |   | 73,404,258 |   |   |   | 2,181,414 |   |   |   | 5.99 | % |   |   | 92,634,819 |   |   |   | 2,809,468 |   |   |   | 6.12 | % |
| Residential real estate                                                                   |   |   | 11,207,646 |   |   |   | 320,836 |   |   |   | 5.77 | % |   |   | 11,231,769 |   |   |   | 333,877 |   |   |   | 5.99 | % |
| Home Equity                                                                               |   |   | 13,857,468 |   |   |   | 404,580 |   |   |   | 5.89 | % |   |   | 14,957,939 |   |   |   | 438,081 |   |   |   | 5.91 | % |
| Commercial and commercial real estate                                                     |   |   | 139,432,230 |   |   |   | 4,661,341 |   |   |   | 6.74 | % |   |   | 136,927,234 |   |   |   | 4,728,139 |   |   |   | 6.96 | % |
| Mortgage warehouse lines                                                                  |   |   | 102,555,437 |   |   |   | 2,396,621 |   |   |   | 4.71 | % |   |   | 122,836,692 |   |   |   | 2,792,042 |   |   |   | 4.58 | % |
| Installment                                                                               |   |   | 598,390 |   |   |   | 22,458 |   |   |   | 7.57 | % |   |   | 809,691 |   |   |   | 32,657 |   |   |   | 8.13 | % |
| All Other Loans                                                                           |   |   | 30,166,139 |   |   |   | 1,077,992 |   |   |   | 7.21 | % |   |   | 31,372,046 |   |   |   | 1,166,987 |   |   |   | 7.50 | % |
| Total                                                                                     |   |   | 371,221,568 |   |   |   | 11,065,242 |   |   |   | 6.01 | % |   |   | 410,770,190 |   |   |   | 12,301,251 |   |   |   | 6.04 | % |
|                                                                                      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total Interest-Earning Assets                                                             |   |   | 620,443,653 |   |   |   | 14,028,476 |   |   |   | 4.56 | % |   |   | 533,871,699 |   |   |   | 15,126,951 |   |   |   | 5.71 | % |
|                                                                                      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Allowance for Loan Losses                                                                 |   |   | (4,837,099 | ) |   |   |   |   |   |   |   |   |   |   | (3,948,215 | ) |   |   |   |   |   |   |   |   |
| Cash and Due From Bank                                                                    |   |   | 7,864,917 |   |   |   |   |   |   |   |   |   |   |   | 37,090,915 |   |   |   |   |   |   |   |   |   |
| Other Assets                                                                              |   |   | 28,840,208 |   |   |   |   |   |   |   |   |   |   |   | 21,097,384 |   |   |   |   |   |   |   |   |   |
| Total Assets                                                                              |   | $ | 652,311,679 |   |   |   |   |   |   |   |   |   |   | $ | 588,111,783 |   |   |   |   |   |   |   |   |   |
|  Interest-Bearing Liabilities:                                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Money Market and NOW Accounts                                                             |   | $ | 117,892,695 |   |   | $ | 925,588 |   |   |   | 1.58 | % |   | $ | 97,677,148 |   |   | $ | 967,521 |   |   |   | 2.00 | % |
| Savings Accounts                                                                          |   |   | 177,040,353 |   |   |   | 1,040,154 |   |   |   | 1.18 | % |   |   | 123,068,983 |   |   |   | 1,316,408 |   |   |   | 2.16 | % |
| Certificates of Deposit                                                                   |   |   | 164,254,334 |   |   |   | 1,596,271 |   |   |   | 1.96 | % |   |   | 175,994,379 |   |   |   | 2,744,454 |   |   |   | 3.14 | % |
| Other Borrowed Funds                                                                      |   |   | 27,365,138 |   |   |   | 544,422 |   |   |   | 4.01 | % |   |   | 32,525,967 |   |   |   | 725,197 |   |   |   | 4.50 | % |
| Trust Preferred Securities                                                                |   |   | 18,557,000 |   |   |   | 531,690 |   |   |   | 5.78 | % |   |   | 18,557,000 |   |   |   | 532,975 |   |   |   | 5.79 | % |
|                                                                                      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total Interest-Bearing Liabilities                                                        |   |   | 505,109,520 |   |   |   | 4,638,125 |   |   |   | 1.85 | % |   |   | 447,823,477 |   |   |   | 6,286,555 |   |   |   | 2.83 | % |
|                                                                                      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net Interest Spread                                                                       |   |   |   |   |   |   |   |   |   |   | 2.71 | % |   |   |   |   |   |   |   |   |   |   | 2.88 | % |
|                                                                                      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Demand Deposits                                                                           |   |   | 81,216,027 |   |   |   |   |   |   |   |   |   |   |   | 78,934,727 |   |   |   |   |   |   |   |   |   |
| Other Liabilities                                                                         |   |   | 7,745,825 |   |   |   |   |   |   |   |   |   |   |   | 5,537,806 |   |   |   |   |   |   |   |   |   |
| Total Liabilities                                                                         |   |   | 594,071,372 |   |   |   |   |   |   |   |   |   |   |   | 532,296,010 |   |   |   |   |   |   |   |   |   |
| Shareholders’ Equity                                                                |   |   | 58,240,307 |   |   |   |   |   |   |   |   |   |   |   | 55,815,773 |   |   |   |   |   |   |   |   |   |
| Total Liabilities and Shareholders’       Equity |   | $ | 652,311,679 |   |   |   |   |   |   |   |   |   |   | $ | 588,111,783 |   |   |   |   |   |   |   |   |   |
|                                                                                      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net Interest Margin                                                                       |   |   |   |   |   | $ | 9,390,351 |   |   |   | 3.05 | % |   |   |   |   |   | $ | 8,840,396 |   |   |   | 3.34 | % |
|                                                                                      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |

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| Non-interest Expenses                   |   | Six months ended June 30, |      |
|-----------------------------------------|--------|---------------------------|-----------|
|                                    |   | 2010                      |      |   | 2009 |   |
| Salaries and employee benefits          |   | $                         | 4,793,934 |   |   | $ | 4,521,395 |   |
| Occupancy expenses                      |   |                      | 898,765   |   |   |   | 895,672 |   |
| Data processing services                |   |                      | 531,198   |   |   |   | 535,880 |   |
| Equipment expense                       |   |                      | 319,881   |   |   |   | 322,438 |   |
| Marketing                               |   |                      | 66,123    |   |   |   | 82,214 |   |
| Regulatory, professional and other fees |   |                      | 441,141   |   |   |   | 646,603 |   |
| Office expense                          |   |                      | 349,782   |   |   |   | 271,036 |   |
| FDIC insurance expense                  |   |                      | 495,251   |   |   |   | 803,783 |   |
| Directors’ fees                   |   |                      | 53,500    |   |   |   | 57,000 |   |
| Other real estate owned expenses        |   |                      | 46,237    |   |   |   | 100,848 |   |
| All other expenses                      |   |                      | 417,224   |   |   |   | 585,433 |   |
|                                    |   | $                         | 8,413,036 |   |   | $ | 8,822,302 |   |

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| Loan Portfolio Composition    |   | June 30, 2010 |        |   | December 31, 2009 |   |
|-------------------------------|--------|---------------|-------------|--------|-------------------|--------|
| Component                     |   | Amount        |        |   | %of total         |   |   | Amount |   |   | %of total |   |
| Construction loans            |   | $             | 69,448,882  |   |              |   | 16 | % |   |   | $ | 79,805,278 |   |   |   | 21 | % |   |
| Residential real estate loans |   |          | 11,518,231  |   |              |   | 3 | % |   |   |   | 10,253,895 |   |   |   | 3 | % |   |
| Commercial business           |   |          | 57,439,401  |   |              |   | 13 | % |   |   |   | 57,925,392 |   |   |   | 15 | % |   |
| Commercial real estate        |   |          | 93,868,399  |   |              |   | 22 | % |   |   |   | 96,306,097 |   |   |   | 25 | % |   |
| Mortgage warehouse lines      |   |          | 186,052,529 |   |              |   | 43 | % |   |   |   | 119,382,078 |   |   |   | 32 | % |   |
| Loans to individuals          |   |          | 14,236,595  |   |              |   | 3 | % |   |   |   | 15,554,027 |   |   |   | 4 | % |   |
| Deferred loan fees and costs  |   |          | 497,763     |   |              |   | 0 | % |   |   |   | 489,809 |   |   |   | 0 | % |   |
| All other loans               |   |          | 209,645     |   |              |   | 0 | % |   |   |   | 229,159 |   |   |   | 0 | % |   |
|                          |   | $             | 433,271,445 |   |              |   | 100 | % |   |   | $ | 379,945,735 |   |   |   | 100 | % |   |

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|                                         |   |     |      |   |         |   |
|---------------------------------------------------|--------|----------|-----------|--------|--------------|--------|
| Non-Performing Assets and Loans                   |   | June 30, |      |   | December 31, |   |
|                                              |   | 2010     |      |   | 2009         |   |
| Non-Performing loans:                             |   |     |      |   |         |   |
| Loans 90 days or more past due and still accruing |   | $        | 4,488     |   |         | $      | 145,898 |   |
| Non-accrual loans                                 |   |     | 7,303,342 |   |         |   | 4,161,628 |   |
| Total non-performing loans                        |   |     | 7,307,830 |   |         |   | 4,307,526 |   |
| Other real estate owned                           |   |     | 1,713,502 |   |         |   | 1,362,621 |   |
| Total non-performing assets                       |   | $        | 9,021,332 |   |         | $      | 5,670,147 |   |
|                                              |   |     |      |   |         |   |   |   |
| Non-performing loans to total loans               |   |     | 1.69%     |   |         |   | 1.13% |   |
| Non-performing assets to total assets             |   |     | 1.26%     |   |         |   | 0.84% |   |

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| ·       | General economic conditions. |
|---------------------------------------|------------------------------|

| ·       | Trends in charge-offs. |
|---------------------------------------|------------------------|

| ·       | Trends and levels of delinquent loans. |
|---------------------------------------|----------------------------------------|

| ·       | Trends and levels of non-performing loans, including loans over 90 days delinquent. |
|---------------------------------------|-------------------------------------------------------------------------------------|

| ·       | Trends in volume and terms of loans. |
|---------------------------------------|--------------------------------------|

| ·       | Levels of allowance for specific classified loans. |
|---------------------------------------|----------------------------------------------------|

| ·       | Credit concentrations. |
|---------------------------------------|------------------------|

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| Allowance for Loan Losses                               |   | Six Months EndedJune 30, 2010 |        |   | Year EndedDecember 31,2009 |   |        | Six Months EndedJune 30, 2009 |   |
|---------------------------------------------------------|--------|-------------------------------|-------------|--------|----------------------------|--------|-------------|------------------------------------|--------|
| Balance, beginning of period                            |   | $                             | 4,505,387   |   |                       | $      | 3,684,764   |                               |   | $ | 3,684,764 |   |
| Provision charged to operating expenses                 |   |                          | 850,000     |   |                       |   | 2,553,000   |                               |   |   | 788,000 |   |
|                                                    |   |                          |        |   |                       |   |        |                               |   |   |   |   |
| Loans charged off:                                      |   |                          |        |   |                       |   |        |                               |   |   |   |   |
| Construction loans                                      |   |                          | -           |   |                       |   | (1,226,754  | )                                  |   |   | - |   |
| Residential real estate loans                           |   |                          | -           |   |                       |   | -           |                               |   |   | - |   |
| Commercial and commercial real estate                   |   |                          | (410,416    | )      |                       |   | (511,791    | )                                  |   |   | (270,790 | ) |
| Loans to individuals                                    |   |                          | (18,243     | )      |                       |   | (1,973      | )                                  |   |   | - |   |
| Lease financing                                         |   |                          | (792        | )      |                       |   | -           |                               |   |   | - |   |
| All other loans                                         |   |                          | -           |   |                       |   | -           |                               |   |   | - |   |
|                                                    |   |                          | (429,451    | )      |                       |   | (1,740,518  | )                                  |   |   | (270,790 | ) |
| Recoveries:                                             |   |                          |        |   |                       |   |        |                               |   |   |   |   |
| Construction loans                                      |   |                          | -           |   |                       |   | -           |                               |   |   | - |   |
| Residential real estate loans                           |   |                          | -           |   |                       |   | -           |                               |   |   | - |   |
| Commercial and commercial real estate                   |   |                          | 11,955      |   |                       |   | 2,575       |                               |   |   | 1,559 |   |
| Loans to individuals                                    |   |                          | -           |   |                       |   | 5,566       |                               |   |   | 5,200 |   |
| Lease financing                                         |   |                          | -           |   |                       |   | -           |                               |   |   | - |   |
| All other loans                                         |   |                          | -           |   |                       |   | -           |                               |   |   | - |   |
|                                                    |   |                          | 11,955      |   |                       |   | 8,141       |                               |   |   | 6,759 |   |
|                                                    |   |                          |        |   |                       |   |        |                               |   |   |   |   |
| Net charge offs                                         |   |                          | (417,496    | )      |                       |   | (1,732,377  | )                                  |   |   | (264,031 | ) |
| Balance, end of period                                  |   | $                             | 4,937,891   |   |                       | $      | 4,505,387   |                               |   | $ | 4,208,733 |   |
|                                                    |   |                          |        |   |                       |   |        |                               |   |   |   |   |
| Loans:                                                  |   |                          |        |   |                       |   |        |                               |   |   |   |   |
| At period end                                           |   | $                             | 433,271,445 |   |                       | $      | 379,945,735 |                               |   | $ | 404,176,482 |   |
| Average during the period                               |   |                          | 353,238,389 |   |                       |   | 384,314,052 |                               |   |   | 393,845,224 |   |
| Net annualized charge offs to average loans outstanding |   |                          | (0.24%      | )      |                       |   | (0.45%      | )                                  |   |   | (0.13% | ) |
| Allowance for loan losses to:                           |   |                          |        |   |                       |   |        |                               |   |   |   |   |
| Total loans at period end                               |   |                          | 1.14%       |   |                       |   | 1.19%       |                               |   |   | 1.04% |   |
| Non-performing loans                                    |   |                          | 67.57%      |   |                       |   | 104.59%     |                               |   |   | 80.61% |   |
|                                                    |   |                          |        |   |                       |   |        |                               |   |   |   |   |

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|                                         |   | June 30, 2010 |        |   | December 31, 2009 |   |
|----------------------------------------------|--------|---------------|-------------|--------|-------------------|--------|
| Demand                                       |   |          |        |   |              |   |
|     Non-interest bearing |   | $             | 87,950,592  |   |              | $      | 82,473,328 |   |
|     Interest bearing     |   |          | 109,948,204 |   |              |   | 125,529,223 |   |
| Savings                                      |   |          | 173,472,451 |   |              |   | 193,369,640 |   |
| Time                                         |   |          | 162,098,761 |   |              |   | 170,783,163 |   |
|                                         |   | $             | 533,470,008 |   |              | $      | 572,155,354 |   |

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|                                   |   | Actual |       |   | For CapitalAdequacy Purposes |   | To Be Well Capitalized Under Prompt Corrective Action Provision |   |
|----------------------------------------|--------|--------|------------|--------|------------------------------|--------|-----------------------------------------------------------------|--------|
|                                   |   | Amount |       |   | Ratio                        |   |                                                            | Amount |   | Ratio |   | Amount |   |   | Ratio |   |
| As of June 30, 2010                    |   |   |       |   |                         |   |                                                            |   |   |   |   |   |   |   |   |   |
| Company                                |   |   |       |   |                         |   |                                                            |   |   |   |   |   |   |   |   |   |
| Total Capital to Risk Weighted Assets  |   | $      | 82,360,564 |   |                         |   | 16.27%                                                          |   |   | $ | 40,503,360 |   | >8% |   |   | N/A |   |   | N/A |   |
| Tier 1 Capital to Risk Weighted Assets |   |   | 77,422,821 |   |                         |   | 15.29%                                                          |   |   |   | 20,251,680 |   | >4% |   |   | N/A |   |   | N/A |   |
| Tier 1 Capital to Average Assets       |   |   | 77,422,821 |   |                         |   | 11.92%                                                          |   |   |   | 25,976,142 |   | >4% |   |   | N/A |   |   | N/A |   |
| Bank                                   |   |   |       |   |                         |   |                                                            |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total Capital to Risk Weighted Assets  |   | $      | 80,677,323 |   |                         |   | 15.96%                                                          |   |   | $ | 40,431,280 |   | >8% |   | $ | 50,539,100 |   |   | >10% |   |
| Tier 1 Capital to Risk Weighted Assets |   |   | 75,739,580 |   |                         |   | 14.99%                                                          |   |   |   | 20,215,640 |   | >4% |   |   | 30,323,460 |   |   | >6% |   |
| Tier 1 Capital to Average Assets       |   |   | 75,739,580 |   |                         |   | 11.72%                                                          |   |   |   | 25,838,921 |   | >4% |   |   | 32,298,651 |   |   | >5% |   |

|  As of December 31, 2009          |   |   |       |   |   |   |   |   |   |   |       |   |   |   |   |       |
|----------------------------------------|--------|--------|------------|--------|--------|--------|--------|--------|--------|--------|------------|--------|--------|--------|--------|------------|
| Company                                |   |   |       |   |   |   |   |   |   |   |       |   |   |   |   |       |
| Total Capital to Risk Weighted Assets  |   | $      | 79,091,277 |   |   |   | 17.23% |   |   | $      | 36,713,599 |   | >8% |   |   | N/A        |   |   | N/A |   |
| Tier 1 Capital to Risk Weighted Assets |   |   | 74,585,890 |   |   |   | 16.25% |   |   |   | 18,356,800 |   | >4% |   |   | N/A        |   |   | N/A |   |
| Tier 1 Capital to Average Assets       |   |   | 74,585,890 |   |   |   | 10.99% |   |   |   | 27,143,523 |   | >4% |   |   | N/A        |   |   | N/A |   |
| Bank                                   |   |   |       |   |   |   |   |   |   |   |       |   |   |   |   |       |   |   |   |   |
| Total Capital to Risk Weighted Assets  |   | $      | 77,370,821 |   |   |   | 16.90% |   |   | $      | 36,633,760 |   | >8% |   | $      | 45,792,200 |   |   | >10% |   |
| Tier 1 Capital to Risk Weighted Assets |   |   | 72,865,434 |   |   |   | 15.91% |   |   |   | 18,316,040 |   | >4% |   |   | 27,475,320 |   |   | >6% |   |
| Tier 1 Capital to Average Assets       |   |   | 72,865,434 |   |   |   | 10.78% |   |   |   | 27,043,305 |   | >4% |   |   | 33,804,131 |   |   | >5% |   |
|                                   |   |   |       |   |   |   |   |   |   |   |       |   |   |   |   |       |   |   |   |   |   |

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Item 3.          Quantitative and Qualitative Disclosures About Market Risk.

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Item 4.          Controls and Procedures.

Item 2.          Unregistered Sales of Equity Securities and Use of Proceeds.

|      Period |           |    Total Number of Shares Purchased |   |   |     Average Price Paid Per Share |   |   |   Total Number of Shares Purchased As Part of Publicly Announced Plan or Program |   |   | Maximum Number of Shares That May Yet be Purchased Under the Plan or Program |   |
|--------------------------------------|----------------|-----------------------------------------------|--------|--------|-------------------------------------------------|--------|--------|---------------------------------------------------------------------------------------|--------|--------|------------------------------------------------------------------------------|--------|
|  Beginning                      |  Ending   |                                          |   |   |                                            |   |   |                                                                                  |   |   |                                                                         |   |   |
| April 1, 2010                        | April 30, 2010 |                                          |   | -      |                                            |   |   | -                                                                                     |   |   |                                                                         | -      |   |   |   | 163,233 |   |
| May 1, 2010                          | May 31, 2010   |                                          |   | -      |                                            |   |   | -                                                                                     |   |   |                                                                         | -      |   |   |   | 163,233 |   |
| June 1, 2010                         | June 30, 2010  |                                          |   | -      |                                            |   |   | -                                                                                     |   |   |                                                                         | -      |   |   |   | 163,233 |   |
|  Total                          |           |                                          | -      |   |                                            |   | -      |                                                                                  |   |   | -                                                                            |   |   |   | 163,233 |   |

| (1) | The Company’s common stock repurchase program covers a maximum of 195,076 shares of common stock of the Company, representing 5% of the outstanding common stock of the Company on July 21, 2005, as adjusted for the subsequent stock dividends |
|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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Item 6.     Exhibits.

| 31.1   | *      | Certification of Robert F. Mangano, principal executive officer of the Company, pursuant to Securities Exchange Act Rule 13a-14(a)                                                                                                                                  |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   |                                                                                                                                                                                                                                                                |
| 31.2   | *      | Certification of Joseph M. Reardon, principal financial officer of the Company, pursuant to Securities Exchange Act Rule 13a-14(a)                                                                                                                                  |
|   |   |                                                                                                                                                                                                                                                                |
| 32     | *      | Certifications pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of The Sarbanes-Oxley Act of 2002, signed by Robert F. Mangano, principal executive officer of the Company, and Joseph M. Reardon, principal financial officer of the Company |

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SIGNATURES

|                                    | 1ST CONSTITUTION BANCORP |                                         |
|-----------------------------------------|--------------------------|----------------------------------------------|
|                                    |                     |                                         |   |
|                                    |                     |                                         |   |
| Date: August 16, 2010                   | By:                      | /s/ ROBERT F. MANGANO              |   |
|                                    |                     | Robert F. Mangano                            |   |
|                                    |                     | President and Chief Executive Officer        |   |
|                                    |                     | (Principal Executive Officer)                |   |
|                                    |                     |                                         |   |
|                                    |                     |                                         |   |
| Date: August 16, 2010    | By:                      | /s/ JOSEPH M. REARDON                   |   |
|                                    |                     | Joseph M. Reardon                            |   |
|                                    |                     | Senior Vice President and Treasurer          |   |
|                                    |                     | (Principal Financial and Accounting Officer) |   |

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