<PAGE> 1

                               UNITED STATES
                    SECURITIES AND EXCHANGE COMMISSION
                           WASHINGTON, DC 20549

                                FORM 10-Q


(Mark One)

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

             For the quarterly period ended September 30, 1996

                                   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)

      DELAWARE                                        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: 3,714,539 shares of common
stock, par value $.01 per share, were outstanding as of November 1, 1996.


                                       

<PAGE> 2

                   PATRIOT BANK CORP. AND SUBSIDIARIES

                                  INDEX


                                                                          Page


PART I FINANCIAL INFORMATION   

     Item 1 FINANCIAL STATEMENTS                                           

            Consolidated Statements of Financial Condition 
            at September 30, 1996 and December 31, 1995                    3

            Consolidated Statements of Income for the 
            Three-Month and Nine-Month Periods ended 
            September 30, 1996 and 1995                                    4

            Consolidated Statements of Cash Flows for the 
            Nine-Month Periods ended September 30, 1996 and 1995           5

            Notes to Consolidated Financial Statements                     6

     Item 2 MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF
            OPERATIONS AND FINANCIAL CONDITION                            10


PART II OTHER INFORMATION                                                 15

     Items 1 through 6


SIGNATURES                                                                16







                                       2


<PAGE> 3

<TABLE>
<CAPTION>


                                       Patriot Bank Corp. and Subsidiaries
                                CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
                                       (in thousands, except share data)

                                                                     September 30,            December 31,
----------------------------------------------------------------------------------------------------------------
                                                                         1996                     1995
----------------------------------------------------------------------------------------------------------------
                                                                     (unaudited)                 (note)

<S>                                                                   <C>                      <C>     
Assets
  Cash and due from banks                                             $    897                 $  2,878
  Interest-earning deposits in other
   financial institutions                                                3,175                   15,678
                                                                      --------                 --------
     Total cash and cash equivalents                                     4,072                   18,556
  Investment and mortgage-backed securities
   available for sale - at market value                                145,202                   47,646
  Investment securities held to maturity (market value
   of $65,703 and $3,963 at September 30, 1996 and
   December 31, 1995, respectively)                                     66,257                    3,917
  Loans receivable                                                     264,634                  194,250
  Allowance for possible loan losses                                    (1,855)                  (1,702)
  Premises and equipment, net                                            6,512                    3,450
  Accrued interest receivable                                            2,469                    1,205
  Real estate owned                                                         80                      195
  Other assets                                                           2,187                    1,352
                                                                      --------                 --------
     Total assets                                                     $489,558                 $268,869
                                                                      ========                 ========
Liabilities and stockholders' equity
  Deposits                                                            $219,852                 $201,618
  Borrowings                                                           213,500                   10,000
  Advances from borrowers for taxes and insurance                        1,087                    1,778
  Other liabilities                                                      3,718                    1,363
                                                                      --------                 --------
   Total liabilities                                                   438,157                  214,759
                                                                      --------                 --------
  Preferred stock, $.01 par value, 2,000,000
   shares authorized, none issued                                           --                       --   
  Common stock, $.01 par value, 10,000,000
   shares authorized, 3,902,995 shares issued                               39                       38
  Additional paid-in capital                                            38,431                   36,700
  Common stock acquired by ESOP, 271,377
   shares at cost                                                       (2,714)                  (2,714)
  Common stock acquired by MRP, 133,870
   shares at amortized cost                                             (1,624)                      --
  Treasury stock, 188,456 shares at cost                                (2,517)                      --
  Retained earnings                                                     20,446                   19,893
  Net unrealized appreciation (depreciation) on investment
   and mortgage-backed securities available
   for sale, net of taxes                                                (660)                      193
                                                                     --------                  --------
     Total stockholders' equity                                        51,401                    54,110
                                                                     --------                  --------
     Total liabilities and stockholders' equity                      $489,558                  $268,869
                                                                     ========                  ========

</TABLE>
 
 
The accompanying notes are an integral part of these statements.

Note:   The  balance  sheet at  December  31, 1995 is  taken  from  the  audited
financial  statements  at that date but does not include all of the  information
and footnotes required by generally accepted accounting  principles for complete
financial statements.


                                                3

<PAGE> 4

<TABLE>
<CAPTION>

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

                                               Three-Month Period Ended September 30,       Nine-Month Period Ended September 30,
------------------------------------------------------------------------------------------------------------------------------------
                                                     1996                   1995                 1996                  1995
------------------------------------------------------------------------------------------------------------------------------------
                                                                                   (unaudited)

<S>                                              <C>                      <C>                 <C>                   <C>    
Interest income
  Interest-earning deposits                      $     23                 $   32              $    91               $    78
  Investment and mortgage-backed securities         3,492                    739                7,249                 2,029
  Loans                                             4,909                  3,537               13,152                10,249
                                                 --------                 ------              -------               -------
     Total interest income                          8,424                  4,308               20,492                12,356
                                                 --------                 ------              -------               ------- 
Interest expense
  Deposits                                          2,501                  2,346                7,167                 6,560
  Borrowings                                        2,693                    129                4,481                   327
                                                 --------                 ------              -------               -------
     Total interest expense                         5,194                  2,475               11,648                 6,887
                                                 --------                 ------              -------               -------
     Net interest income                            3,230                  1,833                8,844                 5,469
Provision for possible loan losses                     90                     15                  205                    45
                                                 --------                 ------              -------               -------
     Net interest income after
       provision for loan losses                    3,140                  1,818                8,639                 5,424
Non-interest income
  Service fees, charges and other operating
   income                                             124                    144                  364                   384
  Gain on disposition of real estate owned              4                     --                   16                    --
                                                 --------                 ------              -------               -------
     Total non-interest income                        128                    144                  380                   384
                                                 --------                 ------              -------               -------
Non-interest expense
  Salaries and employee benefits                    1,165                    658                3,091                 2,041
  Occupancy and equipment                             241                    177                  632                   557
  Federal deposit insurance premiums                1,454                    215                1,609                   430
  Data processing                                      98                     65                  293                   205
  Advertising                                         105                     45                  314                   200
  Deposit processing                                   61                     65                  184                   184
  Other operating expenses                            257                    172                  930                   612
                                                 --------                 ------              -------               -------
     Total non-interest expense                     3,381                  1,397                7,053                 4,229
                                                 --------                 ------              -------               -------
     Income before income taxes                     (113)                    565                1,966                 1,579
Income taxes                                         (20)                    222                  799                   603
                                                 --------                 ------              -------               -------
   Net income                                    $   (93)                 $  343              $ 1,167               $   976
                                                 ========                 ======              =======               ======= 

Earnings per share                               $(0.025)                                     $ 0.275
                                                 ========                                     =======

Dividends per share                              $  0.067                                     $  .133
                                                 ========                                     =======
</TABLE>



The accompanying notes are an integral part of these statements.


                                                             4


<PAGE>5


<TABLE>
<CAPTION>


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

                                                                   Nine-Month Period Ended September 30,
---------------------------------------------------------------------------------------------------------------
                                                                        1996                  1995
---------------------------------------------------------------------------------------------------------------
                                                                                (unaudited)

<S>                                                                  <C>                    <C>     
Operating activities
  Net income                                                         $    1,167             $    976
  Adjustments to reconcile net income to net cash 
     provided by operating activities
   Amortization and accretion of
     Deferred loan origination fees                                        (367)                (330)
     Premiums and discounts                                                 (30)                 (54)
   Provision for possible loan losses                                       205                   45
   Gain on sale of real estate owned                                        (16)                  -- 
   Depreciation of premises and equipment                                   162                  142
   Management recognition plan                                              108                   --
   Deferred income taxes                                                   (105)                (145)
   Increase in accrued interest receivable                               (1,264)                (113)
   Increase in other assets                                                (289)                (103)
   Increase in other liabilities                                          2,355                  164
                                                                     ----------             --------
     Net cash provided by operating activities                            1,926                  582
                                                                     ----------             --------
Investing activities
  Loan originations and principal payments on loans, net                (70,037)             (15,881)
  Proceeds from the maturity of investment and
   mortgage-backed securities - available for sale                       13,002                3,716
  Proceeds from the maturity of investment and
   mortgage-backed securities - held to maturity                          4,158                   -- 
  Purchase of investment and mortgage-backed
   securities - available for sale                                     (111,854)              (8,153)
  Purchase of investment and mortgage-backed
   securities - held to maturity                                        (66,498)              (1,250)
  Proceeds from sale of real estate owned                                   131                   13
  Purchase of premises and equipment                                     (3,224)                 (56)
                                                                     ----------             --------
     Net cash used in investing activities                             (234,322)             (21,611)
                                                                     ----------             --------
Financing activities
  Net increase in deposits                                           $   18,234             $ 13,178
  Net proceeds from short-term borrowings                               173,500                9,500
  Proceeds from long-term borrowings                                     30,000                   --
  Decrease in advances from borrowers for
    taxes and insurance                                                    (691)                (776)
  Cash paid for dividends                                                  (614)                  -- 
  Purchase of Treasury Stock                                             (2,517)                  --   
                                                                     ----------             --------
    Net cash provided by financing activities                           217,912               21,902
                                                                     ----------             --------

  Net increase (decrease) in cash and cash equivalents                  (14,484)                 873
Cash and cash equivalents at beginning of period                         18,556                5,448
                                                                     ----------             --------
Cash and cash equivalents at end of year                             $    4,072             $  6,321
                                                                     ==========             =========
</TABLE>

SUPPLEMENTAL DISCLOSURES
Cash paid for interest on deposits was  $7,170,000  and $6,568,000 for the nine-
month periods ended  September  30, 1996 and 1995,  respectively.  Cash paid for
income  taxes was  $1,161,000  and  $460,000 for the  nine-month  periods  ended
September 30, 1996 and 1995,  respectively.  Transfers from loans to real estate
owned were $0 and $135,000 for the nine-month  peiords ended  September 30, 1996
and 1995, respectively.

The accompanying notes are an integral part of these statements.


                                        5


<PAGE> 6


PATRIOT BANK CORP. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

September 30, 1996


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  subsidiary,  Patriot Bank. 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,  an cash flows in
conformity  with  generally  accepted  accounting  principles.  However,  in the
opinion  of  management,  the  consolidated  financial  statements  reflect  all
adjustments  (which consist of normal recurring  accruals)  necessary for a fair
presentation of the results for the unaudited periods. The results of operations
for the  three-month  and  nine-month  periods ended  September 30, 1996 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, 1995.


Note 2 - Conversion to Stock Form of Ownership and Earnings Per Share

    On July 13, 1995,  the Board of Directors of Patriot Bank adopted an overall
Plan of Conversion (the Conversion),  as amended on August 30, 1995, pursuant to
which Patriot Bank converted from a federally chartered mutual savings bank to a
federally   chartered   capital  stock  savings  bank.  All  of  Patriot  Bank's
outstanding  capital stock was acquired by Patriot,  a newly organized  Delaware
corporation  which became the holding  company for Patriot Bank.  The conversion
was completed on December 1, 1995.

    On October 25, 1996  Patriot  announced  a special 20% stock  dividend.  The
stock  distribution  will be made on November 21, 1996 to stockholders of record
on November 7, 1996.  Earnings per share have been calculated on a fully diluted
basis and have been  adjusted  for the  special  20%  stock  dividend.  Weighted
average shares  outstanding  during the three-month and nine-month periods ended
September 30, 1996, were 4,225,000 and 4,239,000,  respectively.  The provisions
of Accounting  Principles Board No. 15, "Earnings Per Share," are not applicable
for the three-month and nine-month periods ended September 30, 1995.


                                       6


<PAGE> 7


PATRIOT BANK CORP. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

September 30, 1996

Note 3 - Investment And Mortgage-Backed Securities

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

<TABLE>
<CAPTION>

------------------------------------------------------------------------------------------------------------------------------------
                                      September 30, 1996                                          December 31, 1995
------------------------------------------------------------------------------------------------------------------------------------
                             Amortized    Unrealized     Unrealized     Fair       Amortized   Unrealized    Unrealized     Fair
                               cost           gain          loss        value        cost     appreciation  depreciation    value
------------------------------------------------------------------------------------------------------------------------------------
                                                                    (in thousands)

<S>                           <C>          <C>         <C>            <C>           <C>           <C>         <C>         <C>
Investment and Mortgage-Backed Securities Available for Sale
Investment securities
  U.S. Treasury and
   government
   agency
   securities                 $  6,221     $    --     $     66       $  6,155      $  6,105      $   49      $  --       $  6,154
  Corporate securities           1,008           3           --          1,011         1,019          27         --          1,046
  Other securities               3,981         327          139          4,169         1,000          21         --          1,021
  FHLB stock                    10,791          --           --         10,791         1,914          --         --          1,914
Mortgage-backed
   securities
  FHLMC                         15,243          89           --         15,332        12,179          95         16         12,258
  FNMA                          25,281          --          288         24,993        17,709         161        115         17,755
  GNMA                          14,698          14           --         14,712         5,463          79          3          5,539
  Collateralized mortgage 
   obligations                  68,979          --          940         68,039         1,964          --          5          1,959
                               -------      ------      -------        -------       -------        ----       ----        -------
  Total Investment
   and mortgage-
   backed securities
   available for sale         $146,202     $   433     $  1,433       $145,202      $ 47,353      $  432      $ 139       $ 47,646
                              ========     =======     ========       ========      ========      ======      =====       ========


Investment and Mortgage-Backed Securities Held to Maturity
  Investment securities
   Corporate securities       $  1,502     $     5     $     --       $  1,507      $  1,503      $   63      $  --       $  1,566
   Other securities              1,912          --           50          1,862         2,414           4         21          2,397
Mortgage-backed 
   securities
  Collateralized mortgage
   obligations                  62,843          --          509         62,334            --          --         --             --
                               -------      ------      -------        -------       -------        ----      -----         ------
   Total investment and
     mortgage-backed
     securities held to
     maturity                 $ 66,257     $     5     $    559       $ 65,703      $  3,917      $   67     $   21       $  3,963
                              ========     =======     ========       ========      ========      ======     ======       ========

</TABLE>

                                                              7


<PAGE> 8


Note 4 - Loans Receivable

  Loans receivable are summarized as follows:


<TABLE>
<CAPTION>

                                                       September 30,        December 31,
-------------------------------------------------------------------------------------------------------------
                                                           1996                 1995
-------------------------------------------------------------------------------------------------------------
                                                                 (in thousands)
<S>                                                      <C>                  <C>     
  Real estate loans
   First mortgages secured by one- to four-family
     residences                                          $186,059             $131,352
   Home equity and second mortgage                         68,384               57,969
   Construction                                             2,106                1,712
   Multi-family and commercial                              8,095                3,288
                                                          -------              -------
                                                          264,644              194,321
   Consumer loans                                           2,460                2,159
                                                          -------              -------
   Total loans receivable                                 267,104              196,480
     Less deferred loan origination fees                   (2,470)              (2,230)
                                                          -------              -------
     Total loans receivable, net                         $264,634             $194,250
                                                         ========             ========


Note 5 - Deposits

  Deposits are summarized as follows:

                                                       September 30,        December 31,
-------------------------------------------------------------------------------------------------------------
Deposit type                                               1996                 1995
-------------------------------------------------------------------------------------------------------------
                                                                 (in thousands)

NOW                                                      $  15,001            $  16,857
Money market                                                32,581               34,162
Savings accounts                                            27,591               27,511
Non-interest-bearing demand                                  4,756                2,519
                                                          --------             --------
  Total demand, transaction, money
    market and savings deposits                             79,929               81,049
Certificates of deposits                                   139,923              120,569
                                                          --------             --------
  Total deposits                                         $ 219,852            $ 201,618
                                                         =========            =========
</TABLE>

                                               8


<PAGE> 9


 
Note 6 - Stock Repurchase

    On August 8, 1996 Patriot  announced the completion of its stock  repurchase
program  pursuant to which 188,456 shares were  repurchased at an aggregate cost
of  $2,517,000.  These  treasury  shares will be utilized for general  corporate
purposes  including  the issuance of shares in  connection  with the exercise of
stock options.

Note 7 - Legislative Matters

    On September 30, 1996, the President  signed into law the Deposit  Insurance
Funds Act of 1996 (the "Funds Act") which, among other things, imposes a special
one-time  assessment  on SAIF member  institutions,  including  Patriot Bank, to
recapitalize  the SAIF. As required by the Funds Act, the FDIC imposed a special
assessment of 65.7 basis points on SAIF assessable deposits held as of March 31,
1995,  payable  November 27, 1996.  The special  assessment was recognized as an
expense  in the  third  quarter  of 1996  and is tax  deductible.  Patriot  Bank
recorded a special  after-tax  charge of $836,000  (1,338,000  before-tax)  as a
result of the FDIC special assessment.

    The Funds Act also  spreads the  obligations  for  payment of the  Financing
Corporation ("FICO") bonds across all SAIF and BIF members. Beginning on January
1, 1997, BIF deposits will be assessed for FICO payments at a rate of 20% of the
rate  assessed on SAIF  deposits.  Based on current  estimates by the FDIC,  BIF
deposits  will be  assessed  a FICO  payment  of 1.3 basis  points,  while  SAIF
deposits will pay an estimated 6.5 basis points on the FICO bonds. Full pro rata
sharing of the FICO  payments  between  BIF and SAIF  members  will occur on the
earlier of January  1, 2000 or the date the BIF and SAIF are  merged.  The Funds
Act  specifies  that the BIF and SAIF will be merged on January 1, 1999 provided
no savings associations remain as of that time.

    As a result of the Funds  Act,  the FDIC  recently  proposed  to lower  SAIF
assessments  to 0 to  27  basis  points  effective  January  1,  1997,  a  range
comparable to that of BIF members.  However,  SAIF members will continue to make
the highter FICO payments  described above.  Management cannot predict the level
of  FDIC  insurance  assessments  on an  on-going  basis,  whether  the  savings
association  charter  will be  eliminated  or  whether  the BIF  and  SAIF  will
eventually be merged.
 
Note 8 - Recent Developments

    On October 28, 1996 Patriot  announced  its intention to convert the charter
of Patriot Bank from a federally  chartered  savings  bank to a state  chartered
commercial  bank.  This change will have no significant  effect on the financial
condition or results of operation of Patriot.


                                       9

<PAGE> 10


PATRIOT BANK CORP. AND SUBSIDIARIES

MANAGEMENT'S DISCUSSION AND ANALYSIS

September 30, 1996

    GENERAL.  Patriot Bank Corp. and Subsidiaries  (Patriot) reported a net loss
of $93,000 or $.025 per share for the  three-month  period ended  September  30,
1996. The net loss includes a special  after-tax charge of $836,000  ($1,338,000
before-tax) representing the special deposit insurance assessment levied against
all SAIF member financial institutions by the FDIC to recapitalize its SAIF fund
(see Note 7 to the Consolidated Financial Statements).

    Excluding  the special  charge  Patriot  reported core income of $743,000 or
$.175 per share for the  three-month  period  ended  September  30,  1996.  This
represents  an increase of 117% over net income of $343,000 for the  three-month
period ended September 30, 1995.  Excluding the special  charge,  net income for
the nine-month period ended September 30, 1996 was $2,003,000 or $.475 per share
compared to $976,000 for the nine-month  period ended September 30, 1995. Return
on average  assets and return on average  equity (both based upon core earnings)
were .63% and 5.63%, respectively,  for three three-month period ended September
30, 1996 compared to .52% and 7.01%,  respectively,  for the three-month  period
ended September 30, 1995.

    STOCK  CONVERSION.  On July 13,  1995,  Patriot  Bank's  Board of  Directors
adopted an overall Plan of Conversion (the  Conversion) as amended on August 30,
1995, pursuant to which Patriot Bank converted from a federally chartered mutual
savings bank to a federally chartered capital stock savings bank. All of Patriot
Bank's  outstanding  capital  stock was acquired by Patriot Bank Corp.,  a newly
organized  Delaware  corporation  which  became the holding  company for Patriot
Bank. The Conversion was completed on December 1, 1995.

    NET INTEREST INCOME.  Net interest income for the three-month and nine-month
periods  ended  September 30, 1996 was  $3,230,000  and  $8,844,000  compared to
$1,833,000  and  $5,469,000  for the same  periods  in 1995.  This  increase  is
primarily due to an increase in average balances.  Patriot's net interest margin
(net  interest  income as a percentage of average  interest-earning  assets) was
3.18% for the nine-month  period ended  September 30, 1996 compared to 3.32% for
the same period in 1995.

    Interest on loans was $4,909,000 and  $13,152,000  for the  three-month  and
nine-month   periods  ended  September  30,  1996  compared  to  $3,537,000  and
$12,356,000  for the same  periods  in 1995.  The  average  balance of loans was
$221,641,000  with an average  yield of 7.92% for the  nine-month  period  ended
September  30,  1996  compared  to an average  balance of  $170,072,000  with an
average  yield of 8.04% for the same  period in 1995.  The  increase  in average
balance is due to the  aggressive  marketing of  residential  mortgage loans and
home equity  loans.  The  decrease in average  yield is primarily a result of an
emphasis on short-term and adjustable rate loans.

    Interest on Patriot's investment  portfolio  (investment and mortgage-backed
securities)  was $3,492,000 and  $7,249,000 for the  three-month  and nine-month
periods ended  September 30, 1996  compared to $739,000 and  $2,029,000  for the
same  periods in 1995.  The  average  balance of the  investment  portfolio  was
$146,301,000  with an average  yield of 6.61% for the  nine-month  period  ended
September 30, 1996 compared to an average balance of $45,034,000 with an average
yield of 6.01% for the same period in 1995. The increase in average  balance and
the increase in yield was due to the purchase of investment and  mortgage-backed
securities to more fully leverage Patriot's capital.


    Interest on total deposits was $2,501,000 and $7,167,000 for the three-month
and  nine-month  periods ended  September 30,  1996  compared to $2,346,000  and
$6,560,000 in the same periods in 1995.  The average  balance of total  deposits
was $211,615,000  with an average cost of 4.51% for the nine-month  period ended
September  30,  1996  compared  to an average  balance of  $194,482,000  with an
average  cost of 4,51% for the same  period in 1995.  The  increase  in  average
balance was  primarily  the result of an emphasis  placed on  transaction  based
deposit products and competitive pricing of certificates of deposit.

    Interest on borrowings was $2,693,000 and $4,481,000 for the three-month and
nine-month  periods  ended  September 30, 1996 compared to $129,000 and $327,000
for the same periods in 1995. The average balance of borrowings was $107,761,000
with an average cost of 5.53% for the nine-month period ended September 30, 1996
compared to an average  balance of $6,723,000  with a cost of 6.35% for the same
period in 1995. The increase in average balance was due to the use of borrowings
to fund the growth in the balance sheet.  The decrease in the cost of borrowings
was the result of lower overall interest rates.

                                       10


<PAGE> 11


    PROVISION FOR POSSIBLE  LOAN LOSSES.  The provision for possible loan losses
was $90,000 and  $205,000  for the  three-month  and  nine-month  periods  ended
September 30, 1996 compared to $15,000 and $45,000 for the same periods in 1995.
The  increase in the  provision  was due to an  increase in loans and  Patriot's
re-entry into  commercial  lending offset by Patriot's  high asset quality,  low
level of delinquencies and low level of non-performing  assets. At September 30,
1996 Patriot's  non-performing assets were .15% of total assets and all loans 30
days or more delinquent  were .76% of total loans.

    NON-INTEREST  INCOME.  Total  non-interest income was $128,000 and  $380,000
for the three-month and nine-month  periods ended September 30, 1996 compared to
$166,000 and $383,000 for the same periods in 1995.


    NON-INTEREST   EXPENSE.   Total  non-interest  expense  was  $3,381,000  and
$7,053,000 for the three-month  and nine-month  periods ended September 30, 1996
compared to $1,404,000 and $4,214,000 for the same periods in 1995. The increase
in  non-interest  expense  was  primarily  related  to  the  special  charge  of
$1,338,000  for the special  deposit  insurance  assessment  levied against SAIF
member  financial  institutions by the FDIC to  recapitalize  its SAIF fund (see
Note 7 to the Consolidated Financial  Statements).  The increase in non-interest
expense was also the result of the  recognition of expense  related to Patriot's
employee  stock   ownership  and   stock-based   incentive   plans,   additional
compensation  and  benefits  and other  costs  related to the growth of Patriot,
offset somewhat by other operating  efficiencies  and cost-saving  efforts.  The
ratio of non-interest  expense to average assets  (excluding the special charge)
was 2.01% for the nine-month  period ended  September 30, 1996 compared to 2.51%
for the same period in 1995.  The  improvement  in the overhead  ratio  reflects
Patriot's emphasis on managing costs.

    INCOME TAX PROVISION.  The income tax (benefit)  provision was ($20,000) and
$799,000 for the  three-month  and nine-month  periods ended  September 30, 1996
compared to $222,000 and $603,000 for the same periods in 1995.  The increase in
the  year-to-date  income tax  provision was  consistent  with the growth in net
income before taxes.

Financial Condition

    LOAN  PORTFOLIO.   Patriot's   primary  loan  products  are  fixed-rate  and
adjustable-rate  mortgage loans and home equity loans on existing owner-occupied
residential real estate.  Patriot also offers  residential  construction  loans,
commercial loans and other consumer loans. At September 30, 1996 Patriot's total
loan  portfolio  was  $261,634,000,  compared  to  a  total  loan  portfolio  of
$194,250,000  at December 31, 1995.  The increase in the loan  portfolio was the
result of aggressive  marketing of  residential  mortgage  loans and home equity
loans and Patriot's  re-entry into  commercial  lending.  During the  nine-month
period ended September 30, 1996,  Patriot originated total loans of $40,500,000,
compared to total loans  originated of $30,100,000  for the same period in 1995.

    CASH AND CASH  EQUIVALENTS.  Cash and cash equivalents at September 30, 1996
were  $4,072,000  compared to  $18,556,000 at December 31, 1995. The decrease in
cash and cash  equivalents  was primarily due to the  investment of a portion of
the proceeds from the stock  conversion  that were  deposited  temporarily in an
interest-earning account at December 31, 1995.

    INVESTMENT AND  MORTGAGE-BACKED  SECURITIES.  Investment  securities consist
primarily  of U.S.  agency  securities,  mortgage-backed  securities  which  are
generally  insured  or  guaranteed  by  either  FHLMC,  FNMA  or  the  GNMA  and
collateralized mortgage obligations.

    Total investment and  mortgage-backed  securities at September 30, 1996 were
$211,459,000  compared to  $51,563,000  at December  31,  1995.  The increase in
investment and mortgage-backed  securities was due to the purchase of securities
to more fully leverage Patriot's capital.


                                       11

<PAGE> 12


    OTHER ASSETS.  Premises and  equipment at September 30, 1996 was  $6,512,000
compared to $3,450,000  at December 31, 1995.  The increase was primarily due to
the renovation of Patriot's corporate  headquarters and Patriot's  investment in
technology related equipment.  Accrued interest receivable at September 30, 1996
was  $2,469,000  compared to  $1,205,000  at December 31, 1995.  The increase is
consistent  with the growth in the loan and investment  portfolios.  Real estate
owned at  September  30, 1996 was $80,000  compared to $195,000 at December  31,
1995.  The decrease in real estate  owned was due to the disposal of  foreclosed
assets.  Other  assets  at  September  30,  1996  were  $2,187,000  compared  to
$1,352,000  at December 31, 1995.  The increase is primarily due to the deferred
tax  benefit  related  to the  special  charge  (see Note 7 to the  Consolidated
Financial Statements).

    DEPOSITS.  Deposits are attracted from within Patriot's  primary market area
through the offering of various  deposit  instruments,  including  NOW accounts,
money market accounts, savings accounts,  certificates of deposit and retirement
savings plans.

    Total  deposits  at  September  30,  1996  were  $219,852,000   compared  to
$201,618,000  at December 31, 1995.  The increase was primarily the result of an
emphasis  placed on transaction  based deposit  products and  competitive  rates
offered on certificates of deposit.

    BORROWINGS.  Patriot utilizes  borrowings as a source of funds for its asset
growth  and its  asset/liability  management.  Patriot  is  eligible  to  obtain
advances  from the FHLB upon the  security of the FHLB common  stock it owns and
certain of its residential  mortgages and mortgage-backed  securities,  provided
certain  standards related to  creditworthiness  have been met. Patriot may also
utilize  repurchase  agreements to meet its liquidity  needs.  FHLB advances are
made pursuant to several  different credit  programs,  each of which has its own
interest  rate and range of  maturities.  The maximum  amount that the FHLB will
advance to member  institutions  fluctuates from time to time in accordance with
the policies of the FHLB.

    Total  borrowings  at  September  30,  1996 were  $213,500,000  compared  to
$10,000,000  at December 31, 1995.  The  increase in  borrowings  was due to the
leveraging  of Patriot's  capital.  

    STOCKHOLDERS' EQUITY. Total stockholders'equity was $51,401,000 at September
30, 1996 compared to  $54,110,000 at December 31, 1995. The decrease is a result
of the repurchase of 188,000 shares of common stock at a cost of $2,517,000 (see
Note  6 to  the  Consolidated  Financial  Statements)  and  an  increase  in the
unrealized  depreciation on investment and mortgage-backed  securities available
for sale.

Liquidity and Capital Resources

    LIQUIDITY.  Patriot's  primary sources of funds are deposits,  principal and
interest payments on loans,  principle and interests  payments on investment and
mortgage-backed  securities,  and FHLB advances.  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  condition,  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.  Patriot has
other sources of liquidity,  including repurchase agreements,  other borrowings,
and certain investment and mortgage-backed securities.

    Patriot Bank is required under  applicable  federal  regulations to maintain
specified  levels of "liquid"  investments  in cash and U.S.  Treasury and other
qualifying investments.  Regulations currently in effect require Patriot Bank to
maintain liquid assets of not less than 5% of its net withdrawable accounts plus
short-term  borrowings,  of which  short-term  liquid assets must consist of not
less than 1%. These levels are changed from time to time by the Office of Thrift
Supervision (OTS) to reflect economic conditions. Patriot Bank's liquidity ratio
at September 30, 1996 was 5.38%.

    During the nine-month period ended September 30, 1996, significant liquidity
was  provided  by  financing  activities,   in  particular  deposit  growth  and
borrowings.   Maturities  of  investment  and  mortgage-backed  securities  also
provided  significant  liquidity.  The funds provided by these  activities  were
reinvested in new loans and investment and mortgage-backed securities.


                                       12

<PAGE> 13


    CAPITAL RESOURCES. OTS regulations currently require savings institutions to
maintain  a minimum  tangible  capital  ratio of not less than  1.5%,  a minimum
leverage  capital ratio of not less than 3% of tangible assets and not less than
4% of risk-adjusted  assets,  and a minimum risk-based capital ratio (based upon
credit  risk) of not less than 8%. The OTS requires a minimum  leverage  capital
requirement  of 3% for  associations  rated  composite 1 under the CAMEL  rating
system.  For all  other  savings  associations,  the  minimum  leverage  capital
requirement is 3% plus at least an additional 100 to 200 basis points.

    The OTS has incorporated an interest rate risk component into its risk-based
capital  requirements.  Under the  regulation,  savings  associations  which are
deemed to have an  "above  normal"  level of  interest  rate risk must  deduct a
portion of that risk from total capital for  regulatory  capital  purposes.  The
final regulation became effective January 1, 1994;  however,  implementation has
been  delayed.  It is currently  anticipated  that Patriot Bank will not have an
"above normal" level of interest rate risk.

    Under the OTS prompt  corrective action  regulations, the OTS is required to
take certain  supervisory  actions against  undercapitalized  institutions,  the
severity of which depends on the institution's degree of undercapitalization.  A
depository  institution's  capital  tier  depends  upon its  capital  levels  in
relation to various  relevant  capital  measures,  which  include  leverage  and
risk-based   capital   measures  and  certain  other  factors.   Under  the  OTS
regulations,  a savings  institution  that has a leverage  capital ratio of less
than 4% (3% for institutions  receiving the highest CAMEL rating) will be deemed
to be undercapitalized for purposes of the regulation.  Depository  institutions
that are not  classified  as well  capitalized  or  adequately  capitalized  are
subject to various  restrictions  regarding  capital  distributions,  payment of
management fees, acceptance of brokered deposits and other operating activities.

    At September 30, 1996,  Patriot Bank was classified as well  capitalized and
was in compliance with all capital requirements.  The following table sets forth
the capital ratios of Patriot Bank and the current  regulatory  requirements  at
September 30, 1996:

<TABLE>
<CAPTION>

                                                                            Patriot
                                                                             Bank            Requirement
-------------------------------------------------------------------------------------------------------------
<S>                                                                          <C>                <C>  
Tangible capital to tangible assets                                           7.46%             1.50%
Leverage (core) capital to tangible assets                                    7.46              3.00
Leverage (core) capital to risk-adjusted assets                              15.67              4.00
Risk-based capital to risk-adjusted assets                                   16.47              8.00

</TABLE>
 
                                                13


<PAGE> 14



    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  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
operations to changes in interest rates. Patriot monitors its interest rate risk
as such risk relates to its operating  strategies.  Patriot's Board of Directors
has established an  Asset/Liability  Committee  comprised of senior  management,
which is  responsible  for  reviewing  its  asset/liability  and  interest  rate
position and making decisions involving  asset/liability  considerations,  which
meets weekly and reports trends and Patriot's interest rate risk position to the
Board of Directors on a quarterly basis.

    Patriot utilizes income  simulation  modeling in measuring its 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.

    The  matching of assets and  liabilities  may be analyzed by  examining  the
extent to which such assets and liabilities are "interest rate sensitive" and by
monitoring  an  institution's  interest  rate  sensitivity  "gap."  An  asset or
liability is said to be interest rate sensitive within a specific time period if
it will mature or reprice within that time period. The interest rate sensitivity
gap is defined as the difference between the amount of  interest-earning  assets
maturing  or  repricing  within  a  specific  time  period  and  the  amount  of
interest-bearing  liabilities  maturing or repricing  within that time period. A
gap is considered  positive when the amount of interest  rate  sensitive  assets
exceeds the amount of interest rate sensitive  liabilities.  A gap is considered
negative  when the amount of interest  rate  sensitive  liabilities  exceeds the
amount of interest rate  sensitive  assets.  During a period of rising  interest
rates,  therefore,  a negative gap theoretically  would tend to adversely affect
net interest income, while a positive gap would tend to result in an increase in
net interest  income.  Conversely,  during a period of falling interest rates, a
negative gap position would  theoretically  tend to result in an increase in net
interest  income while a positive  gap would tend to affect net interest  income
adversely.

    Patriot  has  a  significant  amount  of  its  earning  assets  invested  in
fixed-rate  mortgage  loans  and  fixed-rate   mortgage-backed  securities  with
contractual  maturities  greater than one year.  Patriot has  initiated  several
actions  designed  to control  its level of interest  rate risk.  These  actions
included:  (i) increasing  the  percentage of the loan  portfolio  consisting of
short-term and adjustable-rate  mortgage loans through increased originations of
these loans,  (ii)  acquiring  short-term  and  adjustable-rate  mortgage-backed
securities,  and (iii)  undertaking  to lengthen the  maturities of deposits and
borrowings.  At September 30, 1996, using management's  estimates of prepayments
and  the  repricing  of  deposits  and  other   liabilities,   Patriot's   total
interest-bearing  liabilities maturing or repricing within one year exceeded its
total net interest-earning  assets maturing or repricing in the same time period
by $71,475,000, representing a one-year cumulative "gap," as defined above, as a
percentage of total assets of negative 14.5%.


                                       14

<PAGE> 15



PART II OTHER INFORMATION

     Item 1   LEGAL PROCEEDINGS

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

              Not applicable.

     Item 5   OTHER INFORMATION

              Not applicable.

     Item 6   EXHIBITS AND REPORTS ON FORM 8-K.

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

                   Exhibit 27   - Financial Data Schedule (filed
                   herewith)

              (b)  Reports on Form 8-K.

                   Report on Form 8-K dated October 22, 1996 (date of
                   earliest event - October 22, 1996) contained a press
                   release announcing Patriot's earnings  for the third
                   quarter of 1996.

 
                                       15


<PAGE> 16


                                  SIGNATURES

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


 
                                                    PATRIOT BANK CORP.
                                             --------------------------------
                                                       (Registrant)




Date      November 14, 1996                  --------------------------------
      -------------------------                      Joseph W. Major
                                          President and Chief Operating Officer



Date      November 14, 1996                  --------------------------------
      -------------------------                      Richard A. Elko
                                               Executive Vice President and
                                                 Chief Financial Officer




                                       16