**UNITED STATESSECURITIES AND EXCHANGE COMMISSION**

**Washington, D.C. 20549**

 

**FORM 10-QSB**

 
| **ý**                                          | **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**                                              |
|                                                |                                                                                                 |
| **o**                                               | **TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF  THE SECURITIES EXCHANGE ACT OF 1934.** |
|                                                |                                                                                                 |
| **Commission  file number 333-84114**               |

 

**1st Colonial Bancorp, Inc.**

(Exact name of registrantas specified in its charter)

 
| **Pennsylvania**                                                 |   | **01-0715542**                        |
|------------------------------------------------------------------|--------|---------------------------------------|
| (State or other  jurisdiction of  incorporation or organization) |   | (I.R.S. Employer  Identification No.) |
|                                                             |   |                                  |
| **1040  Haddon Avenue  Collingswood, NJ**                        |   | **08108**                             |
| (Address of Principal  Executive Offices)                        |   | (Zip Code)                            |
|                                                             |   |                                  |
| **(856)  858-1100**                                              |
| (Registrant’s telephone  number, including area code)       |

 

Indicate by check mark whether the Registrant (1) has filed allreports required to be filed by Section 13 or 15(d) of the SecuritiesExchange Act of 1934 during the preceding 12 months (or for such shorterperiod that the Registrant was required to file such reports), and (2) hasbeen subject to such filing requirements for the past 90 days.

 

Yes  ý       No  o

 

Indicate the number of shares outstanding of each of the issuer’sclasses of common stock, as of the latest practicable date:

 
| **Class**                        |   | **Number of Shares Outstanding  as of May 12, 2004** |
|----------------------------------|--------|-----------------------------------------------------------|
| Common Stock, without  par value |   | 2,251,142                                                 |

 

 

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INDEX TO FORM 10-QSB

 
| PART I.  FINANCIAL INFORMATION |                                                                                                                               |
|-------------------------------------|------------------------------------------------------------------------------------------------------------------------------------|
|                                |                                                                                                                               |   |
| Item 1.                             | Financial Statements                                                                                                               |   |
|                                |                                                                                                                               |   |
|                                | Consolidated  Statements of Financial Condition March 31, 2004 (Unaudited) and  December 31, 2003                        |   |
|                                |                                                                                                                               |   |
|                                | Consolidated  Statements of Income and Comprehensive Income (Unaudited) - For the Three  Months Ended March 31, 2004 and 2003 |   |
|                                |                                                                                                                               |   |
|                                | Consolidated  Statements of Cash Flows – (Unaudited) For the Three Months Ended March 31,  2004 and 2003                      |   |
|                                |                                                                                                                               |   |
|                                | Notes to Financial  Statements                                                                                                     |   |
|                                |                                                                                                                               |   |
| Item 2.                             | Management’s Discussion and Analysis of  Financial Condition and Results of Operations                                        |   |
|                                |                                                                                                                               |   |
| Item 3.                             | Controls and Procedures                                                                                                            |   |
|                                |                                                                                                                               |   |
| PART II.                            | OTHER INFORMATION                                                                                                                  |   |
|                                |                                                                                                                               |   |
| Item 6.                             | Exhibits and  Reports on Form 8-K                                                                                                  |   |
|                                |                                                                                                                               |
| Signatures                          |                                                                                                                               |
|                                |                                                                                                                               |
| CEO and CFO  Certifications         |                                                                                                                               |

 

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PART 1 - FINANCIAL INFORMATION

1st COLONIAL BANCORP,INC. AND SUBSIDIARY

CONSOLIDATEDSTATEMENTS OF FINANCIAL CONDITION

 

(Dollars in thousands)

 
|                                                                                                                                      |   | **March 31,  2004** |       | **December 31,  2003** |       |
|-------------------------------------------------------------------------------------------------------------------------------------------|--------|---------------------|------------|------------------------|------------|
|                                                                                                                                      |   | **(unaudited)**     |       |                   |       |
| **Assets:**                                                                                                                               |   |                |       |                   |       |
| Cash and due from banks                                                                                                                   |   | $                   | 2,557      |                   | $          | 6,281 |   |
| Federal funds sold                                                                                                                        |   | 16,307              |       | 9,735                  |       |
| Interest bearing  deposits                                                                                                                |   | 500                 |       | 500                    |       |
| Investments held to  maturity                                                                                                             |   | 5,806               |       | 5,808                  |       |
| Securities available  for sale (amortized cost of $25,382 at March 31, 2004 and $28,107 at  December 31, 2003)                       |   | 25,472              |       | 27,985                 |       |
| Mortgages loans  available for sale                                                                                                       |   | 84                  |       | 281                    |       |
| Loans                                                                                                                                     |   | 68,849              |       | 66,550                 |       |
| Less: Allowance for  loan losses                                                                                                          |   | (833                | )          | (768                   | )          |
| Net loans                                                                                                                                 |   | 68,016              |       | 65,782                 |       |
| Bank premises and  equipment, net                                                                                                         |   | 933                 |       | 935                    |       |
| Accrued interest receivable                                                                                                               |   | 407                 |       | 373                    |       |
| Deferred tax assets                                                                                                                       |   | 220                 |       | 301                    |       |
| Other assets                                                                                                                              |   | 144                 |       | 91                     |       |
| Total Assets                                                                                                                              |   | $                   | 120,446    |                   | $          | 118,072 |   |
|                                                                                                                                      |   |                | ** ** |                   | ** ** |
| **Liabilities:**                                                                                                                          |   |                |       |                   |       |
| Demand deposits                                                                                                                           |   | $                   | 53,843     |                   | $          | 57,717 |   |
| Savings deposits                                                                                                                          |   | 22,591              |       | 20,374                 |       |
| Other time deposits                                                                                                                       |   | 29,444              |       | 26,232                 |       |
| Total deposits                                                                                                                            |   | 105,878             |       | 104,323                |       |
|                                                                                                                                      |   |                |       |                   |       |
| Short-term borrowings                                                                                                                     |   | 4,536               |       | 4,087                  |       |
| Accrued interest  payable                                                                                                                 |   | 5                   |       | 8                      |       |
| Taxes payable                                                                                                                             |   | 124                 |       | 48                     |       |
| Other liabilities                                                                                                                         |   | 80                  |       | 55                     |       |
| Total liabilities                                                                                                                         |   | $                   | 110,623    |                   | $          | 108,521 |   |
|                                                                                                                                      |   |                |       |                   |       |
| **Shareholders’ equity:**                                                                                                            |   |                |       |                   |       |
| Common stock (no par  value)                                                                                                              |   |                |       |                   |       |
| Authorized: 5,000,000  shares, issued and outstanding: 1,418,731 shares at March 31, 2004 and  1,414,487 shares at December 31, 2003 |   | —              |       | —                 |       |
| Preferred stock,  1,000,000 shares authorized, no shares issued                                                                           |   | —              |       | —                 |       |
| Additional paid in  capital                                                                                                               |   | 9,273               |       | 9,238                  |       |
| Retained earnings                                                                                                                         |   | 496                 |       | 386                    |       |
| Accumulated other  comprehensive income, net                                                                                              |   | 54                  |       | (73                    | )          |
| Total shareholders’  equity                                                                                                          |   | 9,823               |       | 9,551                  |       |
| Total liabilities &  shareholders’ equity                                                                                        |   | $                   | 120,446    |                   | $          | 118,072 |   |

 

The accompanying notes are an integral part of these statements.

 

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1st COLONIAL BANCORP,INC. AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF INCOME

AND COMPREHENSIVE INCOME(UNAUDITED)

FOR THE THREE MONTHSENDED MARCH 31, 2004 AND 2003

 

(Dollars in thousands, except per share data)

 
|                                                 |   | **Three months ended  March 31,** |   |
|------------------------------------------------------|--------|----------------------------------------|--------|
|                                                 |   | **2004**                               |   | **2003** |   |
| Interest income:                                     |   |                                   |   |   |   |
| Interest and fees on  loans                          |   | $                                      | 996    |   | $ | 899 |   |
| Interest on federal  funds sold                      |   | 21                                     |   | 13 |   |
| Interest and dividends  on investments:              |   |                                   |   |   |   |
| Taxable                                              |   | 196                                    |   | 245 |   |
| Nontaxable                                           |   | 17                                     |   | 5 |   |
| Total interest income                                |   | 1,230                                  |   | 1,162 |   |
| Interest expense:                                    |   |                                   |   |   |   |
| Interest on demand  deposits                         |   | 139                                    |   | 120 |   |
| Interest on savings  deposits                        |   | 19                                     |   | 43 |   |
| Interest on time  deposits                           |   | 156                                    |   | 140 |   |
| Interest on short-term  borrowings                   |   | 5                                      |   | 12 |   |
| Total interest expense                               |   | 319                                    |   | 315 |   |
| Net interest income                                  |   | 911                                    |   | 847 |   |
| Provision for loan  losses                           |   | 58                                     |   | 60 |   |
|                                                 |   |                                   |   |   |   |
| Net interest income  after provision for loan losses |   | 853                                    |   | 787 |   |
|                                                 |   |                                   |   |   |   |
| Other income:                                        |   |                                   |   |   |   |
| Service charges on  deposit accounts                 |   | 36                                     |   | 33 |   |
| Gain on sale of  mortgage loans                      |   | 9                                      |   | 20 |   |
| Other income, service  charges and fees              |   | 14                                     |   | 8 |   |
| Total other income                                   |   | 59                                     |   | 61 |   |
|                                                 |   |                                   |   |   |   |
| Other expenses:                                      |   |                                   |   |   |   |
| Salaries, wages and  employee benefits               |   | 313                                    |   | 279 |   |
| Occupancy and equipment  expenses                    |   | 92                                     |   | 82 |   |
| Advertising expense                                  |   | 11                                     |   | 34 |   |
| Data processing expense                              |   | 75                                     |   | 62 |   |
| Professional services                                |   | 68                                     |   | 64 |   |
| Other Operating  Expenses                            |   | 170                                    |   | 136 |   |
| Total other expenses                                 |   | 729                                    |   | 657 |   |
| Income before income  taxes                          |   | 183                                    |   | 191 |   |
| Income tax expense                                   |   | 73                                     |   | 77 |   |
| Net income                                           |   | $                                      | 110    |   | $ | 114 |   |
| Other comprehensive  income (loss), net              |   | 127                                    |   | (39 | ) |
| Total comprehensive  income                          |   | $                                      | 237    |   | $ | 75 |   |
| Net income per share  information:                   |   |                                   |   |   |   |
| Basic earnings per  share                            |   | $                                      | 0.08   |   | $ | 0.08 |   |
| Diluted earnings per  share                          |   | $                                      | 0.07   |   | $ | 0.08 |   |

 

The accompanying notes are an integral part of these statements.

 

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1st COLONIAL BANCORP,INC. AND SUBSIDIARY

CONSOLIDATED STATEMENTSOF CASH FLOWS (UNAUDITED)

 

(Dollars in thousands)

 
|                                                                                                            |   | **For the Three Months Ended  March 31,** |   |
|-----------------------------------------------------------------------------------------------------------------|--------|------------------------------------------------|--------|
|                                                                                                            |   | **2004**                                       |   | **2003** |   |
| Net income                                                                                                      |   | $                                              | 110    |   | $ | 114 |   |
| Adjustments to  reconcile net income to net cash provided/(used) by operating activities:                       |   |                                           |   |   |   |
| Depreciation and  amortization                                                                                  |   | 33                                             |   | 25 |   |
| Amortization of premium  (discount) on securities, net                                                          |   | 23                                             |   | 45 |   |
| Amortization of  deferred loan fees/cost, net                                                                   |   | 17                                             |   | 10 |   |
| Deferred taxes                                                                                                  |   | (4                                             | )      | — |   |
| Gains on sale of  mortgage loans available for sale                                                             |   | (9                                             | )      | (20 | ) |
| Loss on retirement of  fixed assets                                                                             |   | 2                                              |   | — |   |
| Provision for loan  losses                                                                                      |   | 58                                             |   | 60 |   |
| Cash disbursed for  mortgage banking activities                                                                 |   | (1,605                                         | )      | (5,359 | ) |
| Cash received for  mortgage banking activities                                                                  |   | 1,811                                          |   | 4,547 |   |
| (Increase)decrease in  accrued interest receivable                                                              |   | (34                                            | )      | 7 |   |
| Increase in other  assets                                                                                       |   | (53                                            | )      | (31 | ) |
| (Decrease)increase in  accrued interest payable                                                                 |   | (3                                             | )      | 3 |   |
| Increase in income  taxes payable                                                                               |   | 76                                             |   | 31 |   |
| Increase in other  liabilities                                                                                  |   | 25                                             |   | 42 |   |
| Total Adjustments                                                                                               |   | 337                                            |   | (640 | ) |
| Net cash  provided/(used)by operating activities                                                                |   | 447                                            |   | (526 | ) |
|                                                                                                            |   |                                           |   |   |   |
| Cash flows used in  investing activities:                                                                       |   |                                           |   |   |   |
| Proceeds from maturity  and sale of securities available-for-sale                                               |   | 5,200                                          |   | 12,601 |   |
| Proceeds from maturity  of securities held to maturity                                                          |   | 365                                            |   | 95 |   |
| Purchases of securities  available-for-sale                                                                     |   | (3,200                                         | )      | (11,809 | ) |
| Purchases of securities  held to maturity                                                                       |   | (363                                           | )      | (140 | ) |
| Repayment of principal  of securities available-for-sale                                                        |   | 702                                            |   | 894 |   |
| Increase in loans  receivable, net                                                                              |   | (2,309                                         | )      | (1,725 | ) |
| Capital expenditures                                                                                            |   | (33                                            | )      | (202 | ) |
| Net cash  provided/(used) in investing activities                                                               |   | 362                                            |   | (286 | ) |
|                                                                                                            |   |                                           |   |   |   |
| Cash flows from  financing activities:                                                                          |   |                                           |   |   |   |
| Net increase in  deposits                                                                                       |   | 1,555                                          |   | 2,781 |   |
| Net  increase(decrease)increase in short-term borrowings                                                        |   | 449                                            |   | (610 | ) |
| Exercise of warrants                                                                                            |   | 35                                             |   | 2 |   |
| Expenses for issuance  of common stock                                                                          |   | —                                         |   | (7 | ) |
| Net cash provided by  financing activities                                                                      |   | 2,039                                          |   | 2,166 |   |
| Net increase in cash  and cash equivalents                                                                      |   | 2,848                                          |   | 1,354 |   |
| Cash and cash  equivalents as of beginning of period                                                            |   | 16,516                                         |   | 12,161 |   |
| Cash and cash  equivalents as of March 31,                                                                      |   | $                                              | 19,364 |   | $ | 13,515 |   |
|                                                                                                            |   |                                           |   |   |   |
| Supplemental disclosure  of cash flow information:                                                              |   |                                           |   |   |   |
| Cash paid during the  period for:                                                                               |   |                                           |   |   |   |
| Interest                                                                                                        |   | $                                              | 322    |   | $ | 312 |   |
| Income taxes                                                                                                    |   | —                                         |   | 46 |   |
| Noncash items:                                                                                                  |   |                                           |   |   |   |
| Change in unrealized  gains for securities available-for-sale, net of taxes of ($85) for 2004 and  $24 for 2003 |   | 127                                            |   | (39 | ) |

 

The accompanying notes are an integral part of these statements.

 

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NOTES TO FINANCIAL STATEMENTS

 

**Note1.  General**

 

1st ColonialBancorp, Inc. (the “Company”) was formed on February 26, 2002 pursuant tothe filing of Articles of Incorporation with the Commonwealth ofPennsylvania.  Prior to June 30,2002, the Company did not have any material assets or liabilities.  On June 30, 2002, the Company acquired1st Colonial National Bank (the “Bank”) pursuant to the merger of the Bank withand into Interim 1st Colonial National Bank (“Interim”), a wholly-ownedsubsidiary of the Company.  The acquisitionwas part of the reorganization of the Bank from a stand-alone national bank toa bank holding company structure.

 

In thereorganization, each existing shareholder of the Bank received an equal numberof shares of the Company’s common stock in exchange for his or her Bank commonstock.  The shares of the Company’scommon stock issued in the reorganization were registered under the SecuritiesAct of 1933, as amended, pursuant to the Company’s Registration Statement No.333-84114 filed with the SEC.  Thereorganization was accounted for in a manner similar to a pooling ofinterests.  The Bank’s business andoperations were unchanged by the reorganization and merger.

 

6

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**Note2.  Summary of Significant AccountingPolicies**

 

The consolidated financial statements include theaccounts of the Company and its wholly owned subsidiary, 1st Colonial NationalBank.  Any material intercompanybalances and transactions have been eliminated in consolidation.

 

In the opinion ofmanagement, the accompanying unaudited financial statements contain adjustmentsconsisting only of normal recurring adjustments, necessary to present fairlythe consolidated financial position of the Company as of March 31, 2004and December 31, 2003 and the consolidated results of operations for the threemonth periods ended March 31, 2004 and 2003.  The accounting policies and reporting practices of the Companyare in accordance with accounting principles generally accepted in the United Statesof America and have been followed on a consistent basis.

 

The accompanyingfinancial statements have been prepared in accordance with instructions forForm 10-QSB and accordingly do not include all of the detailed schedules,information and notes necessary for a fair presentation of financial condition,results of operations and cash flows in accordance with accounting principlesgenerally accepted in the United States of America.

 

The results ofoperations for the three months ended March 31, 2004 are not necessarilyindicative of the results to be expected for the full year.

 

The preparation offinancial statements in conformity with accounting principles generallyaccepted in the United States of America requires management to make estimatesand assumptions that affect the reported amounts of assets and liabilities anddisclosure of contingent assets and liabilities at the date of the financialstatements and the reported amounts of income and expenses during the reportingperiod. Actual results could differ from those estimates.  Material estimates that are particularlysusceptible to significant change in the near-term relate to the determinationof the allowance for loan losses and the valuation of the deferred tax assets.

 

**Note3.  Earnings Per Share**

 

Basic earnings per common share is calculated on thebasis of the weighted average number of common shares outstanding.  Diluted earnings per common share includesdilutive common stock equivalents as computed under the treasury stock methodusing average common stock prices for the respective period.  All calculations have been adjusted toaccount for the 5% stock dividend paid on April 15, 2004.  Options and warrants to purchase 497,429 and440,740 shares of common stock were outstanding at March 31, 2004 and2003, respectively, and to the extent dilutive, were included in thecomputation of earnings per diluted common share.

 

The following is areconciliation of the numerators and denominators of the basic and dilutedearnings per common share calculations.

 

7

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(Dollars are inthousands, except per share data)

 
|                                                                                                |   | **Three months ended  March 31,** |   |
|-----------------------------------------------------------------------------------------------------|--------|----------------------------------------|--------|
|                                                                                                |   | **2004**                               |   | **2003** |   |
| Numerator:                                                                                          |   |                                   |   |   |   |
| Net Income                                                                                          |   | $                                      | 110    |   | $ | 114 |   |
| Denominator for basic  earnings per share-weighted average shares                                   |   | 1,417                                  |   | 1,411 |   |
| Effect of dilutive  securities:                                                                     |   |                                   |   |   |   |
| Director and employee  stock options                                                                |   | 18                                     |   | 8 |   |
| Warrants                                                                                            |   | 62                                     |   | 0 |   |
| Denominator for diluted  earnings per share- adjusted weighted average shares and assumed exercised |   | 1,497                                  |   | 1,419 |   |
|                                                                                                |   |                                   |   |   |   |
| Basic earnings per  share                                                                           |   | $                                      | 0.08   |   | $ | 0.08 |   |
| Diluted earnings per  share                                                                         |   | $                                      | 0.07   |   | $ | 0.08 |   |

 

The followingwarrants and options were issued by the Bank with respect to Bank commonstock.  Pursuant to the Agreement andPlan of Reorganization and Merger dated as of March 5, 2002 among theCompany, the Bank and Interim, as of June 30, 2002, these outstandingwarrants and stock options became warrants and stock options to purchase thecommon stock of the Company.

 

Warrants wereissued to the Bank’s underwriter in connection with its initial public offeringof common stock in June 2000. Total warrants outstanding at March 31, 2004 entitled the holdersto purchase 97,024 shares of common stock at a purchase price of$9.56 per share.  These warrantsare exercisable until June 29, 2005.

 

On June 29, 2000,the Bank issued stock options to the Bank’s employees entitling them topurchase a total of 17,224 shares of Bank common stock.  These options will vest and becomeexercisable in five equal annual installments commencing on the firstanniversary of the date of grant and continuing on each successive anniversaryof such date.  These options areexercisable at $6.60 per share for a period of ten years after the grantdate.  At March 31, 2004, all of theseoptions were still outstanding.

 

On June 29,2000, the Bank also issued stock options to the Bank’s directors entitling themto purchase a total of 5,230 shares of Bank common stock.  These options are exercisable at $6.60 pershare for a period of ten years after the date of the grant.  These options have fully vested.  At March 31, 2004, options to purchase 4,619shares of the Company’s common stock were still outstanding.

 

In April 2001,options to purchase a total of 7,277 shares of Bank common stock were grantedto the Bank’s directors at an exercise price of $8.25 per share.  These options are fully

 

8

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vested and expire tenyears from the date of the grant.  As ofMarch 31, 2004, options to purchase 6,384 shares of the Company’s common stockwere still outstanding.

 

In June 2001,options to purchase a total of 4,315 shares of Bank common stock were grantedto certain Bank employees at an exercise price of $8.25 per share, of which 20%become vested on each anniversary of the grant date.  These options expire ten years from the date of the grant.  At March 31, 2004, all of these options werestill outstanding.

 

On February 20,2002, options to purchase a total of 11,030 shares of common stock were grantedto certain Bank employees at an exercise price of $9.30 per share, of which 20%become vested on each anniversary of the grant date.  These options expire ten years from the date of the grant.  At March 31, 2004, 10,753 of these optionswere still outstanding.

 

On June 12,2002, options to purchase a total of 8,895 shares of common stock were grantedto the Bank’s directors at an exercise price of $8.69 per share.  These options are fully vested and expireten years from the date of the grant. At March 31, 2004, all of these options were still outstanding.

 

Warrants wereissued to purchasers of the Company’s common stock in an offering that closedon December 16, 2002.  Warrants wereissued for 280,475 shares of the Company’s common stock at a price of $8.71 pershare.  These warrants are immediatelyexercisable and expire three years from issue date.  At March 31, 2004, 272,728 of these warrants were stilloutstanding.

 

On January 15,2003, options to purchase a total of 11,028 shares of common stock were grantedto certain Bank employees at an exercise price of $7.82 per share, of which 20%become vested on each anniversary of the grant date.  These options expire ten years from the date of the grant.  At March 31, 2004, all of these options werestill outstanding.

 

OnJanuary 15, 2003, options to purchase a total of 8,280 shares of commonstock were granted to the Bank’s directors at an exercise price of $7.82 pershare.  These options are fully vestedand expire ten years from the date of the grant.  At March 31, 2004, all of these options were still outstanding.

 

On April 22, 2003,options to purchase a total of 7,880 shares of common stock were granted to theBank’s directors at an exercise price of $8.71 per share.  These options are fully vested and expireten years from the date of the grant. At March 31, 2004, all of these options were still outstanding.

 

On January 2,2004, options to purchase a total of 32,550 shares of common stock were grantedto certain Bank employees at an exercise price of $10.89 per share.  These options become fully vested one yearfrom the date of the grant and expire ten years from the date of thegrant.  At March 31, 2004, all of theseoptions were still outstanding.

 

On January 2, 2004, options to purchase a total of15,750 shares of common stock were granted to the Bank’s directors at anexercise price of $10.89 per share. These options become 

 

9

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fully vested elevenmonths from the date of the grant and expire ten years from the date of thegrant.  At March 31, 2004, all of theseoptions were still outstanding.

 

**Note4.  Allowance for Loan Losses**

 

The Bank determines theprovision for loan losses through a quarterly analysis of the allowance forloan losses.  Factors such as changes inthe nature and volume of the portfolio, overall portfolio quality,concentrations of credit risk, review of specific problem loans, currenteconomic conditions and trends that may affect the ability of borrowers to pay,and prior loss experience within the various categories of the portfolio areconsidered when reviewing the risks in the portfolio.  All loans greater than $100,000 and all classified loans areanalyzed individually.  While managementbelieves the allowance for loan losses is currently appropriate, futureadditions to the allowance may be necessary based on changes in generaleconomic conditions and/or the condition of specific borrowers.  The allowance is reviewed quarterly by theBoard of Directors and senior management of the Bank.  In addition, various regulatory agencies, as an integral part oftheir examination process, periodically review the allowance for loanlosses.  Such agencies may require theBank to recognize additions to the allowance based on their judgments aboutinformation available to them at the time of their examination.

 

In addition to management review, an external serviceprovides a detailed loan review analysis. In the course of a year, all loans in excess of $100,000 are reviewedand rated.  In addition, other smallerloans are reviewed on a random basis. At each quarterly review cycle, all classified loans are assigned aspecific reserve allocation based on the guidelines established in the Bank’scredit policy which was approved by the Board of Directors.  These could range from 2.5%-10% on special mentionloans; 10%-25% on substandard loans; 50%-75% on loans rated doubtful and 100%on any loan rated loss.

 

The balance of any rated loan is deducted from theremaining general portfolio classification. The general category is currently segregated by commercial real estateloans, commercial and industrial loans, residential real estate loans,construction loans and other consumer loans. Each category of loan is then assigned loss factors based on a review ofthe following areas: (i) historical losses (due to limited loss experience, we use theloss experience of peer banks as reported in the Uniform Bank PerformanceReport); (ii) policies and procedures; (iii) economic conditions;(iv) nature and volume; (v) management; (vi) oversight;(vii) concentrations; and (viii) external factors.  The sum of the assigned loss factors is thenapplied to the outstanding balance of the respective category.

 

**Note5.  Litigation**

 

We areperiodically parties to or otherwise involved in legal proceedings arising inthe normal course of business, such as claims to enforce liens, claimsinvolving the making and servicing of real property loans, and other issuesincident to our business.  We do notbelieve that there is any pending or threatened proceeding against us which, ifdetermined adversely, would have a material effect on our business or financialposition.

 

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**Note6.  Stock Options**

 

At March 31, 2004,the Company has two stock-based compensation plans, which are described morefully in note 3.  The Company accountsfor those plans under the recognition and measurement principles of APB OpinionNo. 25, *Accountingfor Stock Issued to Employees*, and related interpretations.  No stock-based employee compensation cost isreflected in net income, as all option granted under those plans had anexercise price equal to the market value of the underlying common stock on thedate of grant.  The following tableillustrates the effect on net income and earnings per share if the Company hadapplied the fair value recognition provision of FASB Statement No. 123, *Accountingfor Stock-Based Compensation*, to stock-based employee compensation.

 
|                         |   | **Three  Months Ended** |   |
|------------------------------|--------|-------------------------|--------|
|                         |   | **March 31,  2004**     |   | **March 31,  2003** |   |
|                         |   | **As  reported**        |   | **Compensation  expense** |   | **Pro forma** |   | **As  reported** |   | **Compensation  expense** |   | **Pro forma** |   |
| Net income                   |   | $                       | 110    |   | 68 |   | 42 |   | 114 |   | 24 |   | 90 |   |
| Basic earnings  per share    |   | 0.08                    |   | 0.05 |   | 0.03 |   | 0.08 |   | 0.02 |   | 0.06 |   |
| Dilutive  earnings per share |   | 0.07                    |   | 0.04 |   | 0.03 |   | 0.08 |   | 0.02 |   | 0.06 |   |
|                              |        |                         |        |  |  |  |  |  |  |  |  |  |  |  |

 

**Note 7.  Common Stock Offering**

 

On April 26, 2004, the Company completed its offeringof common stock.  In the offering, theCompany sold, through Ryan Beck & Co., 828,000 shares at an offering priceof $10.00 per share.  Net proceeds areexpected to approximate $7.2 million. The proceeds are being used to fund, among other things, the continuedgrowth of the Bank, including the establishment of additional branches.

 

**Item2.****                                   MANAGEMENT’SDISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS**

 

**GENERAL**

 

The followingpresents management’s discussion and analysis of our financial condition andresults of operations and should be read in conjunction with the financialstatements and related notes included in Form 10-KSB filed with the Securitiesand Exchange

 

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commission on March 23,2004.  This Form 10-QSB containsforward-looking statements.* *Youcan find many of these statements before and after words such as “may,”“could,” “should,” “will,” “would,” “believe,” “expect,” “anticipate,”“estimate,” “project,” “intend,” “plan,” “seek,” “assume” or similarexpressions.

 

These forward-looking statements, implicitly andexplicitly, include the assumptions underlying the statements and otherinformation with respect to our beliefs, plans, objectives, goals,expectations, anticipations, estimates, intentions, financial condition,results of operations, future performance and business, including our:

 

•                  plans for theuse of the net proceeds of our underwritten public offering of828,000 shares of common stock, which was completed on April 26,2004;

 

•                  expectations forcontinued acceptance and success in the banking and business communities in ourmarket area;

 

•                  expectations asto the amount, mix, yield and other characteristics of the deposits and loanswe expect to acquire and make; and

 

•                  expectations andestimates with respect to our revenues, expenses, earnings, return on equity,return on assets, efficiency ratio, asset quality and other financial data andcapital and performance ratios.

 

Although we believe that the expectations reflected inour forward-looking statements are reasonable, these statements involve risksand uncertainties that are subject to change based on various important factors(some of which are beyond our control). The following factors, among others, could cause our financialperformance to differ materially from our goals, plans, objectives, intentions,expectations, and other forward-looking statements:

 

•                  the strength ofthe United States economy in general and the strength of the regional and localeconomies in which we conduct operations;

 

•                  the effects of,and changes in, trade, monetary and fiscal policies and laws, includinginterest rate policies of the Board of Governors of the Federal Reserve System;

 

•                  inflation,interest rate, market and monetary fluctuations;

 

•                  our ability toraise the capital necessary on a timely basis to support our continued assetgrowth and geographic expansion;

 

•                  our ability tomaintain and continue to obtain the desired customers and employees;

 

•                  our timelydevelopment of new products and services in a changing environment, includingthe features, pricing and quality compared to the products and services of ourcompetitors;

 

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•                  the willingnessof prospective customers to substitute our products and services for the bankproducts and services they currently use, and the impact of competition frombanks, thrifts and others in our market;

 

•                  changes in thetiming and structure of our growth and related transactions and other changedfacts and circumstances resulting from the passage of time;

 

•                  the impact ofchanges in financial services policies, laws and regulations, including laws,regulations and policies concerning taxes, banking, securities and insurance,and the application thereof by regulatory bodies;

 

•                  technologicalchanges;

 

•                  change inconsumer spending and savings habits; and

 

•                  regulatory orjudicial proceedings.

 

If one or more of the factors affecting ourforward-looking information and statements proves incorrect, then our actualresults, performance or achievements could differ materially from thoseexpressed in, or implied by, forward-looking information and statementscontained in this prospectus. Therefore, we caution you not to place undue reliance on ourforward-looking information and statements.

 

We do not intend to update our forward-lookinginformation and statements, whether written or oral, to reflect change.  All forward-looking statements attributableto us are expressly qualified by these cautionary statements.

 

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**Overview**

** **

Effective June 30, 2002, the Bank became a whollyowned subsidiary of the Company, which has no material operations other thanownership of the Bank.  Therefore, thefinancial statements of 1st Colonial prior to June 30, 2002 are thehistorical statements of the Bank.  Allper share data has been restated for the effect of the 10% stock dividend paidon January 15, 2002 to shareholders of record as of January 2, 2002,the 5% stock dividend paid on April 15, 2003 to shareholders of record asof April 1, 2003 and the 5% stock dividend paid on April 15, 2004 toshareholders of record as of April 1, 2004.

 

The Bank conducts community banking activities byaccepting deposits from the public and investing the proceeds in loans andinvestment securities.  The Bank’slending products include commercial loans and lines of credit, consumer andhome equity loans, and multi-family residential and non-residential real estateloans.  In order to manage its liquidityand interest rate risk, the Bank maintains an investment portfolio consistingof municipal, U.S. government and mortgage-backed securities, most of which areinvestment grade.  The Bank’s loan andinvestment portfolios are funded with deposits as well as collateralizedborrowings secured by the Bank’s investment securities.

 

Our earnings are largely dependent upon net interestincome (the difference between what we earn on our loans and investments andwhat we pay on deposits and borrowings). In addition to net interest income, our net income is impacted by ourloan loss provision, other income (mostly deposit fees and income from sale ofloans held for sale) and other expense (such as salaries and benefits,professional fees, occupancy cost and data processing expenses).

 

The Bank’s mainoffice is located at 1040 Haddon Avenue, Collingswood, New Jersey.

 

At March 31,2004, the Bank had 23 full-time and 3 part-time employees.

 

**CRITICALACCOUNTING MATTERS**

 

The preparation of financial statements in conformitywith accounting principles generally accepted in the United States of Americarequires management to make estimates and assumptions that affect the reportedamounts of assets and liabilities and disclosure of contingent assets andliabilities at the date of the financial statements and the reported amounts ofincome and expenses during the reporting period.  Actual results could differ from those estimates.  Material estimates that are particularlysusceptible to significant change in the near-term relate to the determinationof the allowance for loan losses and the valuation of the deferred tax assets.

 

See note 4 to thefinancial statements in Item 1 above for a description of the Bank’s policieswith respect to the allowance for loan losses.

 

Deferred tax assets and liabilities are recognized forthe future tax consequences attributable to differences between the financialstatement carrying amounts of existing assets and liabilities and theirrespective tax bases, as well as operating loss carryforwards.  Deferred

 

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tax assets andliabilities are measured using enacted tax rates expected to apply to taxableincome in the years in which those temporary differences are expected to berecovered or settled.  The effect ondeferred tax assets and liabilities of a change in tax rates is recognized inincome in the period that includes the enactment date.  A valuation allowance is established againstdeferred tax assets when, in the judgment of management, it is more likely thatnot that such deferred tax assets will not become available.  The realizability of deferred tax assets isdependent upon various factors, including the generation of future taxableincome, the existence of taxes paid and recoverable, the reversal of deferredtax liabilities, and tax planning strategies.

 

**FINANCIALCONDITION**

 

The Company’sassets totaled $120.4 million at March 31, 2004, as compared to$118.1 million at December 31, 2003, an increase of $2.4 million or 2.0%. Thisincrease was caused principally by an increase in the Bank’s deposits of$1.6 million and an increase of $449,000 in short-term borrowings.  The Bank’s assets at March 31, 2004,consisted primarily of cash and cash equivalents, including federal funds soldand interest bearing deposits, which totaled $19.4 million, investmentsecurities, which totaled $31.3 million and loans, including loans availablefor sale, which totaled $68.1 million. The Bank’s premises and equipment totaled $933,000 at March 31,2004, consisting primarily of leasehold improvements at the Collingswood mainoffice and land and improvements for the Westville branch.  The Bank’s assets at December 31, 2003consisted primarily of cash and cash equivalents, including federal funds soldand interest bearing deposits, which totaled $16.5 million, investmentsecurities which totaled $33.8 million, and loans which totaled $66.1 million.

 

During the first threemonths of 2004, we continued to concentrate our efforts in building our loanportfolio.  Total loans, including loansavailable for sale, increased during such period by $2.0 million, or 3.1%.  Deposits totaled $105.9 million atMarch 31, 2004, as compared to $104.3 million at December 31, 2003, anincrease of $1.6 million or 1.5%. Non-interest bearing demand deposits totaled $22.8 million andinterest-bearing demand deposits totaled $31.0 million at March 31, 2004,as compared to $20.4 million and $37.3 million, respectively, at December 31,2003.  A $2.4 million increase in demandaccounts was offset by a seasonal decrease of $3.6 million in municipaldeposits and a $3.3 million decrease in labor union deposits.  Other interest bearing demand depositsincreased $655,000.  Savings depositstotaled $22.6 million and certificates of deposit totaled $29.4 million atMarch 31, 2004, as compared to $20.4 and $26.2 million, respectively, atDecember 31, 2003.

 

**RESULTSOF OPERATIONS**

 

*General.*  Net income decreased 3.5% to $110,000for the three months ended March 31, 2004, as compared to net income of$114,000 for the period ended March 31, 2003.  This decrease was due to a $72,000 increase in other expense, onlypartially offset by a $64,000 increase in net interest income.  Other income declined by $2,000 offset by a$2,000 reduction in the provision for loan losses.  Due to lower operating income, income tax expense declined by $4,000.

 

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Basic earnings per share were $0.08 for the threemonths ended March 31, 2004 and the three months ended March 31,2003.  Diluted earnings per sharedeclined to $0.07 for the three months ended March 31, 2004 compared to $0.08 pershare for the prior period.  Thisdecline was due to the fact that the 272,728 warrants issued by the Company inDecember 2002 had a dilutive effect for the three month period ended March 31,2004.  However, these warrants had anantidilutive effect in the comparable prior period.

 

*NetInterest Income*. Interest income increased by $68,000 to $1.2 million, primarily dueto an increase in interest and fees on loans of $97,000 for the three monthsended March 31, 2004.  Averageloans and loans available for sale outstanding increased by $11.9 million or21.4% from the prior period, which more than offset the decline in the averageyield on the loan portfolio.  Theaverage yield on our loan portfolio declined from 6.57% for the three monthperiod ended March 31, 2003 to 5.95% for the current three month period due tothe declining interest rate environment. Interest on federal funds sold and interest bearing deposits increasedby $8,000 due to an increase of $3.8 million in average balances, despitelower yields caused by market rate declines. While the average balance of the investment portfolio increased $2million from the prior period, interest and dividends on investments decreasedby $37,000 due to the overall decline in market rates.  The average tax-equivalent yield oninvestment securities declined to 2.69% in 2004 from 3.29% in 2003.

 

Total interest expense increased $4,000 from the priorperiod, due principally to a $12.5 million increase in average interestbearing liabilities.  The increase inthe average balance of deposits was ameliorated by the lower rates paid ondeposit accounts and short-term borrowings, as the cost of interest-bearingliabilities declined from 1.79% in 2003 to 1.53% in 2004.  Our net interest margin was 3.40% for thethree months ended March 31, 2004 as compared to 3.78% for the priorperiod ended March 31, 2003, as our interest-earning assets repriceddownward to a greater degree than our interest-bearing liabilities.

 

*Provisionfor Loan Losses*.  Theprovision for loan losses decreased to $58,000 for three months endedMarch 31, 2004 compared to $60,000 for the prior period.  Factors such as changes in the nature andvolume of the portfolio, overall portfolio quality, concentrations of creditrisk, review of specific problem loans, current economic conditions and trendsthat may affect the ability of borrowers to pay, and prior loss experiencewithin the various categories of the portfolio are considered when reviewingthe risks in the portfolio.  Theallowance for loan losses was $833,000 at March 31, 2004, or 1.21% of totaloutstanding loans.

 

*TotalOther Income*.  Otherincome, primarily service charges on deposit accounts and gains on sale ofmortgages held for sale, decreased $2,000 to $59,000 for the three months endedMarch 31, 2004.  Fees from depositaccount holders for the three months ended March 31, 2004 wereapproximately $36,000 compared to $33,000 in the prior period.  This 9.1% increase was principally due todeposit growth.  For the three monthsended March 31, 2004, we recorded fees on the sale of residential mortgageloans held for sale of $9,000 compared to $20,000 in the prior period.  This was primarily due to decreasedrefinancing activity due to higher interest rates during the current threemonth period.  In general, we sell allnewly originated fixed-rate residential mortgage loans into the secondarymarket on a servicing released basis. The increase in other fees and charges of $6,000 to $14,000 in 2004 from$8,000 in 2003, was primarily volume related.

 

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*TotalOther Expense*.  Totalother expenses for the three months ended March 31, 2004 increased $72,000or 11.0% to $729,000 compared to $657,000 in the prior period.  Most of the increases were due to growthrelated factors:

 

•                  Employee relatedexpenses were $313,000 for the period compared to $279,000 for the three monthsended March 31, 2003, reflecting additions to our staff as well as normalcompensation increases.

 

•                  Occupancy andequipment expenses increased $10,000 to $92,000 for the three months endedMarch 31, 2004, compared to $82,000 in the prior period.  Additional equipment for new staff andnormal equipment upgrades accounted for these increases.

 

•                  Due to increasedbusiness volume, data processing expenses increased 21.0% to $75,000 for thethree months ended March 31, 2004 compared to $62,000 for the priorperiod.

 

•                  Professionalservices, including audit, loan review, and legal expenses increased $4,000 to$68,000 during the three months ended March 31, 2004 compared to $64,000for the comparable prior period.  Thisincrease was primarily related to our growth.

 

•                  Other operatingexpenses included postage, ATM charges, telephone expenses, businessdevelopment costs and other miscellaneous expenses.  Due to growth and increased activity, other operating expensesincreased $34,000 or 25.0% to $170,000 for the three months endedMarch 31, 2004, compared to $136,000 for the three months endedMarch 31, 2003.

 

The increases above were partially offset by adecrease in advertising expenses of $23,000 to $11,000 for the three monthsended March 31, 2004 compared to $34,000 in the prior period.  The prior period contained activity relatingto our Westville opening and other marketing campaigns designed to increasecommunity awareness of our presence, products and capabilities.

 

*IncomeTaxes*.  Our recordedincome tax expense for the three months ended March 31, 2004 was $73,000compared to $77,000 in the prior period. The decrease in income tax expense is due to lower pre-tax income forthe three months ended March 31, 2004 as compared to the priorperiod.  The effective rates for thethree months ended March 31, 2004 and 2003 were 39.9% and 40.3%,respectively.

 

**LIQUIDITY**

 

Liquidityrepresents the ability to meet present and future financial obligations througheither the sale or maturity of existing assets or the acquisition of additionalfunds through deposits and borrowings. Liquid assets include cash, federal funds sold, securities classified asavailable for sale, and loans maturing within one year.  As a result of the Bank’s management of

 

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liquid assets, and theability to generate liquidity through deposits and short-term customer repos,management believes that the Bank maintains overall liquidity sufficient tosatisfy its deposit requirements and meet its customers’ credit needs.  In addition, the Bank maintains a $900,000secured line of credit and a $4.0 million unsecured line of credit with commercialbanks.

 

At March 31, 2004,cash, securities classified as available for sale, interest bearing deposits,and federal funds sold were 37.2% of total assets.  Asset liquidity is also provided by managing loans and thematurity of investment securities.  Tothe extent possible, loans are funded with deposits or other funding withcoinciding maturity or repricing dates.

 

Net cash providedby operating activities for the three months ended March 31, 2004 was$447,000 as compared to cash used by operating activities of $526,000 in theprior period.  The change relatesprimarily to a decrease in the level of mortgage loans held for sale.  Net cash provided by investing activitieswas $362,000 compared to $286,000 used in the prior period.  The net change was largely due to a decreasein the amount of cash being invested in securities.  Funds provided by financing activities were $2.0 million for theperiod ended March 31, 2004 compared to $2.2 million for the prior period.  The primary reason was slower deposit growthoffset by an increase in other borrowed funds and proceeds from warrantconversions.  Borrowed funds increasedas a result of a daily sweep from a large depository account.  All collected balances in excess of athreshold amount are swept into an overnight repurchase agreement.

 

**CAPITALRESOURCES**

 

The assessment ofcapital adequacy depends on a number of factors such as asset quality,liquidity, earnings performance, changing competitive conditions, economicforces and growth and expansion activities. The Bank seeks to maintain a capital base to support its growth andexpansion activities, to provide stability to current operations and to promotepublic confidence.

 

The Bank’s capitalposition exceeds regulatory minimums. The primary indicators relied on by the Office of the Comptroller of theCurrency and other bank regulators in measuring strength of capital positionare the Tier 1 Risk-Based Capital Ratio, Total Risk-Based Capital Ratioand Leverage Ratio.  Tier 1 Capitalconsists of common and qualifying preferred stockholders equity lessgoodwill.  Total Capital consists ofTier 1 Capital, and a portion of the allowance for possible loanlosses.  Risk-based capital ratios arecalculated with reference to risk weighted assets, which consist of both on andoff balance sheet risks (such as letters of credit and unused lines ofcredit).  The Leverage Ratio consists ofTier 1 capital divided by quarterly average assets.

 

The followingtable shows the Bank’s regulatory capital ratios and shareholders’ equity tototal assets as of March 31, 2004:

 

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|                                       |   | **Regulatory  Minimum** |   | **Actual  Ratio** |   |
|--------------------------------------------|--------|-------------------------|--------|-------------------|--------|
|                                       |   |                    |   |              |   |
| Tier 1  risk-based capital ratio           |   | 4.0                     | %      | 13.3              | %      |
| Total risk-based  capital ratio            |   | 8.0                     | %      | 14.4              | %      |
| Tier 1 leverage  ratio                     |   | 4.0                     | %      | 8.4               | %      |
| Shareholders’  equity to total assets |   | None                    |   | 8.2               | %      |

 

On April 26, 2004, the Company completed itspublic offering of 828,000 shares of common stock at a price of $10.00 pershare.  The offering was underwritten ona firm-commitment basis by Ryan Beck & Co., Inc.  Net of underwriting discounts andcommissions, the Company received proceeds of approximately $7.7 millionfrom the offering.  We will use aportion of the proceeds to enable the Bank to increase its legal lending limitand to provide the capital necessary, in light of the regulatory capitalrequirements described above, to support the Bank’s growth.  A portion of the proceeds also may be usedto fund the establishment or acquisition of additional branches, if we findlocations that we believe will be successful and will provide growthopportunities for the Bank.  Although wedesire to open two additional branches by the first quarter of 2006, wecurrently have no definitive plans or arrangements to establish or acquire anybranches.

 

**Item 3****.  Controls and Procedures**

 

As of March 31, 2004, 1st Colonial, under thesupervision and with the participation of its management, including the ChiefExecutive Officer and the Chief Financial Officer, evaluated the effectivenessof the design and operation of 1st Colonial’s disclosure controls andprocedures.  Based on that evaluation,1st Colonial’s Chief Executive Officer and Chief Financial Officer concludedthat 1st Colonial’s disclosure controls and procedures are effective.  There were no significant changes to 1stColonial’s internal controls or in other factors that could significantlyaffect these controls subsequent to the date of their evaluation.

 

**PART II****– OTHERINFORMATION**

 

**Item6.  Exhibits and Reports on Form 8-K.**

 

(a)  Exhibits

 
| **Number** |   | **Title**                                                                                                                                                                                                                                     |
|------------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|       |   |                                                                                                                                                                                                                                          |
| 3.1        |   | Articles of Incorporation of 1st Colonial Bancorp,  Inc. (Incorporated by reference to Exhibit 3.1 to 1st Colonial Bancorp,  Inc.’s Registration Statement No. 333-84114 on Form S-4 filed with the  Securities and Exchange Commission) |
|       |   |                                                                                                                                                                                                                                          |
| 3.2        |   | Bylaws of 1st Colonial Bancorp, Inc. (Incorporated  by reference to Exhibit 3.2 to 1st Colonial Bancorp, Inc.’s Registration  Statement No. 333-84114 on Form S-4 filed with the Securities and Exchange  Commission)                    |

 

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| 4.1    |   | Form of certificate evidencing shares of 1st  Colonial Bancorp, Inc. 1st Colonial Bancorp, Inc.’s Common Stock  (Incorporated by reference to Exhibit 4.1 to 1st Colonial Bancorp, Inc.’s  Registration Statement No. 333-84114 on Form S-4 filed with the Securities  and Exchange Commission) |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   |                                                                                                                                                                                                                                                                                                      |
| 31.1   |   | Chief Executive Officer Certification pursuant to  Section 302 of the Sarbanes-Oxley Act of 2002.                                                                                                                                                                                                         |
|   |   |                                                                                                                                                                                                                                                                                                      |
| 31.2   |   | Chief Financial Officer Certification pursuant to  Section 302 of the Sarbanes-Oxley Act of 2002.                                                                                                                                                                                                         |
|   |   |                                                                                                                                                                                                                                                                                                      |
| 32.1   |   | Certification of the Chief Executive Officer of the  Registrant pursuant to 18 U.S.C. Section 1350, as adopted Pursuant to Section  906 of the Sarbanes-Oxley Act of 2002                                                                                                                                 |
|   |   |                                                                                                                                                                                                                                                                                                      |
| 32.2   |   | Certification of the Chief Financial Officer of the  Registrant pursuant to 18 U.S.C. Section 1350, as adopted Pursuant to Section  906 of the Sarbanes-Oxley Act of 2002                                                                                                                                 |

 
| (b)    |   | Reports on Form 8-K                                                                                                                                                                                                                                                                                                    |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   |                                                                                                                                                                                                                                                                                                                   |
|   |   | A Current Report on Form 8-K dated March 18,  2004, was filed by 1st Colonial Bancorp, Inc. on March 18, 2004,  reporting matters under Items 7 (Financial Statements and Exhibits) and  12 (Results of Operations and Financial Condition).  No financial statements were filed with such report. |

 

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**SIGNATURES**

 

Pursuant to therequirements of the Securities Exchange Act of 1934, the registrant has dulycaused this report to be signed on its behalf by the undersigned thereunto dulyauthorized.

 
|                      | 1ST COLONIAL BANCORP, INC.     |
|---------------------------|--------------------------------|
|                      |                           |
|                      |                           |
| Date:  May  12, 2004 | /s/  Gerard  M. Banmiller |   |
|                      | Gerard M. Banmiller            |
|                      | President and                  |
|                      | Chief Executive Officer        |
|                      |                           |
| Date:  May  12, 2004 | /s/  Robert  C. Faix      |   |
|                      | Robert C. Faix                 |
|                      | Senior Vice President and      |
|                      | Chief Financial Officer        |

 

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