FORM 10-QSB

                       SECURITIES AND EXCHANGE COMMISSION

                            WASHINGTON, D. C. 20549

                      ------------------------------------

(Mark One)

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

               For the quarterly period ended September 30, 1995
                                       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 No. 0-11526

                           FIRST COLONIAL GROUP, INC.
             (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

      PENNSYLVANIA                                    23-2228154
(STATE OR OTHER JURISDICTION OF            (I.R.S. EMPLOYER IDENTIFICATION NO.)
 INCORPORATION OR ORGANIZATION

76 SO. MAIN ST., NAZARETH, PA                           18064
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICE                (ZIP CODE)

REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE:  610-746-7300

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 THE NUMBER OF SHARES  OUTSTANDING  OF EACH OF THE  ISSUER'S  CLASSES OF
COMMON  STOCK AS OF THE  LATEST  PRACTICABLE  DATE:  1,467,619  SHARES OF COMMON
STOCK, $5 PAR VALUE, OUTSTANDING ON SEPTEMBER 30, 1995.

<PAGE>


                  FIRST COLONIAL GROUP, INC. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEET

                             (Dollars in Thousands)
                                  (Unaudited)
<TABLE>

                                                   Sept. 30          Dec. 31
                                                     1995             1994
                                                 ---------         ---------
<S>                                           <C>               <C>   
ASSETS
  Cash and Due From Banks                        $  11,082         $  10,669
  Federal Funds Sold                                   --                --
                                                 ---------         ---------
    Total Cash and Cash Equivalents                 11,082            10,669
  Interest-Bearing Deposits With Banks                 447               401
  Investment Securities                             37,296            36,525
    (Market Value: Sept. 30, 1995 - $37,195;
     Dec. 31, 1994 - $34,298          
  Securities Available-for-Sale at Fair Value       45,618            43,610
  Mortgage Loans Held-for-Sale                         732                69
  Total Loans, Net of Unearned Discount            192,523           185,215
    Less:  Allowance for Possible Loan Losses       (2,422)           (2,187)
                                                 ---------         ---------
      Net Loans                                    190,101           183,028
  Premises and Equipment                             6,315             5,862
  Other Real Estate                                    528               373
  Accrued Interest Income                            2,025             1,748
  Other Assets                                       2,774             2,268
                                                 ---------         ---------
      TOTAL ASSETS                               $ 296,918         $ 284,553
                                                 =========         =========
LIABILITIES
  Deposits
    Non-Interest Bearing Deposits                $  27,106         $  25,028
    Interest-Bearing Deposits                      220,275           222,504
                                                 ---------         ---------
      Total Deposits                               247,381           247,532
  Securities Sold Under Agreements to Repurchase     8,769             9,027
  Short-Term Borrowing                              10,293               750
  Long-Term Debt                                       643               862
  Accrued Interest Payable                           3,049             2,682
  Other Liabilities                                  2,668             1,300
                                                 ---------         ---------
      TOTAL LIABILITIES                            272,803           262,153
                                                 ---------         ---------
SHAREHOLDERS' EQUITY
  Preferred Stock, Par Value $5.00 a share
    Authorized - 500,000 shares, none Issued           --                --
  Common Stock, Par Value $5.00 a share
    Authorized - 10,000,000 shares
    Issued -      1,467,619 shares at
    Sept. 30,  1995 and 1,455,427 shares
    at Dec. 31, 1994                                 7,338             7,277
  Additional Paid in Capital                         7,010             6,882
  Retained Earnings                                 10,089            10,050
  Employee Stock Ownership Plan Debt                  (643)             (775)
  Net Unrealized Gain (Loss) on
    Securities Available-for-Sale                      321            (1,034)
                                                 ---------         ---------
Total Shareholders' Equity                          24,115            22,400
                                                 ---------         ---------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY       $ 296,918         $ 284,553
                                                 =========         =========
</TABLE>

See accompanying notes to interim consolidated financial statements.

<PAGE>

                  FIRST COLONIAL GROUP, INC. AND SUBSIDIARIES
                        CONSOLIDATED STATEMENT OF INCOME

                 (Dollars in Thousands, except Per Share Data)
                                  (Unaudited)

<TABLE>

                                     Three Months Ended      Nine Months Ended
                                    Sept. 30,   Sept. 30,   Sept. 30,  Sept. 30,
                                   ---------   ---------   --------- ---------
<S>                                <C>         <C>        <C>       <C>
INTEREST INCOME:
 Interest and Fees on Loans           $4,316      $3,774     $12,577   $11,079
 Investment Securities Income
   Taxable                             1,174         890       3,324     2,444
   Tax-Exempt                             95          86         290       253
 Interest on Other Investments
   Deposits With Banks                    34          38         101       126
   Federal Funds Sold                      1          24           2        57
                                   ---------   ---------   --------- ---------
     Total Interest Income             5,620       4,812      16,294    13,959
                                   ---------   ---------   --------- ---------
INTEREST EXPENSE:
 Interest on Deposits                  2,182       1,703       6,114     5,070
 Interest on Repurchase Agreements        93          46         284        91
 Interest on Short-Term Borrowing        114           3         317         3
 Interest on Long-Term Debt               31          32          95        98
                                   ---------   ---------   --------- ---------
     Total Interest Expense            2,420       1,784       6,810     5,262
                                   ---------   ---------   --------- ---------
NET INTEREST INCOME:                   3,200       3,028       9,484     8,697
 Provision for Possible Loan Losses      100         100       1,698       300
                                   ---------   ---------   --------- ---------
   Net Interest Income After Provision
     For Possible Loan Losses          3,100       2,928       7,786     8,397
                                   ---------   ---------   --------- ---------
OTHER INCOME:
 Trust Income                            161         171         481       516
 Service Charges on Deposit Accounts     260         194         776       573
 Investment Securities Gains, Net         29           9          15        89
 Gain (Loss) on the Sale of 
   Mortgage Loans                         (4)        (15)          9        79
 Other Operating Income                  161         117         414       343
                                   ---------   ---------   --------- ---------
     Total Other Income                  607         476       1,695     1,600
                                   ---------   ---------   --------- ---------
OTHER EXPENSES:
   Salaries and Employee Benefits      1,273       1,170       3,867     3,450
   Net Occupancy and Equipment Expense   476         427       1,391     1,238
   Other Operating Expenses            1,009       1,003       3,215     2,817
                                   ---------   ---------   --------- ---------
         Total Other Expenses          2,758       2,600       8,473     7,505
                                   ---------   ---------   --------- ---------
Income  Before Income Taxes              949         804       1,008     2,492

Provision for Income Taxes               290         243         241       755
                                   ---------   ---------   --------- ---------
NET INCOME                              $659        $561        $767    $1,737
                                   =========   =========   ========= =========
Net Income Per Share                   $0.46       $0.40       $0.54     $1.23
                                   =========   =========   ========= =========
Average Shares Outstanding         1,435,068   1,413,664   1,430,073 1,408,391
 
</TABLE>


See accompanying notes to interim consolidated financial statements.

<PAGE>

                           FIRST COLONIAL GROUP, INC.
                      CONSOLIDATED STATEMENT OF CASH FLOWS

                             (Dollars in Thousands)
                                  (Unaudited)
<TABLE>

                                                        Nine Months Ended
                                                     Sept. 30,    Sept. 30,
                                                        1995        1994
                                                     --------    --------
<S>                                                <C>        <C> 
OPERATING ACTIVITIES
Net Income                                           $    767    $  1,737
Adjustments to Reconcile Net Income to Net Cash
 Provided by Operating Activities:
   Provision for Possible Loan Losses                   1,698         300
   Depreciation and Amortization                          463         321
   Amortization of Security Discounts                    (115)        (66)
   Amortization of Security Premiums                      145         202
   Amortization of Deferred Fees on Loans                  49        (258)
   Investment Securities Gains, Net                       (15)        (89)
   Gain on Sale of Mortgage Loans                          (9)        (79)
   Mortgage Loans Originated for Sale                  (4,105)     (4,141)
   Mortgage Loan Sales                                  3,442      18,836
 Changes in Assets and Liabilities:
   Net Increase in Accrued Interest Income               (277)       (243)
   Increase (Decrease) in Accrued Interest Payable        367        (621)
   Net Increase in Other Assets                          (519)       (835)
   Net Increase in Other Liabilities                      669          40
                                                     --------    --------
Net Cash Provided by Operating Activities               2,560      15,104
                                                     --------    --------
INVESTING ACTIVITIES
Proceeds from Maturities of Securities
  Available-for-Sale                                    6,175       8,288
Proceeds from Maturities of Securities
  Held-to-Maturity                                      2,036       3,805
Proceeds from Sales of Securities
  Available-for-Sale                                    6,156       3,850
Purchase of Securities Available-for-Sale             (12,272)    (20,268)
Purchase of Securities Held-to-Maturity                (2,836)    (13,522)
Net (Increase) Decrease in Interest Bearing
  Deposits With Banks                                     (46)        248
Net Increase in Loans                                  (9,055)    (11,327)
Purchase of Premises and Equipment, Net                  (903)       (432)
Proceeds from Sale of Other Real Estate Owned              89         882
                                                     --------    --------
Net Cash Used In Investing Activities                 (10,656)    (28,476)
                                                     --------    --------
FINANCING ACTIVITIES
Net Increase (Decrease) in Interest and
  Non-Interest Bearing Demand Deposits
  and Savings Accounts                                (14,550)      8,342
Net Increase (Decrease) in Certificates
  of Deposits                                          14,399      (2,144)
Repayment of Long-Term Debt                              (219)       (250)
Increase in Short-Term Borrowings                       9,675         540
Net (Decrease) Increase in
  Repurchase Agreements                                  (258)      4,154
Proceeds from Issuance of Stock                           190         184
Cash Dividends                                           (728)       (713)
Cash in Lieu of Fractional Shares                        --            (3)
                                                     --------    --------
Net Cash Provided by Financing Activities               8,509      10,110
                                                     --------    --------
Increase in Cash and Cash Equivalents                     413      (3,262)
Cash and Cash Equivalents, January 1                   10,669      14,931
                                                     --------    --------
Cash and Cash Equivalents, End of Period             $ 11,082    $ 11,669
                                                     ========    ========
</TABLE>


See accompanying notes to consolidated financial statements.

<PAGE>

                           FIRST COLONIAL GROUP, INC.

               NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS

                                  (Unaudited)

NOTE A  -  GENERAL

The accompanying  Consolidated  Financial  Statements,  Footnotes and Discussion
should be read in conjunction with the Audited Financial Statements,  Footnotes,
and  Discussion  contained  in the  Company's  Annual  Report for the year ended
December 31, 1994.

The financial information presented herein is unaudited; however, in the opinion
of  management,  all  adjustments   (which  include  only  normal   recurring
adjustments)  necessary to present  fairly the unaudited  financial  information
have been made.  The results for the three and nine months ended  September  30,
1995 are not necessarily  indicative of results to be expected for the full year
or any other interim period.

NOTE B  -  CASH DIVIDENDS

On August 21,  1995 the  Company  paid its 1995 third  quarter  dividend  on its
common stock of $.17 per share to shareholders of record on August 10, 1995.

NOTE C  -  IMPAIRED LOANS

On  January  1, 1995 the  Company  adopted  Statement  of  Financial  Accounting
Standards  (SFAS) No. 114,  "Accounting for Creditors for Impairment of a Loan",
as amended by SFAS No. 118,  "Accounting by Creditors for Impairment of a Loan -
Income  Recognition  and  Disclosures".  SFAS No. 114  requires  that a creditor
measure  impairment  based on the present  value of  expected  future cash flows
discounted at the loan's  effective  interest  rate,  except that as a practical
expedient, a creditor may measure impairment based on a loans' observable market
price, or the fair value of the collecteral if the loan is collateral dependent.
Regardless of the measurement  method, a creditor must measure  impairment based
on  the  fair  value  of  the  collateral  when  the  creditor  determines  that
foreclosure is probable.  SFAS No. 118 allows  creditors to use existing methods
for recognizing interest income on impaired loans.

The Company has  identified a loan as impaired when it is probable that interest
and principal will not be collected  according to the  contractual  terms of the
loan  agreement.  The accrual of interest is  discontinued  in such loans and no
income is  recognized  until all recorded  amounts of interest and principal are
recovered in full.

Loan  impairment  is measured by estimating  the expected  future cash flows and
discounting  them at the  respective  effective  interest rate or by valuing the
underlying collateral.  The recorded investment in these loans and the valuation
for credit loses related to loan impairment are as follows:

<PAGE>

<TABLE>

                                                   Sept. 30, 
                                                     1995
                                                  ----------
<S>                                            <C>   
     Principal amount of impaired loans           $1,638,000
     Accrued interest                                   ---
     Deferred loan costs                               4,000
                                                  ----------
                                                   1,642,000
     Less valuation allowance                        205,000
                                                  $1,437,000
</TABLE>

On January 1, 1995 a valuation for credit losses  related to impaired  loans was
established.  The  activity in this  allowance  account  for the quarter  ending
September 30, 1995 is as follows:

<TABLE>
<S>                                              <C>    

     Valuation allowance at January 1, 1995         $160,000
     Provision for loan impairment                    89,000
     Direct charge-offs                               44,000
     Recoveries                                         ---
                                                     -------
     Valuation allowance at September 30, 1995      $205,000

</TABLE>

Total cash  collected  on  impaired  loans  during the nine month  period  ended
September 30, 1995 was $156,000, of which $115,000 was credited to the principal
balance outstanding on such loans and $41,000 was recognized as interest income.
Interest  that would have been  accrued on impaired  loans during the first nine
months of 1995 was $135,000.  Interest  income on impaired loans  recognized for
the first nine  months of 1995 was  $3,000.  The  valuation  allowance  for
impaired  loans of $205,000 at September 30, 1995 is included in the  "Allowance
for Possible Loan Losses" which amounts to $2,422,000 at September 30, 1995.

NOTE D  -  SUBSIDIARIES

First Colonial Group, Inc. (the Company) is a Pennsylvania  business corporation
which is registered as a bank holding company under the Bank Holding Company Act
of 1956. The Company has two wholly-owned  subsidiaries,  Nazareth National Bank
and Trust  Company (the "Bank")  founded in 1897 and First C. G.  Company,  Inc.
founded in 1986.

NOTE E  -  INVESTMENT CONSIDERATIONS

In analyzing  whether to make,  or to continue,  an  investment  in the Company,
investors   should   consider,   among   other   factors,   certain   investment
considerations  more  particularly  described in the Company's  Annual Report on
Form  10-KSB  for the year  ended  December  31,  1994,  a copy of which  can be
obtained from Reid L. Heeren, Vice President,  First Colonial Group, Inc., 76 S.
Main Street, Nazareth, PA 18064.

<PAGE>

                  FIRST COLONIAL GROUP, INC. AND SUBSIDIARIES

                    Management's Discussion and Analysis of

                 Financial Condition and Results of Operations


The following  financial  review and analysis is of the financial  condition and
earnings  performance of the Company and its wholly owned  subsidiaries  for the
three and nine month periods ended September 30, 1995.

Liquidity and Capital Resources

Liquidity is a measure of the Company's  ability to raise funds to support asset
growth,  meet deposit  withdrawal and other borrowing  needs,  maintain  reserve
requirements and otherwise  operate the Company on an ongoing basis. The Company
manages its assets and liabilities to maintain liquidity and earnings stability.
Among the sources of asset  liquidity are money market  investments,  securities
available-for-sale,  funds  received from the repayment of loans and  short-term
borrowings.  At September 30, 1995, cash, due from banks,  and  interest-bearing
deposits with banks totaled $11,529,000, and securities maturing within one year
totaled   $5,257,000.   At  December  31,  1994,   cash,   due  from  banks  and
interest-bearing  deposits  with  banks  totaled  $11,070,000,   and  securities
maturing within one year were $3,858,000.  Securities sold under an agreement to
repurchase  totaled  $8,769,000 at September 30, 1995 and $9,027,000 at December
31, 1994. The Bank is a member of the Federal Home Loan Bank of Pittsburgh.  The
Bank had  interest-bearing  deposits at the Federal Home Loan Bank of Pittsburgh
in the amount of $51,000 at September  30, 1995 and $4,000 at December 31, 1994.
These  deposits  are  included  in due  from  banks on the  Company's  financial
statements.  As a result of this  relationship,  the Company  places most of its
short-term  funds  at the  Federal  Home  Loan  Bank of  Pittsburgh  in place of
interest  bearing  deposits  with other banks.  The Company had no Federal Funds
Sold at September 30, 1995 or at December 31, 1994.

The Federal Home Loan Bank of Pittsburgh provides the Bank with a line of credit
in the amount of  $27,666,000.  The Bank had short-term  (overnight)  borrowings
against this line of  $3,293,000  at September 30, 1995 and $750,000 at December
31, 1994. At September 30, 1995 the Bank had  additional  short-term  borrowings
from the Federal Home Loan Bank totaling  $7,000,000 of which  $4,000,000 is due
in November 1995 and $3,000,000 is due in August 1996.

Cash flows for the nine  months  ended  September  30,  1995  consisted  of cash
provided by operating  activities of  $2,560,000  and cash provided by financing
activities of $8,509,000  partially offset by cash used in investing  activities
of  $10,656,000  resulting  in an  increase  in cash  and  cash  equivalents  of
$413,000.  Cash provided by operating  activities  consisted  principally of net
income of $767,000, mortgage loan sales of $3,442,000, provision for loan losses
of  $1,698,000,  increases  in other  liabilities  of  $669,000,  an increase in
accrued  interest  payable of $367,000  and  depreciation  and  amortization  of
$463,000;  reduced in part by mortgage loans  originated for sale of $4,105,000,
increases in other assets of $519,000 and an increase in accrued interest income

<PAGE>

of $277,000.  The increase in other  assets was  primarily  the result of higher
prepaid operating expenses.  The increase in accrued interest expense was caused
by  growth in  certificates  of  deposit.  Cash from  financing  activities  was
provided  by an  increase  in  certificates  of  deposit of  $14,399,000  and an
increase in short-term  borrowings of $9,675,000 offset in part by a $14,550,000
decrease  in demand  and  savings  deposits,  a $258,000  decline in  repurchase
agreements  and  repayments  of  long-term  debt  of  $219,000.  Also  affecting
financing  activities  was the  issuance  of 12,191 new  shares of common  stock
pursuant to the  Dividend  Reinvestment  Plan for  proceeds of $190,000  and the
payment of cash dividends of $728,000.  Investing  Activities  used cash for the
purchase  of  securities  available-for-sale  of  $12,272,000,  the  purchase of
securities held-to-maturity of $2,836,000, a net increase in loans of $9,055,000
and the purchase of premises and equipment of $903,000,  partially offset by the
proceeds  from  the  sales  of  available-for-sale   securities  of  $6,156,000,
maturities of securities  available-for-sale  of  $6,175,000  and  maturities of
securities held-to-maturity of $2,036,000.

The Company recognizes the importance of maintaining  adequate capital levels to
support  sound,  profitable  growth  and to  encourage  depositor  and  investor
confidence.  Shareholders'  equity at  September  30,  1995 was  $24,115,000  as
compared to  $22,400,000  at December 31, 1994, for an increase of $1,715,000 or
7.7%. This increase was primarily  attributable to net income for the first nine
months of 1995 of $767,000, proceeds of the sale of common stock to the Dividend
Reinvestment Plan of $190,000 and a $1,355,000 increase in the fair value of the
available-for-sale  securities  during  the  first  nine  months  of  1995  (see
discussion on "Investment  Securities"),  less dividends paid on common stock of
$728,000.

The Company  maintains a Dividend  Reinvestment and Stock Purchase Plan.  During
the first nine months of 1995, 12,191 shares of common stock were purchased from
authorized  and  unissued  shares at an average  price of $15.58 for proceeds of
approximately $190,000.

Banking  regulators require bank holding companies and banks to maintain certain
capital levels,  through  risk-based capital standards by which all bank holding
companies and banks are evaluated in terms of capital adequacy. These guidelines
relate a banking  company's  capital  to the risk  profile  of its  assets.  The
risk-based  capital standards now require all banks to have Tier 1 capital of at
least 4% and total capital,  Tier 1 and Tier 2, of 8% of  risk-adjusted  assets.
Tier 1  capital  includes  common  shareholders'  equity,  qualifying  perpetual
preferred stock together with related  surpluses and retained  earnings.  Tier 2
capital may be  comprised  of limited  life  preferred  stock,  qualifying  debt
instruments, and the allowance for possible loan losses.

Banking  regulators also require bank holding  companies and banks to maintain a
certain Tier 1 leverage ratio. The leverage ratio requirement is measured as the
ratio of Tier 1 capital to adjusted  average assets.  The tables below provide a
comparison of the Company's and Bank's  risk-based  capital  ratios and leverage
ratio, to the minimum regulatory guidelines for the periods indicated.

<PAGE>

CAPITAL RATIOS OF THE COMPANY

                                        Company        
                                 Sept. 30,  December 31,    Minimum Regulatory
                                   1995        1994            Requirement
                                   ----        ----                       
     Tier 1 Leverage Ratio         7.93%       8.43%           3.00% - 5.00%

     Risk-Based Capital Ratios
        Tier I Capital            14.51%      14.82%               4.00%
        Total Capital             15.77%      16.06%               8.00%


CAPITAL RATIOS OF THE BANK

         Bank
                                 Sept. 30,  December 31,    Minimum Regulatory
                                   1995        1994            Requirement
                                   ----        ----                       

     Tier 1 Leverage Ratio         6.76%       7.23%           3.00% - 5.00%

     Risk-Based Capital Ratios
        Tier I Capital            12.21%      12.77%               4.00%
        Total Capital             13.47%      14.23%               8.00%


The Company is not aware of any known trends,  events or uncertainties that will
have a  material  effect  on  the  Company's  liquidity,  capital  resources  or
operations,   except  for  lower   interest  rates  which  could  cause  deposit
disintermediation  and current  recessionary trends, the results of which cannot
be  determined  at this time.  The Company is not under any  agreement  with the
regulatory  authorities  not  is it  aware  of  any  current  recommendation  by
regulatory  authorities  which, if they were implemented,  would have a material
adverse  effect  on  liquidity,  capital  resources,  or the  operations  of the
Company.

<PAGE>

Assets and Liabilities

Total assets at September 30, 1995 were  $296,918,000,  representing an increase
of 4.3% over  total  assets of  $284,553,000  at  December  31,  1994.  Deposits
decreased  by  $151,000  or 0.1%  from  $247,532,000  on  December  31,  1994 to
$247,381,000 on September 30, 1995.  Contributing to this decrease was a decline
of  $10,583,000  in savings,  club and money market  deposits and  $6,045,000 in
interest-bearing  checking accounts offset in part by increases of $2,078,000 in
non-interest checking deposits and $14,400,000 in certificates of deposit. Loans
outstanding at September 30, 1995 were  $192,523,000 as compared to $185,215,000
at December 31, 1994.  This is an increase of $7,308,000 or 3.9%.  The growth in
loans was  comprised of an increase of $4,734,000  or 7.0% in  residential  real
estate loans,  a $2,423,000 or 5.0% increase in consumer loans and a $151,000 or
0.2%  increase  in  commercial  loans.  During  the first  nine  months of 1995,
$3,443,000 of residential real estate loans were sold. The amount of these loans
originated in 1995 was $3,374,000 with the remaining $69,000 being originated in
1994. The Bank continues to service all of these loans. As of September 30, 1995
there were $732,000 of mortgage loans identified as  held-for-sale.  The loan to
deposit ratio was 77.8% at September 30, 1995 and 74.8% at December 31, 1994.

Premises and equipment increased by $453,000 to $6,315,000 at September 30, 1995
from  $5,862,000 at December 31, 1994. This increase was primarily the result of
the  establishment of a new branch in the Redner's  Supermarket on Airport Road,
Allentown, Lehigh County, Pennsylvania.

The Company had  long-term  debt  totaling  $643,000  at  September  30, 1995 as
compared to $862,000 at December 31, 1994.

At September 31, 1995 the Bank had total short-term  borrowings from the Federal
Home Loan Bank of Pittsburgh of $10,293,000 as compared to $750,000 at September
31, 1994.  Included in this amount was  overnight  borrowings  against a line of
credit of $27,666,000 of $3,293,000 and $750,000 at September 31, 1995 and 1994,
respectively.  In addition,  during the first  quarter of 1995 the Bank borrowed
$7,000,000  from the  Federal  Home  Loan  Bank of  Pittsburgh.  Of this  amount
$4,000,000  matures in November  1995 and the  remaining  $3,000,000  matures in
August  1996.  The  interest  rate on these loans is based on LIBOR plus 2 basis
points  (currently  5.895%) and changes  quarterly in February,  May, August and
November.  The loans are secured by the Bank's  investment in  residential  real
estate loans and securities.  These funds were borrowed to improve liquidity and
to fund loans.

Results of Operations

The net income for the three month period ended September 30, 1995 was $659,000,
a $98,000 or a 17.5%  increase  compared to net income of $561,000  for the same
period in 1994.  This increase was primarily  attributable to an increase in net
interest  income of $172,000,  an increase in total other  income,  exclusive of
securities  gains, of $111,000 and a $20,000 increase in securities  gains. This
was partially  offset by higher total other expenses of $158,000 and an increase
in Federal income taxes of $47,000.

The net income for the nine months  ended  September  30, 1995 was  $767,000,  a
$970,000 or 55.8% decline from net income of  $1,737,000  for the same period in
1994.  This decrease is primarily the result of a higher  provision for possible
loan losses of  $1,398,000  for the first nine months of 1995 as compared to the
same period in 1994. Most of this additional  provision for possible loan losses
($1,278,000 net of recoveries of $272,000) is  attributable to losses  resulting

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from the checking account overdrafts of a certain customer. Also contributing to
the decrease in net income was increases in total other expenses of $968,000 and
a $74,000 decline in investment  securities  gains. This was partially offset by
an  increase  in net  interest  income of  $787,000,  an increase in total other
income,  exclusive  of  security  gains of  $169,000  and a $514,000  decline in
Federal income taxes.

Per share  earnings for the three  months ended  September 30 were $.46 for 1995
and $.40 for 1994.  Average  shares  outstanding  during this three month period
were  1,435,068 in 1995 and 1,413,664 in 1994. The net income per share was $.54
for the first nine  months of 1995 as  compared to net income per share of $1.23
for the same period in 1994.  Average shares  outstanding  are 1,430,073 for the
first nine months of 1995 and 1,408,391 for the first nine months of 1994.

Net Interest Income

Net interest  income is the  difference  between the  interest  earned on loans,
other  investments  and other  interest  earning assets and the interest paid on
deposits  and  other  interest  bearing  liabilities.  The net  interest  income
amounted to  $3,200,000  for the three  months  ended  September  30,  1995,  as
compared to  $3,028,000  for the three  months  ended  September  30,  1994,  an
increase of $172,000 or 5.7%.  During the three month period ended September 30,
1995,  interest  income  increased  $808,000 or 16.8% and interest  expense also
increased  by $636,000 or 35.7% over the same time period of 1994.  The increase
in net  interest  income was the result of the  increase in  interest  earned on
interest earning assets being greater than the increase in the cost of funds.

For the nine  month  period  ended  September  30,  1995,  net  interest  income
increased  $787,000  or 9.0% to  $9,484,000  over  the  same  period  in 1994 of
$8,697,000.  In this nine month period,  interest income increased by $2,335,000
or 16.7% and interest expense increased $1,548,000 or 29.4% as compared to 1994.
The increase in interest income during the nine month period is due to increased
interest rates earned on loans and investments as a result of changing  economic
conditions and a higher prime  interest  rate. The increase in interest  expense
for the nine month period was  primarily  due to an increase in  certificate  of
deposit balances and higher interest rates. Interest earning assets,  including
loans were  $276,616,000  at September 30, 1995 as compared to  $259,355,000  at
September 30, 1994. This represents an increase of $17,261,000 or 6.6%.

Other Income and Other Expenses

Other income for the three months ended  September  30, 1995  including  service
charges, trust fees, gains on the sale of mortgage loans and other miscellaneous
income, but exclusive of securities gains or losses, was $578,000 as compared to
$467,000 for the same period in 1994. This was an increase of $111,000 or 23.7%.
In the three  month  period  ended  September  30,  1995  service  charges  were
$260,000,  a $66,000 or 34.0%  increase  over the 1994 amount of  $194,000.  The
revenues from the Trust Department operations were $161,000 for the three months
ended  September  30, 1995 as compared to $171,000  for the three  months  ended
September 30, 1994, a decrease of $10,000 or 5.8%. There was a loss on the sale

<PAGE>

of mortgage loans of $4,000 for the three month period ending September 30, 1995
as  compared  to a loss of  $15,000  for the same  period  ended in 1994.  Other
operating  income for the three  months  ended  September  30, 1995 was $161,000
versus $117,000 for the same period in 1994, an increase of $44,000 or 37.6%.

Total other income,  including service charges, trust fees, gains on the sale of
mortgage loans and other miscellaneous income, but exclusive of securities gains
or losses,  increased by 11.2% or $169,000 to $1,680,000 from $1,511,000 for the
nine months  ended  September  30, 1995 over the same time period in 1994.  This
increase was primarily due to higher service  charges which amounted to $776,000
for the first nine months of 1995 as compared to $573,000 for the same period of
1994,  a gain of  $203,000  or 35.4%.  The  revenue  from the  Trust  Department
operations  was  $481,000  for  the  nine  months  ended   September  30,  1995,
representing  a $35,000 or 6.8%  decrease  over the $516,000 for the nine months
ended  September  30,  1994.  Other  operating  income for the nine months ended
September  30, 1995 was  $414,000 as compared to $343,000 for the same period in
1994,  an  increase  of $71,000 or 21.1%.  Gains on the sale of  mortgage  loans
amounted  to $9,000 for the first nine  months of 1995  versus  $79,000 in 1994.
This is a reduction of $70,000 or 88.6%.

The total  reduction in gains on the sale of mortgage  loans was the result of a
reduced level of mortgage  loans  refinancing  and rising  interest  rates.  The
higher  service  charges are due to increased fees being charged by the Bank for
Automated Teller Machine services and increased number of checking accounts.

Total  other  expenses  for the three  month  period  ended  September  30, 1995
increased  by  $158,000  or 6.1% to  $2,758,000  as  compared to the total other
expenses  for the same  time  period  in 1994 of  $2,600,000.  Included  in this
increase is a $103,000 or 8.8%  increase  in salary and benefit  expenses  which
were  $1,273,000  and  $1,170,000  for  the  third  quarter  of 1995  and  1994,
respectively.  This increase is the result of the  additional  staff for the new
Stroudsburg Branch opened in October 1994, the new Airport Road Branch opened in
March 1995 and general  salary  increases of  approximately  3%.  Occupancy  and
equipment  expenses were $476,000 for the three month period ended September 30,
1995 and $427,000 for the same period in 1994,  an increase of $49,000 or 11.5%.
Most of this  increase is due to  expenses  related to the new  branches.  Other
operating  expenses  for the three month period  ended  September  30, 1995 were
$1,009,000,  an increase of $6,000 or 0.6% over the $1,003,000 in other expenses
for 1994.

Other  expenses  for the nine  months  ended  September  30, 1995  increased  by
$968,000 or 12.9%,  to $8,473,000  from  $7,505,000 for the same period in 1994.
Salaries  and  employee  benefits  were  $3,867,000  for the nine  months  ended
September 30, 1995 as compared to $3,450,000 for the nine months ended September
30, 1994  representing  an increase of $417,000 or 12.1%.  These  increases  are
primarily due to staff  additions as a result of the new Stroudsburg and Airport
Road Branches and normal salary  increases of  approximately  3% . Occupancy and
equipment  expenses were $1,391,000 for the nine months ended September 30, 1995
and  $1,238,000  for the nine months ended  September  30, 1994,  an increase of
$153,000 or 12.4%. Most of this increase is also due to the addition of the new

<PAGE>

branches.  Other operating expenses for the nine months ended September 30, 1995
were  $3,215,000 in relation to $2,817,000  for the nine months ended  September
30,  1994,  an increase of $398,000 or 14.1%.  This  increase is  primarily  the
result of higher legal fees related to a customer overdraft and expenses to open
the Airport Road Branch.

Investment Securities

The Company classifies its debt and marketable securities into three categories:
trading,  available-for-sale,  and held-to-maturity as provided by the Financial
Accounting  Standards No. 115,  "Accounting for Certain  Investments in Debt and
Equity Securities".  The Company had no trading securities at September 30, 1995
and December 31, 1994.

Available-for-sale  securities are carried at fair value with the net unrealized
gains  or  losses   reported  in  equity.   The  Company  had   $45,618,000   in
available-for-sale  securities at September 30, 1995 with a net unrealized  gain
of $321,000.  At December  31, 1994  available-for-sale  securities  amounted to
$43,610,000 with a net unrealized loss of $1,034,000.

During the three month period  ended  September  30, 1995 $45,000 of  securities
available-for-sale  were sold for a net gain of $29,000.  For the same period in
1994,  $165,000  of  available-for-sale  securities  were sold for a net gain of
$9,000.  For the first nine months of 1995,  net  securities  gains  amounted to
$15,000 on the sale of $6,144,000 of available-for-sale  securities, as compared
to securities  gains of $89,000 on the sale of $3,850,000 of  available-for-sale
securities for the same period in 1994.

Held-to-maturity  securities  totaling  $37,296,000  at  September  30, 1995 are
carried at cost. At December 31, 1994 the  held-to-maturity  securities  totaled
$36,525,000. The Company has the intent and ability to hold the held-to-maturity
securities until maturity.  The Company,  at September 30, 1995 and December 31,
1994, did not hold any securities  identified as  derivatives.  At September 30,
1995 and  December  31,  1994 the Company did hold  $8,000,000  in various  U.S.
Agency Step-up or Multi Step-up securities ($5,000,000 in available-for-sale and
$3,000,000 in held-to-maturity).

Allowance and Provision for Possible Loan Losses

The provision  for loan losses for the three month  periods ended  September 30,
1995 and September 30, 1994 was $100,000.  The provision for loan losses for the
first nine months of 1995 was  $1,698,000  as compared to $300,000 for the first
nine months of 1994. Included in the nine month 1995 provision is $1,550,000 for
overdrawn checking accounts of a certain customer less recoveries of $272,000.

For the same period in 1994 there were net loan losses of $93,000. For the first
nine months of 1995 net loan losses were $1,463,000 including $1,278,000 related
to the overdrawn  checking  accounts,  as compared to $173,000  during the first
nine months of 1994.

<PAGE>

The allowance for possible loan losses at September 30, 1995 totaled  $2,422,000
an increase of $235,000  over the  December 31, 1994 amount of  $2,187,000.  The
allowance for possible loan losses as a percentage of total loans outstanding at
September  30, 1995 was 1.25%.  This  compares to 1.18% at December 31, 1995. As
provided by SFAS No. 114, as amended by SFAS No. 118,  $205,000 of the allowance
for possible  loan losses is allocated to impaired  loans at September  30, 1995
(see Note C "Impaired Loans" in the Interim Consolidated Financial Statements).

Non-Performing Loans

The  following  discussion  relates to the  Bank's  non-performing  loans  which
consist of those on a  non-accrual  basis and accruing  loans which are past due
ninety days or more.

Accrual of interest is discontinued on a loan when  management  believes,  after
considering  economic and business conditions and collection  efforts,  that the
borrower's  financial  condition  is such that the  collection  of  interest  is
doubtful.  The Company  views  these loans as  non-accrual,  but  considers  the
principal to be  substantially  collectible  because the loans are  protected by
adequate  collateral or other  resources.  Interest on these loans is recognized
only when  received.  The  following  table shows the balance of  non-performing
loans for each of the dates indicated.

                                              Sept. 30,     December 31,  
                                                 1995           1994 

Non-accrual loans on a cash basis            $1,764,000      $1,724,000
Non-accrual loans as a percentage
   of total loans                                   .92%            .93%
Accruing loans past due 90 days or more      $  804,000      $1,069,000
Accruing loans past due 90 days or more
   as a percentage of total loans                   .42%            .58%
Other Real Estate Owned from
   Foreclosed Property                       $  528,000      $  373,000


There are no significant loans classified for regulatory  purposes that have not
been included in the above table of non-performing  loans. At September 30, 1995
the  Company  has  no   significant   loans  that  qualify  as  "Troubled   Debt
Restructuring"  as  defined  by  The  Financial   Accounting  Standards  Board's
Statement of Financial  Accounting  Standards No. 15 "Accounting for Debtors and
Creditors for Troubled Debt Restructuring".

<PAGE>

PART 11  -  OTHER INFORMATION

ITEM 5. Other Information

The  Office  of  the  Comptroller  of  the  Currency  has  approved  the  Bank's
application  to purchase and assume the Pointe North Branch of  CoreStates  Bank
located  on  Bath  Pike  (Rt.  512)  Hanover   Township,   Northampton   County,
Pennsylvania.  The deposits  and loans are being  acquired at book value with no
premium  being  paid.  In  addition,  the  Bank  will  be  purchasing  leasehold
improvements and furniture at book value of approximately  $270,000.  The branch
facility  is leased  from a third  party.  The branch  office has  approximately
$7,000,000 in deposits and $1,800,000 in loans.  It is anticipated  the purchase
will be completed in November of 1995.  Following the  acquisition of the Pointe
North  Branch,  the Bank will close its Park Plaza office which is located about
one mile south of the Pointe North location on Rt. 512 and  consolidate the Park
Plaza deposits and loans into the Pointe North facility.

The Bank has also received  approval from the Office of the  Comptroller  of the
Currency  to  establish  a  branch  inside  the  Redner's   Supermarket  at  the
Northampton  Crossings  Shopping  Center on Rt. 248,  Lower  Nazareth  Township,
Northampton  County,  Pennsylvania.  In addition,  approval has been received to
establish  a  Customer-Bank  Communication  Terminal  (CBCT)  Branch  within the
parking lot of the above shopping  center.  Both of these locations  should open
for business late in the fourth quarter of 1995.

In September,  the Company was saddened by the  unexpected  death of a director,
Walter L. Peters, Esquire. Mr. Peters had been a director of the Company and the
Bank and was a member of the Executive Committee.

ITEM 6. Exhibits and Reports on Form 8-K

        (a)     Exhibits
                11.1 Statement Re:   Computation of Per Share Earnings
                27.1 Financial Data Schedule

        (b)     Reports on Form 8-K
                  No reports on Form 8-K were filed for the quarter during
                which this report is filed.

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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.


                                        FIRST COLONIAL GROUP, INC.

DATE:                                   BY: /S/  S. ERIC BEATTIE

                                             S. ERIC BEATTIE
                                             PRESIDENT
                                            (PRINCIPAL EXECUTIVE OFFICER)


DATE:                                   BY: /S/  REID L. HEEREN
                                             REID L. HEEREN
                                             VICE PRESIDENT
                                            (PRINCIPAL FINANCIAL OFFICER)