---



UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549



FORM 10-Q



(Mark One)



|x | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934
|- | ----------------------------------------------------------------------------------------



For the quarterly period ended March 31, 2004



or



| ̈ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934
|- | -----------------------------------------------------------------------------------------



For the transition period from
 to



Commission file Number: 000-32891



1ST CONSTITUTION BANCORP

(Exact Name
of Registrant as Specified in Its Charter)



|                                                               |  |                                     
|-------------------------------------------------------------- |  | ------------------------------------
|New Jersey                                                     |  | 22-3665653                          
|(State of Other Jurisdiction of 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)



Indicate by check mark whether the
registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has
been subject to such filing requirements for the past 90 days. Yes x No ̈



Indicate by check mark whether the registrant is an accelerated filer (as
defined in Rule 12b-2 of the Securities Exchange Act of 1934). Yes ̈No x



As of May 11, 2004, there were 1,562,328 shares of the registrants
common stock, no par value, outstanding.



---



---

1ST CONSTITUTION BANCORP



FORM 10-Q



INDEX



|           |  |                                                                                                                            |  |     
|---------- |  | -------------------------------------------------------------------------------------------------------------------------- |  | ----
|           |  |                                                                                                                            |  | Page
|PART I.    |  | FINANCIAL INFORMATION                                                                                                      |  |     
|           |  |                                                                                                                           
|Item 1.    |  | Financial Statements                                                                                                       |  | 1   
|           |  |                                                                                                                           
|           |  | Consolidated Balance Sheets as of March 31, 2004 (unaudited) and December 31, 2003                                         |  | 1   
|           |  |                                                                                                                           
|           |  | Consolidated Statements of Income for the Three Months Ended March 31, 2004 (unaudited) and March 31, 2003 (unaudited)     |  | 2   
|           |  |                                                                                                                           
|           |  | Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2004 (unaudited) and March 31, 2003 (unaudited) |  | 3   
|           |  |                                                                                                                           
|           |  | Notes to Consolidated Financial Statements (unaudited)                                                                     |  | 4   
|           |  |                                                                                                                           
|Item 2.    |  | Managements Discussion and Analysis of Financial Condition and Results of Operations                                      |  | 6   
|           |  |                                                                                                                           
|Item 3.    |  | Quantitative and Qualitative Disclosures about Market Risk                                                                 |  | 18  
|           |  |                                                                                                                           
|Item 4.    |  | Controls and Procedures                                                                                                    |  | 19  
|           |  |                                                                                                                           
|PART II    |  | OTHER INFORMATION                                                                                                          |  |     
|           |  |                                                                                                                           
|Item 2.    |  | Changes in Securities, Use of Proceeds and Issuer Purchases of Equity Securities                                           |  | 20  
|           |  |                                                                                                                           
|Item 6.    |  | Exhibits and Reports on Form 8-K                                                                                           |  | 23  
|           | 
|SIGNATURES |  | 24                                                                                                                        





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PART I. FINANCIAL INFORMATION



|Item 1. | Financial Statements
|------- | --------------------



1st Constitution Bancorp and Subsidiaries

Consolidated Balance Sheets

(unaudited)



|                                                                                                                                                                                   |  |                |             |   |                   |   |             |  
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | -------------- | ----------- | - | ----------------- | - | ----------- | -
|                                                                                                                                                                                   |  | March 31, 2004 |             |   | December 31, 2003 |  
|ASSETS                                                                                                                                                                             |  |                |             |   |                   |   |             |  
|CASH AND DUE FROM BANKS                                                                                                                                                            |  | $              | 7,560,178   |   |                   | $ | 6,987,850   |  
|FEDERAL FUNDS SOLD / SHORT-TERM INVESTMENTS                                                                                                                                        |  |                | 3,221,247   |   |                   |   | 7,715,036   |  
|                                                                                                                                                                                   |  |                |             |   |                   |   |             |  
|Total cash and cash equivalents                                                                                                                                                    |  |                | 10,781,425  |   |                   |   | 14,702,886  |  
|                                                                                                                                                                                   |  |                |             |   |                   |   |             |  
|INVESTMENT SECURITIES:                                                                                                                                                             |  |                |             |   |                   |   |             |  
|Available for sale, at fair value                                                                                                                                                  |  |                | 92,051,823  |   |                   |   | 84,999,973  |  
|Held to maturity (fair value of $6,391,619 and $6,516,652 in 2004 and 2003, respectively)                                                                                          |  |                | 6,060,342   |   |                   |   | 6,191,197   |  
|                                                                                                                                                                                   |  |                |             |   |                   |   |             |  
|Total investment securities                                                                                                                                                        |  |                | 98,112,165  |   |                   |   | 91,191,170  |  
|                                                                                                                                                                                   |  |                |             |   |                   |   |             |  
|LOANS HELD FOR SALE                                                                                                                                                                |  |                | 8,494,554   |   |                   |   | 15,405,982  |  
|                                                                                                                                                                                   |  |                |             |   |                   |   |             |  
|LOANS                                                                                                                                                                              |  |                | 169,552,730 |   |                   |   | 163,950,306 |  
|Less- Allowance for loan losses                                                                                                                                                    |  |                | (1,846,632  | ) |                   |   | (1,786,632  | )
|                                                                                                                                                                                   |  |                |             |   |                   |   |             |  
|Net loans                                                                                                                                                                          |  |                | 167,706,098 |   |                   |   | 162,163,674 |  
|                                                                                                                                                                                   |  |                |             |   |                   |   |             |  
|PREMISES AND EQUIPMENT, net                                                                                                                                                        |  |                | 1,455,018   |   |                   |   | 1,316,517   |  
|ACCRUED INTEREST RECEIVABLE                                                                                                                                                        |  |                | 1,360,453   |   |                   |   | 1,169,015   |  
|BANK OWNED LIFE INSURANCE                                                                                                                                                          |  |                | 6,390,256   |   |                   |   | 6,331,006   |  
|OTHER ASSETS                                                                                                                                                                       |  |                | 549,312     |   |                   |   | 1,157,924   |  
|                                                                                                                                                                                   |  |                |             |   |                   |   |             |  
|Total assets                                                                                                                                                                       |  | $              | 294,849,281 |   |                   | $ | 293,483,174 |  
|                                                                                                                                                                                   |  |                |             |   |                   |   |             |  
|LIABILITIES AND SHAREHOLDERS EQUITY                                                                                                                                               |  |                |             |   |                   |   |             |  
|LIABILITIES:                                                                                                                                                                       |  |                |             |   |                   |   |             |  
|Deposits                                                                                                                                                                           |  |                |             |   |                   |   |             |  
|Non-interest bearing                                                                                                                                                               |  | $              | 46,662,946  |   |                   | $ | 42,661,432  |  
|Interest bearing                                                                                                                                                                   |  |                | 197,237,380 |   |                   |   | 202,692,292 |  
|                                                                                                                                                                                   |  |                |             |   |                   |   |             |  
|Total deposits                                                                                                                                                                     |  |                | 243,900,326 |   |                   |   | 245,353,724 |  
|SECURITIES SOLD UNDER AGREEMENTS TO REPURCHASE                                                                                                                                     |  |                | 1,926,102   |   |                   |   | 1,921,015   |  
|OTHER BORROWINGS                                                                                                                                                                   |  |                | 15,500,000  |   |                   |   | 15,500,000  |  
|REDEEMABLE SUBORDINATED DEBENTURES                                                                                                                                                 |  |                | 5,155,000   |   |                   |   | 5,155,000   |  
|ACCRUED INTEREST PAYABLE                                                                                                                                                           |  |                | 948,607     |   |                   |   | 906,576     |  
|ACCRUED EXPENSES AND OTHER LIABILITIES                                                                                                                                             |  |                | 2,634,446   |   |                   |   | 1,061,603   |  
|                                                                                                                                                                                   |  |                |             |   |                   |   |             |  
|Total liabilities                                                                                                                                                                  |  |                | 270,064,481 |   |                   |   | 269,897,918 |  
|                                                                                                                                                                                   |  |                |             |   |                   |   |             |  
|COMMITMENTS AND CONTINGENCIES                                                                                                                                                      |  |                |             |   |                   |   |             |  
|SHAREHOLDERS EQUITY:                                                                                                                                                              |  |                |             |   |                   |   |             |  
|Common stock, no par value; 15,000,000 shares authorized; 1,565,367 shares issued and 1,562,463 and 1,565,163 outstanding as of March 31, 2004
and December 31, 2003, respectively |  |                | 19,687,439  |   |                   |   | 19,694,828  |  
|Retained earnings                                                                                                                                                                  |  |                | 4,621,590   |   |                   |   | 3,745,784   |  
|Treasury Stock, shares at cost (2,904 shares at March 31, 2004 and 204 shares at December 31, 2003, respectively)                                                                  |  |                | (92,382     | ) |                   |   | (5,517      | )
|Accumulated other comprehensive income                                                                                                                                             |  |                | 568,152     |   |                   |   | 150,161     |  
|                                                                                                                                                                                   |  |                |             |   |                   |   |             |  
|Total shareholders equity                                                                                                                                                         |  |                | 24,784,799  |   |                   |   | 23,585,256  |  
|                                                                                                                                                                                   |  |                |             |   |                   |   |             |  
|Total liabilities and shareholders equity                                                                                                                                         |  | $              | 294,849,281 |   |                   | $ | 293,483,174 |  
|                                                                                                                                                                                   |  |                |             |   |                   |   |             |  



See
accompanying notes to consolidated financial statements.



1



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1stConstitution Bancorp and Subsidiaries

Consolidated Statements of Income

(unaudited)



|                                                                                    |  |                              |           |      |   |          
|----------------------------------------------------------------------------------- |  | ---------------------------- | --------- | ---- | - | ---------
|                                                                                    |  | Three Months Ended March 31,
|                                                                                    |  | 2004                         |           | 2003
|INTEREST INCOME:                                                                    |  |                              |           |      |   |          
|Interest and fees on loans                                                          |  | $                            | 3,084,598 |      | $ | 2,752,687
|Interest on securities:                                                             |  |                              |           |      |   |          
|Taxable                                                                             |  |                              | 813,514   |      |   | 710,405  
|Tax-exempt                                                                          |  |                              | 83,999    |      |   | 60,194   
|Interest on Federal funds sold and short-term investments                           |  |                              | 6,211     |      |   | 3,642    
|                                                                                    |  |                              |           |      |   |          
|Total interest income                                                               |  |                              | 3,988,322 |      |   | 3,526,928
|                                                                                    |  |                              |           |      |   |          
|INTEREST EXPENSE:                                                                   |  |                              |           |      |   |          
|Interest on deposits                                                                |  |                              | 747,327   |      |   | 845,090  
|Interest on securities sold under agreements to repurchase and other borrowed funds |  |                              | 223,724   |      |   | 229,022  
|Interest on redeemable subordinated debentures                                      |  |                              | 62,183    |      |   | 66,485   
|                                                                                    |  |                              |           |      |   |          
|Total interest expense                                                              |  |                              | 1,033,234 |      |   | 1,140,597
|                                                                                    |  |                              |           |      |   |          
|Net interest income                                                                 |  |                              | 2,955,088 |      |   | 2,386,331
|PROVISION FOR LOAN LOSSES                                                           |  |                              | 60,000    |      |   | 60,000   
|                                                                                    |  |                              |           |      |   |          
|Net interest income after provision for loan losses                                 |  |                              | 2,895,088 |      |   | 2,326,331
|                                                                                    |  |                              |           |      |   |          
|NON-INTEREST INCOME:                                                                |  |                              |           |      |   |          
|Service charges on deposit accounts                                                 |  |                              | 126,632   |      |   | 145,642  
|Gain on sale of loans held for sale                                                 |  |                              | 262,436   |      |   | 265,707  
|Income on Bank-owned life insurance                                                 |  |                              | 59,250    |      |   | 69,705   
|Other income                                                                        |  |                              | 63,641    |      |   | 54,314   
|                                                                                    |  |                              |           |      |   |          
|Total other income                                                                  |  |                              | 511,959   |      |   | 535,368  
|                                                                                    |  |                              |           |      |   |          
|NON-INTEREST EXPENSE:                                                               |  |                              |           |      |   |          
|Salaries and employee benefits                                                      |  |                              | 1,193,865 |      |   | 958,825  
|Occupancy expense                                                                   |  |                              | 245,856   |      |   | 200,295  
|Other operating expenses                                                            |  |                              | 680,191   |      |   | 584,014  
|                                                                                    |  |                              |           |      |   |          
|Total other expense                                                                 |  |                              | 2,119,912 |      |   | 1,743,134
|                                                                                    |  |                              |           |      |   |          
|Income before income taxes                                                          |  |                              | 1,287,135 |      |   | 1,118,565
|INCOME TAXES                                                                        |  |                              | 411,328   |      |   | 393,696  
|                                                                                    |  |                              |           |      |   |          
|Net income                                                                          |  | $                            | 875,807   |      | $ | 724,869  
|                                                                                    |  |                              |           |      |   |          
|NET INCOME PER SHARE:                                                               |  |                              |           |      |   |          
|Basic                                                                               |  | $                            | 0.56      |      | $ | 0.47     
|Diluted                                                                             |  | $                            | 0.53      |      | $ | 0.45     
|                                                                                    |  |                              |           |      |   |          



See
accompanying notes to consolidated financial statements.



2



---

1st Constitution Bancorp and Subsidiaries

Consolidated Statements of Cash Flows

(unaudited)



|                                                                                  |  |                              |             |   |      |   |             |  
|--------------------------------------------------------------------------------- |  | ---------------------------- | ----------- | - | ---- | - | ----------- | -
|                                                                                  |  | Three months ended March 31, |            
|                                                                                  |  | 2004                         |             |   | 2003 |  
|OPERATING ACTIVITIES:                                                             |  |                              |             |   |      |   |             |  
|Net income                                                                        |  | $                            | 875,807     |   |      | $ | 724,869     |  
|Adjustments to reconcile net income to net cash provided by operating activities- |  |                              |             |   |      |   |             |  
|Provision for loan losses                                                         |  |                              | 60,000      |   |      |   | 60,000      |  
|Depreciation and amortization                                                     |  |                              | 79,678      |   |      |   | 82,689      |  
|Net amortization on securities                                                    |  |                              | 118,919     |   |      |   | 336,689     |  
|Gain on sale of loans held for sale                                               |  |                              | (262,436    | ) |      |   | (390,442    | )
|Originations of loans held for sale                                               |  |                              | (12,306,322 | ) |      |   | (14,310,371 | )
|Proceeds from sales of loans held for sale                                        |  |                              | 19,480,186  |   |      |   | 21,032,342  |  
|(Increase) Decrease in accrued interest receivable                                |  |                              | (191,438    | ) |      |   | 3,384       |  
|Income on Bank  owned life insurance                                             |  |                              | (59,250     | ) |      |   | (69,705     | )
|Decrease (Increase) decrease in other assets                                      |  |                              | 314,748     |   |      |   | (369,793    | )
|Increase (Decrease) in accrued interest payable                                   |  |                              | 42,031      |   |      |   | (18,285     | )
|Increase in accrued expenses and other liabilities                                |  |                              | 1,572,844   |   |      |   | 46,694      |  
|                                                                                  |  |                              |             |   |      |   |             |  
|Net cash provided by operating activities                                         |  |                              | 9,724,767   |   |      |   | 7,128,071   |  
|                                                                                  |  |                              |             |   |      |   |             |  
|INVESTING ACTIVITIES:                                                             |  |                              |             |   |      |   |             |  
|Purchases of securities -                                                         |  |                              |             |   |      |   |             |  
|Available for sale                                                                |  |                              | (14,236,640 | ) |      |   | (5,215,351  | )
|Held to maturity                                                                  |  |                              | 0           |   |      |   | (198,102    | )
|Proceeds from maturities and prepayments of securities -                          |  |                              |             |   |      |   |             |  
|Available for sale                                                                |  |                              | 7,773,173   |   |      |   | 12,791,325  |  
|Held to maturity                                                                  |  |                              | 128,019     |   |      |   | 247,749     |  
|Net (increase) decrease in loans                                                  |  |                              | (5,602,424  | ) |      |   | 443,582     |  
|Capital expenditures                                                              |  |                              | (173,179    | ) |      |   | (42,344     | )
|                                                                                  |  |                              |             |   |      |   |             |  
|Net cash (used in) provided by investing activities                               |  |                              | (12,111,051 | ) |      |   | 8,026,859   |  
|                                                                                  |  |                              |             |   |      |   |             |  
|FINANCING ACTIVITIES:                                                             |  |                              |             |   |      |   |             |  
|Purchase of treasury stock                                                        |  |                              | (86,866     | ) |      |   | 0           |  
|Net decrease in demand, savings and time deposits                                 |  |                              | (1,453,398  | ) |      |   | (4,051,863  | )
|Net increase in securities sold under agreements to repurchase                    |  |                              | 5,087       |   |      |   | 7,734       |  
|Net decrease in other borrowings                                                  |  |                              | 0           |   |      |   | (2,500,000  | )
|                                                                                  |  |                              |             |   |      |   |             |  
|Net cash used in financing activities                                             |  |                              | (1,535,177  | ) |      |   | (6,544,129  | )
|                                                                                  |  |                              |             |   |      |   |             |  
|(Decrease) increase in cash and cash equivalents                                  |  |                              | (3,921,461  | ) |      |   | 8,610,801   |  
|CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD                                  |  |                              | 14,702,886  |   |      |   | 9,594,374   |  
|                                                                                  |  |                              |             |   |      |   |             |  
|CASH AND CASH EQUIVALENTS AT END OF PERIOD                                        |  | $                            | 10,781,425  |   |      | $ | 18,205,175  |  
|                                                                                  |  |                              |             |   |      |   |             |  
|SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:                                |  |                              |             |   |      |   |             |  
|Cash paid during the period for -                                                 |  |                              |             |   |      |   |             |  
|Interest                                                                          |  | $                            | 991,203     |   |      | $ | 1,158,882   |  
|Income taxes                                                                      |  |                              |            |   |      |   |            |  
|                                                                                  |  |                              |             |   |      |   |             |  



See
accompanying notes to consolidated financial statements.



3



---

1st Constitution Bancorp and Subsidiaries

Notes To Consolidated Financial Statements

March 31, 2004 (Unaudited)



|(1) | Summary of Significant Accounting Policies
|--- | ------------------------------------------



The accompanying unaudited Consolidated Financial Statements herein have been prepared by 1st Constitution Bancorp (the Company), in accordance with
accounting principles generally accepted in the United States of America and pursuant to the rules and regulations of the Securities and Exchange Commission (the SEC). Certain information and footnote disclosures normally included in
financial statements have been condensed or omitted pursuant to such rules and regulations. These consolidated Financial Statements should be read in conjunction with the audited financial statements and the notes thereto included in the
Companys Form 10-K for the year ended December 31, 2003, filed with the SEC on March 25, 2004.



In the opinion of the Company, all adjustments (consisting only of normal recurring accruals) which are necessary for a fair presentation of the operating results for the interim periods have been included. The
results of operations for periods of less than a year are not necessarily indicative of results for the full year.



Certain reclassifications have been made to the prior years financial statements to conform with the classifications used in 2004.



Net Income Per Common Share



Basic net income per common share is computed by dividing net income by the weighted average
number of shares outstanding during each period.



Diluted net income per common
share is computed by dividing net income by the weighted average number of shares outstanding, as adjusted for the assumed exercise of potential common stock options, using the treasury stock method. All share and per share amounts have been
restated for the effect of a 5% stock dividend declared on December 18, 2003 and paid on January 31, 2004 to shareholders of record on January 15, 2004.



The following tables illustrate the required disclosure of the reconciliation of the numerators and denominators of the basic and diluted earnings per share (EPS)
computations,



|                                                                    |  |                                   |         |                        |           |                 |   |       |  
|------------------------------------------------------------------- |  | --------------------------------- | ------- | ---------------------- | --------- | --------------- | - | ----- | -
|                                                                    |  | Three Months Ended March 31, 2004 |        
|                                                                    |  | Income                            |         | Weighted-averageshares |           | Per shareamount |  
|Basic EPS                                                           |  |                                   |         |                        |           |                 |   |       |  
|Net income available to common stockholders                         |  | $                                 | 875,807 |                        | 1,564,877 |                 | $ | 0.56  |  
|Effect of dilutive securities                                       |  |                                   |         |                        |           |                 |   |       |  
|Options and Grants                                                  |  |                                   |        |                        | 80,190    |                 |   | (0.03 | )
|                                                                    |  |                                   |         |                        |           |                 |   |       |  
|Diluted EPS                                                         |  |                                   |         |                        |           |                 |   |       |  
|Net income available to common stockholders plus assumed conversion |  | $                                 | 875,807 |                        | 1,645,067 |                 | $ | 0.53  |  
|                                                                    |  |                                   |         |                        |           |                 |   |       |  



All options have been
included in the computation of diluted earnings per share.



4



---

|                                                                    |  |                                   |         |                        |           |                 |   |       |  
|------------------------------------------------------------------- |  | --------------------------------- | ------- | ---------------------- | --------- | --------------- | - | ----- | -
|                                                                    |  | Three Months Ended March 31, 2003 |        
|                                                                    |  | Income                            |         | Weighted-averageshares |           | Per shareAmount |  
|Basic EPS                                                           |  |                                   |         |                        |           |                 |   |       |  
|Net income available to common stockholders                         |  | $                                 | 724,869 |                        | 1,551,143 |                 | $ | 0.47  |  
|Effect of dilutive securities                                       |  |                                   |         |                        |           |                 |   |       |  
|Options and Grants                                                  |  |                                   |        |                        | 84,670    |                 |   | (0.02 | )
|                                                                    |  |                                   |         |                        |           |                 |   |       |  
|Diluted EPS                                                         |  |                                   |         |                        |           |                 |   |       |  
|Net income available to common stockholders plus assumed conversion |  | $                                 | 724,869 |                        | 1,635,813 |                 | $ | 0.45  |  
|                                                                    |  |                                   |         |                        |           |                 |   |       |  



All options have been
included in the computation of diluted earnings per share.



Stock-Based
Compensation



Stock-based compensation is accounted for under the
intrinsic value based method as prescribed by Accounting Principals Board (APB) Opinion No. 25, Accounting for Stock Issued to Employees. Included below are the pro forma disclosures required by SFAS No. 123, Accounting
for Stock-Based Compensation, as amended by SFAS No. 148, Accounting for Stock-Based Compensation-Transaction and Disclosure which assumes the fair value based method of accounting had been adopted.



|                                                                                                                                 |  |                             |         |   |      |   |         |  
|-------------------------------------------------------------------------------------------------------------------------------- |  | --------------------------- | ------- | - | ---- | - | ------- | -
|                                                                                                                                 |  | Three months endedMarch 31, |        
|                                                                                                                                 |  | 2004                        |         |   | 2003 |  
|Net income -                                                                                                                     |  |                             |         |   |      |   |         |  
|As reported                                                                                                                      |  | $                           | 875,807 |   |      | $ | 724,869 |  
|Deduct: Stock-based employee compensation determined under fair value based method for stock options, net of related tax
effects |  |                             | (6,357  | ) |      |   | (4,387  | )
|                                                                                                                                 |  |                             |         |   |      |   |         |  
|Pro forma                                                                                                                        |  | $                           | 869,450 |   |      | $ | 720,482 |  
|                                                                                                                                 |  |                             |         |   |      |   |         |  
|Net income per share -                                                                                                           |  |                             |         |   |      |   |         |  
|As reported -                                                                                                                    |  |                             |         |   |      |   |         |  
|Basic                                                                                                                            |  | $                           | 0.56    |   |      | $ | 0.47    |  
|Diluted                                                                                                                          |  | $                           | 0.53    |   |      | $ | 0.45    |  
|Pro forma -                                                                                                                      |  |                             |         |   |      |   |         |  
|Basic                                                                                                                            |  | $                           | 0.56    |   |      | $ | 0.46    |  
|Diluted                                                                                                                          |  | $                           | 0.53    |   |      | $ | 0.44    |  



On March 31, 2004, the FASB issued a
proposed Statement, Share-Based Payment, that addresses the accounting for share-based payment transactions in which an enterprise receives employee services in exchange for (a) equity instruments of the enterprise or (b) liabilities that are
based on the fair value of the enterprises equity instruments or that may be settled by the issuance of such equity instruments. The proposed Statement would eliminate the ability to account for share-based compensation transactions using APB
Opinion No. 25, Accounting for Stock Issued to Employees, and generally would require instead that such transactions be accounted for using a fair-value-based method. The Company is currently evaluating this proposed statement.



5



---

Trust Preferred Securities



In January 2003, the Financial Accounting Standards Board (FASB) issued FASB Interpretation 46 (FIN 46),
Consolidation of Variable Interest Entities. FIN 46 clarifies the application of Accounting Research Bulletin 51, Consolidated Financial Statements, to certain entities in which voting rights are not effective in identifying the investor
with the controlling financial interest. An entity is subject to consolidation under FIN 46 if the investors either do not have sufficient equity at risk for the entity to finance its activities without additional subordinated financial support, are
unable to direct the entitys activities, or are not exposed to the entitys losses or entitled to its residual returns (variable interest entities). Variable interest entities within the scope of FIN 46 would be required to be
consolidated by their primary beneficiary. The primary beneficiary of a variable interest entity is determined to be the party that absorbs a majority of the entitys expected losses, receives a majority of its expected returns, or both.



Management has determined that 1stConstitution Capital Trust I (the Trust) qualifies as a variable interest entity under FIN 46. The Trust issued mandatorily redeemable preferred
stock to investors and loaned the proceeds to the Company. The Trust holds, as its sole asset, subordinated debentures issued by the Company in 2002. Prior to December 31, 2003, the Trust was included in the Companys consolidated balance sheet
and statements of income. Subsequent to the issuance of FIN 46, the FASB issued a revised interpretation, FIN 46(R), the provisions of which must be applied to certain variable interest entities by March 31, 2004. The Company adopted the provisions
under FIN 46 and accordingly deconsolidated the Trust as of December 31, 2003. The banking regulatory agencies have not issued any guidance that would change the regulatory capital treatment for the trust-preferred securities issued by the Trust.
However, as additional interpretations from the banking regulators related to entities such as the Trust become available, management will reevaluate its potential impact to its Tier I capital calculation under such interpretations. As of March 31,
2004 and December 31, 2003, assuming the Company was not allowed to include the $5.2 million in subordinated debentures issued by the Trust in Tier 1 capital, the Company would have Tier 1 capital ratios of 11.94% and 11.58% and leverage ratios of
8.34% and 8.03%, respectively, each on a pro forma basis.



|Item 2. | Managements Discussion and Analysis of Financial Condition and Results of Operations
|------- | -------------------------------------------------------------------------------------



The following discussion of the operating results and financial condition at March 31, 2004 is intended to help readers analyze the
accompanying financial statements, notes and other supplemental information contained in this document. Results of operations for the three month period ended March 31, 2004 are not necessarily indicative of results to be attained for any other
period.



This discussion and analysis should be read in conjunction with the
consolidated financial statements, notes and tables included elsewhere in this report and Part II, Item 7 of the Companys Form 10-K (Managements Discussion and Analysis of Financial Condition and Results of Operations) for the year ended
December 31, 2003, as filed with the Securities and Exchange Commission on March 25, 2004.



6



---

General



Throughout the following sections, the Company refers to 1stConstitution Bancorp and its wholly owned subsidiaries, 1stConstitution Bank and 1stConstitution Capital Trust I, the Bank refers to 1stConstitution Bank, and the Trust refers to 1stConstitution Capital Trust I. The purpose of this discussion and analysis is to assist in the understanding and evaluation of the Companys financial
condition, changes in financial condition, and results of operations.



The
Company is a bank holding company registered under the Bank Holding Company Act of 1956, as amended. The Company was organized under the laws of New Jersey in February 1999 for the purpose of acquiring all of the issued and outstanding stock of the
Bank, a full service commercial bank which began operations in August 1989, and thereby enabling the Bank to operate within a bank holding company structure. The Company became an active bank holding company on July 1, 1999. The Bank is a
wholly-owned subsidiary of the Company. Other than its investment in the Bank, the Company currently conducts no other significant business activities.



The Bank operates seven branches, and has two subsidiaries, 1stConstitution Investment Company of Delaware, Inc., which manages an investment portfolio, and FCB Assets Holdings, Inc., which is used by the Bank to manage and dispose of repossessed real estate.



The Trust, a subsidiary of the Company, was created to issue trust preferred securities to
assist the Company to raise additional regulatory capital.



Forward-Looking
Statements



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



7



---

RESULTS OF OPERATIONS



Summary



The Company realized net income of $875,807 for the three months ended March 31, 2004, an increase of 20.8% over the $724,869 for the same period in 2003. Net income per diluted share was $0.53 for the three months
ended March 31, 2004 compared to $0.45 per diluted share for the prior year.



Earnings Analysis



Interest Income



For the first three months of 2004, interest income was $3,988,322, an increase of $461,394,
or 13.1%, compared to interest income of $3,526,928 for the same period in 2003. The following table sets forth the Companys consolidated average balances of assets, liabilities and shareholders equity as well as interest income and
expense on related items, and the Companys average rates for the three month periods ended March 31, 2004 and 2003, respectively.



Average Balance Sheets with Resultant Interest and Rates



|                                                                |  |                                   |              |   |                                   |   |             |  |       |                 |  |   |              |   |             |   |            |  |       |  
|--------------------------------------------------------------- |  | --------------------------------- | ------------ | - | --------------------------------- | - | ----------- |  | ----- | --------------- |  | - | ------------ | - | ----------- | - | ---------- |  | ----- | -
|(yields on a tax-equivalent basis)                              |  | Three months ended March 31, 2004 |              |   | Three months ended March 31, 2003 |  
|                                                                |  | Average Balance                   |              |   | Interest                          |   | AverageRate |  |       | Average Balance |  |   | Interest     |   | AverageRate |  
|Assets:                                                         |  |                                   |              |   |                                   |   |             |  |       |                 |  |   |              |   |             |   |            |  |       |  
|Federal Funds Sold/Short-Term Investments                       |  | $                                 | 2,596,661    |   |                                   | $ | 6,211       |  | 0.96  | %               |  | $ | 1,301,033    |   |             | $ | 3,642      |  | 1.14  | %
|Securities:                                                     |  |                                   |              |   |                                   |   |             |  |       |                 |  |   |              |   |             |   |            |  |       |  
|Collateralized Mortgage Obligations/ Mortgage Backed Securities |  |                                   | 84,564,653   |   |                                   |   | 813,514     |  | 3.85  | %               |  |   | 78,930,486   |   |             |   | 710,405    |  | 3.60  | %
|States and Political Subdivisions                               |  |                                   | 8,875,453    |   |                                   |   | 124,319     |  | 5.60  | %               |  |   | 5,728,195    |   |             |   | 89,087     |  | 6.22  | %
|                                                                |  |                                   |              |   |                                   |   |             |  |       |                 |  |   |              |   |             |   |            |  |       |  
|Total                                                           |  |                                   | 93,440,106   |   |                                   |   | 937,833     |  | 4.01  | %               |  |   | 84,658,681   |   |             |   | 799,492    |  | 3.78  | %
|Loan Portfolio:                                                 |  |                                   |              |   |                                   |   |             |  |       |                 |  |   |              |   |             |   |            |  |       |  
|Commercial                                                      |  |                                   | 29,686,779   |   |                                   |   | 569,957     |  | 7.70  | %               |  |   | 41,498,558   |   |             |   | 730,424    |  | 7.14  | %
|Installment                                                     |  |                                   | 5,284,206    |   |                                   |   | 101,141     |  | 7.68  | %               |  |   | 11,160,032   |   |             |   | 217,126    |  | 7.89  | %
|Commercial Mortgages and Construction Wholesale                 |  |                                   | 109,124,289  |   |                                   |   | 1,645,350   |  | 6.05  | %               |  |   | 78,064,042   |   |             |   | 1,217,783  |  | 6.33  | %
|Residential Mortgages and Construction Retail                   |  |                                   | 25,551,574   |   |                                   |   | 331,569     |  | 5.20  | %               |  |   | 20,177,012   |   |             |   | 353,637    |  | 7.11  | %
|All Other Loans                                                 |  |                                   | 9,312,150    |   |                                   |   | 436,581     |  | 18.86 | %               |  |   | 9,030,847    |   |             |   | 233,716    |  | 10.90 | %
|                                                                |  |                                   |              |   |                                   |   |             |  |       |                 |  |   |              |   |             |   |            |  |       |  
|Total                                                           |  |                                   | 178,958,998  |   |                                   |   | 3,084,598   |  | 6.91  | %               |  |   | 159,930,491  |   |             |   | 2,752,686  |  | 6.98  | %
|Total Interest-Earning Assets                                   |  |                                   | 274,995,765  |   |                                   |   | 4,028,642   |  | 5.88  | %               |  |   | 245,890,205  |   |             |   | 3,555,820  |  | 5.86  | %
|                                                                |  |                                   |              |   |                                   |   |             |  |       |                 |  |   |              |   |             |   |            |  |       |  
|Allowance for Loan Losses                                       |  |                                   | (1,824,435   | ) |                                   |   |             |  |       |                 |  |   | (1,707,660   | ) |             |   |            |  |       |  
|Cash and Due From Bank                                          |  |                                   | 7,107,225    |   |                                   |   |             |  |       |                 |  |   | 8,393,930    |   |             |   |            |  |       |  
|Other Assets                                                    |  |                                   | 10,141,198   |   |                                   |   |             |  |       |                 |  |   | 9,200,256    |   |             |   |            |  |       |  
|                                                                |  |                                   |              |   |                                   |   |             |  |       |                 |  |   |              |   |             |   |            |  |       |  
|Total Assets                                                    |  |                                   | $290,419,753 |   |                                   |   |             |  |       |                 |  |   | $261,776,731 |   |             |   |            |  |       |  
|                                                                |  |                                   |              |   |                                   |   |             |  |       |                 |  |   |              |   |             |   |            |  |       |  
|Interest-Bearing Liabilities:                                   |  |                                   |              |   |                                   |   |             |  |       |                 |  |   |              |   |             |   |            |  |       |  
|Money Market and NOW Accounts                                   |  | $                                 | 83,086,862   |   |                                   | $ | 187,085     |  | 0.90  | %               |  | $ | 72,726,253   |   |             | $ | 189,941    |  | 1.06  | %
|Savings Accounts                                                |  |                                   | 26,418,860   |   |                                   |   | 33,766      |  | 0.51  | %               |  |   | 15,772,138   |   |             |   | 38,718     |  | 1.00  | %
|Certificates of Deposit                                         |  |                                   | 72,913,970   |   |                                   |   | 454,628     |  | 2.50  | %               |  |   | 61,314,693   |   |             |   | 481,778    |  | 3.19  | %
|Certificates of Deposit of $100,000 and Over                    |  |                                   | 11,730,726   |   |                                   |   | 71,849      |  | 2.46  | %               |  |   | 21,931,091   |   |             |   | 134,653    |  | 2.49  | %
|Federal Funds Purchased/Other Borrowed Funds                    |  |                                   | 19,330,958   |   |                                   |   | 223,724     |  | 4.64  | %               |  |   | 21,796,755   |   |             |   | 229,022    |  | 4.26  | %
|Trust Preferred Securities                                      |  |                                   | 5,155,000    |   |                                   |   | 62,183      |  | 4.83  | %               |  |   | 5,155,000    |   |             |   | 66,484     |  | 5.16  | %
|                                                                |  |                                   |              |   |                                   |   |             |  |       |                 |  |   |              |   |             |   |            |  |       |  
|Total Interest-Bearing Liabilities                              |  |                                   | 218,636,376  |   |                                   |   | 1,033,235   |  | 1.90  | %               |  |   | 198,695,930  |   |             |   | 1,140,596  |  | 2.33  | %
|                                                                |  |                                   |              |   |                                   |   |             |  |       |                 |  |   |              |   |             |   |            |  |       |  
|Net Interest Spread                                             |  |                                   |              |   |                                   |   |             |  | 3.98  | %               |  |   |              |   |             |   |            |  | 3.53  | %
|                                                                |  |                                   |              |   |                                   |   |             |  |       |                 |  |   |              |   |             |   |            |  |       |  
|Demand Deposits                                                 |  |                                   | 45,436,807   |   |                                   |   |             |  |       |                 |  |   | 38,732,954   |   |             |   |            |  |       |  
|Other Liabilities                                               |  |                                   | 2,351,948    |   |                                   |   |             |  |       |                 |  |   | 3,310,581    |   |             |   |            |  |       |  
|                                                                |  |                                   |              |   |                                   |   |             |  |       |                 |  |   |              |   |             |   |            |  |       |  
|Total Liabilities                                               |  |                                   | 266,425,131  |   |                                   |   |             |  |       |                 |  |   | 240,739,465  |   |             |   |            |  |       |  
|Shareholders Equity                                            |  |                                   | 23,994,622   |   |                                   |   |             |  |       |                 |  |   | 21,621,731   |   |             |   |            |  |       |  
|                                                                |  |                                   |              |   |                                   |   |             |  |       |                 |  |   |              |   |             |   |            |  |       |  
|Total Liabilities and Shareholders Equity                      |  |                                   | 290,419,753  |   |                                   |   |             |  |       |                 |  |   | 261,776,731  |   |             |   |            |  |       |  
|                                                                |  |                                   |              |   |                                   |   |             |  |       |                 |  |   |              |   |             |   |            |  |       |  
|Net Interest Margin                                             |  |                                   |              |   |                                   |   | $2,995,407  |  | 4.37% |                 |  |   |              |   |             |   | $2,415,224 |  | 3.98  | %
|                                                                |  |                                   |              |   |                                   |   |             |  |       |                 |  |   |              |   |             |   |            |  |       |  



8



---

The current year increase in interest income on a tax-equivalent basis resulted from higher average balances in the
securities and loan portfolios which were partially offset by a lower average yield earned on the loan portfolio. Average loans increased $19,028,507, or 11.9% to $178,958,998 while the yield on the portfolio decreased 7 basis points to 6.91% from
6.98%. The lower loan yield reflected the lower interest rate environment that existed throughout 2003 and continued into the first quarter of 2004.



Average securities increased $8,781,425, or 10.4%, to $93,440,106 for the quarter ended March 31, 2004 from $84,658,681 for the quarter ended March 31, 2003 while the
yield on the securities portfolio increased 23 basis points to 4.01% for the quarter ended March 31, 2004 from 3.78% for the quarter ended March 31, 2003.



Overall, the yield on the Companys total interest-earning assets increased 2 basis points to 5.88% for the three months ended March 31, 2004 from the 5.86% for
three months ended March 31, 2003.



Interest Expense



Total interest expense decreased by $107,363, or 9.4%, to $1,033,234 for the three months
ended March 31, 2004 from $1,140,597 for the three months ended March 31, 2003. The decrease in interest expense for the current period resulted primarily from the impact of higher levels of interest-bearing liabilities priced at a significantly
lower market interest rate level. The average rate paid on interest bearing liabilities for the three months ended March 31, 2004 decreased 43 basis points to 1.90% from 2.33% for the three months ended March 31, 2003.



Net Interest Income



The Companys net interest income for the three month period ended March 31, 2004 was $2,955,088, an increase of 23.8% from $2,386,331
for the three months ended March 31, 2003. For the first three months of 2004, interest income increased by $461,394 compared to the first three months of 2003, while interest expense decreased by $107,363 compared to the first three months of 2003.
The increase in the loan and securities portfolios average balances during the first three months of 2004, compared to the first three months of 2003 contributed to the current period increase in net interest income despite the lower yield on the
loan portfolio in the three months ended March 31, 2004 compared to the three months ended March 31, 2003.



The net interest margin (on a tax-equivalent basis), which is net interest income divided by average interest-earning assets, was 4.37% for the first three months of 2004 compared to 3.98% for the first three months
of 2003. The principal factor causing the increase in the net interest margin was the decrease in net investment portfolio amortization for the three months ended March 31, 2004 versus the three months ended March 31, 2003. Net amortization for the
three



9



---

months ended March 31, 2004 was $118,919 versus $336,689 for the three months ended March 31, 2003.



Provision for Loan Losses



For the three months ended March 31, 2004 and March 31, 2003, the provision for loan losses
was $60,000. The amount of the loan loss provisions and the level of the allowance for loan losses are critical accounting polices of the Company and are based upon a number of factors including managements evaluation of potential losses in
the portfolio after consideration of appraised collateral values, financial conditions and past credit history of the borrowers as well as prevailing economic conditions.



Non-Interest Income



Total non-interest income for the three months ended March 31, 2004 was $511,959, a decrease of 4.4% over non-interest income of $535,368 for the three months ended March
31, 2003. The decrease was due to decreases in service charges on deposit accounts, gains on sales of loans held for sale, income on Bank-owned life insurance and an increase in other non-interest income.



Gain on sale of loans held for sale represents the largest single source on non-interest
income. Gain on sale of loans held for sale for the three months ended March 31, 2004 was $262,436 compared to $265,707 for the three months ended March 31, 2003. The volatile interest rate environment that existed in the first three months of 2004
lowered the current period volume of mortgage loan originations and subsequent secondary market mortgage loan sales.



Service charges on deposit accounts amounted to $126,632 for the three months ended March 31, 2004 compared to $145,642 for the three months ended March 31, 2003. Service
charge income decreased in the first three months of 2004 principally due to decreases in income from overdraft fees and wire transfer service fees.



The other income component of non-interest income amounted to $63,641 for the three months ended March 31, 2004 compared to $54,314 for the three months ended March 31,
2003. Income from Bank Owned Life Insurance (BOLI) amounted to $59,250 for the three months ended March 31, 2004 compared to $69,705 for the three months ended March 31, 2003. In April 2001, the Company purchased $6.0 million in tax-free
BOLI assets which partially offset the cost of employee benefit plans and reduced the overall effective tax rate.



The Company also generates non-interest income from a variety of other fee-based services. Deposit and service fee charges are received and adjusted as needed from time
to time by management to reflect current costs incurred by the Bank to the offer the products or services amid the Companys competitive market.



Non-Interest Expense



Total non-interest expense for the three months ended March 31, 2004 was $2,119,912, an increase of $376,778, or 21.6% compared to non-interest expense of $1,743,134 for the three months ended March 31, 2003.



10



---

In January 2004, the Company entered into a two year lease for a new Loan Production Office in Fort Lee, New Jersey. The
lease provides for the rental of 1,567 square feet with an aggregate monthly rental of $2,873 in the first year and $2,938 in the second year. The staffing and operations of this Loan Production Office have resulted in increases in each of
non-interest expense categories for the three months ended March 31, 2004 compared to the three months ended March 31, 2003.



The following table presents the major components of non-interest expense for the three months ended March 31, 2004 and 2003.



Non-interest Expenses



|                                        |  |                              |           |      |   |          
|--------------------------------------- |  | ---------------------------- | --------- | ---- | - | ---------
|                                        |  | Three months ended March 31,
|                                        |  | 2004                         |           | 2003
|Salaries and employee benefits          |  | $                            | 1,193,865 |      | $ | 958,825  
|Occupancy expenses                      |  |                              | 245,856   |      |   | 200,295  
|Equipment expense                       |  |                              | 114,098   |      |   | 118,888  
|Marketing                               |  |                              | 59,843    |      |   | 50,074   
|Computer services                       |  |                              | 145,968   |      |   | 122,379  
|Regulatory, professional and other fees |  |                              | 116,099   |      |   | 132,120  
|Office expense                          |  |                              | 90,515    |      |   | 81,656   
|All other expenses                      |  |                              | 153,668   |      |   | 78,897   
|                                        |  |                              |           |      |   |          
|                                        |  | $                            | 2,119,912 |      | $ | 1,743,134
|                                        |  |                              |           |      |   |          



Salaries and employee benefits
increased 24.5% to $1,193,865 for the three months ended March 31, 2004 from $958,825 for the three months ended March 31, 2003. This increase reflects the increase in staffing levels to manage the continuing growth of the Company.



The Companys ratio of non-interest expense to average assets increased to 2.94% for the
three months ended March 31, 2004 compared to 2.90% for the three months ended March 31, 2003. The Companys efficiency ratio increased to 61.1% for the first three months of 2004 compared to a ratio of 59.7% for the first three months of 2003.



Financial Condition



March 31, 2004 Compared with December 31, 2003



Total consolidated assets at March 31, 2004 totaled $294,849,281, increasing from
$293,483,174 at December 31, 2003.



Cash and Cash Equivalents



Cash and Cash Equivalents at March 31, 2004 totaled $10,781,425 compared
to $14,702,886 at December 31, 2003. Cash and cash equivalents at March 31, 2004 consisted of cash and due from banks of $7,560,178 and Federal funds sold/short term investments of $3,221,247. The corresponding balances at December 31, 2003 were
$6,987,850 and $7,715,036, respectively.



11



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Investment Securities



Investment Securities represented 33.3% of total assets at March 31, 2004 and 31.1% at December 31, 2003. Total securities increased $6,920,995, or 7.6%, at March 31,
2004 to $98,112,165 from $91,191,170 at December 31, 2003.



Investment
Securities available for sale totaled $92,051,823 at March 31, 2004, an increase of $7,051,850, or 8.3%, from December 31, 2003. During the first three months of 2004, $14,236,640 of securities available for sale were purchased (predominantly U.S.
government agency securities) and funded by calls and maturities of securities held to maturity, securities available for sale and short-term investments.



Investment Securities held to maturity totaled $6,060,342 at March 31,2004, a decrease of $130,855, or 2.1%, from December 31, 2003.



Loans



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



The following table sets forth the classification of loans by major category
at March 31, 2004 and December 31, 2003.



Loan Portfolio Composition



|                                |  |                |             |           |                   |   |        |   |             |  |       |  
|------------------------------- |  | -------------- | ----------- | --------- | ----------------- | - | ------ | - | ----------- |  | ----- | -
|                                |  | March 31, 2004 |             |           | December 31, 2003 |  
|Component                       |  | Amount         |             | %of total |                   |   | Amount |   | %of total   | 
|Construction loans              |  | $              | 65,778,733  |           | 38.8              | % |        | $ | 56,971,265  |  | 34.7  | %
|Residential real estate loans   |  |                | 9,365,019   |           | 5.5               | % |        |   | 8,059,032   |  | 4.9   | %
|Commercial and industrial loans |  |                | 80,210,907  |           | 47.3              | % |        |   | 83,398,619  |  | 50.9  | %
|Loans to individuals            |  |                | 13,343,409  |           | 7.9               | % |        |   | 13,236,895  |  | 8.1   | %
|Lease financing                 |  |                | 220,718     |           | 0.1               | % |        |   | 1,054,198   |  | 0.6   | %
|All other loans                 |  |                | 633,944     |           | 0.4               | % |        |   | 1,230,297   |  | 0.8   | %
|                                |  |                |             |           |                   |   |        |   |             |  |       |  
|                                |  | $              | 169,552,730 |           | 100.0             | % |        | $ | 163,950,306 |  | 100.0 | %
|                                |  |                |             |           |                   |   |        |   |             |  |       |  



The loan portfolio increased
$5,602,424, or 3.4%, at March 31, 2004 to $169,552,730 from $163,950,306 at December 31, 2003. The ability of the Company to enter into larger loan relationships and managements philosophy of relationship banking are key factors in the
Companys strategy for loan growth. Strong competition from both bank and non-bank competitors could result in comparatively lower yields on new and established lending relationships. The ultimate collectability of the loan portfolio and the
recovery of the carrying amount of real estate are subject to changes in the Companys market regions economic environment and real estate market.



12



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Non-Performing Assets



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



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



Nonaccrual loans amounted to $330,194 at March 31, 2004, compared to
$330,783 at December 31, 2003. As the table demonstrates, despite the amount of non-performing assets at March 31, 2003, loan quality and ratios remain strong. This was accomplished through quality loan underwriting, a proactive approach to loan
monitoring and aggressive workout strategies.



Non-Performing Assets and
Loans



|                                                  |  |              |         |   |                 |   |         |  
|------------------------------------------------- |  | ------------ | ------- | - | --------------- | - | ------- | -
|                                                  |  | March 312004 |         |   | December 312003 |  
|Non-Performing loans:                             |  |              |         |   |                 |   |         |  
|Loans 90 days or more past due and still accruing |  | $            | 0       |   |                 | $ | 0       |  
|Non-accrual loans                                 |  |              | 330,194 |   |                 |   | 330,783 |  
|                                                  |  |              |         |   |                 |   |         |  
|Total non-performing loans                        |  |              | 330,194 |   |                 |   | 330,783 |  
|Other real estate owned                           |  |              | 8,971   |   |                 |   | 8,971   |  
|                                                  |  |              |         |   |                 |   |         |  
|Total non-performing assets                       |  | $            | 339,165 |   |                 | $ | 339,754 |  
|                                                  |  |              |         |   |                 |   |         |  
|Non-performing loans to total loans               |  |              | 0.19    | % |                 |   | 0.20    | %
|Non-performing assets to total assets             |  |              | 0.12    | % |                 |   | 0.12    | %



The Company had no restructured loans
at March 31, 2004 and December 31, 2003. Impaired loans totaled $330,194 at March 31, 2004 and $330,783 at December 31, 2003.



Allowance for Loan Losses



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



13



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



The
allowance for loan losses amounted to $1,846,632 at March 31, 2004, an increase of $60,000 from December 31, 2003. The ratio of the allowance for loan losses to total loans was 1.09% at March 31, 2004 and December 31, 2003, respectively. The quality
of the loan portfolio remained strong and it is managements belief that the allowance for loan losses is adequate in relation to credit risk exposure levels.



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



Allowance for Loan Losses



|                                             |  |               |             |   |               |   |             |  
|-------------------------------------------- |  | ------------- | ----------- | - | ------------- | - | ----------- | -
|                                             |  | March 31,2004 |             |   | March 31,2003 |  
|Balance, beginning of period                 |  | $             | 1,786,632   |   |               | $ | 1,669,882   |  
|Provision charged to operating expenses      |  |               | 60,000      |   |               |   | 60,000      |  
|Loans charged off                            |  |               | 0           |   |               |   | 0           |  
|Recoveries                                   |  |               | 0           |   |               |   | 0           |  
|                                             |  |               |             |   |               |   |             |  
|Net (charge offs) / recoveries               |  |               | 0           |   |               |   | 0           |  
|                                             |  |               |             |   |               |   |             |  
|Balance, end of period                       |  | $             | 1,846,632   |   |               | $ | 1,729,882   |  
|                                             |  |               |             |   |               |   |             |  
|Loans:                                       |  |               |             |   |               |   |             |  
|At period end                                |  | $             | 169,552,730 |   |               | $ | 150,606,154 |  
|Average during the period                    |  |               | 178,958,730 |   |               |   | 159,930,491 |  
|Net charge offs to average loans outstanding |  |               | 0.00        | % |               |   | 0.00        | %
|Allowance for loan losses to:                |  |               |             |   |               |   |             |  
|Total loans at period end                    |  |               | 1.09        | % |               |   | 1.15        | %
|Non-performing loans                         |  |               | 559.26      | % |               |   | 409.07      | %



Deposits



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



Total deposits decreased $1,453,398, or 0.6%, to $243,900,326
at March 31, 2004 from $245,353,724 at December 31, 2003. This decrease in total deposits was primarily the result of a $5,454,912 decrease in interest bearing deposits to $197,237,380, as management believes that depositors with maturing time
deposits migrated from the Company in searching for higher rates during the current period of financial market volatility and economic uncertainty. This was partially offset by a $4,001,514 increase in non-interest bearing deposits to $46,662,946.



14



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Other Borrowings



Other Borrowings are mainly comprised of fixed rate convertible advances from the Federal Home Loan Bank (FHLB) and federal funds purchased. These borrowings
are primarily used to fund asset growth not supported by deposit generation. The balance of other borrowings at March 31, 2004 and December 31, 2003 consisted of FHLB borrowings of $15,500,000. FHLB advances are fully secured by marketable
securities and qualifying one-to-four family mortgage loans.



Trust
Preferred Securities



In January 2003, the Financial Accounting Standards
Board (FASB) issued FASB Interpretation 46 (FIN 46), Consolidation of Variable Interest Entities. FIN 46 clarifies the application of Accounting Research Bulletin 51, Consolidated Financial Statements, to certain
entities in which voting rights are not effective in identifying the investor with the controlling financial interest. An entity is subject to consolidation under FIN 46 if the investors either do not have sufficient equity at risk for the entity to
finance its activities without additional subordinated financial support, are unable to direct the entitys activities, or are not exposed to the entitys losses or entitled to its residual returns (variable interest entities).
Variable interest entities within the scope of FIN 46 would be required to be consolidated by their primary beneficiary. The primary beneficiary of a variable interest entity is determined to be the party that absorbs a majority of the entitys
expected losses, receives a majority of its expected returns, or both.



Management has determined that the Trust qualifies as a variable interest entity under FIN 46. The Trust issued mandatorily redeemable preferred stock to investors and loaned the proceeds to the Company. The Trust holds, as its sole asset,
subordinated debentures issued by the Company in 2002. Prior to December 31, 2003, the Trust was included in the Companys consolidated balance sheet and statements of income. Subsequent to the issuance of FIN 46, the FASB issued a revised
interpretation, FIN 46(R), the provisions of which must be applied to certain variable interest entities by March 31, 2004. The Company adopted the provisions under FIN 46 and accordingly, deconsolidated the Trust as of December 31, 2003. The
banking regulatory agencies have not issued any guidance that would change the regulatory capital treatment for the trust-preferred securities issued by the Trust. However, as additional interpretations from the banking regulators related to
entities such as the Trust become available, management will reevaluate its potential impact to its Tier I capital calculation under such interpretations. As of March 31, 2004 and December 31, 2003, assuming the Company was not allowed to include
the $5.2 million in subordinated debentures issued by the Trust in Tier 1 capital, the Company would have Tier 1 capital ratios of 11.94% and 11.58% and leverage ratios of 8.34% and 8.03%, respectively, each on a pro forma basis.



15



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Shareholders Equity And Dividends



Shareholders equity at March 31, 2004 totaled $24,784,799, an increase of $1,199,543, or 5.1%, from $23,585,256 at December 31, 2003.
Book value per common share rose to $15.86 at March 31, 2004 from $15.07 at December 31, 2003.



The increase in shareholders equity and book value per share resulted primarily from net income of $875,807 less the effect of stock buybacks plus the increase in unrealized holding gains on securities.



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



In 2000, the Board of Directors
authorized a stock repurchase program that allows for the repurchase of a limited number of the Companys shares at managements discretion on the open market. The Company undertook this repurchase program in order to increase shareholder
value. A table disclosing repurchases of Company shares made during the first quarter ended March 31, 2004 is set forth under Part II, Item 2 of this report, Changes in Securities, Use of Proceeds and Issuer Purchases of Equity Securities.



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



Capital Ratios



|                                       |  |        |            |       |       |  
|-------------------------------------- |  | ------ | ---------- | ----- | ----- | -
|                                       |  | Amount |            | Ratio |      
|As of March 31, 2004 -                 |  |        |            |       |       |  
|Total capital to risk weighted assets  |  | $      | 32,199,583 |       | 15.32 | %
|Tier 1 capital to risk weighted assets |  |        | 30,352,951 |       | 14.41 | %
|Tier 1 capital to average assets       |  |        | 30,352,951 |       | 10.07 | %
|                                       |  |       
|As of December 31, 2003 -              |  |        |            |       |       |  
|Total capital to risk weighted assets  |  | $      | 30,221,727 |       | 14.94 | %
|Tier 1 capital to risk weighted assets |  |        | 28,435,095 |       | 14.06 | %
|Tier 1 capital to average assets       |  |        | 28,435,095 |       | 9.74  | %



The minimum regulatory capital
requirements for financial institutions require institutions to have a Tier 1 capital to average assets ratio of 4.0%, a Tier 1 capital to risk weighted assets ratio of 4.0% and a total capital to risk weighted assets ratio of 8.0%. To be considered
well capitalized, an institution must have a minimum Tier 1 leverage ratio of 5.0%. At March 31, 2004, the ratios of the Company exceeded the ratios required to be considered well capitalized. It is managements goal to monitor and
maintain adequate capital levels to continue to support asset growth and continue its status as a well-capitalized institution.



16



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Liquidity



At March 31, 2004, the amount of liquid assets remained at a level management deemed adequate to ensure that contractual liabilities, depositors withdrawal requirements,
and other operational and customer credit needs could be satisfied.



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



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



The Consolidated Statements of Cash Flows present the changes in cash from operating, investing and financing activities. At March 31, 2004, the balance of cash and cash
equivalents was $10,781,425.



Net cash provided by operating activities totaled
$9,724,767 in the three months ended March 31, 2004 compared to $7,128,071 in the three months ended March 31, 2003. The primary sources of funds are net income from operations adjusted for provision for loan losses, depreciation expenses, and net
proceeds from sales of loans held for sale.



Net cash used in investing
activities totaled $12,111,051 in the three months ended March 31, 2004 compared to $8,026,859 provided by investing activities in the three months ended March 31, 2003. The current period amount was the result of a higher volume of securities
purchases and loan originations for the three months ended March 31, 2004.



Net
cash used in financing activities amounted to $1,535,177 in the three months ended March 31, 2004 compared to $6,544,192 used in financing activities in the three months ended March 31, 2003. The current period amount resulted primarily from a
modest decrease in deposits during the three months period ended March 31, 2004 compared to the same prior year period.



The securities portfolio is also a source of liquidity, providing cash flows from maturities and periodic repayments of principal. During the three months ended March 31,
2004, maturities and prepayments of investment securities totaled $7,901,192. Another source of liquidity is the loan portfolio, which provides a steady flow of payments and maturities.



17



---

Interest Rate Sensitivity Analysis



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



The Company continually evaluates
interest rate risk management opportunities, including the use of derivative financial instruments. Management believes that hedging instruments currently available are not cost-effective, and therefore, has focused its efforts on increasing the
Companys spread by attracting lower-costing retail deposits.



|Item 3. | Quantitative and Qualitative Disclosures about Market Risk
|------- | ----------------------------------------------------------



To measure the impacts of longer-term asset and liability mismatches beyond two years, the Company utilizes Modified Duration of Equity and Economic Value of Portfolio
Equity (EVPE) models. The modified duration of equity measures the potential price risk of equity to changes in interest rates. A longer modified duration of equity indicates a greater degree of risk to rising interest rates. Because of
balance sheet optionality, an EVPE analysis is also used to dynamically model the present value of asset and liability cash flows, with rates ranging up or down 200 basis points. The economic value of equity is likely to be different as interest
rates change. Results falling outside prescribed ranges require action by management. At March 31, 2004 and December 31, 2003, the Companys variance in the economic value equity as a percentage of assets with an instantaneous and sustained
parallel shift of 200 basis points is within the negative 3% guideline, as shown in the tables below.



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



18



---

Market Risk Analysis



|                                   |  |                |            |                   |   |             |  |      |             |        |   |            |  |   |             |  |   |            
|---------------------------------- |  | -------------- | ---------- | ----------------- | - | ----------- |  | ---- | ----------- | ------ | - | ---------- |  | - | ----------- |  | - | -----------
|                                   |  | March 31, 2004 |            | December 31, 2003
|Change in Rates                    |  | Flat           |            | -200bp            |   | +200bp      |  | Flat |             | -200bp |   | +200bp    
|Economic Value of Portfolio Equity |  | $              | 31,234,000 |                   | $ | 27,085,000  |  | $    | 27,840,000  |        | $ | 30,507,000 |  | $ | 27,599,000  |  | $ | 26,218,000 
|                                   |  |                |            |                   |   |            
|Change                             |  |                |            |                   |   | (4,149,000) |  |      | (3,394,000) |        |   |            |  |   | (2,907,000) |  |   | (4,288,000)
|                                   |  |                |            |                   |   |            
|Change as a % of assets            |  |                |            |                   |   | (1.41%)     |  |      | (1.15%)     |        |   |            |  |   | (0.99%)     |  |   | (1.46%)    



|Item 4. | Controls and Procedures.
|------- | ------------------------



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



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



19



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PART II. OTHER INFORMATION



|Item 2. | Changes in Securities, Use of Proceeds and Issuer Purchases of Equity Securities.
|------- | ---------------------------------------------------------------------------------



Shareholders Rights Plan



On March 18, 2004, the Companys Board of Directors declared a dividend distribution of one Right for each outstanding share of Company common stock. The
distribution is payable to the shareholders of record at the close of business on March 29, 2004. Each Right entitles the registered holder to purchase from the Company one one-hundredth of a share of a series of the Companys preferred stock
designated as Series A Junior Participating Preferred Stock (Preferred Stock) at a price of $142.00 per one one-hundredth of a share, subject to adjustment. The description and terms of the Rights are set forth in a Rights Agreement (the
Rights Agreement) between the Company and Registrar and Transfer Company, as Rights Agent, which was filed as an exhibit to the Form 8-K filed by the Company with the SEC on March 18, 2004.



Initially, the Rights will be attached to all common stock certificates representing shares
then outstanding, and no separate Rights Certificates will be distributed. Subject to certain exceptions specified in the Rights Agreement, the Rights will separate from the common stock and a distribution date (the Distribution Date)
will occur upon the earlier of (i) 10 business days following a public announcement that a person or group of affiliated or associated persons (an Acquiring Person) has acquired beneficial ownership of 12% or more of the outstanding
shares of common stock (the Stock Acquisition Date), other than as a result of repurchases of stock by the Company or certain inadvertent actions which are promptly remedied, (ii) 10 business days (or such later date as the Board shall
determine prior to any person becoming an Acquiring Person) following the commencement of a tender offer or exchange offer that would result in a person or group becoming an Acquiring Person.



Until the Distribution Date, (i) the Rights will be evidenced by the common stock
certificates and will be transferred with and only with such common stock certificates, (ii) new common stock certificates issued after the Record Date will contain a notation incorporating the Rights Agreement by reference and (iii) the surrender
for transfer of any certificates for common stock outstanding will also constitute the transfer of the Rights associated with the common stock represented by such certificate. Pursuant to the Rights Agreement, the Company reserves the right to
require prior to the occurrence of a Triggering Event (as defined below) that, upon any exercise of Rights, a number of Rights be exercised so that only whole shares of Preferred Stock will be issued.



The Rights are not exercisable until the Distribution Date and will expire at 5:00 P.M. (New
York City time) on March 29, 2014, unless such date is extended or the Rights are earlier redeemed or exchanged by the Company as described below.



Except as otherwise determined by the Board of Directors, only shares of common stock issued prior to the Distribution Date will be issued with Rights.



20



---

In the event that a Person becomes an Acquiring Person, each holder of a Right will thereafter have the right to receive,
upon exercise, common stock (or, in certain circumstances, cash, property or other securities of the Company) having a value equal to two times the exercise price of the Right. Notwithstanding any of the foregoing, following the occurrence of the
event set forth in this paragraph, all Rights that are, or (under certain circumstances specified in the Rights Agreement) were, beneficially owned by any Acquiring Person will be null and void. However, Rights are not exercisable following the
occurrence of the event set forth above until such time as the Rights are no longer redeemable by the Company as set forth below.



In the event that, on or at any time after a Stock Acquisition Date, the Company (i) engages in a merger or other business combination transaction in which the Company is
not the surviving corporation, (ii) the Company engages in a merger or other business combination transaction in which the Company is the surviving corporation and any shares of the Companys common stock are changed into or exchanged for other
securities or assets or (iii) 50% or more of the assets, cash flow or earning power of the Company and its subsidiaries (taken as a whole) are sold or transferred so that each holder of a Right (except as noted below) shall thereafter have the right
to receive, upon the exercise thereof at the then current exercise price of the Right, that number of shares of common stock of the acquiring company which at the time of such transaction would have a market value (determined as provided in the
Rights Agreement) of two times the exercise price of the Right. The events set forth in this paragraph and in the second preceding paragraph are referred to as the Triggering Events.



At any time until the time at which any person becomes an Acquiring Person, the Company may
redeem the rights in whole, but not in part, at a price of $0.01 per Right, (payable in cash, common stock or other consideration deemed appropriate by the Board of Directors). Immediately upon the action of the Board of Directors of the Company
electing to redeem the Rights, the Rights will terminate and the only right of the holders of Rights will be to receive the $0.01 Redemption Price.



At any time after a person becomes an Acquiring Person and prior to the acquisition by such person or group of fifty percent (50%) or more of the outstanding common
stock, the Board may exchange the Rights (other than Rights owned by such person or group which have become void), in whole or in part, for common stock at an exchange ratio of one share of common stock, or one one-hundredth of a share of Preferred
Stock (or of a share of a class or series of the Companys preferred stock having equivalent rights, preferences and privileges), per Right (subject to adjustment).



21



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Issuer Purchases of Equity Securities



On March 12, 2001, the Board of Directors authorized a stock repurchase program that allows for the repurchase of a limited number of the
Companys shares at managements discretion on the open market. The Company undertook this repurchase program in an effort to increase shareholder value. The following table provides common stock repurchases made by or on behalf of the
Company during the three months ended March 31, 2004.



Issuer
Purchases of Equity Securities (1)



|                 |  |                                 |  |                             |  |                                                                             |       |                                                                            |       |  |       
|---------------- |  | ------------------------------- |  | --------------------------- |  | --------------------------------------------------------------------------- | ----- | -------------------------------------------------------------------------- | ----- |  | ------
|Period           |  | Total Number ofShares Purchased |  | Average PricePaid Per Share |  | Total Number of SharesPurchased As Part ofPublicly AnnouncedPlan or Program |       | Maximum Number of SharesThat May Yet be PurchasedUnder the Plan or Program
|Beginning        |  | Ending                          |  |                             |  |                                                                            
|January 1, 2004  |  | January 31, 2004                |  | 0                           |  |                                                                             |      |                                                                            | 0     |  | 57,834
|February 1, 2004 |  | February 29, 2004               |  | 500                         |  | $                                                                           | 32.99 |                                                                            | 500   |  | 57,334
|March 1, 2004    |  | March 31, 2004                  |  | 2,200                       |  | $                                                                           | 31.99 |                                                                            | 2,200 |  | 55,134
|                 |  |                                 |  |                             |  |                                                                             |       |                                                                            |       |  |       
|                 |  | Total                           |  | 2,700                       |  | $                                                                           | 32.17 |                                                                            | 2,700 |  | 55,134
|                 |  |                                 |  |                             |  |                                                                             |       |                                                                            |       |  |       

---

|(1) | The stock repurchase program covers a maximum of 66,805 shares of common stock of the
Company, representing 5% of the common stock of the Company on December 31, 2000, and was announced on March 12, 2001. Unless terminated earlier by resolution of the Board of Directors, the stock repurchase program will expire when the Company has
repurchased all shares authorized for repurchase under the program.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



22



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



| | (a) | Exhibits
| | --- | --------



|  |      |  |                                                                                                                                                        
|- | ---- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------
|  |     
|3 | (i)  |  | Certificate of Incorporation of the Company (incorporated by reference to Exhibit 3(i) to the Companys Form 10-K filed with the SEC on March 25, 2004)
|  |     
|3 | (ii) |  | Bylaws of the Company (incorporated by reference to Exhibit 3(ii) to the Companys Form 10-QSB filed with the SEC on May 14, 2003)                     



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



On March 18, 2004, the Company filed with the Commission a Form 8-K reporting under Item 5 the adoption by the Board of Directors of the Company of a
shareholder rights plan. On January 20, 2004, the Company furnished the Commission with information regarding earnings and other financial results for the quarter ended December 31, 2003, pursuant to Item 12 of Form 8-K.



23



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SIGNATURES



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



|                   |  |  |  |                         |  |                   |  |                                                                                      
|------------------ |  |  |  | ----------------------- |  | ----------------- |  | -------------------------------------------------------------------------------------
|                   |  |  |  | 1STCONSTITUTION BANCORP
|                   |  |  | 
|Date: May 13, 2004 |  |  |  | By:                     |  | ROBERT F. MANGANO
|                   |  |  |  |                         |  |                   | 
|                   |  |  |  |                         |  |                   |  | Robert F. Mangano President and Chief Executive Officer (Principal Executive Officer)



|                   |  |  |  |     |  |                   |  |                                                                                     
|------------------ |  |  |  | --- |  | ----------------- |  | ------------------------------------------------------------------------------------
|                   |  |  | 
|Date: May 13, 2004 |  |  |  | By: |  | JOSEPH M. REARDON
|                   |  |  |  |     |  |                   | 
|                   |  |  |  |     |  |                   |  | Joseph M. Reardon Senior Vice President and Treasurer (Principal Accounting Officer)



24