<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 June 30, 2003
                                          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: 6,599,214 shares of
common stock were outstanding as of August 11, 2003.

                                       1

<PAGE>

                       PATRIOT BANK CORP AND SUBSIDIARIES

                                      INDEX

<TABLE>
<CAPTION>
                                                                                                Page
<S>                                                                                             <C>
PART I         FINANCIAL INFORMATION                                                              3

         Item 1   FINANCIAL STATEMENTS (Unaudited)                                                3

                  Consolidated Balance Sheets at June 30, 2003
                  and December 31, 2002                                                           3

                  Consolidated Statements of Income for the Three and Six-Month Periods
                  ended June 30, 2003 and 2002                                                    4

                  Consolidated Statements of Shareholders' Equity for the
                  Periods ended June 30, 2003 and December 31, 2002                               5

                  Consolidated Statements of Cash Flows for the Three and Six-Month
                  Periods ended June 30, 2003 and 2002                                            6

                  Consolidated Statements of Comprehensive Income for the
                  Three and Six-Month Periods ended June 30, 2003 and 2002                        8

                  Notes to Consolidated Financial Statements                                      9

         Item 2   MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF
                  OPERATIONS AND FINANCIAL CONDITION                                             17

         Item 3   QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT
                  MARKET RISK                                                                    23

         Item 4   CONTROLS AND PROCEDURES                                                        25

PART II       OTHER INFORMATION

         Items 1 through 6                                                                       26

SIGNATURES                                                                                       28

EXHIBITS                                                                                         29
</TABLE>

                                       2

<PAGE>

ITEM 1   FINANCIAL STATEMENTS

                       Patriot Bank Corp. and Subsidiaries
                           CONSOLIDATED BALANCE SHEETS
                        (in thousands, except share data)

<TABLE>
<CAPTION>
                                                                                   JUNE 30, 2003     DECEMBER 31, 2002
                                                                                ------------------  -------------------
                                                                                   (unaudited)
<S>                                                                             <C>                 <C>
ASSETS
Cash and cash due from banks                                                        $   19,801         $    15,741
Interest earning deposits in other financial institutions                                1,082               1,098
                                                                                    ----------         -----------
     Total cash and cash equivalents                                                    20,883              16,839

Securities available for sale                                                          342,243             315,868

Loans held for sale                                                                      5,311               4,314
Loans and leases receivable, net of allowance for credit loss of $7,341
   and $6,922 at June 30, 2003 and December 31, 2002, respectively                     585,386             611,295
Premises and equipment, net                                                              9,468               7,612
Accrued interest receivable                                                              3,686               3,946
Real estate owned and other repossessed property                                           474                 404
Cash surrender value life insurance                                                     18,615              18,208
Goodwill                                                                                11,442               8,777
Amortizing intangible assets                                                             3,638               3,137
Other assets                                                                             4,735               4,743
                                                                                    ----------         -----------

     TOTAL ASSETS                                                                   $1,005,881         $   995,143
                                                                                    ==========         ===========

LIABILITIES AND SHAREHOLDERS' EQUITY

Deposits                                                                            $  605,738         $   519,120
FHLB advances and federal funds                                                        257,828             368,173
Repurchase agreements                                                                   42,931              14,210
Advances from borrowers for taxes and insurance                                          2,489               2,208
Trust preferred debt securities                                                         20,500              20,500
Other liabilities                                                                        6,877               4,987
                                                                                    ----------         -----------

    Total liabilities                                                                  936,363             929,198

SHAREHOLDERS' EQUITY

Preferred stock, $.01 par value, 5,000,000 shares authorized,
   None issued at June 30, 2003 and December 31, 2002, respectively                          -                   -
Common stock, No par value, 20,000,000 shares authorized, 7,216,480 and
   7,216,480 shares issued at June 30, 2003 and December 31, 2002, respectively              -                   -
Additional paid-in capital                                                              68,430              57,611
Common stock acquired by ESOP, 325,224 and 339,364 shares at cost at June 30,
   2003 and December 31, 2002, respectively                                             (1,604)             (1,638)
Common stock acquired by MRP, 6,929 and 9,051 shares at amortized
   Cost at June 30, 2003 and December 31, 2002, respectively                               (76)                (98)
Retained earnings                                                                        5,934              13,855
Treasury stock acquired, 544,171 and 516,174 shares at cost at
   June 30, 2003 and December 31, 2002, respectively                                    (7,102)             (6,441)
Accumulated other comprehensive income                                                   3,936               2,656
                                                                                    ----------         -----------

     Total shareholders' equity                                                         69,518              65,945
                                                                                    ----------         -----------

     TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY                                     $1,005,881         $   995,143
                                                                                    ==========         ===========
</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)
                                   (unaudited)

<TABLE>
<CAPTION>
                                                                 Three-Month Period Ended     Six-Month Period Ended
                                                                         June 30,                    June 30,
                                                                    2003          2002          2003          2002
                                                                    ----          ----          ----          ----
<S>                                                              <C>            <C>           <C>          <C>
INTEREST INCOME
    Interest-earning deposits                                    $         4    $      12     $      10    $      60
    Investment securities                                              4,053        4,370         8,249        8,781
    Loans and leases                                                  10,643       12,433        21,773       24,931
                                                                 -----------    ---------     ---------    ---------
        Total interest income                                         14,700       16,815        30,032       33,772
                                                                 -----------    ---------     ---------    ---------
INTEREST EXPENSE
    Deposits                                                           3,238        3,615         6,378        7,898
    Short-term borrowings                                                478        1,128         1,278        2,255
    Long-term borrowings                                               3,557        4,806         7,173        9,577
                                                                 -----------    ---------     ---------    ---------
        Total interest expense                                         7,273        9,549        14,829       19,730
                                                                 -----------    ---------     ---------    ---------
    Net interest income before provision for credit losses             7,427        7,266        15,203       14,042
    Provision for credit losses                                          900        1,000         2,000        1,675
                                                                 -----------    ---------     ---------    ---------
    Net interest income after provision for credit losses              6,527        6,266        13,203       12,367
                                                                 -----------    ---------     ---------    ---------
NON-INTEREST INCOME
     Service fees on deposits                                            918          648         1,780        1,249
     Fees on loans and leases                                            441          241           867          594
     Investment gains / (losses)                                         376          134           932          134
     Gain on the sale of loans and leases                                746          486         1,449          797
     BOLI                                                                202          225           413          459
     Patriot Advisors' commissions                                       502           88           980          211
     Loss on the disposition of borrowings                              (136)          --          (725)           -
     Other non-interest income                                            39          (19)           38           20
                                                                 -----------    ---------     ---------    ---------
        Total non-interest income                                      3,088        1,803         5,734        3,464
                                                                 -----------    ---------     ---------    ---------
NON-INTEREST EXPENSE
     Salaries and employee benefits                                    4,064        2,985         7,967        5,962
     Occupancy and equipment                                           1,074          956         2,164        1,997
     Professional services                                               278          414           603          631
     Advertising                                                         173          205           337          332
     Deposit processing                                                  294          288           583          534
     Amortization of intangible assets                                   149          121           270          243
     Office supplies & postage                                           226          189           435          359
     Other operating expense                                             722          329         1,302          762
                                                                 -----------    ---------     ---------    ---------
             Total non-interest expense                                6,980        5,487        13,661       10,820
                                                                 -----------    ---------     ---------    ---------
Income before taxes                                                    2,635        2,582         5,276        5,011
      Income tax expense                                                 484          602         1,025        1,191
                                                                 -----------    ---------     ---------    ---------
NET INCOME                                                       $     2,151    $   1,980     $   4,251    $   3,820
                                                                 ===========    =========     =========    =========

Earnings per share - basic                                       $      0.34    $    0.30     $    0.67    $    0.58
                                                                 ===========    =========     =========    =========

Earnings per share - diluted                                     $      0.32    $    0.28     $    0.63    $    0.55
                                                                 ===========    =========     =========    =========

Dividends per share                                              $    0.1200    $  0.0909     $  0.2291    $  0.1795
                                                                 ===========    =========     =========    =========
</TABLE>

The accompanying notes are an integral part of these statements.

                                       4

<PAGE>

                       Patriot Bank Corp. and Subsidiaries
                 CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
                            (in thousands, unaudited)

<TABLE>
<CAPTION>
                                                                                                         ACCUMULATED
                                                    ADDITIONAL                                              OTHER
                                           NUMBER    PAID-IN                        RETAINED   TREASURY  COMPREHENSIVE
                                         OF SHARES   CAPITAL      ESOP       MRP    EARNINGS    STOCK      INCOME         TOTAL
                                          ------     -------      ----       ---    ---------   ------     -------        -----
<S>                                      <C>        <C>         <C>       <C>       <C>        <C>       <C>            <C>
BALANCE AT JANUARY 1, 2002                   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......            2          --        --        40         --        --             --         40
Purchase of treasury stock...........         (293)         --        --        --         --    (4,189)            --     (4,189)
Release of ESOP shares...............           26         172       181        --         --        --             --        353
Sale of stock associated with
ESPP.................................            9          --        --        --         --       118             --        118
Change in unrealized gains
     on securities available
     for sale, net of taxes..........           --          --                  --         --        --          2,477      2,477
Exercise of stock options............           50        (498)       --        --         --       680             --        182
Stock awards.........................           --          --        --        --         --         1             --          1
Net income...........................           --          --        --        --      7,698        --             --      7,698
Cash dividends paid..................           --          --        --        --     (2,441)       --             --     (2,441)
                                         ---------  ----------  --------  --------  ---------  --------  -------------  ---------
BALANCE AT DECEMBER 31, 2002                 5,774  $   57,611  $ (1,638) $    (98) $  13,855  $ (6,441) $       2,656  $  65,945
                                         =========  ==========  ========  ========  =========  ========  =============  =========
Release and amortization of MRP......            2          --        --        22         --        --             --         22
Purchase of treasury stock...........          (89)         --        --        --         --    (1,497)            --     (1,497)
Release of ESOP shares...............           14         191        34        --         --        --             --        225
Sale of stock associated with
ESPP.................................            4          --        --        --         --        65             --         65
Change in unrealized gains
     on securities available
     for sale, net of taxes..........           --          --        --        --         --        --          1,280      1,280
Exercise of stock options............            2          --        --        --         --        13             --         13
Issuance of stock for acquisitions...           50          --        --        --         --       758             --        758
Stock dividend 10%                             583      10,628        --        --    (10,628)       --             --         --
Net income...........................           --          --        --        --      4,251        --             --      4,251
Cash dividends paid..................           --          --        --        --     (1,544)       --             --     (1,544)
                                         ---------  ----------  --------  --------  ---------  --------  -------------  ---------
BALANCE AT JUNE 30, 2003                     6,340  $   68,430  $ (1,604) $    (76) $   5,934  $ (7,102) $       3,936  $  69,518
                                         =========  ==========  ========  ========  =========  ========  =============  =========
</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>
                                                                                          SIX-MONTH PERIOD ENDED JUNE 30,
                                                                                          -------------------------------
                                                                                                2003           2002
                                                                                             ---------       ---------
<S>                                                                                       <C>                <C>
OPERATING ACTIVITIES

   Net Income                                                                                $   4,251       $   3,820
   Adjustments to reconcile net income to net cash provided by operating activities
       Amortization and accretion of:
          Deferred loan origination costs (fees)                                                    74            (424)
          Premiums and discounts                                                                   277            (553)
          MRP shares                                                                                22              18
          Intangible assets                                                                        270             243
       Provision for credit losses                                                               2,000           1,675
       Release of ESOP shares                                                                      225             169
       Gain on sale of investment securities                                                      (932)           (134)
       Loss on disposition of borrowings                                                           725              --
       Loss on sale and write down of real estate owned and other repossessed assets                45             180
       Depreciation of premises and equipment                                                      698             648
       Loss on disposition of equipment                                                             --              57
       Mortgage loans originated for sale                                                      (66,874)        (38,474)
       Mortgage loans sold                                                                      65,877          37,785
       Deferred income tax expense (benefit)                                                       107            (481)
       Increase in cash surrender value of life insurance                                         (407)           (455)
       Decrease in accrued interest receivable                                                     260              37
       Decrease (increase) in other assets                                                          75            (898)
       (Decrease) increase in other liabilities                                                   (621)            354
                                                                                             ---------       ---------
          Net cash provided by operating activities                                              6,072           3,567
                                                                                             ---------       ---------
INVESTING ACTIVITIES

       Loan originations & principal payments on loans, net                                     22,911           7,524
       Proceeds from the sale of securities - available for sale                                31,791           5,738
       Proceeds from the maturity of securities - available for sale                            59,089          43,314
       Proceeds from the maturity of securities - held to maturity                                  --          10,301
       Purchase of securities - available for sale                                            (114,661)        (64,273)
       Proceeds from sale of real estate owned                                                     809             481
       Cash paid in business combinations                                                         (387)             --
       Purchase of premises and equipment, net of sales                                         (2,508)           (546)
                                                                                             ---------       ---------
          Net cash (used in) provided by investing activities                                   (2,956)          2,539
                                                                                             ---------       ---------
FINANCING ACTIVITIES

       Net increase (decrease) in deposits                                                      86,618         (28,099)
       (Repayment of) proceeds from short term borrowings                                     (111,725)         19,090
       Funding of trust preferred securities                                                        --           5,000
       Proceeds from short term repurchase agreements                                           28,721              --
       Repayment of long term borrowings                                                            (4)             (3)
       Increase in advances from borrowers for taxes and insurance                                 281             570
       Cash paid for dividends                                                                  (1,544)         (1,250)
       Proceeds from the sale of stock associated with ESPP                                         65              56
       Proceeds from the exercise of stock options                                                  13              13
       Purchase of treasury stock                                                               (1,497)             --
                                                                                             ---------       ---------
          Net cash provided by (used in) financing activities                                      928          (4,623)
                                                                                             ---------       ---------
       Increase in cash and cash equivalents                                                     4,044           1,483
Cash and cash equivalents at beginning of the period                                            16,839          21,466
                                                                                             ---------       ---------
Cash and cash equivalents at end of the period                                               $  20,883       $  22,949
                                                                                             =========       =========

SUPPLEMENTAL DISCLOSURES

     Cash paid for interest on deposits                                                      $   6,839       $   7,857
     Cash paid for income taxes                                                                    927           1,000
     Transfers from loans and leases to real estate owned and other repossessed property     $     924       $     918
</TABLE>

                                       6

<PAGE>

                       Patriot Bank Corp. and Subsidiaries
                CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)
                            (in thousands, unaudited)

SUPPLEMENTAL DISCLOSURES (CONTINUED)

On January 3, 2003, Patriot purchased the stock of Bonds & Paulus Associates,
Inc. for $458,000 plus contingent consideration to be paid in shares of Patriot
Bank Corp. common stock based upon future revenues of Bonds & Paulus. Of the
$458,000, $115,000 was paid in cash and 22,810 shares of Patriot Bank Corp.
common stock having a value of $343,000 were issued at closing. In conjunction
with the acquisition of Bonds & Paulus Associates, Inc., liabilities were
assumed as follows:

<TABLE>
<S>                                    <C>
Fair value of assets acquired          $  1,671.0
Cash paid                                  (115.0)
Stock issued                               (343.0)
                                       ----------
Liabilities assumed                    $  1,213.0
</TABLE>

On January 17, 2003, Patriot purchased the stock of Pension Benefits Inc. for
$829,000 plus contingent consideration to be paid in shares of Patriot Bank
Corp. common stock based upon future revenues of Pension Benefits, Inc. Of the
$829,000, $414,500 was paid in cash and 27,338 shares of Patriot Bank Corp.
common stock were issued at closing. In conjunction with the acquisition of
Pension Benefits Inc., liabilities were assumed as follows:

<TABLE>
<S>                                    <C>
Fair value of assets acquired          $  2,114.0
Cash paid                                  (414.5)
Stock issued                               (414.5)
                                       ----------
Liabilities assumed                    $  1,285.0
</TABLE>

        The accompanying notes are an integral part of these statements.

                                       7

<PAGE>

                       PATRIOT BANK CORP. AND SUBSIDIARIES
                 CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                                                         THREE-MONTH PERIOD        SIX-MONTH PERIOD
                                                                           ENDED JUNE 30,           ENDED JUNE 30,
                                                                         ------------------        ----------------
                                                                           2003      2002           2003      2002
                                                                          ------    ------         ------    ------
                                                                                        (IN THOUSANDS)
<S>                                                                      <C>        <C>            <C>       <C>
Net Income.............................................................  $ 2,151    $1,980         $4,251    $3,820
Other comprehensive income.............................................
 Unrealized gains on securities........................................
  Unrealized holding gains arising during the period...................       46     2,706          1,280        45
 Less: Reclassification adjustment for gains included in net income
  Net gains on the sale of investment securities.......................     (376)     (134)          (932)     (134)
  Income tax expense associated with net gains on the sale of
  investment securities................................................      128        46            317        46
                                                                         -------    ------         ------    ------
Comprehensive income...................................................  $ 1,949    $4,598         $4,916    $3,777
                                                                         =======    ======         ======    ======
</TABLE>

                                       8

<PAGE>

                       PATRIOT BANK CORP. AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)
                                  June 30, 2003

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 and six-month periods ended June 30, 2003
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, 2002. All
share amounts, including earnings per share, have been restated to reflect the
effect of the 10% stock dividend paid in April 2003.

In December 2002, the FASB issued Statement No. 148, Accounting for Stock-Based
Compensation--Transition and Disclosure. This statement amends FASB Statement
No. 123, Accounting for Stock-Based Compensation, to provide alternative methods
of transition for a voluntary change to the fair value based method of
accounting for stock-based employee compensation. In addition, this Statement
amends the disclosure requirements of Statement 123 to require prominent
disclosures in both annual and interim financial statements about the method of
accounting for stock-based employee compensation and the effect of the method
used on reported results. The requirements of Statement No. 148 are effective
for fiscal years ending after December 15, 2002, except for financial reports
containing condensed financial statements for interim periods. Patriot continues
to account for stock based compensation under APB No. 25. If Statement No. 123
would have been applied it would have had the following impact:

<TABLE>
<CAPTION>
                                                                            THREE-MONTH PERIOD ENDED,
                                                                                     JUNE 30
                                                                            -------------------------
                                                                             2003               2002
                                                                            ------             ------
                                                                                  (IN THOUSANDS)
<S>                                                                         <C>                <C>
Net income, as reported                                                     $2,151             $1,980
Deduct: Total stock-based employee compensation expense determined
under fair value based method for all awards, net of related tax effects       (45)               (30)
                                                                            ------             ------

Pro forma net income                                                        $2,106             $1,950
                                                                            ======             ======

Earnings per share:
      Basic - as reported                                                   $  .34             $  .30
                                                                            ======             ======
      Basic - pro forma                                                     $  .33             $  .30
                                                                            ======             ======

      Diluted  - as reported                                                $  .32             $  .28
                                                                            ======             ======
      Diluted  - pro forma                                                  $  .31             $  .28
                                                                            ======             ======
</TABLE>

<TABLE>
<CAPTION>
                                                                             SIX-MONTH PERIOD ENDED,
                                                                                     JUNE 30
                                                                             -----------------------
                                                                              2003             2002
                                                                             ------           ------
                                                                                  (IN THOUSANDS)
<S>                                                                          <C>              <C>
Net income, as reported                                                      $4,251           $3,820
Deduct: Total stock-based employee compensation expense determined
under fair value based method for all awards, net of related tax effects        (91)             (47)
                                                                             ------           ------

Pro forma net income                                                         $4,160           $3,773
                                                                             ======           ======

Earnings per share:
      Basic - as reported                                                    $  .67           $  .58
                                                                             ======           ======
      Basic - pro forma                                                      $  .65           $  .57
                                                                             ======           ======

      Diluted  - as reported                                                 $  .63           $  .55
                                                                             ======           ======
      Diluted  - pro forma                                                   $  .61           $  .55
                                                                             ======           ======
</TABLE>

                                       9

<PAGE>

                       PATRIOT BANK CORP. AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)
                                  June 30, 2003

NOTE 2 - SECURITIES

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

<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------------------------------------------
                                                   June 30, 2003                                  December 31, 2002
---------------------------------------------------------------------------------------------------------------------------------
                                  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                 $  36,078   $      947   $       18   $ 37,007   $  66,304   $      599   $      652   $ 66,251

    Corporate debt securities        22,575          868        1,130     22,313      22,724          131        1,467     21,388
    FHLMC preferred stock            84,709        3,431           --     88,140      67,626        3,715           --     71,341
    FHLB and FRB stock               15,874           --           --     15,874      17,949           --           --     17,949
    Equity securities                17,100          623          178     17,545       6,647          799          164      7,282

Mortgage-backed securities

    FHLMC                            56,579          503          116     56,966      67,523          700           81     68,142
    FNMA                            101,677        1,068           60    102,685      55,821          373           67     56,127
    GNMA                                 65            9           --         74          96           13           --        109

Collateralized mortgage
obligations:

    FHLMC                                58            1           --         59       2,960           18           --      2,978
    FNMA                              1,564           16           --      1,580       3,689          105           --      3,794
    Other                                --           --           --         --         505            2           --        507
                                  ---------   ----------   ----------   --------   ---------   ----------   ----------   --------

Total securities available for
Sale                              $ 336,279   $    7,466   $    1,502   $342,243   $ 311,844   $    6,455   $    2,431   $315,868
                                  =========   ==========   ==========   ========   =========   ==========   ==========   ========
</TABLE>

                                       10

<PAGE>

                       PATRIOT BANK CORP. AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)
                                  June 30, 2003

NOTE 3 - LOANS RECEIVABLE

  Loans receivable are summarized as follows:

<TABLE>
<CAPTION>
-------------------------------------------------------------------------------
Composition of loan portfolio               June 30, 2003     December 31, 2002
-------------------------------------------------------------------------------
                                                     (in thousands)
<S>                                         <C>               <C>
Comercial Portfolio:
    Commercial loans                          $ 321,140          $  315,537
    Commercial leases                            77,418              77,138
Consumer Portfolio:
    Home equity                                  75,618              72,400
    Consumer                                      7,870               7,724
Mortgage Portfolio:
    Residential mortgages                     $  97,318          $  135,632
    Construction                                 11,902               8,220
                                              ---------          ----------

Total loans and leases, gross                   591,266             616,651
    Deferred loan costs                           1,461               1,566
    Allowance for credit losses                  (7,341)             (6,922)
                                              ---------          ----------

       Total loans and leases, net            $ 585,386          $  611,295
                                              =========          ==========
</TABLE>

NOTE 4 - DEPOSITS

  Deposits are summarized as follows:

<TABLE>
<CAPTION>
------------------------------------------------------------------------
Deposit type                          June 30, 2003    December 31, 2002
------------------------------------------------------------------------
                                                (in thousands)
<S>                                   <C>              <C>
NOW                                     $  35,975          $  31,505
Money market                              167,032            143,565
Savings accounts                           75,552             59,029
Non-interest-bearing demand                60,032             53,471
                                        ---------          ---------
  Total demand, transaction, money
     market and savings deposits          338,591            287,570

Certificates of deposits                  267,147            231,550
                                        ---------          ---------
   Total deposits                       $ 605,738          $ 519,120
                                        =========          =========
</TABLE>

                                       11

<PAGE>

                       PATRIOT BANK CORP. AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)
                                  June 30, 2003

NOTE 5 - EARNINGS PER SHARE

         The dilutive effect of stock options is excluded from basic earnings
per share but included in the computation of diluted earnings per share.

<TABLE>
<CAPTION>
                                         For Three-Months Ended June 30, 2003    For Six-Months Ended June 30, 2003
                                        -------------------------------------   -------------------------------------
                                          Income        Shares      Per-Share     Income        Shares      Per-Share
                                        (Numerator)  (Denominator)   Amount     (Numerator)  (Denominator)   Amount
                                        -----------  -------------  ---------   -----------  -------------   ------
                                                    (in thousands)                          (in thousands)
<S>                                     <C>          <C>            <C>         <C>          <C>            <C>
BASIC EPS
Net Income available to common
  Shareholders                            $2,151         6,367        $0.34       $ 4,251        6,390        $0.67

EFFECT OF DILUTIVE SECURITIES
Dilutive Options                              --           434         (.02)           --          385         (.04)
                                          ------         -----        -----       -------        -----        -----

DILUTED EPS
Net income available to common
  shareholders                            $2,151         6,801        $0.32       $ 4,251        6,775        $0.63
                                          ======         =====        =====       =======        =====        =====
</TABLE>

<TABLE>
<CAPTION>
                                         For Three-Months Ended June 30, 2002    For Six-Months Ended June 30, 2002
                                        -------------------------------------   -------------------------------------
                                          Income        Shares      Per-Share     Income        Shares      Per-Share
                                        (Numerator)  (Denominator)   Amount     (Numerator)  (Denominator)   Amount
                                        -----------  -------------  ---------   -----------  -------------   ------
                                                    (in thousands)                          (in thousands)
<S>                                     <C>          <C>            <C>         <C>          <C>            <C>
BASIC EPS
Net Income available to common
  Shareholders                            $1,980         6,611        $0.30       $ 3,820        6,604        $0.58

EFFECT OF DILUTIVE SECURITIES
Dilutive Options                              --           373         (.02)           --          290         (.03)
                                          ------         -----        -----       -------        -----        -----

DILUTED EPS
Net income available to common
  shareholders                            $1,980         6,984        $0.28       $ 3,820        6,894        $0.55
                                          ======         =====        =====       =======        =====        =====
</TABLE>

NON-DILUTIVE OPTIONS. Patriot had 0 and 235,000 non-dilutive options at June 30,
2003 and 2002, respectively.

                                       12

<PAGE>

                       PATRIOT BANK CORP. AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)
                                  June 30, 2003

NOTE 6 - SEGMENT REPORTING

         The Company has four reportable segments: Banking, Mortgage Banking,
Financial Advisors and Commercial Leasing. Banking operates a network of 16
community banking offices providing deposit and loan services to customers.
Mortgage Banking originates and sells residential mortgages into the secondary
market to generate fee income. Financial Advisors results for the three and six
month periods ended June 30, 2002, reflect only brokerage services. In January
2003, Patriot completed its acquisition of two companies, which is disclosed in
Note 13 - Business Combinations. As a result of these business combinations,
Financial Advisors' now offers wealth and investment management, pension
benefits, and insurance services in addition to brokerage services. The impact
of these two acquisitions was $4,498,000 to total assets as well as $453,000 and
$865,000 to other income for the three-month and six-months periods ended 2003.
Commercial Leasing originates small ticket leases.

         The following table highlights income statement and balance sheet
information for each of the segments at or for the three and six-month periods
ended June 30, 2003 and 2002.

<TABLE>
<CAPTION>
                                                          AT OR FOR THE THREE-MONTH PERIOD ENDED JUNE 30, 2003
                                                    ----------------------------------------------------------------
                                                                 MORTGAGE     FINANCIAL      COMMERCIAL
                                                     BANKING      BANKING      ADVISORS        LEASING      TOTAL
                                                     -------     --------      --------        -------      -----
                                                                            (IN THOUSANDS)
<S>                                                 <C>          <C>          <C>            <C>          <C>
Net interest income                                 $    6,334   $     75      $      6      $    1,012   $    7,427
Other income                                             1,703        533           502             350        3,088
Total net income                                         1,602        210           (67)            406        2,151
Total assets                                           916,662      5,349         5,359          78,511    1,005,881
Total loans and leases, net                            507,968      5,311             -          77,418      590,697
Intersegment interest income / (expense)                  (890)        75             6             809            -
                                                    ----------------------------------------------------------------
</TABLE>

<TABLE>
<CAPTION>
                                                          AT OR FOR THE SIX-MONTH PERIOD ENDED JUNE 30, 2003
                                                    ----------------------------------------------------------------
                                                                 MORTGAGE     FINANCIAL      COMMERCIAL
                                                     BANKING      BANKING      ADVISORS        LEASING      TOTAL
                                                     -------     --------      --------        -------      -----
                                                                            (IN THOUSANDS)
<S>                                                 <C>          <C>          <C>            <C>          <C>
Net interest income                                 $   13,045   $    154      $     16      $    1,988   $   15,203
Other income                                             3,002      1,038           980             714        5,734
Total net income                                         3,076        394           (45)            826        4,251
Total assets                                           916,662      5,349         5,359          78,511    1,005,881
Total loans and leases, net                            507,968      5,311             -          77,418      590,697
Intersegment interest income / (expense)                (1,868)       154            16           1,698            -
                                                    ----------------------------------------------------------------
</TABLE>

<TABLE>
<CAPTION>
                                                          AT OR FOR THE THREE-MONTH PERIOD ENDED JUNE 30, 2002
                                                    ----------------------------------------------------------------
                                                                 MORTGAGE     FINANCIAL      COMMERCIAL
                                                     BANKING      BANKING      ADVISORS        LEASING      TOTAL
                                                     -------     --------      --------        -------      -----
                                                                            (IN THOUSANDS)
<S>                                                 <C>          <C>          <C>            <C>          <C>
Net interest income                                 $    6,337   $     52      $      2      $      875   $    7,266
Other income                                             1,108        344            88             263        1,803
Total net income                                         1,572        135           (15)            288        1,980
Total assets                                           919,262      7,491           669          82,486    1,009,908
Total loans and leases, net                            552,190      7,341             -          81,055      640,586
Intersegment interest income / (expense)                (1,095)        52             2           1,041            -
                                                    ----------------------------------------------------------------
</TABLE>

<TABLE>
<CAPTION>
                                                          AT OR FOR THE THREE-MONTH PERIOD ENDED JUNE 30, 2002
                                                    ----------------------------------------------------------------
                                                                 MORTGAGE     FINANCIAL      COMMERCIAL
                                                     BANKING      BANKING      ADVISORS        LEASING      TOTAL
                                                     -------     --------      --------        -------      -----
                                                                            (IN THOUSANDS)
<S>                                                 <C>          <C>          <C>            <C>          <C>
Net interest income                                 $   12,206   $    104      $      4      $    1,728   $   14,042
Other income                                             2,096        602           211             555        3,464
Total net income                                         3,058        175            31             556        3,820
Total assets                                           919,262      7,491           669          82,486    1,009,908
Total loans and leases, net                            552,190      7,341             -          81,055      640,586
Intersegment interest income / (expense)                (2,184)       104             4           2,076            -
</TABLE>

                                       13

<PAGE>

                       PATRIOT BANK CORP, AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)
                                  June 30, 2003

NOTE 7 - ACCOUNTING FOR GOODWILL AND OTHER INTANGIBLE ASSETS

A summary of non-amortizing and amortizing intangible assets is as follows:

<TABLE>
<CAPTION>
                                                   JUNE 30, 2003                              DECEMBER 31, 2002
                                     -----------------------------------------    ------------------------------------------
                                         GROSS                                        GROSS
                                       CARRYING     ACCUMULATED   NET CARRYING      CARRYING    ACCUMULATED    NET CARRYING
                                        AMOUNT     AMORTIZATION      AMOUNT          AMOUNT     AMORTIZATION      AMOUNT
                                     -----------------------------------------    ------------------------------------------
                                                                         (IN THOUSANDS)
<S>                                  <C>           <C>            <C>             <C>           <C>            <C>
Non-amortizing intangible assets:
   Goodwill                          $    13,640   $      2,198   $     11,442    $    10,975   $      2,198   $       8,777

Amortizing intangible assets:
   Core deposit intangible                 4,606          1,972          2,634          4,606          1,729           2,877
   Customer lists                            826             27            799              -              -               -
   Originated mortgage servicing
      rights                                 664            459            205            664            404             260
                                     -----------------------------------------    ------------------------------------------
   Total amortizing intangible
      assets                               6,096          2,458          3,638          5,270          2,133           3,137
                                     -----------------------------------------    ------------------------------------------
Total intangible assets              $    19,736   $      4,656   $     15,080    $    16,245   $      4,331   $      11,914
                                     =========================================    ==========================================
</TABLE>

Aggregate amortization expense for the three and six-month period ended June 30
is as follows:

<TABLE>
<CAPTION>
                                    THREE-MONTH PERIOD ENDED  SIX-MONTH PERIOD ENDED
                                              JUNE 30                JUNE 30
                                    ------------------------------------------------
                                     2003     2002             2003     2002
                                     ----     ----             ----     ----
                                     (IN THOUSANDS)           (IN THOUSANDS)
<S>                                 <C>      <C>              <C>      <C>
Amortization expense .............  $   170  $   206          $   325  $  350
</TABLE>

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

<TABLE>
<CAPTION>
FOR THE YEAR ENDED                        ESTIMATED EXPENSE
                                            (IN THOUSANDS)
<S>                                       <C>
December 31, 2003 ....................         $   681
December 31, 2004 ....................             579
December 31, 2005 ....................             518
December 31, 2006 ....................             503
December 31, 2007 ....................             495
</TABLE>

The changes in the carrying amount of goodwill are as follows:

<TABLE>
<CAPTION>
                                          JUNE 30, 2003  DECEMBER 31, 2002
                                                   (IN THOUSANDS)
<S>                                       <C>            <C>
Balance at the beginning of period ...      $  8,777         $  8,688
Goodwill acquired ....................         2,665               89
Amortization expense .................             -                -
                                            --------         --------
Balance at the end of period .........      $ 11,442         $  8,777
                                            ========         ========
</TABLE>

                                       14

<PAGE>

                       PATRIOT BANK CORP, AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)
                                  June 30, 2003

NOTE 8 - 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. The adoption of this statement did
not have an impact on Patriot's earnings, financial condition, or equity.

NOTE 9 - 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 10 - 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. This Statement 146
is to be applied prospectively to exit or disposal activities initiated after
December 31, 2002. The adoption of this Statement did not have an impact on
Patriot's earnings, financial condition, or equity.

NOTE 11 - AMENDMENTS OF STATEMENT 133 ON DERIVATIVE INSTRUMENTS AND HEDGING
ACTIVITIES

In April 2003, the FASB issued SFAS No. 149, "Amendments of Statement 133 on
Derivative Instruments and Hedging Activities", which establishes accounting and
reporting standards for derivative instruments, including derivatives embedded
in other contracts and hedging activities. This Statement amends Statement No.
133 for decisions made by the FASB as part of its Derivatives Implementation
Group process. This Statement also amends Statement No. 133 to incorporate
clarifications of the definition of a derivative. This Statement is effective
for contracts entered into or modified and hedging relationships designated
after June 30, 2003. The provisions of this Statement are not expected to have a
material impact on Patriot's consolidated earnings, financial condition, or
equity.

NOTE 12 - ACCOUNTING FOR CERTAIN FINANCIAL INSTRUMENTS WITH CHARACTERISTICS OF
BOTH LIABILITIES AND EQUITY

In May 2003, the FASB issued SFAS No. 150, "Accounting for Certain Financial
Instruments with Characteristics of both Liabilities and Equity". This Statement
establishes standards for how an issuer classifies and measures certain
financial instruments with characteristics of both liabilities and equity. It
requires that an issuer classify a financial instrument that is within its scope
as a liability (or an asset in some circumstances). Some of the provisions of
this Statement are consistent with the current definition of liabilities in FASB
Concepts Statement No. 6, "Elements of Financial Statements". The remaining
provisions of this Statement are consistent with the Board's proposal to revise
that definition to encompass certain obligations that a reporting entity can or
must settle by issuing its own equity shares, depending on the nature of the
relationship established between the holder and the issuer. Effective for
financial instruments entered into or modified after May 31, 2003 and otherwise,
is effective at the beginning of the first interim period after June 15, 2003.
Patriot does not expect the adoption of this Statement to have an impact on its
consolidated earnings, financial condition, or equity.

                                       15
<PAGE>

                       PATRIOT BANK CORP, AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)
                                  June 30, 2003

NOTE 13 - BUSINESS COMBINATIONS

WEALTH MANAGEMENT FIRM ACQUISITION. On January 3, 2003, Patriot completed the
acquisition of Bonds & Paulus Associates, Inc. (Bonds & Paulus), a wealth
management firm headquartered in Chester County, Pennsylvania. Founded in 1993,
Bonds & Paulus is a registered investment advisory firm, providing investment
advisory and financial planning services to high net-worth individuals and
families. Bonds & Paulus was merged into Patriot Advisors, a division of Patriot
Bank Corp. that provides a full range of wealth and investment management
services. The acquisition was accounted for as a purchase. Bonds & Paulus was
purchased for $458,000 plus contingent consideration to be paid in shares of
Patriot Bank Corp. common stock based upon future revenues of Bonds & Paulus. Of
the $458,000, $115,000 was paid in cash and 22,810 shares of Patriot Bank Corp.
common stock having a value of $343,000 were issued at closing. Based upon
current revenue, the total purchase price will approximate $1,300,000. Goodwill
arising from the transaction totaled $1,209,000.

PENSION BENEFITS SERVICE PROVIDER ACQUISITION. On January 17, 2003, Patriot
completed the acquisition of Pension Benefits, Inc., a pension benefits service
provider headquartered in West Chester, Pennsylvania. Founded in 1986, Pension
Benefits Inc. is a third party administrator and a registered investment
advisory firm, providing comprehensive retirement plan solutions to businesses.
Pension Benefits, Inc. was merged into Patriot Advisors, a division of Patriot
Bank Corp. The acquisition was accounted for as a purchase. Pension Benefits,
Inc. was purchased for $829,000 plus contingent consideration to be paid in
shares of Patriot Bank Corp. common stock based upon future revenues of Pension
Benefits, Inc. Of the $829,000, $414,500 was paid in cash and 27,338 shares of
Patriot Bank Corp. common stock were issued at closing. Based upon current
revenue, the total purchase price will approximate $1,600,000. Goodwill arising
from the transaction totaled $1,431,000.


Supplemental pro forma information that discloses the results of operations for
Patriot Bank Corp. and its subsidiaries for the three and six-month period ended
June 30, 2003 to the same period in 2002 is provided below. The pro forma
information assumes the business combinations of Bonds & Paulus Associates, Inc.
and Pension Benefits, Inc. had been completed as of the beginning of each period
and illustrates the impact on Patriot's non-interest income, net income and EPS
for each period.

<TABLE>
<CAPTION>
                               THREE-MONTH PERIOD ENDED   SIX-MONTH PERIOD ENDED
                                        JUNE 30                  JUNE 30
                                   2003         2002         2003      2002
                               -------------------------------------------------
                                     (IN THOUSANDS)          (IN THOUSANDS)
<S>                            <C>         <C>            <C>        <C>
Revenue                        $   17,788  $     19,007   $  35,868  $  38,013
Net Income                     $    2,151  $      1,983   $   4,287  $   3,826
                               ==========  ============   =========  =========

Earnings per share - basic     $     0.34  $       0.30   $    0.67  $    0.58
                               ==========  ============   =========  =========
Earnings per share - diluted   $     0.32  $       0.28   $    0.63  $    0.56
                               ==========  ============   =========  =========
</TABLE>

                                       16

<PAGE>

                       PATRIOT BANK CORP, AND SUBSIDIARIES

ITEM 2. 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.

     SUMMARY. Patriot reported diluted earnings per share of $.32 and net income
of $2,151,000 for the three-month period ended June 30, 2003 compared to diluted
earnings per share of $.28 and net income of $1,980,000 for the three month
period ended June 30, 2002. Diluted earnings per share for the six-month period
ending June 30, 2003 was $.63 and net income of $4,251,000 compared with $.55
and net income of $3,820,000 for the six-month period ended June 30, 2002. 2002
earnings per share has been restated to reflect the effect of the 10% stock
dividend paid in April 2003. Return on average equity was 12.43%, for the
three-month period ended June 30, 2003 compared to 12.82%, for the three-month
period ended June 30, 2002.

     NET INTEREST INCOME. Net interest income for the three and six-month
periods ended June 30, 2003 was $7,427,000 and $15,203,000 compared to
$7,266,000 and $14,042,000 for the same periods in 2002. The increase in net
interest income is primarily due to the decreases in market rates paid on
Patriot's funding sources outpacing decreases in the rates earned on interest
earning assets. As a result, Patriot's net interest margin was expanded.
Patriot's net interest margin (net interest income as a percentage of average
interest-earning assets) for the three and six-month periods ended June 30, 2003
was 3.50% and 3.59% compared to 3.32% and 3.18% for the same periods in 2002.

     Interest on loans and leases was $10,643,000 and $21,773,000 for the three
and six-month periods ended June 30, 2003 compared to $12,433,000 and
$24,931,000 for the same periods in 2002. The average balance of loans was
$597,415,000 with an average yield of 7.31% for the six-month period ended June
30, 2003 compared to an average balance of $640,718,000 with an average yield of
7.80% for the same period in 2002. The decrease in average balance is primarily
due to Patriot allowing residential mortgages to run-off, offset by aggressive
marketing of consumer and commercial loans. In just the six-month period from
June 30, 2003, the residential mortgage loan balance has decreased $38,300,000
while the commercial loan and lease balance has increased $5,900,000. The
decrease in average yield is primarily a result of a decrease in market rates.

     Interest on Patriot's investment portfolio (investment and mortgage-backed
securities) was $4,053,000 and $8,249,000 for the three and six-month periods
ended June 30, 2003 compared to $4,370,000 and $8,781,000 for the same periods
in 2002. The average balance of the investment portfolio was $331,197,000 with
an average yield of 5.82% for the six-month period ended June 30, 2003 compared
to an average balance of $292,286,000 with an average yield of 6.58% for the
same period in 2002. The increase in average balance is primarily due to Patriot
investing funds from the repayment of residential mortgage loans. The decrease
in average yield is related to general decreases in market rates on adjustable
rate securities as well as new security purchases at lower yields. Some of these
security purchases have been tax beneficial securities so even though Patriot's
yield may be lower, Patriot's tax expense is lower as well.

     Interest on total deposits was $3,238,000 and $6,378,000 for the three and
six-month periods ended June 30, 2003 compared to $3,615,000 and $7,898,000 for
the same periods in 2002. The average balance of total deposits was $563,482,000
with an average cost of 2.25% for the six-month period ended June 30, 2003
compared to an average balance of $523,608,000 with an average cost of 3.02% for
the same period in 2002. The increase in average balance is primarily the result
of aggressive marketing of money market and transaction-based deposit accounts
through new and existing branches offset by a decrease in the average balance of
Patriot's certificate of deposit accounts. The overall decrease in the average
cost on deposits was primarily the result of a decrease in market rates, a
reduction in higher costing certificate of deposit accounts and emphasis placed
on lower cost core deposit accounts.

     Interest on borrowings was $4,035,000 and $8,451,000 for the three-month
and six-month periods ended June 30, 2003 compared to $5,934,000 and $11,832,000
for the same periods in 2002. The average balance of borrowings was $354,921,000
with an average cost of 4.74% for the six-month period ended June 30, 2003
compared to an average balance of $410,395,000 with a cost of 5.74% for the same
period in 2002. The decrease in average balance was primarily due to borrowings
being replaced with branch deposit growth. The decrease in the yield on
borrowings was the result of a decrease in interest rates and the result of
restructured borrowed funds with a higher cost of funds. During the six-month
period of 2003, Patriot prepaid $55,000,0000 in FHLB borrowings and restructured
$72,000,000 in FHLB borrowings.

PROVISION FOR CREDIT LOSSES. The provision for credit losses was $900,000 and
$2,000,000 for the three-month and six-month periods ended June 30, 2003
compared to $1,000,000 and $1,675,000 for the same period in 2002. Net
charge-offs for the three and six-month periods-ended June 30, 2003, were
$764,000 and $1,580,000. The combination of these items represented an addition
of $83,000 and $419,000 to the allowance for credit losses, which totaled
$7,258,000 at June 30, 2003. Patriot's total loans consist of four distinct
portfolios, each of which is monitored and analyzed separately. The allowance
for credit losses is based on management's

                                       17

<PAGE>

                       PATRIOT BANK CORP, AND SUBSIDIARIES

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS (CONTINUED)

ongoing evaluation of the loan portfolios and reflects an amount considered by
management to be its best estimate of the amount necessary to absorb known and
inherent losses in the portfolios. Management considers a variety of factors
when establishing the allowance, such as the impact of current economic
conditions, diversification of the portfolios, 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. In addition, regulatory authorities, as
an integral part of their examinations, periodically review the allowance for
credit losses. They may require additions to the allowance based upon their
judgements about information available to them at the time of examination.
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 credit losses. Since the allowance for credit losses is dependent,
to a great extent, on conditions that may be beyond Patriot's control,
management's estimate of the allowance necessary to absorb credit losses and
actual credit losses could differ.

RESIDENTIAL MORTGAGE LOANS. The residential 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 three 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 that uses historical
data to estimate losses inherent in the portfolio.

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

COMMERCIAL LOANS. 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. Compared to December
31, 2002, the level of non-performing assets in the commercial lending portfolio
decreased from $3,893,000 to $3,108,000 at June 30, 2003. Patriot closely
monitors local economic and business trends relative to its commercial lending
portfolio to estimate the effect those trends may have on losses. Patriot's
commercial loan portfolio contains some loans that are substantially larger than
the loans within its other portfolios. The 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 specifically
reserves for individual loans, which exhibit weakness.

COMMERCIAL LEASES. Patriot entered the commercial leasing business in 1998
principally through the acquisition of Keystone Financial Leasing (KFL).
Patriot's leasing portfolio has approximately a 3-year life. Patriot performs an
internal regression analysis on this portfolio using historical data (including
KFL data). Patriot also closely monitors regional and national economic business
trends relative to its commercial leasing portfolio to estimate the effect those
trends may have on losses. During 2002, Patriot experienced an increase in the
level of charge-offs in the commercial leasing portfolio. Patriot attributes the
increase to a general weakness in the overall economy, relatively low previous
year charge-offs and higher delinquency trends in certain sectors of the
portfolio. In response to the elevated charge-offs, Patriot enhanced it's
policies, procedures and resources related to the credit administration of the
leasing portfolio. The result of these enhancements has been a steady
improvement in delinquencies, and non-performing and charged-off leases in the
latter part of 2002 and the first quarter of 2003. Compared to December 31,
2002, the level of non-performing assets in the commercial leasing portfolio
decreased from $1,012,000 to $782,000 at June 30, 2003.

Patriot's percentage of loan loss reserves to total loans increased from 1.11%
at December 31, 2002, to 1.23% at June 30, 2003, which correlates to Patriot's
growth in its higher risk commercial loan portfolio. During the first six months
of 2003, Patriot's overall loan and lease portfolios decreased from $611,295,000
at December 31, 2002, to $585,386,000. The decrease in the loan portfolios was
attributed to the run-off of residential mortgage loans, which was offset by
growth in the commercial loan portfolio. At June 30, 2003, Patriot had
$8,605,000 in loans and leases which were 30 days or more delinquent which
represented 1.44% of Patriot's total loan and lease portfolio compared to
$9,845,000 or 1.58% at June 30, 2002. Based on the growth in the commercial loan
portfolio and the increased level of delinquent loans and leases, management
determined a provision of $2,000,000 was necessary to adequately

                                       18

<PAGE>

                       PATRIOT BANK CORP, AND SUBSIDIARIES

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS (CONTINUED)

address the losses inherent in Patriot's loan and lease portfolios. Patriot
believes that the allowance provides for known and inherent credit losses at
June 30, 2003.

         NON-INTEREST INCOME. Total non-interest income was $3,088,000 and
$5,734,000 for the three-month and six-month periods ended June 30, 2003
compared to $1,803,000 and $3,464,000 for the same periods in 2002. The increase
in non-interest income was derived from three sources:

Non-Interest income from the gains on the sale of loans and leases was $746,000
and $1,449,000 for the three and six-month periods ended June 30, 2003 compared
to $486,000 and $797,000 for the same period in 2002. This increase was
primarily due to mortgage banking gains associated with higher volumes. Gains
recognized on the sale of the guaranteed portion of Small Business
Administration loans contributed to this increase as well.

Patriot Advisors, a division of Patriot Bank Corp., provided $502,000 and
$980,000 in non-interest income during the three and six-month periods ended
June 30, 2003 compared to $88,000 and $211,000 for the same period in 2002. This
increase in Patriot Advisors' non-interest income can be attributed to the
acquisitions of Bonds & Paulus Associates, Inc. and Pension Benefits, Inc.,
which occurred during the first quarter of 2003.

Non-Interest income from serivce fees on deposits was $918,000 and $1,780,000
for the three and six-month periods ended June 30, 2003 compared to $648,000 and
$1,249,000 for the same period in 2002. The increase in service fees on deposits
was a result of the implementation of an overdraft privilege product which was
implemented during the third quarter of 2002.

During the six-month period of 2003, Patriot prepaid $55,000,0000 in FHLB
borrowings. During the first and second quarters in 2003, Patriot recorded a
$588,000 and $136,000 loss, respectively, the prepayment penalties for repaying
these advances early. In conjunction with these transactions, Patriot sold
$30,859,000 of securities and recognized $556,000 and $376,000 of investment
gains during the first and second quarters in 2003, respectively. Overall, the
combination of these transactions allowed Patriot to improve its interest rate
risk profile.

         NON-INTEREST EXPENSE. Total non-interest expense was $6,980,000 and
$13,661,000 for the three and six-month periods ended June 30, 2003 compared to
$5,487,000 and $10,820,000 for the same periods in 2002. Of this increase in
non-interest expense, $1,079,000 and $2,005,000 for the three and six-month
periods in 2003, was primarily due to higher compensation costs associated with
increases in staffing. Patriot's two acquisitons during the first quarter of
2003 as well as service requirements associated with branch deposit and
commercial lending growth caused the increases in staffing. Other non-interest
expenses such as occupancy and equipment, advertising, deposit processing and
office supplies and postage were also higher during the three and six-month
periods in 2003 as compared to the same periods in 2002, which can be attributed
to normal recurring expenses associated with Patriot's two acquisitions during
the first quarter of 2003 and the addition of 2 new branches in 2003.

         INCOME TAX PROVISION. The income tax provision was $484,000 and
$1,025,000 for the three-month and six-month periods ended June 30, 2003
compared to $602,000 and $1,191,000 for the same periods in 2002. The effective
tax rate was 18.37% and 19.43% for the three-month and six-month periods ended
June 30, 2003 compared to 23.32% and 23.77% for the same periods in 2002. The
decrease in the effective tax rate was due to greater tax exempt interest from
tax-beneficial securities.

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. Patriot has
sold substantially all new residential mortgage (fixed and adjustable rate)
originations since 2000. At June 30, 2003, Patriot's total loan portfolio was
$585,386,000, compared to $611,295,000 at December 31, 2002. The decrease in the
loan portfolio was primarily the result of Patriot allowing residential
mortgages to run-off, offset by an emphasis placed on increasing commercial and
consumer lending relationships.

         CASH AND CASH EQUIVALENTS. Cash and cash equivalents at June 30, 2003
were $20,883,000 compared to $16,839,000 at December 31, 2002. The increase in
cash balances was primarily due to timing differences.

                                       19

<PAGE>

                      PATRIOT BANK CORP, AND SUBSIDIARIES3

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS (CONTINUED)

         SECURITIES. Investment securities consist of US Treasury and government
agency securities, and corporate debt and equity securities. Mortgage-backed
securities consist of securities generally issued by either the FHLMC, FNMA or
the Government National Mortgage Association ("GNMA"). Collateralized Mortgage
Obligations ("CMOs") consist of securities issued by the FHLMC, FNMA or private
issuers. Total investment and mortgage-backed securities at June 30, 2003 were
$342,243,000 compared to $315,868,000 at December 31, 2002. The increase in
investment and mortgage-backed securities was primarily due to the purchase of
$114,661,000 of available for sale securities offset by investment amortization
and maturities. The funding source for these purchases was principally
residential mortgage loan prepayments.

         DEPOSITS. Deposits are primarily attracted from within Patriot's market
area through the offering of various deposit instruments, including checking
accounts, money market accounts, savings accounts, certificates of deposit and
retirement savings plans. Patriot also solicits brokered deposits from various
sources. Total deposits at June 30, 2003 were $605,738,000 compared to
$519,120,000 at December 31, 2002. Of this increase, $35,597,000 was related to
growth in certificates of deposits and $51,022,000 was related to an increase in
core deposits.

         FHLB ADVANCES AND FEDERAL FUNDS. Patriot utilizes borrowings as a
source of funds for its growth strategy and its asset/liability management.
Patriot is eligible to obtain advances from the FHLB upon the security of
certain loan portfolios, mortgage-backed securities, and investment securities,
provided certain standards related to creditworthiness have been met. 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. Patriot also uses Federal Funds as a
funding source. Federal Funds are transactions that are typically between
financial institutions and are short-term unsecured borrowings. Total FHLB
advances and federal funds borrowed at June 30, 2003 were $257,828,000 compared
to $368,173,000 at December 31, 2002. The decrease in FHLB advances and federal
funds was associated with the repayment of short-term FHLB advances. During this
six-month period in 2003, Patriot prepaid $55,000,0000 in FHLB borrowings and
restructured $72,000,000 in FHLB borrowings, which allowed Patriot to improve
its interest rate risk profile.

         On June 20, 2003, the Company entered into three pay variable receive
fixed interest rate swaps to hedge changes in the fair value of designated fixed
rate FHLB advances. The notional amount of these contracts totals $72 million
and mature on May 29, 2008. The company has agreed to pay 3 month LIBOR plus a
spread, with quarterly reset, and to receive a fixed rate equal to the rate paid
on the individual FHLB advances.

         Since the terms of interest rate swaps mirror those of the hedged
items, FHLB advances, the company has adopted the short cut method, as
prescribed in SFAS No. 133, to account for these transactions. Therefore, no
hedge ineffectiveness was recognized in earnings related to these fair value
hedges.

         REPURCHASE AGREEMENTS. Patriot uses repurchase agreements as a funding
source. Repurchase agreements are generally short-term obligations
collateralized by government agency and other securities. Total repurchase
agreements at June 30, 2003 were $42,931,000 compared to $14,210,000 at December
31, 2002. The increase in repurchase agreements was primarily due to the
addition of $31,934,000 of brokered repurchase agreements offset by a decrease
in customer repurchase agreements. The increase in repurchase agreements
replaced FHLB advances that were repaid during the first six months of 2003.

         OTHER LIABILTIIES. Other Liabilities at June 30, 2003 were $6,877,000
compared to $4,987,000 at December 31, 2002. The increase in other liabilities
was primarily attributable to the accrual of contingent consideration associated
with the purchase of Bonds and Paulus Associates, Inc. and Pension Benefits Inc.

         SHAREHOLDERS' EQUITY. Total shareholders' equity was $69,518,000 at
June 30, 2003 compared to $65,945,000 at December 31, 2002. The increase was
primarily a result of net income and an increase in accumulated other
comprehensive income offset by cash dividends paid and the repurchase of shares
of Patriot Bank Corp. common stock.

                                       20

<PAGE>

                       PATRIOT BANK CORP, AND SUBSIDIARIES

CRITICAL ACCOUNTING POLICIES

ALLOWANCE FOR CREDIT LOSSES ON LOANS AND LEASES

The allowance for credit losses on loans and leases is based on management's
ongoing evaluation of the loan portfolio and reflects an amount considered by
management to be its best estimate of the amount necessary to absorb 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 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. In addition, regulatory authorities, as an integral part of their
examinations, periodically review the allowance for credit losses. They may
require additions to the allowance based upon their judgements about information
available to them at the time of examination. 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 credit
losses on loans and leases is available to absorb further loan losses in any
category.

Management uses significant estimates to determine the allowance for credit
losses. Because the allowance for credit losses is dependent, to a great extent,
on conditions that may be beyond Patriot's control, management's estimate of the
amount necessary to absorb allowance for credit losses and actual credit losses
could differ. Patriot's current judgement is that the allowance for credit
losses on loans and leases is appropriate at June 30, 2003.

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
basis, 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 would be 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. At June 30, 2003, 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 possible that management's judgement about the
need for a valuation allowance for deferred taxes could change in the future.

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 less estimated disposal costs. Any excess at the date of
transfer of the recorded investment in the loan over the fair market value less
estimated disposal costs 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 less estimated disposal costs. Any excess at the date of transfer of
the recorded investment in the lease over the fair market value less estimated
disposal costs 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 that are beyond Patriot's control. It
is possible that management's estimates included in the valuation of REO and
other repossessed property could change in the future. Patriot's current
judgement is that the valuation of REO and other repossessed property is
appropriate at June 30, 2003.

                                       21

<PAGE>

                       PATRIOT BANK CORP, AND SUBSIDIARIES

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, Federal Funds 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 first six months of 2003, $90,880,000 of liquidity was provided from
the repayment and sale of securities. Additional liquidity of $86,618,000 was
provided by deposit growth, $28,721,000 by short-term repurchase agreements and
$22,911,000 from the repayment of loans. These funds were used to purchase
$114,661,000 of investment securities, repay $111,729,000 of borrowings and fund
$5,313,000 and $3,394,000 of commercial and consumer loans, net of prepayments,
respectively.

At June 30, 2003, Patriot had outstanding loan commitments of $62,925,000.
Patriot anticipates that it will have sufficient funds available to meet its
loan commitments. Certificates of deposit that are scheduled to mature in one
year or less from June 30, 2003, totaled $155,282,000. Based upon historical
experience, Patriot expects that substantially all of the maturing certificates
of deposit will be retained at maturity, excluding brokered certificates in the
amount of $16,918,000.

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 CAMELS 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 June 30, 2003, 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
June 30, 2003:

<TABLE>
<CAPTION>
                                                                        To Be                  To Be
                                                Actual         Adequately Capitalized   Well Capitalized
                                                ------         ----------------------   ----------------
                                           Amount     Ratio      Amount    Ratio         Amount    Ratio
                                           ------     -----      ------    -----         ------    -----
                                                               As of  June 30, 2003
                                                               (dollars in thousands)
<S>                                       <C>       <C>        <C>        <C>            <C>       <C>
Total  capital (to risk weighted assets)

Patriot Bank Corp.                        $ 81,091    12.57%   $  51,617      8%         64,521     10%
Patriot Bank                                80,394    12.47%      51,560      8%         64,450     10%

Tier I capital (to risk-weighted assets)

Patriot Bank Corp.                          72,006    11.16%      25,808      4%         38,713      6%
Patriot Bank                                71,228    11.05%      25,780      4%         38,670      6%

Tier I capital (to average assets)

Patriot Bank Corp.                          72,006     7.32%      39,362      4%         49,202      5%
Patriot Bank                                71,228     7.22%      39,467      4%         49,334      5%
</TABLE>

                                       22

<PAGE>

                       PATRIOT BANK CORP, AND SUBSIDIARIES

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

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's Board of Directors has established an Asset/Liability
Committee, 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.

The Company 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 level of interest rate risk of the Company 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 the company has calculated an
estimate of net interest income for the year ending June 30, 2004, based upon
the assets, liabilities and off-balance sheet financial instruments in existence
at June 30, 2003. 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, with a
floor of 25bp. The following table reflects the estimated percentage change in
estimated net interest income for the year ending June 30, 2004 resulting from
changes in interest rates.

<TABLE>
<CAPTION>
   Rate ramp to interest rates        % change
----------------------------------    -----------
<S>                                   <C>
             +2%                      (1.22%)
             -2%                       (.50%)
</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 the company 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 an unchanged interest rate environment. This method of
measurement primarily evaluates the longer term repricing risks and options in
the Company's balance sheet. The Company 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 the Company 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 June 30, 2003, resulting from shocks to interest rates.

<TABLE>
<CAPTION>
                     Percent change       EVE Equity/
Rate shock             from base          EVE Assets
----------             ---------          ----------
<S>                  <C>                  <C>
     +2%                  4.97%             13.60%
     +1%                  4.50%             13.25%
   Base                                     12.43%
     -1%                -10.97%             10.89%
     -2%                -27.70%              8.72%
</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 re-price within that time period. The interest rate
sensitivity gap is defined as the difference

                                       23

<PAGE>

                       PATRIOT BANK CORP, AND SUBSIDIARIES

ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK (CONTINUED)

between the amount of interest-earning assets maturing or re-pricing within a
specific time period and the amount of interest-bearing liabilities maturing or
repricing within that time period, as well as the impact of off balance sheet
instruments maturing or repricing within that time period.

The following table summarizes the amount of interest-earning assets,
interest-bearing liabilities, and off-balance sheet instruments outstanding at
June 30, 2003, which are anticipated, based upon certain assumptions, to
re-price or mature in each of the future time periods shown. Loan amounts
reflect principal balances expected to be repaid and/or re-priced 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 re-price or mature during a particular period were determined in
accordance with the earlier of term to re-pricing 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 June 30, 2003:

<TABLE>
<CAPTION>
                                         0-90        91-180      181-365
                                         Days         Days         Days
                                       ----------  -----------  -----------
<S>                                    <C>         <C>          <C>
GAP to Total Assets                      2.90%       2.10%        5.40%

Cumulative GAP to Total Assets           2.90%       5.00%       10.40%
</TABLE>

As shown above, the company has a positive cumulative 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 based on
market conditions or the magnitude of the change in the 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.

The Company'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 the Company'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.

                                       24

<PAGE>

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
         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.

(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.

                                       25

<PAGE>

   PART II        OTHER INFORMATION

         Item 1   LEGAL PROCEEDINGS

                  There are various claims and lawsuits in which Patriot is
                  periodically involved incidental to 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 the Company.

         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

                  The company held its Annual Meeting of Shareholders on April
24, 2003. At the said meeting 6,141,562 shares of Common Stock were entitled to
vote, of which 5,205,499 shares were present in person or by proxy. The
following matters were voted upon at the Annual Meeting and the number of
affirmative votes, negative votes and abstentions with respect to the matters
are as follows:

         1. At the Annual Meeting, one director was elected for three-year
terms. The nominee was Russell J. Kunkel.

<TABLE>
<CAPTION>
                      For       %     Withheld     %
<S>                <C>        <C>     <C>        <C>
Russell J. Kunkel  5,114,663  98.30    90,836    1.70
</TABLE>

         The names of each of the directors whose term of office continued after
the Annual Meeting and their respective term expirations are as follows:

<TABLE>
<S>                   <C>
James B. Elliott      2004

Larry V. Thren        2004

Richard Elko          2005

James A. Bentley, Jr  2005
</TABLE>

         2. The ratification of the appointment of KPMG LLP as independent
auditors of Patriot Bank Corp. for fiscal year ending December 31, 2003.

<TABLE>
<CAPTION>
For                  %       Against     %    Abstain    %
<S>                <C>       <C>        <C>   <C>        <C>
5,176,263          99.40     14,961     0.3    14,275    0.3
</TABLE>

         Item 5 OTHER INFORMATION

                                 Not applicable.

                                       26

<PAGE>

         Item 6   EXHIBITS AND REPORTS ON FORM 8-K.

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

                           -     Exhibit 31.1  Section 302 CEO Certification

                           -     Exhibit 31.2  Section 302 CFO Certification

                           -     Exhibit 32.1  Section 906 CEO Certification

                           -     Exhibit 32.2  Section 906 CFO Certification

                           (b)   Reports filed on Form 8K

                           --    On April 1, 2003, the registrant filed a Form
                                 8-K reporting the declaration of a 10% stock
                                 dividend.

                           --    On April 16, 2003, the registrant filed a Form
                                 8-K announcing earnings for the first quarter
                                 of 2003.

                           --    On April 24, 2003, the registrant filed a Form
                                 8-K reporting the declaration of a cash
                                 dividend of 12 cents per share.

                                       27

<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 August 11, 2003
                                           _____________________________________
                                                      Richard A. Elko
                                           President and Chief Executive Officer

Date August 11, 2003
                                           _____________________________________
                                                        James G. Blume
                                                     Senior Vice President and
                                                      Chief Financial Officer

                                       28