<PAGE>
                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, DC 20549

                                    FORM 10-Q

(Mark One)

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

                For the quarterly period ended September 30, 2002

                                       or

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

For the transition period from ________________ to ________________

                         Commission File Number 0-26744

                               PATRIOT BANK CORP.
             (Exact name of registrant as specified in its charter)

         PENNSYLVANIA                                    232820537
 (State or other jurisdiction of              (IRS Employer Identification No.)
 incorporation or organization)

High and Hanover Streets, Pottstown, Pennsylvania                     19464-9963
(Address of principal executive offices)                              (Zip Code)

                                 (610) 323-1500
              (Registrant's telephone number, including area code)

                                 Not Applicable
              (Former name, former address and former fiscal year,
                          if changed since last report)

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

                      APPLICABLE ONLY TO CORPORATE ISSUERS:

      Indicate the number of shares outstanding of each of the issuer's classes
of common stock, as of the latest practicable date: 6,185,274 shares of common
stock were outstanding as of November 13, 2002.


                                       1
<PAGE>
                       PATRIOT BANK CORP. AND SUBSIDIARIES

                                      INDEX

<TABLE>
<CAPTION>
                                                                                         Page
<S>                                                                                      <C>
PART I  FINANCIAL INFORMATION

        Item 1  FINANCIAL STATEMENTS (Unaudited)

                Consolidated Balance Sheets at September 30, 2002
                and December 31, 2001

                Consolidated Statements of Income for the Three-Month and Nine-Month
                Periods ended September 30, 2002 and 2001

                Consolidated Statements of Stockholders' Equity for the
                Periods ended September 30, 2002 and December 31, 2001

                Consolidated Statements of Cash Flows for the Nine-Month
                Periods ended September 30, 2002 and 2001

                Consolidated Statements of Comprehensive Income for the Three-Month
                and Nine-Month Periods ended September 30, 2002 and 2001

                Notes to Consolidated Financial Statements

        Item 2  MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF
                OPERATIONS AND FINANCIAL CONDITION

        Item 3  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

        Item 4  CONTROLS AND PROCEDURES

PART II OTHER INFORMATION

         Items 1 through 6

SIGNATURES

CERTIFICATIONS
</TABLE>


                                       2
<PAGE>
                       Patriot Bank Corp. and Subsidiaries
                           CONSOLIDATED BALANCE SHEETS
                      (in thousands, except for share data)

<TABLE>
<CAPTION>
                                                                                   September 30,  December 31,
                                                                                   ---------------------------
                                                                                       2002           2001
                                                                                   -------------  ------------
                                                                                    (unaudited)
<S>                                                                                  <C>          <C>
ASSETS
Cash and due from banks                                                              $  16,972    $    14,218
Interest-earning deposits in other financial institutions                                8,665          7,248
                                                                                     ---------    -----------
   Total cash and cash equivalents                                                      25,637         21,466
Investment and mortgage-backed securities available for sale                           279,453        247,612
Investment and mortgage-backed securities held to maturity
     (market value of $0 and $43,078 at September 30, 2002
     and December 31, 2001, respectively)                                                   --         43,637
Loans held for sale                                                                      5,999          6,652
Loans and leases receivable, net of allowance for credit loss of
    $6,628 and $6,199 at September 30, 2002 and December 31, 2001,
    respectively                                                                       629,691        642,940
Premises and equipment, net                                                              6,622          6,758
Accrued interest receivable                                                              3,682          3,988
Real estate and other property owned                                                       619            349
Cash surrender value of life insurance                                                  17,988         17,305
Goodwill                                                                                 8,765          8,688
Amortizing intangible assets                                                             3,387          3,943
Other assets                                                                             5,136          6,732
                                                                                     ---------    -----------
    Total assets                                                                     $ 986,979    $ 1,010,070
                                                                                     =========    ===========

LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits                                                                             $ 533,166    $   533,863
FHLB advances                                                                          347,174        387,179
Repurchase agreements                                                                   10,236             --
Trust preferred debt securities                                                         20,500         18,000
Advances from borrowers for taxes and insurance                                          1,639          3,329
Other liabilities                                                                        7,601          5,993
                                                                                     ---------    -----------
      Total liabilities                                                                920,316        948,364
                                                                                     ---------    -----------
Preferred stock, $.01 par value, 5,000,000 shares authorized, none
      issued at September 30, 2002 and December 31, 2001, respectively                      --             --
Common stock, no par value, 20,000,000 shares authorized, 6,560,436 and
      6,555,436 issued at September 30, 2002 and December 31, 2001, respectively            --             --
Additional Paid in capital                                                              57,393         57,867
Common stock acquired by ESOP, 314,944 and 334,225  shares at amortized cost at
     September 30, 2002 and December 31, 2001, respectively                             (1,683)        (1,819)
Common stock acquired by MRP, 9,193 and 5,650 shares at amortized
     cost at September 30, 2002 and December 31, 2001, respectively                       (109)           (68)
Retained earnings                                                                       12,528          8,598
Treasury stock, 377,248 and 235,833 at cost at September 30, 2002
     and December 31, 2001, respectively                                                (5,056)        (3,051)
Accumulated other comprehensive income                                                   3,590            179
                                                                                     ---------    -----------
     Total stockholders' equity                                                         66,663         61,706
                                                                                     ---------    -----------
     Total liabilities and stockholders' equity                                      $ 986,979    $ 1,010,070
                                                                                     =========    ===========
</TABLE>

The accompanying notes are an integral part of these statements.


                                       3
<PAGE>
                       Patriot Bank Corp. and Subsidiaries
                        CONSOLIDATED STATEMENTS OF INCOME
                      (in thousands, except for share data)

<TABLE>
<CAPTION>
                                                                 Three-Month Period Ended    Nine-Month Period Ended

                                                                                    September 30,
                                                                     -------------------------------------------
                                                                     2002        2001           2002        2001
                                                                     ----        ----           ----        ----
                                                                                      (unaudited)
<S>                                                              <C>            <C>          <C>           <C>
INTEREST INCOME
    Interest-earning deposits                                       $      7    $     71       $     67    $    489
    Investment and mortgage-backed securities                          4,295       4,931         13,076      16,595
    Loans and leases                                                  12,281      13,505         37,212      41,230
                                                                    --------    --------       --------    --------
        Total interest income                                         16,583      18,507         50,355      58,314
                                                                    --------    --------       --------    --------
INTEREST EXPENSE
    Deposits                                                           3,341       6,330         11,239      22,512
    Short-term borrowings                                                953         808          3,208       1,531
    Long-term borrowings                                               4,668       5,382         14,245      16,947
                                                                    --------    --------       --------    --------
         Total interest expense                                        8,962      12,520         28,692      40,990
                                                                    --------    --------       --------    --------
    Net interest income before provision for
               credit losses                                           7,621       5,987         21,663      17,324
    Provision for credit losses                                       (1,200)       (500)        (2,875)     (1,450)
                                                                    --------    --------       --------    --------
    Net interest income after provision for
               credit losses                                           6,421       5,487         18,788      15,874
                                                                    --------    --------       --------    --------
NON-INTEREST INCOME
    Service fees, charges and other operating income                   1,378       1,502          3,943       4,139
    Gain (loss) on sale of real estate acquired through
            foreclosure                                                   (1)          2            (33)        (14)
    Gain on sale of investment and mortgage-backed
            securities available for sale                                183          --            317         503
    Mortgage banking gains                                               425         487          1,222       1,313
                                                                    --------    --------       --------    --------
            Total non-interest income                                  1,985       1,991          5,449       5,941
                                                                    --------    --------       --------    --------
NON-INTEREST EXPENSE
     Salaries and employee benefits                                    3,246       2,480          9,208       7,102
     Office occupancy and equipment                                      994       1,107          2,991       3,412
     Professional services                                               412         260            877         615
     Marketing & advertising                                             226         275            558         608
     Deposit processing                                                  281         284            815         816
     Goodwill amortization                                                --         183             --         547
     Core deposit intangible amortization                                121         121            363         364
     Office supplies & postage                                           178         159            537         449
     Other operating expense                                             443         402          1,372       1,421
                                                                    --------    --------       --------    --------
            Total non-interest expense                                 5,901       5,271         16,721      15,334
                                                                    --------    --------       --------    --------
Income before taxes and cumulative effect of
      change in accounting principle                                   2,505       2,207          7,516       6,481
Income taxes                                                             493         629          1,684       1,822
                                                                    --------    --------       --------    --------
Income before cumulative effect of change
      in accounting principle                                          2,012       1,578          5,832       4,659
Cumulative effect of change in accounting principle, net of
      ($105,000) in income tax                                            --          --             --        (204)
                                                                    --------    --------       --------    --------
            Net income                                              $  2,012    $  1,578       $  5,832    $  4,455
                                                                    ========    ========       ========    ========

Basic Earnings Per Share:
Income before cumulative effect of change in accounting principle   $   0.34    $   0.27       $   0.97    $   0.79
Cumulative effective of change in accounting principle                    --          --             --        (.03)
                                                                    --------    --------       --------    --------
Net Income                                                          $   0.34    $   0.27       $   0.97    $   0.76
                                                                    ========    ========       ========    ========

Dilutive Earnings Per Share:
Income before cumulative effect of change in accounting principle   $   0.32    $   0.26       $   0.93    $   0.78
Cumulative effective of change in accounting principle                    --          --             --        (.03)
                                                                    --------    --------       --------    --------
Net Income                                                          $   0.32    $   0.26       $   0.93    $   0.75
                                                                    ========    ========       ========    ========


Dividends Per Share                                                 $  .1025    $  .0900       $  .2950    $  .2775
                                                                    ========    ========       ========    ========
</TABLE>

The accompanying notes are an integral part of these statements.


                                       4
<PAGE>
                       Patriot Bank Corp. and Subsidiaries
                 CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
                            (in thousands, unaudited)

<TABLE>
<CAPTION>
                                                                                                           Accumulated
                                                     Additional                                              Other
                                          Number of   Paid-in                        Retained   Treasury  Comprehensive
                                           Shares     Capital       ESOP      MRP    Earnings     Stock   Income (Loss)     Total
                                           ------     -------       ----      ---    --------     -----   -------------     -----
<S>                                       <C>        <C>         <C>        <C>      <C>        <C>       <C>              <C>
BALANCE AT JANUARY 1, 2001                  5,784    $ 58,174    $(1,999)   $(241)   $  4,833    $(4,043)   $(4,924)       $ 51,800
Release and amortization
    of MRP                                     52          42         --      173          --         --         --             215
Release of ESOP shares                         26          58        180       --          --         --         --             238
Sale of stock associated with
    Employee Stock Purchase Plan                7          --         --       --          --         59         --              59
Change in unrealized gains
    on securities available
    for sale, net of taxes                     --          --         --       --          --         --      5,103           5,103
Exercise of stock options                     111        (407)        --       --          --        933        526
Net income                                     --          --         --       --       6,099         --         --           6,099
Cash dividends paid                            --          --         --       --      (2,334)        --         --          (2,334)
                                           ------    --------    -------    -----    --------    -------    -------        --------
BALANCE AT DECEMBER 31, 2001                5,980    $ 57,867    $(1,819)   $ (68)   $  8,598    $(3,051)   $   179        $ 61,706
                                           ------    --------    -------    -----    --------    -------    -------        --------
Common stock issued                             5          70         --       --          --         --         --              70
Common stock acquired by MRP                   (5)         --         --      (70)         --         --         --             (70)
Release and amortization of MRP                 1          --         --       29          --         --         --              29
Purchase of Treasury Stock                   (199)         --         --       --          --     (2,777)        --          (2,777)
Release of ESOP shares                         19         123        136       --          --         --         --             259
Sale of stock associated with
 Employee Stock Purchase Plan                   7          --         --       --          --         91         --              91
Change in unrealized gains
    on securities available
    for sale, net of taxes                     --          --         --       --          --         --      3,411           3,411
Exercise of stock options                      51        (667)        --       --          --        680         --              13
Stock awards                                   --          --         --       --          --          1         --               1
Net income                                     --          --         --       --       5,832         --         --           5,832
Cash dividends paid                            --          --         --       --      (1,902)        --         --          (1,902)
                                           ------    --------    -------    -----    --------    -------    -------        --------
BALANCE AT SEPTEMBER 30, 2002               5,859    $ 57,393    $(1,683)   $(109)   $ 12,528    $(5,056)   $ 3,590        $ 66,663
                                           ------    --------    -------    -----    --------    -------    -------        --------
</TABLE>

The accompanying notes are an integral part of these statements.


                                       5
<PAGE>
                       Patriot Bank Corp. and Subsidiaries
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                            (in thousands, unaudited)

<TABLE>
<CAPTION>
                                                                                      Nine-Month Period Ended
                                                                                      -----------------------
                                                                                           September 30,
                                                                                           -------------
                                                                                         2002         2001
                                                                                       --------    ---------
<S>                                                                                   <C>          <C>
OPERATING ACTIVITIES
Net Income                                                                             $  5,832    $   4,455
Adjustments to reconcile net income to net cash provided by operating activities
          Amortization and accretion of
             Deferred loan origination fees                                                (594)         (45)
             Premiums and discounts                                                        (595)      (1,483)
             MRP shares                                                                      30          166
             Goodwill                                                                        --          547
             Amortizing intangibles                                                         556          364
          Provision for credit losses                                                     2,875        1,450
          Release of ESOP shares                                                            259          170
          Gain on sale of securities available for sale                                    (317)        (194)
          Losses on real estate owned and other repossessed assets                          191           53
          Depreciation of premises and equipment                                            958        1,191
          Loss on disposition of equipment                                                   57           --
          Mortgage loans originated for sale                                            (58,520)     (53,947)
          Mortgage loans sold                                                            59,173       60,400
          Increase in deferred income taxes                                                (940)      (2,377)
          Increase in cash surrender value of life insurance                               (683)        (587)
          Decrease in accrued interest receivable                                           306          936
          Decrease (increase) in other assets                                              (133)         288
          Increase in other liabilities                                                   1,531        4,819
                                                                                       --------    ---------
               Net cash provided by operating activities                                  9,986       16,206
                                                                                       --------    ---------
INVESTING ACTIVITIES
        Loan originations and principal payments on loans, net                            9,612       (1,590)
        Proceeds from the sale of securities - available for sale                        25,328       49,830
        Proceeds from the maturity of securities - available for sale                    76,864       39,357
        Proceeds from the maturity of securities - held to maturity                      11,638       27,178
        Purchase of securities - available for sale                                     (95,039)     (29,149)
        Proceeds from sale of real estate owned                                             892        1,341
        Purchase of premises and equipment                                                 (914)        (333)
        Proceeds from sale of premises and equipment                                         35           16
                                                                                       --------    ---------
               Net cash provided by investing activities                                 28,416       86,650
                                                                                       --------    ---------
FINANCING ACTIVITIES
        Net decrease in deposits                                                           (697)    (115,310)
        Repayment of short term borrowings                                               (4,764)     (22,651)
        Funding of trust preferred securities                                             2,500           --
        Proceeds from long term borrowings                                                   --       30,343
        Repayment of long term borrowings                                               (25,005)          --
        Decrease in advances from borrowers for  taxes and insurance                     (1,690)      (1,352)
        Cash paid for dividends                                                          (1,902)      (1,879)
        Purchase of treasury stock                                                       (2,777)          --
        Proceeds from the sale of stock associated with Employee Stock Purchase Plan         91           36
        Proceeds from the exercise of stock options                                          13          525
                                                                                       --------    ---------
               Net cash used in financing activities                                    (34,231)    (110,288)
                                                                                       --------    ---------

Net increase (decrease) in cash and cash equivalents                                      4,171       (7,432)

Cash and cash equivalents at beginning of year                                           21,466       27,076
                                                                                       --------    ---------

Cash and cash equivalents at the end of the period                                     $ 25,637    $  19,644
                                                                                       ========    =========

Supplemental Disclosures
        Cash paid for interest on deposits                                             $ 11,173    $  22,275
                                                                                       ========    =========
        Cash paid for income taxes                                                     $  1,475    $   1,194
                                                                                       ========    =========
        Transfers from loans and leases to real estate owned                           $  1,353    $   1,533
                                                                                       ========    =========
        Transfer securities from held to maturity to available for sale                $ 31,537    $ 220,471
                                                                                       ========    =========
</TABLE>

The accompanying notes are an integral part of these statements.


                                       6
<PAGE>
                       Patriot Bank Corp. and Subsidiaries
                 CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
                            (in thousands, unaudited)

<TABLE>
<CAPTION>
                                                              Three-Month Period Ended   Nine-Month Period Ended
                                                              ------------------------   -----------------------
                                                                                 September 30,
                                                              --------------------------------------------------
                                                                   2002       2001        2002        2001
                                                                   ----       ----        ----        ----
<S>                                                           <C>            <C>       <C>        <C>
Net income                                                        $ 2,012    $1,578      $ 5,832    $  4,455
Other comprehensive income, net of tax

   Unrealized gains on securities
      Unrealized gains associated with change in accounting
               principle                                               --        --           --       3,000
      Unrealized holding gains arising during the period            3,486     3,704        3,620       4,007
      Less: Reclassification adjustment for gains included
               in net income                                         (121)       --         (209)       (128)
                                                                  -------    ------      -------    --------

Comprehensive income                                              $ 5,377    $5,282      $ 9,243    $ 11,334
                                                                  =======    ======      =======    ========
</TABLE>

The accompanying notes are an integral part of these statements.


                                       7
<PAGE>
PATRIOT BANK CORP. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

September 30, 2002

Note 1 - General

      The accompanying financial statements of Patriot Bank Corp. and
Subsidiaries ("Patriot") include the accounts of the parent company, Patriot
Bank Corp. and its wholly-owned subsidiaries, Patriot Bank and Patriot
Investment Company. All material intercompany balances and transactions have
been eliminated in consolidation. These financial statements have been prepared
in accordance with the instructions for Form 10-Q and therefore do not include
certain information or footnotes necessary for the presentation of financial
condition, results of operations, and cash flows in conformity with generally
accepted accounting principles. However, in the opinion of management, the
consolidated financial statements reflect all adjustments (which consist of
normal recurring accruals) necessary for a fair presentation of the results for
the unaudited periods. The results of operations for the three-month and
nine-month period ended September 30, 2002 are not necessarily indicative of the
results which may be expected for the entire year. The consolidated financial
statements should be read in conjunction with the annual report on Form 10-K for
the year ended December 31, 2001.


                                       8
<PAGE>
PATRIOT BANK CORP. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

September 30, 2002

Note 2 - Investment And Mortgage-Backed Securities

      The amortized cost and estimated fair value of investment and
mortgage-backed securities are as follows:

<TABLE>
<CAPTION>
                                                    September 30, 2002                            December 31, 2001
                                       -------------------------------------------    --------------------------------------------
                                       Amortized   Unrealized  Unrealized    Fair     Amortized   Unrealized  Unrealized     Fair
                                          cost        gain        loss       value      cost         gain        loss        value
                                       ---------   ----------  ----------    -----    ---------   ----------  ----------     -----
                                                                              (in thousands)
<S>                                    <C>         <C>         <C>         <C>         <C>         <C>         <C>         <C>
AVAILABLE FOR SALE:
Investment securities
    U.S.  treasury and
       government agency
       Securities                      $ 62,753    $    883    $    589    $ 63,047    $ 31,475    $      2    $  1,640    $ 29,837
    Corporate debt securities            19,832           2       1,999      17,835      16,582          27       1,656      14,953
    FHLMC preferred stock                67,595       4,144          --      71,739      42,762       2,184          53      44,893
    FHLB stock                           19,058          --          --      19,058      19,359          --          --      19,359
    Equity securities                     9,595         960         259      10,296       5,845          31         433       5,443

Mortgage-backed securities
    FHLMC                                31,645         765          --      32,410       5,194          13          10       5,197
    FNMA                                 36,390       1,248          10      37,628      45,466         124         144      45,446
    GNMA                                    100          14          --         114         120          12          --         132

Collateralized mortgage obligations:
    FHLMC                                12,872         114          --      12,986      44,879         566         193      45,252
    FNMA                                 13,058         162          --      13,220      33,632         582          70      34,144
    Other                                 1,115           5          --       1,120       2,938          18          --       2,956
                                       --------    --------    --------    --------    --------    --------    --------    --------
Total securities available for
     sale                              $274,013    $  8,297    $  2,857    $279,453    $248,252    $  3,559    $  4,199    $247,612
                                       ========    ========    ========    ========    ========    ========    ========    ========

HELD TO MATURITY:
Investment securities
   U.S. Treasury and
     government agency
     securities                        $     --    $     --    $     --    $     --    $ 14,388    $    342    $    226    $ 14,504
     Corporate debt securities               --          --          --          --       1,000           1          --       1,001

Mortgage-backed securities
     FHLMC                                   --          --          --          --       1,661          27          36       1,652
     FNMA                                    --          --          --          --       1,680          80          51       1,709
     GNMA                                    --          --          --          --       2,245          57          65       2,237

Collateralized mortgage
   Obligations
    FHLMC                                    --          --          --          --      16,187         264         834      15,617
    FNMA                                     --          --          --          --       6,476          53         171       6,358
                                       --------    --------    --------    --------    --------    --------    --------    --------

Total securities held to maturity      $     --    $     --    $     --    $     --    $ 43,637    $    824    $  1,383    $ 43,078
                                       ========    ========    ========    ========    ========    ========    ========    ========
</TABLE>

Pursuant to an interest rate risk strategy to reduce the asset sensitivity of
the bank, certain adjustable rate held to maturity securities were sold.
Consequently, the remaining held to maturity portfolio of $31,537,000 has been
reclassified to available for sale.


                                       9
<PAGE>
Note 3 - Loans Receivable

      Loans receivable are summarized as follows:

<TABLE>
<CAPTION>
                                                        September 30,    December 31,
                                                        -----------------------------
                                                            2002             2001
                                                        -------------    ------------
                                                               (in thousands)
<S>                                                     <C>              <C>
Comercial portfolio:
      Commercial loans                                   $ 306,820        $ 283,848
      Commercial leases                                     79,670           77,838
Consumer portfolio:
      Home equity loans                                     69,503           66,834
      Other consumer loans                                   7,769            8,614
Mortgage portfolio:
      Secured by real estate loans                       $ 160,172        $ 206,467
      Construction loans                                    10,856            4,605
                                                         ---------        ---------

         Total loans and leases receivable, gross          634,790          648,206
         Less deferred loan origination costs                1,529              933
         Allowance for credit losses                        (6,628)          (6,199)
                                                         ---------        ---------

         Total loans and leases receivable, net          $ 629,691        $ 642,940
                                                         =========        =========
</TABLE>

Note 4 - Deposits

      Deposits are summarized as follows:

<TABLE>
<CAPTION>
                                                   September 30,    December 31,
                                                   -----------------------------
Deposit type                                           2002             2001
                                                   -------------    ------------
                                                          (in thousands)
<S>                                                <C>              <C>
NOW                                                 $  42,308        $  30,951

Money market                                          141,102          135,214

Savings accounts                                       67,456           45,534

Non-interest-bearing demand                            39,070           38,235
                                                    ---------        ---------

   Total demand, transaction, money
       market and savings deposits                    289,936          249,934

Certificates of deposits                              243,230          283,929
                                                    ---------        ---------

   Total deposits                                   $ 533,166        $ 533,863
                                                    =========        =========
</TABLE>


                                       10
<PAGE>
NOTE 5 - Earnings per share

<TABLE>
<CAPTION>
                                         For Three-Months Ended September 30, 2002         For Nine-Months Ended September 30, 2002
                                         -----------------------------------------         ----------------------------------------
                                             Income         Shares      Per-Share             Income         Shares      Per-Share
                                          (Numerator)   (Denominator)     Amount            (Numerator)   (Denominator)    Amount
                                          -----------   -------------   ---------           -----------   -------------  ---------
<S>                                      <C>            <C>             <C>                <C>            <C>            <C>
BASIC EPS
Net Income available to common
Stockholders                              $2,012          5,954           $0.34             $5,832          5,987         $0.97

EFFECT OF DILUTIVE SECURITIES
Dilutive Options                              --            325            (.02)                --            284          (.04)
                                          ------          -----           -----             ------          -----         -----

DILUTED EPS
Net income available to common
Stockholders plus assumed conversions     $2,012          6,279           $0.32             $5,832          6,271         $0.93
                                          ======          =====           =====             ======          =====         =====
</TABLE>

<TABLE>
<CAPTION>
                                         For Three-Months Ended September 30, 2001         For Nine-Months Ended September 30, 2001
                                         -----------------------------------------         ----------------------------------------
                                             Income         Shares      Per-Share             Income         Shares      Per-Share
                                          (Numerator)   (Denominator)     Amount            (Numerator)   (Denominator)    Amount
                                          -----------   -------------     ------            -----------   -------------    ------
<S>                                      <C>            <C>             <C>                <C>            <C>            <C>
BASIC EPS
Net Income available to common
Stockholders                                  $1,578        5,902         $0.27                $4,455        5,867         $0.76

EFFECT OF DILUTIVE SECURITIES
Dilutive Options                                  --          180          (.01)                   --          112          (.01)
                                              ------        -----         -----                ------        -----         -----

DILUTED EPS
Net income available to common
Stockholders plus assumed conversions         $1,578        6,082         $0.26                $4,455        5,979         $0.75
                                              ======        =====         =====                ======        =====         =====
</TABLE>


                                       11
<PAGE>
Note 6 - Segment Reporting

      Patriot has three reportable segments: Patriot Bank, Patriot Mortgage and
Patriot Commercial Leasing Corporation. Patriot Bank operates a community
banking network with seventeen community banking offices providing deposits and
loan services to customers. Patriot Mortgage is a mortgage banking unit which
sells residential mortgages into the secondary market to generate fee income.
Patriot Commercial Leasing Corporation (Patriot Leasing) is a small ticket
leasing company.

      The following table highlights income statement and balance sheet
information for each of the segments at or for the three-month and nine-month
periods ended September 30, 2002 and 2001 (in thousands).

<TABLE>
<CAPTION>
                          For the three-month period ended September 30, 2002    For the nine-month period ended September 30, 2002
                          ---------------------------------------------------    --------------------------------------------------
                          PATRIOT       PATRIOT      PATRIOT     CONSOLIDATED    PATRIOT       PATRIOT       PATRIOT   CONSOLIDATED
                            BANK       MORTGAGE      LEASING       PATRIOT        BANK         MORTGAGE      LEASING      PATRIOT
<S>                       <C>          <C>          <C>          <C>             <C>           <C>          <C>        <C>
Net interest income       $  6,805     $    156     $    660       $  7,621      $ 19,191      $    436     $  2,036     $ 21,663
Other income                 1,307          413          265          1,985         3,613         1,016          820        5,449
Total net income             1,946          106          (40)         2,012         5,470           179          183        5,832
Total assets               890,589       15,285       81,105        986,979       890,589        15,285       81,105      986,979
Total loans and leases,
gross                      539,979       15,141       79,670        634,790       539,979        15,141       79,670      634,790
</TABLE>

<TABLE>
<CAPTION>
                          For the three-month period ended September 30, 2001    For the nine-month period ended September 30, 2001
                          ---------------------------------------------------    --------------------------------------------------
                          PATRIOT       PATRIOT      PATRIOT     CONSOLIDATED    PATRIOT       PATRIOT       PATRIOT   CONSOLIDATED
                            BANK       MORTGAGE      LEASING        PATRIOT        BANK        MORTGAGE      LEASING      PATRIOT
<S>                       <C>          <C>          <C>          <C>             <C>           <C>          <C>        <C>
Net interest income       $  5,358     $     66     $    563      $    5,987     $ 15,402      $    182     $  1,740     $   17,324
Other income                 1,270          394          327           1,991        3,763         1,108        1,070          5,941
Total net income             1,354           49          175           1,578        3,863            35          557          4,455
Total assets               950,581        6,786       74,097       1,031,464      950,581         6,786       74,097      1,031,464
Total loans and leases,
gross                      574,724        6,762       73,217         654,703      574,724         6,762       73,217        654,703
</TABLE>

Patriot Mortgage's net income includes support allocations of $166,000 and
$497,000 for the three-month and nine-month periods ended September 30, 2002
compared to $152,000 and $457,000 for the same periods in 2001. Patriot
Mortgage's funding is based off the 30-day FHLB average. The cost of funds was
$64,000 and $146,000 for the three-month and nine-month periods ended September
30, 2002 compared to $62,000 and $187,000 for the same periods in 2001.

Patriot Leasing's net income includes an internal charge of $60,000 and $180,000
for the three-month and nine-month periods ended September 30, 2002 and 2001.
Patriot Leasing's funding is based off a three year average of the 3 year FHLB
average plus a spread. The cost of funds to Patriot Leasing for the first
nine-months in 2002 was $1,246,000 and $3,674,000 for the three-month and
nine-month periods ended September 30, 2002 compared to $1,126,000 and
$3,292,000 for the same periods in 2001.


                                       12
<PAGE>
Note 7 - Accounting for Derivative Instruments and Hedging Activities

      In June 1998, the FASB issued SFAS No. 133 "Accounting for Derivative
Instruments and Hedging Activities." This statement as amended by SFAS No. 137
in June 1999 and SFAS No. 138 in June 2000 establishes accounting and reporting
standards for derivative instruments, including certain derivative instruments
embedded in other contracts (collectively referred to as derivatives), and for
hedging activities. It requires that an entity recognize all derivatives as
either assets or liabilities in the statement of financial position and measure
those instruments at fair value. The accounting for changes in the fair value of
a derivative depends on the intended use of the derivative and the resulting
designation. If certain conditions are met, a derivative may be specifically
designated as (a) a hedge of certain exposure to changes in the fair value of a
recognized asset or liability or an unrecognized firm commitment; (b) a hedge of
the exposure to variable cash flows of a forecasted transaction; or (c) a hedge
of foreign currency exposure. Patriot adopted SFAS No. 133 on January 1, 2001.
At the time of adoption, Patriot reclassified approximately $220,471,000 of
fixed rate mortgage backed securities, CMO's and agency securities from held to
maturity to available for sale resulting in a net of tax increase of
approximately $3,000,000 in accumulated other comprehensive income. Patriot
typically has not used derivative instruments and currently holds no positions
that had further impact on earnings, financial condition or equity. During 2001,
Patriot sold $30,333,000 of the securities reclassified resulting in a
cumulative change in accounting principle with a net after tax impact of a
$204,000 loss.

Note 8 - Accounting for Goodwill and Other Intangible Assets

      In June 2001, the FASB issued Statement No. 142, "Goodwill and Other
Intangible Assets." The Statement addresses financial accounting and reporting
for acquired goodwill and other intangible assets and supersedes APB Opinion No.
17, Intangible Assets. It addresses how intangible assets that are acquired
individually or with a group of other assets (but not those acquired in a
business combination) should be accounted for in financial statements upon their
acquisition. The Statement also addresses how goodwill and other intangible
assets should be accounted for after they have been initially recognized in the
financial statements, including requirements for periodic impairment evaluation.
The provisions of the Statement are required to be applied starting with fiscal
years beginning after December 15, 2001, except that goodwill and intangible
assets acquired after June 30, 2001, will be subject immediately to the
non-amortization and amortization provisions of the Statement. The Statement is
required to be applied at the beginning of an entity's fiscal year and to be
applied to all goodwill and other intangible assets recognized in its financial
statements at that date. Patriot adopted Statement No. 142 in January 2002.
Patriot has completed its evaluation and, based on this evaluation, there was no
indication of transitional impairment losses as of the date of adoption on its
operations.

      As of the date of adoption, Patriot had unamortized goodwill in the amount
of $8.7 million, which will be subject to the transition provisions of SFAS No.
142. Amortization expenses related to goodwill was $0 and $183,000 for the three
months ended September 30, 2002 and 2001, and $0 and $547,000 for the nine
months ended September 30, 2002 and 2001, respectively.

A summary of goodwill and amortizing intangible assets at September 30, 2002 is
as follows:

<TABLE>
<CAPTION>
                                                    As of September 30, 2002
                                                        (in thousands)

                                   Gross Carrying         Accumulated           Net Carrying
                                       Amount             Amortization             Amount
                                   --------------         ------------          ------------
<S>                                <C>                    <C>                   <C>
Goodwill (non-amortizing)             $ 10,963             $  2,198              $  8,765
</TABLE>

Amortization expense of other intangible assets for the nine months ended
September 30, 2002 is as follows (in thousands):

<TABLE>
<CAPTION>
                                                    As of September 30, 2002
                                                        (in thousands)

                                   Gross Carrying         Accumulated           Net Carrying
                                       Amount             Amortization            Amount
                                       ------             ------------            ------
<S>                                <C>                    <C>                   <C>
Amortizing intangibles:

Core Deposit Intangible               $  4,606             $  1,608             $  2,998

Originated Mortgage Servicing Rights  $    664             $    275             $    389
                                      --------             --------             --------
Total amortizing intangibles          $  5,270             $  1,883             $  3,387
                                      ========             ========             ========
</TABLE>


                                       13
<PAGE>
The estimated amortization expense of intangible assets for each of the five
succeeding fiscal years is as follows:

Estimated annual amortization expense (in thousands)

<TABLE>
<S>                                                         <C>
For the year ended December 31, 2002                        486
                                2003                        465
                                2004                        433
                                2005                        433
                                2006                        433
</TABLE>

Note 9 - Accounting for Asset Retirement Obligations

In June 2001, the FASB issued Statement No. 143, "Accounting for Asset
Retirement Obligations." This Statement addresses financial accounting and
reporting for obligations associated with the retirement of tangible long-lived
assets and the associated asset retirement costs. It applies to legal
obligations associated with the retirement of long-lived assets that result from
the acquisition, construction, development and (or) the normal operation of a
long-lived asset, except for certain obligations of lessees. As used in this
Statement, a legal obligation is an obligation that a party is required to
settle as a result of an existing or enacted law, statute, ordinance, or written
or oral contract or by legal construction of a contract under the doctrine of
promissory estoppel. This Statement requires that the fair value of a liability
for an asset retirement obligation be recognized in the period in which it is
incurred if a reasonable estimate of fair value can be made. The associated
asset retirement costs are capitalized as part of the carrying amount of the
long-lived asset. It is effective for financial statements issued for fiscal
years beginning after June 15, 2002. Earlier application is encouraged. Patriot
does not expect the adoption of this Statement to have an impact on it's
earnings, financial condition, or equity.

Note 10 - Accounting for the Impairment or Disposal of Long-Lived Assets

In August 2001, the FASB issued Statement No. 144, "Accounting for the
Impairment or Disposal of Long-Lived Assets." This Statement addresses financial
accounting and reporting for the impairment or disposal of long-lived assets and
supersedes SFAS No. 121, "Accounting for the Impairment of Long-Lived Assets and
for Long-Lived Assets to Be Disposed Of." However, the Statement retains the
fundamental provisions of Statement 121 for (a) recognition and measurement of
the impairment of long-lived assets to be held and used and (b) measurement of
long-lived assets to be disposed of by sale. This Statement supersedes the
accounting and reporting provisions of APB Opinion No. 30, "Reporting the
Results of Operations-Reporting the Effects of Disposal of a Segment of a
Business, and Extraordinary, Unusual and Infrequently Occurring Events and
Transactions," for the disposal of a segment of a business. However, this
Statement retains the requirement of Opinion 30 to report discontinued
operations separately from continuing operations and extends that reporting to a
component of an entity that either has been disposed of (by sale, by
abandonment, or in distribution to owners) or is classified as held for sale.
The provisions of this Statement are effective for financial statements issued
for fiscal years beginning after December 15, 2001, and interim periods within
those fiscal years, with earlier application encouraged. The provisions of this
Statement generally are to be applied prospectively. The adoption of this
Statement did not have any impact on Patriot's earnings, financial condition, or
equity.

Note 11 - Reporting Gains and Losses from Extinguishment of Debt

In April 2002, the FASB issued Statement No. 145, "Reporting Gains and Losses
from Extinguishment of Debt". This Statement rescinds FASB Statement No. 4,
Reporting Gains and Losses from Extinguishment of Debt, and an amendment of that
statement, FASB Statement No. 64, Extinguishments of Debt Made to Satisfy
Sinking-Fund Requirements. This Statement amends FASB Statement No. 13,
Accounting for Leases, to eliminate an inconsistency between the required
accounting for sale-leaseback transactions and the required accounting for
certain lease modifications. It is effective for financial statements issued for
fiscal years beginning after May 15, 2002, and interim periods within those
fiscal years. The adoption of this Statement did not have an impact on Patriot's
earnings, financial condition, or equity.

Note 12 - Accounting for Costs Associated with Exit or Disposal Activities

In June 2002, the FASB issued Statement No. 146, "Accounting for Costs
Associated with Exit or Disposal Activities". This statement requires companies
to recognize costs associated with exit or disposal activities when they are
incurred rather than at the date of a commitment to an exit or disposal plan.
Statement 146 is to be applied prospectively to exit or disposal activities
initiated after December 31, 2002. Patriot does not expect the adoption of this
Statement to have a significant impact on its earnings, financial condition, or
equity.


                                       14
<PAGE>
Note 13 - Acquisitions of Certain Financial Institutions

In October 2002, the FASB issued Statement No. 147, Acquisitions of Certain
Financial Institutions, which amends SFAS No. 72, Accounting for Certain
Acquisitions of Banking or Thrift Institutions, SFAS No.144, Accounting for the
Impairment or Disposal of Long-Lived Assets, and FASB Interpretation No. 9.
Except for transactions between two or more mutual enterprises, this Statement
removes acquisitions of financial institutions from the scope of both Statement
No. 72 and Interpretation 9 and requires that those transactions be accounted
for in accordance with FASB Statements No. 141, Business Combinations, and No.
142, Goodwill and Other Intangible Assets. Thus, the requirement in paragraph 5
of Statement No. 72 to recognize any excess of the fair value of liabilities
assumed over the fair value of tangible and identifiable intangible assets
acquired as an unidentifiable intangible asset no longer applies to acquisitions
of businesses within the scope of this Statement. In addition, this Statement
amends Statement No. 144 to include in its scope long-term customer-relationship
intangible assets of financial institutions such as depositor- and
borrower-relationship intangible assets and credit cardholder intangible assets.
Consequently, those intangible assets are subject to the same undiscounted cash
flow recoverability test and impairment loss recognition and measurement
provisions that Statement No. 144 requires for other long-lived assets that are
held and used.

With some exceptions, the requirements of Statement No. 147 are effective
October 1, 2002. The adoption of this Statement did not have an impact on
Patriot's earnings, financial condition, or equity.


                                       15
<PAGE>
           MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                            AND RESULTS OF OPERATIONS

      In addition to historical information, this discussion and analysis of
Patriot Bank Corp. and Subsidiaries (Patriot) contains forward-looking
statements. The forward-looking statements contained herein are subject to
certain risks and uncertainties that could cause actual results to differ
materially from those projected in the forward-looking statements. Important
factors that might cause such a difference include, but are not limited to those
discussed in the "Management's Discussion and Analysis of Financial Condition
and Results of Operations". Readers are cautioned not to place undue reliance on
these forward-looking statements, which reflect management's analysis only as of
the date hereof. Patriot undertakes no obligation to publicly revise or update
these forward-looking statements to reflect events or circumstances that arise
after the date hereof.

      GENERAL. Patriot reported diluted earnings per share of $.32 and net
income of $2,012,000 for the three-month period ended September 30, 2002
compared to diluted earnings per share of $.26 and net income of $1,578,000 for
the three month period ended September 30, 2001. Diluted earnings per share for
the nine-month period ending September 30, 2002 was $.93 and net income of
$5,832,000 compared with $.75 and net income of $4,455,000 for the nine-month
period ended September 30, 2001. Return on average equity was 12.06%, for the
three-month period ended September 30, 2002 compared to 10.67%, for the
three-month period ended September 30, 2001.

      NET INTEREST INCOME. Net interest income for the three-month and
nine-month periods ended September 30, 2002 was $7,621,000 and $21,663,000
compared to $5,987,000 and $17,324,000 for the same periods in 2001. The
increase in net interest income is primarily due to the impact of decreases in
market rates on Patriot's funding sources and Patriot's strategy to reduce
investments, mortgage-backed securities and mortgage loans and the level of
wholesale funding. The decreases in market rates on Patriot's funding sources
outpaced the decrease in rates on assets and, as a result, expanded Patriot's
net interest margin. Patriot's net interest margin (net interest income as a
percentage of average interest-earning assets) for the three-month and
nine-month periods ended September 30, 2002 was 3.50% and 3.29% compared to
2.61% and 2.40% for the same period in 2001.

      Interest on loans and leases was $12,281,000 and $37,212,000 for the
three-month and nine-month periods ended September 30, 2002 compared to
$13,505,000 and $41,230,000 for the same periods in 2001. The average balance of
loans was $639,368,000 with an average yield of 7.75% for the nine-month period
ended September 30, 2002 compared to an average balance of $655,172,000 with an
average yield of 8.37% for the same period in 2001. The decrease in average
balance is primarily due to Patriot allowing mortgages to run-off, offset by
aggressive marketing of commercial loans and leases. The decrease in average
yield is primarily a result of a decrease in interest rates.

      Interest on Patriot's investment portfolio (investment and mortgage-backed
securities) was $4,295,000 and $13,076,000 for the three-month and nine-month
periods ended September 30, 2002 compared to $4,931,000 and $16,595,000 for the
same periods in 2001. The average balance of the investment portfolio was
$296,462,000 with an average yield of 6.50% for the nine-month period ended
September 30, 2002 compared to an average balance of $342,947,000 with an
average yield of 6.81% for the same period in 2001. The decrease in average
balance is primarily due to Patriot allowing the investment portfolio to
amortize so it can be replaced with generally higher-yielding commercial loans
and leases. The decrease in average yield is related to general decreases in
market rates on adjustable rate securities.

      Interest on total deposits was $3,341,000 and $11,239,000 for the
three-month and nine-month periods ended September 30, 2002 compared to
$6,330,000 and $22,512,000 for the same periods in 2001. The average balance of
total deposits was $521,330,000 with an average cost of 2.86% for the nine-month
period ended September 30, 2002 compared to an average balance of $587,874,000
with an average cost of 5.12% for the same period in 2001. The decrease in
average balance is primarily the result of an decrease in Patriot's jumbo
certificates of deposit, offset by aggressive marketing of money market
accounts, transaction-based deposit accounts and other certificates of deposit.
The overall decrease in the average cost on deposits was primarily the result of
a decrease in interest rates and emphasis placed on lower cost money market and
transaction based deposit accounts.

      Interest on borrowings was $5,621,000 and $17,453,000 for the three-month
and nine-month periods ended September 30, 2002 compared to $6,190,000 and
$18,478,000 for the same periods in 2001. The average balance of borrowings was
$411,321,000 with an average cost of 5.60% for the nine-month period ended
September 30, 2002 compared to an average balance of $419,212,000 with a cost of
5.82% for the same period in 2001. The decrease in average balance was primarily
due to borrowings being repaid by proceeds received on the run-off of the
mortgage loan portfolio and growth in Patriot's branch deposits. The decrease in
the yield on borrowings was the result of a decrease in interest rates.

      PROVISION FOR CREDIT LOSSES. The provision for credit losses was
$1,200,000 and $2,875,000 for the three-month and nine-month periods ended
September 30, 2002 compared to $500,000 and $1,450,000 for the same period in
2001. The increased provision was the result of increased commercial loan and
lease outstandings, higher charge-offs as well as an increase in delinquency and
non-performing loans. An allowance for credit losses is maintained at a level
that represents management's best estimate of known and inherent losses in the
loan and lease portfolio. Management's periodic evaluation of the allowance for
credit losses is based upon evaluation of individual loans and leases, the
overall risk characteristics of the various portfolio segments, regression
analyses using past loss experience, current and projected financial status and
creditworthiness of its borrowers, the adequacy of collateral, the level and
nature of non-performing loans, current economic conditions, the results of the
most recent


                                       16
<PAGE>
regulatory examination and other relevant factors. This evaluation is inherently
subjective. While management uses the best information available to make such
evaluations, future adjustments to the allowance may be necessary if conditions
differ substantially from the assumptions used in making the evaluations. In
addition, various regulatory agencies, as an integral part of their examination
process, periodically review the allowance for credit losses. Such agencies may
require Patriot to recognize additions to the allowance for credit losses based
on their judgments of information, which is available to them at the time of
their examinations.

Patriot's total loans consist of four distinct portfolios. Each of which is
monitored and analyzed seperately.

            The mortgage loan portfolio is seasoned as Patriot has been in the
mortgage lending business for many years and has sold substantially all new
mortgage originations in the past two years. Patriot's mortgage loans are
generally well collateralized and historically Patriot has experienced minimal
losses on these loans. Because of Patriot's consistent history in mortgage
lending and the long-term nature of this portfolio, Patriot predominately relies
upon an internal regression analysis, which uses historical data to estimate
losses that are inherent in the portfolio.

            The consumer loan portfolio consists of mostly home equity loans and
home equity lines of credit. The consumer loan portfolio is also mature as
Patriot has been in consumer lending business for many years. As with mortgage
lending, Patriot predominantly uses an internal regression analysis, which uses
historical data to estimate losses that are inherent in the portfolio.

            Patriot entered the commercial lending business in 1996 and has
grown the portfolio into a substantial portion of total loans. Patriot uses
historical data to prepare regression models to monitor trends of charge-offs
and recoveries and establish appropriate allowance levels. Patriot also closely
monitors local economic and business trends relative to its commercial lending
portfolio to estimate the effect those trends may have on potential losses.
Patriot's commercial loan portfolio contains some loans that are substantially
larger than the loans within other portfolios. The potential loss associated
with an individual loan could have a significant impact on the allowance and
charge-off levels at Patriot. Therefore, Patriot closely monitors these loans
and will specifically reserve for individual loans which exhibit weakness.

            Patriot entered the commercial leasing business in 1998 principally
through the acquisition of Keystone Leasing. Patriot's leasing portfolio has a
short, approximately 3 to 4 year life. Patriot performs an internal regression
analysis on this portfolio using historical data (including Keystone Leasing
data). Patriot also closely monitors regional and national economic business
trends relative to its commercial leasing portfolio to estimate the effects
those trends may have on potential losses.

            Patriot's levels of delinquencies and non-performing assets have
increased somewhat but compare favorably with industry averages. At September
30, 2002 Patriot's non-performing assets were .60% of total assets compared to
..45% at the end of the same period in 2001. Additionally, Patriot had $9,200,000
in loans and leases, which were 30 days or more delinquent representing 1.43% of
Patriot's total loan and lease portfolios compared to $7,845,000 and 1.19%,
respectively, at the end of the same period in 2001.

      NON-INTEREST INCOME. Total non-interest income was $1,985,000 and
$5,449,000 for the three-month and nine-month periods ended September 30, 2002
compared to $1,991,000 and $5,941,000 for the same periods in 2001. The decrease
in non-interest income for the nine-month period,was primarily due to $317,000
in gains recognized on the sale of investment securities available for sale
during 2002 versus $503,000 in gains recognized on the sale of investment
securities available for sale during 2001 as well as a small decline in mortgage
banking gains. Non-interest income also includes recurring non-interest income
such as loan and deposit fees, mortgage banking gains, ATM fees, and income from
bank owned life insurance, that are consistent with the prior period.

      NON-INTEREST EXPENSE. Total non-interest expense was $5,901,000 and
$16,721,000 for the three-month and nine-month periods ended September 30, 2002
compared to $5,271,000 and $15,334,000 for the same periods in 2001. The
increases in non-interest expense was primarily due to higher compensation costs
due to increases in staffing associated with branch deposit growth and
commercial lending offset by the elimination of $547,000 of goodwill
amortization.

      INCOME TAX PROVISION. The income tax provision was $493,000 and $1,684,000
for the three-month and nine-month periods ended September 30, 2002 compared to
$629,000 and $1,822,000 for the same periods in 2001. The effective tax rate was
19.68% and 22.41% for the three-month and nine-month periods ended September 30,
2002 compared to 28.50% and 28.11% for the same periods in 2001. The decreases
in the effective tax rate was primarily due to the elimination of non-deductible
goodwill amortization expense in 2002. Additionally, Patriot purchased certain
tax beneficial securities during the fourth quarter of 2001 and throughout 2002.

      FINANCIAL CONDITION

      LOAN AND LEASE PORTFOLIO. Patriot's primary portfolio loan products are
commercial loans, small ticket commercial leases, fixed-rate and adjustable-rate
residential mortgage loans and home equity loans and lines of credit. Patriot
also offers residential construction loans and other consumer loans. At
September 30, 2002 Patriot's total loan portfolio was $629,691,000, compared to
a total loan portfolio of $642,940,000 at December 31, 2001. The decrease in the
loan portfolio is primarily the result of Patriot allowing mortgages to run-off,
offset by an emphasis placed on increasing commercial lending and leasing
relationships.


                                       17
<PAGE>
      CASH AND CASH EQUIVALENTS. Cash and cash equivalents at September 30, 2002
were $25,637,000 compared to $21,466,000 at December 31, 2001. The increase in
cash balances is associated with timing differences in borrowing activity and
investment prepayments.

      INVESTMENT AND MORTGAGE-BACKED SECURITIES. Investment securities consist
primarily of U.S. agency securities, mortgage-backed securities which are
generally insured or guaranteed by either FHLMC, FNMA or the GNMA and
collateralized mortgage obligations. Total investment and mortgage-backed
securities at September 30, 2002 were $279,453,000 compared to $291,249,000 at
December 31, 2001. The decrease in investment and mortgage-backed securities was
primarily due to $113,513,000 of normal investment prepayments, sales and
maturities offset by the purchase of $95,000,000 of available for sale
securities. Pursuant to an interest rate risk strategy to reduce the asset
sensitivity of the bank, certain adjustable rate held to maturity securities
were sold. Consequently, the remaining held to maturity portfolio of $31,537,000
has been reclassified to available for sale.

      OTHER ASSETS. Other assets at September 30, 2002 were $5,136,000 compared
to $6,732,000 at December 31, 2001. The decrease in other assets was primarily
attributable to an adjustment in Patriot's deferred tax position associated with
unrealized securities gains offset by normal growth in the cash value on bank
owned life insurance.

      DEPOSITS. Deposits are primarily attracted from within Patriot's market
area through the offering of various deposit instruments, including NOW
accounts, money market accounts, savings accounts, certificates of deposit and
retirement savings plans. Patriot also attracts jumbo certificates of deposit.
Total deposits at September 30, 2002 were $533,166,000 compared to $533,863,000
at December 31, 2001. While total deposit balances remained consistent with the
prior period, Patriot's core deposit balances increased by approximately
$40,000,000 which was offset by a decline in certificates of deposit balances.


                                       18
<PAGE>
      BORROWINGS. Patriot utilizes borrowings as a source of funds for its asset
growth and its asset/liability management. Patriot is eligible to obtain
advances from the FHLB upon the security of the FHLB common stock it owns and
certain of its residential mortgages and mortgage-backed securities, provided
certain standards related to creditworthiness have been met. Patriot may also
utilize repurchase agreements to meet its liquidity needs. FHLB advances are
made pursuant to several different credit programs, each of which has its own
interest rate and range of maturities. The maximum amount that the FHLB will
advance to member institutions fluctuates from time to time in accordance with
the policies of the FHLB. Total borrowings at September 30, 2002 were
$377,910,000 compared to $405,179,000 at December 31, 2001. The decrease was
primarily associated with borrowings that matured during the year and were
repaid.

      OTHER LIABILTIIES. Other Liabilities at September 30, 2002 were $7,601,000
compared to $5,993,000 at December 31, 2001. The increase in balance is
primarily the result of the accrual of Patriot's corporate income taxes as a
result from Patriot's net operating income offset by timing differences in
payable accounts.

      STOCKHOLDERS' EQUITY. Total stockholders' equity was $66,663,000 at
September 30, 2002 compared to $61,706,000 at December 31, 2001. The increase in
balance is due to earnings and accumulated other comprehensive income offset by
dividends paid to shareholders' and the repurchase of stock.


                                       19
<PAGE>
                          CRITICAL ACCOUNTING POLICIES

ALLOWANCE FOR LOSSES ON LOANS

The allowance for losses on loans is based on management's ongoing evaluation of
the loan portfolio and reflects an amount considered by management to be its
best estimate of known and inherent losses in the portfolio. Management
considers a variety of factors when establishing the allowance, such as the
impact of current economic conditions, diversification of the loan portfolio,
delinquency statistics, results of loan review and related classifications, and
historic loss rates. In addition, certain individual loans which management has
identified as problematic are specifically provided for, based upon an
evaluation of the borrower's perceived ability to pay, the estimated adequacy of
the underlying collateral and other relevant factors. Consideration is also
given to examinations performed by regulatory agencies. Although provisions have
been established and segmented by type of loan, based upon management's
assessment of their differing inherent loss characteristics, the entire
allowance for losses on loans is available to absorb further loan losses in any
category.

Management uses significant estimates to determine the allowance for loan
losses. Since the allowance for loan losses is dependent, to a great extent, on
conditions that may be beyond Patriot's control, it is at least reasonably
possible that management's estimate of the allowance for loan losses and actual
results could differ in the near term.

In addition, regulatory authorities, as an integral part of their examinations,
periodically review the allowance for loan losses. They may require additions to
the allowance based upon their judgements about information available to them at
the time of examination.

INCOME TAXES

Deferred tax assets and liabilities are recognized for the future tax
consequences attributable to differences between the financial statement
carrying amounts of existing assets and liabilities and their respective tax
bases, as well as operating loss carry forwards. Deferred tax assets and
liabilities are measured using enacted tax rates expected to apply to taxable
income in the years in which those temporary differences are expected to be
recovered or settled. The effect on deferred tax assets and liabilities of a
change in tax rates is recognized in income in the period that includes the
enactment date. A valuation allowance is established against deferred tax assets
when in the judgement of management, it is more likely than not that such
deferred tax assets will not become available. Based on management's evaluation
of the likelihood of realization, no valuation allowance has been established.
Because the judgement about the level of future taxable income is dependent to a
great extent on matters that may, at least in part be beyond Patriot's control,
it is at least reasonably possible that management's judgement about the need
for a valuation allowance for deferred taxes could change in the near term.

REAL ESTATE OWNED (REO) AND OTHER REPOSSESSED PROPERTY

      Real estate owned is defined to include real estate Patriot acquires
through foreclosure. REO is recorded on Patriot's books at the lower of
Patriot's carrying value in the loan or the fair value of the property as of the
date of transfer to REO. Any excess of the recorded investment in the loan over
the fair market value is charged against Patriot's loan loss reserve.

      Other repossessed property consists of mostly leased equipment returned to
Patriot at the end of the lease. The off-lease equipment is recorded on
Patriot's books at the lower of Patriot's carrying value in the lease or the
fair value of the equipment as of the date of transfer to other repossessed
property. Any excess of the recorded investment in the lease over the fair
market value is taken as a loss on Patriot's books. Additionally, valuation of
REO and other repossessed property is dependent to a great extent on current
economic, market and geographic conditions, and that may, at least in part be
beyond Patriot's control. It is at least reasonably possible that management's
estimates included in the valuation of REO and other repossessed property could
change in the near term. Patriot's current judgement is that the valuation of
REO and other repossessed property remains appropriate at September 30, 2002.


                                       20
<PAGE>
      LIQUIDITY AND CAPITAL RESOURCES

      LIQUIDITY. Patriot's primary sources of funds are deposits, principal and
interest payments on loans, principal and interest payments on investment and
mortgage-backed securities, FHLB advances and repurchase agreements. While
maturities and scheduled amortization of loans and investment and
mortgage-backed securities are predictable sources of funds, deposit inflows and
loan and mortgage-backed security prepayments are greatly influenced by economic
conditions, general interest rates and competition. Therefore, Patriot manages
its balance sheet to provide adequate liquidity based upon various economic,
interest rate and competitive assumptions and in light of profitability
measures.

      During the three-month and nine-month period ended September 30, 2002,
significant liquidity was provided by the maturity, principal repayment and sale
of investment and mortgage-backed securities. These funds were invested in new
securities. Additional liquidity was used to repay borrowings.

            At September 30, 2002, Patriot had outstanding loan commitments of
$68,350,000. Patriot anticipates that it will have sufficient funds available to
meet its loan origination commitments. Certificates of deposit which are
scheduled to mature in one year or less from September 30, 2002 totaled
$133,328,000.

CAPITAL RESOURCES. FDIC regulations currently require companies to maintain a
minimum leverage capital ratio of not less than 3% of tier 1 capital to total
adjusted assets, a tier 1 capital ratio of not less than 4% of risk-adjusted
assets, and a minimum risk-based total capital ratio (based upon credit risk) of
not less than 8%. The FDIC requires a minimum leverage capital requirement of 3%
for institutions rated composite 1 under the CAMEL rating system. For all other
institutions, the minimum leverage capital requirement is 3% plus at least an
additional 1% to 2% (100 to 200 basis points). A bank is considered
"well-capitalized" if it maintains a minimum leverage capital ratio of not less
than 5% of tier 1 capital to total adjusted assets, a tier 1 capital ratio of
not less than 6% of risk adjusted assets, and a minimum risk-based total capital
ratio (based upon credit risk) of not less than 10%. At September 30, 2002,
Patriot Bank's and Patriot Bank Corp.'s capital ratios exceeded all requirements
to be considered well capitalized. The following table sets forth the capital
ratios of Patriot Bank Corp., Patriot Bank and the current regulatory
requirements at September 30, 2002:

<TABLE>
<CAPTION>
                                                                                To Be                     To Be
                                                  Actual               Adequately Capitalized        Well-Capitalized
                                           -------------------         ----------------------      ---------------------
                                           Amount         Ratio        Amount           Ratio      Amount          Ratio
                                           ------         -----        ------           -----      ------          -----
                                                                     As of  September 30, 2002
<S>                                        <C>            <C>          <C>              <C>        <C>             <C>
Total  capital (to risk-weighted assets)

Patriot Bank Corp.                         $80,605        12.63%       $51,070            8%       $63,838           10%

Patriot Bank                                79,370        12.46%        50,970            8%        63,712           10%

Tier I capital (to risk-weighted assets)

Patriot Bank Corp.                          71,811        11.25%        25,535            4%        38,303            6%

Patriot Bank                                70,479        11.06%        25,485            4%        38,228            6%

Tier I capital (to average assets)

Patriot Bank Corp.                          71,811         7.25%        39,644            4%        49,555            5%

Patriot Bank                                70,479         7.11%        39,644            4%        49,555            5%
</TABLE>


                                       21
<PAGE>
      MANAGEMENT OF INTEREST RATE RISK. The principal objective of Patriot's
interest rate risk management function is to evaluate the interest rate risk
included in certain on and off balance sheet accounts, determine the level of
risk appropriate given Patriot's business focus, operating environment, capital
and liquidity requirements and performance objectives, and manage the risk
consistent with Board approved guidelines. Through such management, Patriot
seeks to reduce the vulnerability of its net interest income to changes in
interest rates. Patriot monitors its interest rate risk as such risk relates to
its operating strategies. Patriot's Board of Directors has established an
Asset/Liability Committee comprised of senior management and directors, which is
responsible for reviewing its asset/liability and interest rate position and
making decisions involving asset/liability considerations. The Asset/Liability
Committee meets regularly and reports trends and Patriot's interest rate risk
position to the Board of Directors.

      In an effort to reduce interest rate risk at the beginning of the fourth
quarter of 2002, Patriot restructured components of its balance sheet as
follows: restructured $34 million in MBS securities with elevated prepayment
characteristics at a gain; prepaid $50 million in FHLB borrowings with a
prepayment penalty in order to provide more appropriate funding for adjustable
assets. The results of these transactions are anticipated to be relatively
neutral to results for the fourth quarter 2002. Due to the forward looking
nature of the following interest rate risk discussion these transactions are
included in these discussions.

      Patriot uses three complementary methods to analyze and measure interest
rate risk as part of the overall management of interest rate risk. They are
income simulation modeling, estimates of economic value of equity, and static
gap analysis. The combination of these three methods provides a reasonably
comprehensive summary of the levels of interest rate risk of Patriot when
exposed to time factors and changes in interest rate environments.

      Income simulation modeling is utilized in measuring Patriot's interest
rate risk and managing its interest rate sensitivity. Income simulation
considers not only the impact of changing market interest rates on forecasted
net interest income, but also other factors such as yield curve relationships,
the volume and mix of assets and liabilities, customer preferences and general
market conditions.

      Through the use of income simulation modeling Patriot has calculated an
estimate of net interest income for the year ending September 30, 2003, based
upon the assets, liabilities and off-balance sheet financial instruments in
existence at September 30, 2002. Patriot has also estimated changes to that
estimated net interest income based upon interest rates rising or falling in
monthly increments ("rate ramps"). Rate ramps assume that all interest rates
increase or decrease in monthly increments evenly throughout the period modeled.
The following table reflects the estimated percentage change in estimated net
interest income for the year ending September 30, 2003 resulting from changes in
interest rates.

<TABLE>
<CAPTION>
                                                    September 30,2002
      Rate ramp to interest rates                       % change
      ---------------------------                   -----------------
<S>                                                 <C>
                 +2%                                     (0.42)%
                 -2%                                     (1.86)%
</TABLE>

      Economic value of equity (EVE) estimates the discounted present value of
asset and liability cash flows. Discount rates are based upon market prices for
comparable assets and liabilities. As part of this evaluation Patriot has
contracted with an independent consultant to perform an extensive core deposit
analysis to appropriately estimate the discounted present value of the retail
deposit franchise. Upward and downward rate shocks are used to measure
volatility in relation to such interest rate movements in relation to an
unchanged environment. This method of measurement primarily evaluates the longer
term repricing risks and options in Patriot's balance sheet. Patriot has
established policy limits for upward and downward rate shocks of 20% of economic
value of equity at risk for every 100 basis points of interest rate shock.
Additionally Patriot has a policy limit that the ratio of EVE adjusted equity to
EVE adjusted assets will be maintained above a 5% ratio. The following table
reflects the estimated economic value of equity at risk and the ratio of EVE
adjusted equity to EVE adjusted assets at September 30, 2002, resulting from
shocks to interest rates. September 30,2002

<TABLE>
<CAPTION>
                                 Percent change   EVE Equity/
         Rate shock                 from base     EVE Assets
         ----------                 ---------     ----------
<S>                              <C>              <C>
            +2%                     -11.38%         11.09%
            +1%                      -4.30%         11.66%
            Base                                    11.87%
            -1%                      -6.08%         10.97%
            -2%                     -16.15%         9.65%
</TABLE>

      The matching of assets and liabilities may be analyzed by examining the
extent to which such assets and liabilities are "interest rate sensitive" and by
monitoring an institution's interest rate sensitivity "gap." An asset or
liability is said to be interest rate sensitive within a specific time period if
it will mature or reprice within that time period. The interest rate sensitivity
gap is defined as the difference between the amount of interest-earning assets
maturing or repricing within a specific time period and the amount of
interest-bearing liabilities maturing or repricing within that time period.


                                       22
<PAGE>
      The following table summarizes the amount of interest-earning assets and
interest-bearing liabilities outstanding at September 30, 2002, which are
anticipated, based upon certain assumptions, to reprice or mature in each of the
future time periods shown. Loan amounts reflect principal balances expected to
be repaid and/or repriced as a result of contractual amortization and
anticipated prepayments of adjustable-rate loans and fixed-rate loans and as a
result of contractual rate adjustments on adjustable-rate loans. Estimated
prepayment rates were applied to mortgage loans and mortgage-backed securities
based upon industry expectations. Core deposit decay rates have been estimated
based upon a historical analysis of core deposit trends. With the exceptions
noted above, the amount of assets and liabilities shown which reprice or mature
during a particular period were determined in accordance with the earlier of
term to repricing or the contractual maturity of the asset or liability. The
table sets forth the gap and cumulative gap as a percentage of total assets at
September 30, 2002:

<TABLE>
<CAPTION>
                                  0-90               91-180            181-365
                                  Days                Days               Days
                                  ----                ----               ----
<S>                              <C>                 <C>               <C>
September 30,2002
GAP to Total Assets              -0.52%               5.05%              2.56%
Cumulative GAP to Total Assets   -0.52%               4.53%              7.09%
</TABLE>

      As shown above, Patriot has a positive gap (interest sensitive assets are
greater than interest sensitive liabilities) within the next year, which
generally indicates that an increase in rates may lead to an increase in net
interest income and a decrease in rates may lead to a decrease in net interest
income. Interest sensitivity gap analysis measures whether assets or liabilities
may reprice but does not capture the ability to reprice or the range of
potential repricing on assets or liabilities. Thus indications based on a
positive or negative gap position need to be analyzed in conjunction with other
interest rate risk management tools.

      Patriot's management believes that the assumptions and combination of
methods utilized in evaluating estimated net interest income are reasonable;
however, the interest rate sensitivity of Patriot's assets, liabilities and
off-balance sheet financial instruments as well as the estimated effect of
changes in interest rates on estimated net interest income could vary
substantially if different assumptions are used or actual experience differs
from the experience on which the assumptions were based.



Item 4. Controls and Procedures.

(a)   Evaluation of Disclosure Controls and Procedures. Patriot's principal
      executive officer and principal financial officer have concluded that
      Patriot's disclosure controls and procedures (as defined in Rule 13a-14(C)
      under the Securities Exchange Act of 1934, as amended), based on their
      evaluation of these controls and procedures as of a date within (90) days
      prior to the filing date of this form 10-Q, are effective.


                                       23
<PAGE>
(b)   Changes in Internal Controls. There have been no significant changes in
      Patriot's internal controls or in other factors that could significantly
      affect these controls subsequent to the date of the evaluation thereof,
      including any corrective actions with regard to significant deficiencies
      and material weaknesses.


                                       24
<PAGE>
PART II  OTHER INFORMATION

      Item 1 LEGAL PROCEEDINGS

            There are various claims and lawsuits in which Patriot is
periodically involved incidental to the Patriot's business, which in the
aggregate involve amounts which are believed by management to be immaterial to
the financial condition, equity, and results of operations of Patriot.

      Item 2  CHANGES IN SECURITIES

                   Not applicable.

      Item 3  DEFAULTS UPON SENIOR SECURITIES

                   Not applicable.

      Item 4  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

                   Not applicable.

      Item 5  OTHER INFORMATION

                   Not applicable.

      Item 6  EXHIBITS AND REPORTS ON FORM 8-K.

                   (a) The Following exhibits are filed as part of this report.

                   -  Exhibit 99.1 Section 302 Certifications
                   -  Exhibit 99.2 Section 906 Certifications

                   (b) Reports filed on Form 8K

                         none

----------
      * Incorporated herein by reference into this document from the exhibits to
Form S-1, Registration Statement, filed on September 1, 1995 as amended
Registration No. 33-96530.


                                       25
<PAGE>
                                   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.

                                             PATRIOT BANK CORP.
                                                (Registrant)

Date  November 13, 2002                           /s/ RICHARD A. ELKO
                                        -------------------------------------
                                                    Richard A. Elko
                                        President and Chief Executive Officer


Date  November 13, 2002                           /s/ JAMES G. BLUME
                                        -------------------------------------
                                                    James G. Blume
                                               Senior Vice President and
                                                Chief Financial Officer


                                       26