<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 March 31, 2004
                                       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: 6,768,723 shares of common
stock were outstanding as of May 10, 2004.

                                       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 March 31, 2004
             and December 31, 2003                                                     3

             Consolidated Statements of Income for the Three-Month Periods
             ended March 31, 2004 and 2003                                             4

             Consolidated Statements of Shareholders' Equity for the
             Periods ended March 31, 2004 and December 31, 2003                        5

             Consolidated Statements of Cash Flows for the Three-Month
             Period ended March 31, 2004 and 2003                                      6

             Consolidated Statements of Comprehensive Income for the
             Three-Month Period ended March 31, 2004 and 2003                          8

             Notes to Consolidated Financial Statements                                9

     Item 2  MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF
             OPERATIONS AND FINANCIAL CONDITION                                       18

     Item 3  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK               24

     Item 4  CONTROLS AND PROCEDURES                                                  25

PART II OTHER INFORMATION

     Items 1 through 6                                                                27

SIGNATURES                                                                            28

CERTIFICATIONS                                                                        29

EXHIBITS                                                                              31
</TABLE>

                                        2

<PAGE>

ITEM 1 FINANCIAL STATEMENTS

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

<TABLE>
<CAPTION>
                                                                                   MARCH 31, 2004    DECEMBER 31, 2003
                                                                                   --------------    -----------------
<S>                                                                                <C>               <C>
ASSETS

Cash and cash due from banks                                                       $       13,915    $          16,040
Interest earning deposits in other financial institutions                                   3,276                1,705
                                                                                   --------------    -----------------
     Total cash and cash equivalents                                                       17,191               17,745

Securities available for sale                                                             341,705              347,140

Loans held for sale                                                                         4,981                4,363
Loans and leases receivable, net of allowance for credit loss of $7,059
   and $6,904 at March 31, 2004 and December 31, 2003, respectively                       621,683              618,595
Premises and equipment, net                                                                11,434               11,008
Accrued interest receivable                                                                 3,523                3,591
Real estate owned and other repossessed property                                              523                  401
Cash surrender value life insurance                                                        18,841               18,993
Goodwill                                                                                   11,477               11,477
Amortizing intangible assets                                                                3,871                4,014
Other assets                                                                                5,344                6,321
                                                                                   --------------    -----------------
     TOTAL ASSETS                                                                  $    1,040,573    $       1,043,648
                                                                                   ==============    =================

LIABILITIES AND SHAREHOLDERS' EQUITY

Deposits                                                                           $      640,632    $         613,555
FHLB advances and federal funds                                                           257,301              289,655
Repurchase agreements                                                                      44,756               44,407
Advances from borrowers for taxes and insurance                                             1,885                1,592
Junior subordinated debt                                                                   20,500               20,500
Other liabilities                                                                           4,803                8,196
                                                                                   --------------    -----------------
    Total liabilities                                                                     969,877              977,905

SHAREHOLDERS' EQUITY

Preferred stock. $.01 par value, 5,000,000 shares authorized,
   None issued at March 31, 2004 and December 31, 2003, respectively                            -                    -
Common stock. No par value, 20,000,000 shares authorized, 7,216,077 and
   7,216,077 shares issued at March 31, 2004 and December 31, 2003, respectively                -                    -
Additional paid-in capital                                                                 69,343               69,061
Common stock acquired by ESOP, 304,014 and 311,084 shares at cost at
   March 31, 2004 and December 31, 2003, respectively                                      (1,535)              (1,571)
Common stock acquired by MRP, 4,386 and 4,897 shares at amortized
   Cost at March 31, 2004 and December 31, 2003, respectively                                 (50)                 (55)
Retained earnings                                                                           9,417                8,728
Treasury stock acquired, 532,712 and 591,071 shares at cost at
   March 31, 2004 and December 31, 2003, respectively                                      (9,698)             (10,836)
Accumulated other comprehensive income                                                      3,219                  416
                                                                                   --------------    -----------------
     Total shareholders' equity                                                            70,696               65,743
                                                                                   --------------    -----------------
     TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY                                    $    1,040,573    $       1,043,648
                                                                                   ==============    =================
</TABLE>

The accompanying notes are an integral part of these statements.

                                        3

<PAGE>

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

<TABLE>
<CAPTION>
                                                               Three-Month Period Ended
                                                                       March 31,
                                                                 2004            2003
                                                               --------        --------
                                                                    (unaudited)
<S>                                                            <C>             <C>
INTEREST INCOME
    Interest-earning deposits                                  $      2        $      6
    Investment securities                                         4,086           4,196
    Loans and leases                                             10,595          11,130
                                                               --------        --------
        Total interest income                                    14,683          15,332
                                                               --------        --------
INTEREST EXPENSE
    Deposits                                                      2,819           3,140
    Short-term borrowings                                           229             800
    Long-term borrowings                                          3,242           3,616
                                                               --------        --------
         Total interest expense                                   6,290           7,556
                                                               --------        --------
    Net interest income before provision for credit losses        8,393           7,776
    Provision for credit losses                                   1,000           1,100
                                                               --------        --------
    Net interest income after provision for credit losses         7,393           6,676
                                                               --------        --------
NON-INTEREST INCOME
    Service fees on deposits                                        893             862
     Fees on loans and leases                                       395             426
     Investment gains                                                --             556
     Gains on the sale of loans and leases                          372             704
     BOLI                                                           181             210
     Patriot Advisors' commissions                                  804             478
     Loss on the disposition of borrowings                           --            (588)
     Other non-interest income                                       59              (2)
                                                               --------        --------
           Total non-interest income                              2,704           2,646
                                                               --------        --------
NON-INTEREST EXPENSE
     Salaries and employee benefits                               4,841           3,903
     Occupancy and equipment                                      1,170           1,090
     Professional services                                          716             326
     Advertising                                                    128             163
     Deposit processing                                             303             289
     Amortization of intangible assets                              134             121
     Office supplies & postage                                      238             209
     Non-income based tax                                           213             205
     Other operating expense                                        516             375
                                                               --------        --------
             Total non-interest expense                           8,259           6,681
                                                               --------        --------
Income before taxes                                               1,838           2,641
      Income tax expense                                            221             541
                                                               --------        --------
NET INCOME                                                     $  1,617        $  2,100
                                                               ========        ========

Earnings per share - basic                                     $   0.25        $   0.33
                                                               ========        ========

Earnings per share - diluted                                   $   0.24        $   0.31
                                                               ========        ========

Dividends per share                                            $   0.14        $   0.11
                                                               ========        ========
</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, 2003 .......        5,774  $   57,611  $ (1,638) $  (98) $ 13,855  $ (6,441) $       2,656  $ 65,945
                                      =========  ==========  ========  ======  ========  ========  =============  ========
Release and amortization of MRP ..            4          11        --      43        --        --             --        54
Purchase of treasury stock .......         (349)         --        --      --        --    (7,070)            --    (7,070)
Release of ESOP shares ...........           28         457        67      --        --        --             --       524
Sale of stock associated with ESPP            9          --        --      --        --       137             --       137
Change in unrealized gains
     on securities available
     for sale, net of taxes ......           --          --        --      --        --        --         (2,240)   (2,240)
Exercise of stock options ........          210        (373)       --      --        --     1,780             --     1,407
Stock compensation tax benefit ...           --         727        --      --        --        --             --       727
Issuance of stock for acquisitions           50          --        --      --        --       758             --       758
Stock dividend ...................          583      10,628        --      --   (10,628)       --             --        --
Net income .......................           --          --        --      --     8,635        --             --     8,635
Cash dividends paid ..............           --          --        --      --    (3,134)       --             --    (3,134)
                                      ---------  ----------  --------  ------  --------  --------  -------------  --------
BALANCE AT DECEMBER 31, 2003 .....        6,309  $   69,061  $ (1,571) $  (55) $  8,728  $(10,836) $         416  $ 65,743
                                      =========  ==========  ========  ======  ========  ========  =============  ========
Common stock issued ..............           12         111        --      --        --        --             --       111
Release and amortization of MRP ..            1          --        --       5        --        --             --         5
Purchase of treasury stock .......          (12)         --        --      --        --      (341)            --      (341)
Release of ESOP shares ...........            7         171        36      --        --        --             --       207
Sale of stock associated with ESPP            1          --        --      --        --        41             --        41
Change in unrealized gains
     on securities available
     for sale, net of taxes ......           --          --        --      --        --        --          2,803     2,803
Exercise of stock options ........           12          --        --      --        --       110             --       110
Issuance of stock for acquisitions           45          --        --      --        --     1,328             --     1,328
Net income .......................           --          --        --      --     1,617        --             --     1,617
Cash dividends paid ..............           --          --        --      --      (928)       --             --      (928)
                                      ---------  ----------  --------  ------  --------  --------  -------------  --------
BALANCE AT MARCH 31, 2004 ........        6,375  $   69,343  $ (1,535) $  (50) $  9,417  $ (9,698) $       3,219  $ 70,696
                                      =========  ==========  ========  ======  ========  ========  =============  ========
</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>
                                                                            THREE-MONTHS PERIOD ENDED MARCH 31,
                                                                            -----------------------------------
                                                                              2004                       2003
                                                                            --------                   --------
<S>                                                                         <C>                        <C>
OPERATING ACTIVITIES

    Net Income                                                              $  1,617                   $  2,100
    Adjustments to reconcile net income to net cash provided by
    operating activities
        Amortization and accretion of:
           Deferred loan origination costs                                       351                        172
           Premiums                                                              171                         --
           MRP shares                                                              5                         11
           Intangibles                                                           134                        121
        Provision for credit losses                                            1,000                      1,100
        Release of ESOP shares                                                   207                        102
        Gain on sale of investment securities                                     --                       (556)
        Loss on disposition of borrowings                                         --                        588
        (Gain) loss on sale & write down of real estate owned and other
        repossessed assets                                                       (54)                        32
        Depreciation of premises and equipment                                   391                        345
        Mortgage loans originated for sale                                   (15,306)                   (28,627)
        Mortgage loans sold                                                   14,688                     29,486
        Deferred income tax expense                                               --                       (277)
        Decrease (increase) in cash surrender value of life insurance            152                       (207)
        Decrease in accrued interest receivable                                   68                        388
        (Increase) decrease in other assets                                     (459)                       167
        (Decrease) increase in other liabilities                                (305)                       404
                                                                            --------                   --------
           Net cash provided by operating activities                           2,660                      5,349
                                                                            --------                   --------
INVESTING ACTIVITIES

        Loan originations & principal payments on loans, net                  (5,493)                    16,186
        Proceeds from the sale of securities - available for sale              2,122                     11,082
        Proceeds from the maturity of securities - available for sale          7,983                     40,953
        Purchase of securities - available for sale                             (593)                   (78,446)
        Proceeds from sale of real estate owned & other repossessed
        assets                                                                   986                        255
        Cash paid in business combination                                         --                       (803)
        Purchase of premises and equipment                                      (817)                      (716)
                                                                            --------                   --------
           Net cash provided by (used in) investing activities                 4,188                    (11,489)
                                                                            --------                   --------
FINANCING ACTIVITIES

        Net increase in deposits                                              27,077                     48,539
        Repayment of short term borrowings                                   (34,000)                   (63,589)
        Proceeds from short term repurchase agreements                           349                     26,831
        Repayment of long term borrowings                                         (3)                        (2)
        Increase in advances from borrowers for taxes and insurance              293                        110
        Cash paid for dividends                                                 (928)                      (738)
        Proceeds from the sale of stock associated with ESPP                      41                         30
        Proceeds from the exercise of stock options                              110                         13
        Purchase of treasury stock                                              (341)                      (106)
                                                                            --------                   --------
           Net cash (used in) provided by financing activities                (7,402)                    11,088
                                                                            --------                   --------
        Increase (decrease) in cash and cash equivalents                        (554)                     4,948
Cash and cash equivalents at beginning of the period                          17,745                     16,839
                                                                            --------                   --------
Cash and cash equivalents at end of the period                              $ 17,191                   $ 21,787
                                                                            ========                   ========
SUPPLEMENTAL DISCLOSURES

     Cash paid for interest                                                 $  2,784                   $  2,865
     Cash paid for income taxes                                             $     19                   $    862
     Transfers from loans and leases to real estate owned and other
     repossessed property                                                   $  1,054                   $    133
</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. During the first
quarter in 2004, Patriot issued 22,279 shares of Patriot Bank Corp. common stock
having a value of $653,000 as part of the contingent consideration agreed upon
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. During the first quarter in 2004, Patriot
issued 22,989 shares of Patriot Bank Corp. common stock having a value of
$674,000 as part of the contingent consideration agreed upon 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>

On September 5, 2003, Patriot purchased the stock of Tyler Wealth Counselors for
$650,000 in cash. In conjunction with the acquisition of Tyler Wealth Counselors
liabilities were assumed as follows:

<TABLE>
<S>                                          <C>
Fair value of assets acquired                $    687.0
Cash paid                                        (650.0)
Stock issued                                         --
                                             ----------
Liabilities assumed                          $     37.0
</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
                                                                            ENDED MARCH 31,
                                                                          ------------------
                                                                            2004      2003
                                                                          -------    -------
                                                                            (IN THOUSANDS)
<S>                                                                       <C>        <C>
Net Income ..........................................................     $ 1,617    $ 2,100
Other comprehensive income ..........................................
   Unrealized gains on securities ...................................
      Unrealized holding gains arising during the period ............       2,803      1,601

   Less: Reclassification adjustment for gains included in net income
      Net gains on the sale of investment securities ................          --       (556)
      Income tax expense associated with net gains on the sale of
      investment securities .........................................          --        189
                                                                          -------    -------
Comprehensive income ................................................     $ 4,420    $ 3,334
                                                                          =======    =======
</TABLE>

                                        8

<PAGE>

                       PATRIOT BANK CORP. AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)
                                 March 31, 2004

NOTE 1 - GENERAL

In December 2003, Patriot Bank Corp. ("Patriot") and Susquehanna Bancshares,
Inc. ("Susquehanna") announced the signing of a definitive merger agreement
pursuant to which Susquehanna will acquire Patriot in a stock and cash
transaction valued at $212 million, based on Susquehanna's market price as of
the date of the agreement.

The transaction, unanimously approved by the boards of directors of both
companies, will enhance Susquehanna's presence in Pennsylvania, particularly in
the high-growth counties of Berks, Chester, Lehigh, Montgomery and Northampton.
Upon completion of the transaction, Susquehanna will become the fifth largest
banking company headquartered in Pennsylvania with total assets of over $7
billion.

Under the terms of the merger agreement, shareholders of Patriot will be
entitled to elect to receive in exchange for shares of Patriot common stock
either $30.00 in cash, 1.143 common shares of Susquehanna or a combination
thereof. Patriot shareholder elections are subject to allocation procedures. The
application of these procedures will result in the exchange of 20 percent of the
Patriot shares and options for cash, and the remaining Patriot shares and
options will be exchanged for Susquehanna common stock or converted to
Susquehanna options, as appropriate.

On April 21, 2004, Patriot and Susquehanna shareholders approved the Plan of
Merger between Patriot Bank Corp. and Susquehanna Bancshares, Inc. The merger is
anticipated to close on or about June 10, 2004, pending the expected receipt of
all regulatory approvals.

The accompanying financial statements include the accounts of the parent
company, Patriot Bank Corp. and its subsidiaries: Patriot Investment Company,
Patriot Advisors, Inc. and Patriot Bank and its subsidiaries: Marathon
Management Company, Patriot Investment & Insurance Company and Patriot
Commercial Leasing Company, Inc. All material inter-company 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 un-audited periods. The results of
operations for the three-month period ended March 31, 2004 are not necessarily
indicative of the results that 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, 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
had been applied, it would have had the following impact:

<TABLE>
<CAPTION>
                                                                             THREE-MONTH PERIOD ENDED,
                                                                                     MARCH 31
                                                                             -------------------------
                                                                               2004             2003
                                                                             --------         --------
                                                                                   (IN THOUSANDS)
<S>                                                                          <C>              <C>
Net income, as reported                                                      $  1,617         $  2,100
Deduct: Total stock-based employee compensation expense determined
under fair value based method for all awards, net of related tax effects          (38)             (46)
                                                                             --------         --------

Pro forma net income                                                         $  1,579         $  2,054
                                                                             ========         ========

Earnings per share:
     Basic - as reported                                                     $    .25         $    .33
                                                                             ========         ========
     Basic - pro forma                                                       $    .25         $    .32
                                                                             ========         ========

     Diluted  - as reported                                                  $    .24         $    .31
                                                                             ========         ========
     Diluted  - pro forma                                                    $    .23         $    .30
                                                                             ========         ========
</TABLE>

                                        9

<PAGE>

                       PATRIOT BANK CORP. AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)
                                 March 31, 2004

NOTE 2 - SECURITIES

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

<TABLE>
<CAPTION>
                                                    March 31, 2004                              December 31, 2003
                                      ----------------------------------------------------------------------------------------
                                      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                      $  27,768  $      726  $        6  $ 28,488  $  27,692  $      397  $       95  $ 27,994
   Corporate debt securities             17,365         363         534    17,194     17,629         269         728    17,170
   FHLMC preferred stock                 84,826       2,239          --    87,065    100,892       1,559         347   102,104
   FHLB and FRB stock                    13,621          --          --    13,621     15,399          --          --    15,399
   Equity securities                     16,271         194          40    16,425        299          --          40       259

Mortgage-backed securities
   FHLMC                                 56,207         749         210    56,746     59,011         338         435    58,914
   FNMA                                 120,543       1,591         201   121,933    125,156         651         948   124,859
   GNMA                                      58           8          --        66         61           8          --        69

Collateralized mortgage obligations:
   FHLMC                                      1          --          --         1         14          --          --        14
   FNMA                                     166          --          --       166        357           1          --       358
                                      ---------  ----------  ----------  --------  ---------  ----------  ----------  --------
Total securities available for
Sale                                  $ 336,826  $    5,870  $      991  $341,705  $ 346,510  $    3,223  $    2,593  $347,140
                                      =========  ==========  ==========  ========  =========  ==========  ==========  ========
</TABLE>

                                       10

<PAGE>

                       PATRIOT BANK CORP. AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)
                                 March 31, 2004

NOTE 3 - LOANS RECEIVABLE

      Loans receivable are summarized as follows:

<TABLE>
<CAPTION>
                                       March 31,     December 31,
                                       ---------     ------------
Composition of loan portfolio            2004            2003
----------------------------------     ---------     ------------
                                             (in thousands)
<S>                                    <C>           <C>
Commercial Portfolio:
     Commercial loans                  $ 353,354     $    348,507
     Commercial leases                    83,301           82,056
Consumer Portfolio:
     Home equity                          99,837           99,231
     Consumer, other                       4,995            5,144
Mortgage Portfolio:
     Residential mortgages             $  76,923     $     79,092
     Construction                          9,303           10,323
                                       ---------     ------------

Total loans and leases, gross            627,713          624,353
     Deferred loan costs                   1,029            1,146
     Allowance for credit losses          (7,059)          (6,904)
                                       ---------     ------------

       Total loans and leases, net     $ 621,683     $    618,595
                                       =========     ============
</TABLE>

NOTE 4 - DEPOSITS

      Deposits are summarized as follows:

<TABLE>
<CAPTION>
                                       March 31,     December 31,
                                       ---------     ------------
Deposit type                             2004            2003
----------------------------------     ---------     ------------
                                             (in thousands)
<S>                                    <C>           <C>
NOW                                    $  50,682     $     35,947

Money market                             225,842          210,576

Savings accounts                          83,373           83,003

Non-interest-bearing demand               55,561           55,801
                                       ---------     ------------

   Total demand, transaction, money
      market and savings deposits        415,458          385,327

Certificates of deposits                 225,174          228,228
                                       ---------     ------------

   Total deposits                      $ 640,632     $    613,555
                                       =========     ============
</TABLE>

                                       11

<PAGE>

                       PATRIOT BANK CORP. AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)
                                 March 31, 2004

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 March 31, 2004
                                   -----------------------------------------
                                     Income          Shares        Per-Share
                                   (Numerator)    (Denominator)     Amount
                                   -----------    -------------    ---------
                                                 (in thousands)
<S>                                <C>            <C>              <C>
BASIC EPS
Net Income available to common
  Shareholders                     $     1,617            6,366    $    0.25

EFFECT OF DILUTIVE SECURITIES
Dilutive Options                            --              378         (.01)
                                   -----------    -------------    ---------

DILUTED EPS
Net income available to common
  shareholders                     $     1,617            6,744    $    0.24
                                   ===========    =============    =========
</TABLE>

<TABLE>
<CAPTION>
                                     For Three-Months Ended March 31, 2003
                                   -----------------------------------------
                                     Income          Shares        Per-Share
                                   (Numerator)    (Denominator)     Amount
                                   -----------    -------------    ---------
                                                 (in thousands)
<S>                                <C>            <C>              <C>
BASIC EPS
Net Income available to common
  shareholders                     $     2,100            6,413    $    0.33

EFFECT OF DILUTIVE SECURITIES
Dilutive Options                            --              337         (.02)
                                   -----------    -------------    ---------

DILUTED EPS
Net income available to common
  shareholders                     $     2,100            6,750    $    0.31
                                   ===========    =============    =========
</TABLE>

NON-DILUTIVE OPTIONS. Patriot had 0 and 1,375 non-dilutive options for the
three-months ended March 31, 2004 and 2003, respectively.

                                       12

<PAGE>

                       PATRIOT BANK CORP. AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)
                                 March 31, 2004

NOTE 6 - SEGMENT REPORTING

      Patriot has four reportable segments: Banking, Mortgage Banking, Financial
Advisors and Commercial Leasing. Banking operates a network of 17 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' offers wealth and investment
management, pension benefits, and insurance services in addition to brokerage
services. Financial Advisors results for 2003 do not reflect Tyler Wealth
Counselors ("Tyler"). Patriot completed its acquisition of Tyler in September
2003. Refer to "Footnote 14 - Business Combinations" for more information on
this transaction. The impact of Tyler was $1,053,000 to total assets and
$254,000 to other income for the first quarter of 2004. 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-month period ended
March 31, 2004 and 2003.

<TABLE>
<CAPTION>
                                               AT OR FOR THE THREE-MONTH PERIOD ENDED MARCH 31, 2004
                                            ------------------------------------------------------------
                                                        MORTGAGE    FINANCIAL    COMMERCIAL
                                            BANKING      BANKING     ADVISORS      LEASING       TOTAL
                                            --------    --------    ---------    ----------    ---------
                                                                   (IN THOUSANDS)
<S>                                         <C>         <C>         <C>          <C>           <C>
Net interest income                         $  6,886    $    128    $     127    $    1,252    $   8,393
Other income                                   1,436         151          762           355        2,704
Total net income                               1,028          39           25           525        1,617
Total assets                                 946,589       5,021        6,152        82,811    1,040,573
Total loans and leases, gross (1)            539,627       4,981           --        82,056      626,664
Intersegment interest income / (expense)         614          16          127          (757)          --
</TABLE>

<TABLE>
<CAPTION>
                                               AT OR FOR THE THREE-MONTH PERIOD ENDED MARCH 31, 2003
                                            ------------------------------------------------------------
                                                        MORTGAGE    FINANCIAL    COMMERCIAL
                                            BANKING      BANKING     ADVISORS      LEASING       TOTAL
                                            --------    --------    ---------    ----------    ---------
                                                                    (IN THOUSANDS)
<S>                                         <C>         <C>         <C>          <C>           <C>
Net interest income                         $  6,710    $     80    $      10    $      976     $  7,776
Other income                                   1,300         505          478           363        2,646
Total net income                               1,474         184           22           420        2,100
Total assets                                 928,705       3,493        4,874        76,451    1,013,523
Total loans and leases, gross (1)            518,072       3,455           --        75,630      597,157
Intersegment interest income / (expense)         798          80           10          (888)          --
</TABLE>

--------
(1) Total loans and leases includes loans held for sale.

                                       13

<PAGE>

                       PATRIOT BANK CORP. AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)
                                 March 31, 2004

NOTE 7 - ACCOUNTING FOR GOODWILL AND OTHER INTANGIBLE ASSETS

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

<TABLE>
<CAPTION>
                                                     MARCH 31, 2004                         DECEMBER 31, 2003
                                         --------------------------------------   --------------------------------------
                                          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                               $ 13,675   $      2,198   $     11,477   $ 13,675   $      2,198   $     11,477

Amortizing intangible assets:
  Core deposit intangible                   4,606          2,301          2,305      4,606          2,193          2,413
  Customer lists                            1,521             95          1,426      1,521             70          1,451
  Originated mortgage servicing rights        664            524            140        664            514            150
                                         --------   ------------   ------------   --------   ------------   ------------
  Total amortizing intangible assets        6,791          2,920          3,871      6,791          2,777          4,014
                                         --------   ------------   ------------   --------   ------------   ------------
Total intangible assets                  $ 20,466   $      5,118   $     15,348   $ 20,466   $      4,975   $     15,491
                                         ========   ============   ============   ========   ============   ============
</TABLE>

Aggregate amortization expense for the three-month period ended March 31 is as
follows:

<TABLE>
<CAPTION>
                                                     2004      2003
                                                    ------    ------
                                                     (IN THOUSANDS)
<S>                                                 <C>       <C>
Amortization expense.....................           $  143    $  155
</TABLE>

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

<TABLE>
<CAPTION>
                                        ESTIMATED EXPENSE
FOR THE YEAR ENDED                        (IN THOUSANDS)
<S>                                     <C>
December 31, 2004 ..................          $ 602
December 31, 2005 ..................            570
December 31, 2006 ..................            553
December 31, 2007 ..................            397
December 31, 2008 ..................            379
</TABLE>

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

<TABLE>
<CAPTION>
                                              MORTGAGE   FINANCIAL   COMMERCIAL
                                    BANKING   BANKING    ADVISORS     LEASING      TOTAL
                                    -------   --------   ---------   ----------   --------
                                                        (IN THOUSANDS)
<S>                                 <C>       <C>        <C>         <C>          <C>
Balance as of January 1, 2004       $ 6,909   $     --   $   2,663   $    1,905   $ 11,477
Goodwill acquired during the year        --         --          --           --         --
Impairment losses                        --         --          --           --         --
                                    -------   --------   ---------   ----------   --------
Balance as of March 31, 2004        $ 6,909   $     --   $   2,663   $    1,905   $ 11,477
</TABLE>

<TABLE>
<CAPTION>
                                              MORTGAGE   FINANCIAL   COMMERCIAL
                                    BANKING   BANKING    ADVISORS     LEASING      TOTAL
                                    -------   --------   ---------   ----------   --------
                                                        (IN THOUSANDS)
<S>                                 <C>       <C>        <C>         <C>          <C>
Balance as of January 1, 2003       $ 6,909   $     --   $      --     $  1,868   $  8,777
Goodwill acquired during the year        --         --       2,663           37      2,700
Impairment losses                        --         --          --           --         --
                                    -------   --------   ---------   ----------   --------
Balance as of December 31, 2003     $ 6,909   $     --   $   2,663   $    1,905   $ 11,477
</TABLE>

                                       14

<PAGE>

                       PATRIOT BANK CORP. AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)
                                 March 31, 2004

NOTE 8 - CONSOLIDATION OF VARIABLE INTEREST ENTITIES

In January 2003, the FASB issued FASB Interpretation No. 46 (FIN 46),
"Consolidation of Variable Interest Entities," which addresses how a business
enterprise should evaluate whether it has a controlling financial interest in an
entity through means other than voting rights and accordingly should consolidate
the entity. FIN 46 Revised (FIN 46R), issued in December 2003, replaces FIN 46.
FIN 46R requires public entities to apply FIN 46 or FIN 46R to all entities that
are considered special-purpose entities in practice and under the FASB
literature that was applied before the issuance of FIN 46 by the end of the
first reporting period that ends after December 15, 2003. For any variable
interest entities (VIE) that must be consolidated under FIN 46R, the assets,
liabilities and noncontrolling interests of the VIE initially would be measured
at their carrying amounts with any difference between the net amount added to
the balance sheet and any previously recognized interest being recognized as the
cumulative effect of an accounting change. If determining the carrying amounts
is not practicable, fair value at the date FIN 46R first applies may be used to
measure the assets, liabilities and noncontrolling interest of the VIE. The
adoption of FIN 46R did not have a material impact on Patriot's consolidated
earnings, financial condition, or equity, nor has there been any additional
requirement for disclosure.

NOTE 9 - THE MEANING OF OTHER-THAN-TEMPORARY IMPAIRMENT AND ITS APPLICATION TO
CERTAIN INVESTMENTS

In December 2003, the Emerging Issues Task Force issued EITF 03-1, "The Meaning
of Other-Than-Temporary Impairment and Its Application to Certain Investments."
The EITF addresses disclosure requirements regarding information about
temporarily impaired investments. The requirements are effective for fiscal
years ending after December 15, 2003 for all entities that have debt or
marketable equity securities with market values below carrying values. The
requirements apply to investments in debt and marketable equity securities that
are accounted for under SFAS No. 115, "Accounting for Certain Investments in
Debt and Equity Securities." The requirements apply only to annual financial
statements. As of December 31, 2003, Patriot has included the required
disclosures in their financial statements.

NOTE 10 - ACCOUNTING FOR CERTAIN LOANS OR DEBT SECURITIES ACQUIRED IN A TRANSFER

In December 2003, the AICPA's Accounting Standards Executive Committee (AcSEC)
issued SOP 03-3, Accounting for Certain Loans or Debt Securities Acquired in a
Transfer. The SOP is effective for loans acquired in fiscal years beginning
after December 15, 2004, with early adoption encouraged. A certain transition
provision applies for certain aspects of loans currently within the scope of
Practice Bulletin 6, Amortization of Discounts on Certain Acquired Loans. The
SOP addresses accounting for differences between contractual cash flows and cash
flows expected to be collected from an investor's initial investment in loans or
debt securities (loans) acquired in a transfer if those differences are
attributable, at least in part, to credit quality. It includes loans acquired in
business combinations and applies to all non-governmental entities, including
not-for-profit organizations. The SOP does not apply to loans originated by the
entity. The adoption of this Statement did not have an impact on Patriot's
earnings, financial condition, or equity.

                                       15

<PAGE>

                       PATRIOT BANK CORP. AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)
                                 March 31, 2004

NOTE 11 - BUSINESS COMBINATIONS

WEALTH MANAGEMENT ACQUISITIONS. 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 subsidiary 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.
During the first quarter in 2004, Patriot issued 22,279 shares of Patriot Bank
Corp. common stock having a value of $653,000 as part of the contingent
consideration agreed upon at closing. Based upon current revenue, the total
purchase price will approximate $1,300,000. Goodwill arising from the
transaction totaled $1,209,000. An additional $366,000 of intangible assets
acquired were assigned to customer lists subject to amortization and having a
15-year weighted-average useful life.

On September 5, 2003, Patriot completed the acquisition of Tyler Wealth
Counselors, a wealth management firm headquartered in Chester County,
Pennsylvania. Tyler Wealth Counselors is a registered investment advisory firm,
providing investment advisory and financial planning services to individuals and
families. Tyler Wealth Counselors was merged into Patriot Advisors, a subsidiary
of Patriot Bank Corp. that provides a full range of wealth and investment
management services. The acquisition was accounted for as a purchase. Tyler
Wealth Counselors was purchased for $650,000 in cash. $695,000 of intangible
assets acquired were assigned to customer lists subject to amortization and
having a 5-year weighted-average useful life.

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 subsidiary 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. During the first quarter
in 2004, Patriot issued 22,989 shares of Patriot Bank Corp. common stock having
a value of $674,000 as part of the contingent consideration agreed upon at
closing. Based upon current revenue, the total purchase price will approximate
$1,700,000. Goodwill arising from the transaction totaled $1,454,000. An
additional $460,000 of intangible assets acquired were assigned to customer
lists subject to amortization and having a 15-year weighted-average useful life.

Patriot completed an impairment evaluation for each of its acquisitions, as of
December 31, 2003. Based on this evaluation, there was no evidence of
impairment.

Supplemental pro forma information that discloses the results of operations for
Patriot Bank Corp. and its subsidiaries for the three-month period ended March
31, 2004 to the same period in 2003 is provided below. The pro forma information
assumes the business combinations of Tyler Wealth Counselors 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
                                      MARCH 31,
                                   2004       2003
                                 --------   --------
                                   (IN THOUSANDS)
<S>                              <C>        <C>
Revenue                          $ 17,387   $ 18,288

Net Income                       $  1,617   $  2,166
                                 ========   ========

Earnings per share - basic       $   0.25   $   0.34
                                 ========   ========
Earnings per share - diluted     $   0.24   $   0.32
                                 ========   ========
</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 $.24 and net
income of $1,617,000 for the three-month period ended March 31, 2004 compared to
diluted earnings per share of $.31 and net income of $2,100,000 for the three
month period ended March 1, 2003. First quarter 2004's earnings were
significantly affected by certain costs associated with the pending merger with
Susquehanna Bancshares, Inc. Return on average equity was 9.60%, for the
three-month period ended March 31, 2004 compared to 12.50%, for the three-month
period ended March 31, 2003.

      NET INTEREST INCOME. Net interest income for the three-month period ended
March 31, 2004 was $8,393,000 compared to $7,776,000 for the same period in
2003. Patriot's net interest margin (net interest income as a percentage of
average interest-earning assets) was 3.74% for the three-month period ended
March 31, 2004 compared to 3.68% for the same period in 2003. The decreases in
market rates on Patriot's funding sources outpaced decreases in the rates on
earning assets. Additionally, there was improvement in the overall mix of
Patriot's liabilities where higher costing borrowings and certificate of deposit
accounts were replaced with lower costing transaction accounts. As a result,
Patriot's net interest margin expanded.

      Interest on loans and leases was $10,595,000 for the three-month period
ended March 31, 2004 compared to $11,130,000 for the same period in 2003. The
average balance of loans was $623,695,000 with an average yield of 6.79% for the
three-month period ended March 31, 2004 compared to an average balance of
$606,089,000 with an average yield of 7.39% for the same period in 2003. The
increase in average balance is primarily due to aggressive marketing of
commercial and consumer loans as well as commercial leases offset, in part, by
Patriot continuing to allow residential mortgages to run-off. 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 $4,086,000 for the three-month period ended March 31, 2004
compared to $4,196,000 for the same period in 2003. The average balance of the
investment portfolio was $343,272,000 with an average yield of 5.46% for the
three-month period ended March 31, 2004 compared to an average balance of
$317,869,000 with an average yield of 6.15% for the same period in 2003. 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 the purchase of tax beneficial securities and general decreases in
market rates on adjustable rate securities.

      Interest on total deposits was $2,819,000 for the three-month period ended
March 31, 2004 compared to $3,140,000 for the same period in 2003. The average
balance of total deposits was $638,089,000 with an average cost of 1.75% for the
three-month period ended March 31, 2004 compared to an average balance of
$541,821,000 with an average cost of 2.32% for the same period in 2003. The
increase in average balance is primarily the result of aggressive marketing of
money market and transaction-based deposit accounts offset by a decrease in the
average balance of Patriot's certificate of deposit accounts. The overall
decrease in the average cost of deposits was primarily the result of a decrease
in market rates as well as improvement in the overall mix of Patriot's deposits
where higher costing certificate of deposit accounts were replaced with lower
costing transaction accounts.

      Interest on borrowings was $3,471,000 for the three-month period ended
March 31, 2004 compared to $4,416,000 for the same periods in 2003. The average
balance of borrowings was $327,551,000 with an average cost of 4.20% for the
three-month period ended March 31, 2004 compared to an average balance of
$371,319,000 with a cost of 4.76% for the same period in 2003. 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 the
repayment of borrowed funds with a higher cost of funds as well as the
restructuring of certain convertible advances to a lower cost of funds and
longer maturity.

PROVISION FOR CREDIT LOSSES. The provision for credit losses was $1,000,000 for
the three-month period ended March 31, 2004 compared to $1,100,000 for the same
period in 2003. Net of charge-offs and recoveries of $845,000 for the
quarter-ended March 31, 2004, this represented an addition of $155,000 to the
allowance for credit losses, which totaled $7,059,000 at March 31, 2004.
Patriot's percentage of non-performing loans to total loans decreased to .51% at
March 31, 2004 compared to .59% at December 31, 2003. The allowance for credit
losses is based on management's ongoing evaluation of the loan and lease
portfolio and reflects an amount considered by management to be its best
estimate of known and inherent losses in the portfolio. Management considers a
variety of factors when establishing the allowance, such as the impact of
current economic conditions, diversification of the portfolio, delinquency
statistics, results of loan review and related classifications, and historic
loss rates. In addition, certain individual loans which management has

                                       17

<PAGE>

                       PATRIOT BANK CORP. AND SUBSIDIARIES

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

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 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, it is at least reasonably possible that management's estimate of the
allowance for credit losses and actual results could differ in the near term.

Patriot's percentage of loss reserves to total loans and leases was 1.11% at
March 31, 2004. Based on management's evaluation of the impact of current
economic conditions, diversification of the portfolios, delinquency and
non-performing loan statistics, results of loan review and related
classifications, and historic loss rates, management determined a provision of
$1,000,000 was necessary to adequately address the losses inherent in Patriot's
loan and lease portfolios. Patriot believes that the allowance provides for
known and inherent credit losses at March 31, 2004.

Patriot's total loans and leases consist of four distinct portfolios, each of
which is monitored and analyzed separately.

Residential Mortgage Loans. Residential mortgage loans comprise 14.34% of total
loans and leases. Patriot's 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. Compared to December 31,
2003, the level of non-performing assets in the mortgage loan portfolio
decreased slightly during the first quarter of 2004 in correlation to the
overall decrease in the mortgage portfolio. The ratio of non-performing
residential mortgage loans to the total loan and lease portfolio remained
relatively stable during this period. 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 comprise 16.62% of total loans and leases and
consist mostly of home equity loans and home equity lines of credit. The
consumer loan portfolio is also mature as Patriot has been in the consumer
lending business for many years. Compared to December 31, 2003, the level of
non-performing consumer loans in the consumer loan portfolio decreased during
the first quarter of 2004. The ratio of non-performing consumer loans to the
total loan and lease portfolio remained relatively stable during this period.
Patriot predominantly uses an internal regression analysis that uses historical
data to estimate losses inherent in the portfolio.

During the third quarter of 2003, Patriot's internal control process uncovered
what is believed to be a defalcation perpetrated by a mid-level supervisory
employee within Patriot's credit card operation. The defalcation includes an
alleged theft and the alleged falsification and destruction of accounting
records as well as the concealment of credit card delinquencies and
bankruptcies. The alleged defalcation included the concealment of approximately
$460,000 of unsecured customer bankruptcies, which, since they were not material
to any prior period, were charged off during the third quarter of 2003 through
Patriot's loan loss reserve. An additional $26,454 of credit card delinquencies,
which were subject to normal collection procedures were charged off during the
first quarter of 2004. Patriot has incorporated these credit card charge-offs,
retroactively into its regression analysis.

Commercial Loans. Commercial loans comprise 55.90% of total loans and leases.
Patriot entered the commercial lending business in 1996 and has grown the
portfolio into a substantial portion of total loans. Patriot uses historical
data to prepare regression models to monitor trends of charge-offs and
recoveries and establish appropriate allowance levels. Patriot also closely
monitors local economic and business trends relative to its commercial lending
portfolio to estimate the effect those trends may have on potential losses.
Patriot's commercial loan portfolio contains some loans that are substantially
larger than the loans within other portfolios. The potential loss associated
with an individual loan could have a significant impact on the allowance and
charge-off levels at Patriot. Therefore Patriot closely monitors these loans and
will specifically reserve for individual loans which exhibit weakness. Compared
to December 31, 2003, the level of non-performing commercial loans decreased
during the first quarter of 2004. The ratio of non-performing commercial loans
to the total loan and lease portfolio decreased from .41% at December 31, 2003
to 0.35% at March 31, 2004.

Commercial Leases. Commercial leases comprise 13.14% of total loans and leases.
Patriot entered the commercial leasing business in 1998 principally through the
acquisition of Keystone Financial Leasing (KFL). Patriot's leasing portfolio has
a short, approximately 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 effects those trends may have
on potential losses. The ratio of non-performing commercial leases to the total
loan and lease portfolio decreased from .10% at December 31, 2003 to 0.09% at
March 31, 2004.

                                       18

<PAGE>

                       PATRIOT BANK CORP. AND SUBSIDIARIES

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

      NON-INTEREST INCOME. Total non-interest income was $2,704,000 for the
three-month period ended March 31, 2004 compared to $2,646,000 for the same
period in 2003. The increase in non-interest income was related to an increase
in Patriot Advisors' commissions offset by a decrease in the gains on the sale
of loans and leases.

Patriot Advisors' Commissions. Patriot Advisors, a subsidiary of Patriot Bank
Corp., provided $804,000 in non-interest income during the three-month period
ended March 31, 2004 compared to $478,000 for the same period in 2003. This
increase in Patriot Advisors' non-interest income was primarily attributable to
the acquisition of Tyler Wealth Counselors ("Tyler"), which occurred during the
third quarter of 2003. Tyler provided $254,000 of non-interest income during the
three-month period ended March 31, 2004.

Gains on the Sale of Loans and Leases. Non-Interest income from gains on the
sale of loans and leases was $372,000 for the three-month period ended March 31,
2004 compared to $704,000 for the same period in 2003. The decrease was
primarily due to mortgage banking gains associated with lower volumes offset by
increased gains recognized on the sale of the guaranteed portion of Small
Business Administration loans.

Other non-interest income such as loan and deposit fees were consistent with the
prior period. However, during the first quarter of 2003, Patriot prepaid a FHLB
$15,000,0000 advance with a rate of 6.28% and a scheduled maturity of December
4, 2003. As such, Patriot recorded a $588,000 prepayment penalty. During this
time period, Patriot also recorded investment gains of $556,000 on the sale of
$10,526,000 in securities as well. Patriot did not incur any prepayment
penalties or investment gains during the first quarter of 2004.

      NON-INTEREST EXPENSE. Total non-interest expense was $8,259,000 for the
three-month period ended March 31, 2004 compared to $6,681,000 for the same
period in 2003. The increase in non-interest expense was primarily due to
$938,000 of higher compensation costs associated with increases in staffing.
Patriot's three acquisitions during 2003, as well as service requirements
associated with branch deposit and commercial lending growth caused the
increases in staffing. Patriot also recognized $559,000 of merger related
expenses which contributed to this increase.

      INCOME TAX PROVISION. The income tax provision for the first quarter of
2004 was $221,000 compared to $541,000 for the same period in 2003. The
effective tax rate was 12.02% for three-month period ended March 31, 2004
compared to 20.48% for the same period in 2003. The decrease in the effective
tax rate was due to tax exempt income from tax preferential securities
comprising a greater proportion of Patriot's pretax income.

FINANCIAL CONDITION

LOAN AND LEASE PORTFOLIO. Patriot's primary portfolio loan products are
commercial loans and leases and home equity loans on existing owner-occupied
residential real estate. 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 March 31, 2004,
Patriot's total loan portfolio was $621,683,000, compared to $618,595,000 at
December 31, 2003. The increase in the loan portfolio was primarily the result
of emphasis placed on increasing commercial lending, leasing and consumer
relationships offset by Patriot continuing to allow residential mortgages to
run-off.

      CASH AND CASH EQUIVALENTS. Cash and cash equivalents at March 31, 2004
were $17,191,000 compared to $17,745,000 at December 31, 2003. The decrease in
cash balances was primarily due to temporary timing differences.

      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 March 31, 2004 were
$341,705,000 compared to $347,140,000 at December 31, 2003. The decrease in
investment and mortgage-backed securities was primarily due to investment
amortization and maturities.

                                       19

<PAGE>

                       PATRIOT BANK CORP. AND SUBSIDIARIES

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

      OTHER ASSETS. Other assets at March 31, 2004 were $5,344,000 compared to
$6,321,000 at December 31, 2003. The decrease in other assets was primarily
attributable to adjustments to Patriot's deferred tax position related to the
increase of unrealized gains on investments offset by an increase in cash
surrender values related to life insurance policies on certain members of
Patriot's Board of Directors.

      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 March 31, 2004 were $640,632,000 compared to
$613,555,000 at December 31, 2003. Of this increase, $30,131,000 was related to
an increase in core deposits offset by a decrease of $3,054,000 in certificates
of 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 it's 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 March 31, 2004 were $257,301,000 compared to $289,655,000 at
December 31, 2003. The decrease in FHLB advances and federal funds was
associated with the repayment of short-term FHLB advances. During the first
quarter of 2004, $34,000,000 of overnight FHLB advances were repaid with deposit
growth.

      OTHER LIABILITIES. Other Liabilities at March 31, 2004 were $4,803,000
compared to $8,196,000 at December 31, 2003. The decrease in other liabilities
was primarily attributable to the payment of $1,328,000 in contingent
consideration associated with the purchase of Bonds and Paulus Associates, Inc.
and Pension Benefits Inc. as well as $1,649,000 associated with Patriot's FAS
133 interest rate swap market value adjustments.

      SHAREHOLDERS' EQUITY. Total shareholders' equity was $70,696,000 at March
31, 2004 compared to $65,743,000 at December 31, 2003. The increase was
primarily a result of an increase in accumulated other comprehensive income, net
income and the issuance of treasury stock as contingent consideration associated
with acquisitions offset by cash dividends paid.

                                       20

<PAGE>

                       PATRIOT BANK CORP. AND SUBSIDIARIES

CRITICAL ACCOUNTING POLICIES

ALLOWANCE FOR LOSSES ON LOANS AND LEASES

The allowance for losses on loans is based on management's ongoing evaluation of
the loan portfolio and reflects an amount considered by management to be its
best estimate of 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 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. Because the allowance for credit losses is dependent, to a great extent,
on conditions that may be beyond Patriot's control, therefore 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
valuation of the allowance for the losses on loans and leases remains
appropriate at March 31, 2004.

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 March 31, 2004, 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. Any excess of the recorded investment in the loan over the fair
market value is charged against Patriot's loan loss reserve.

Other repossessed property consists of mostly leased equipment returned to
Patriot at the end of the lease. The off-lease equipment is recorded on
Patriot's books at the lower of Patriot's carrying value in the lease or the
fair value of the equipment as of the date of transfer to other repossessed
property. Any excess of the recorded investment in the lease over the fair
market value is taken as a loss on Patriot's books. Additionally, valuation of
REO and other repossessed property is dependent to a great extent on current
economic, market and geographic conditions 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 remains
appropriate at March 31, 2004.

                                       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 quarter of 2004, $27,077,000 of liquidity was provided by
deposit growth, which was used to repay short-term borrowings. Additional
liquidity of $7,983,000 was provided from the maturity of investment securities,
which was used to fund $5,493,000 of new loan growth.

At March 31, 2004, Patriot had outstanding loan commitments of $67,665,000.
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 March 31, 2004, totaled $119,416,000.

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 March 31, 2004, 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
March 31, 2004:

<TABLE>
<CAPTION>
                                                                          To Be                     To Be
                                                Actual            Adequately Capitalized       Well Capitalized
                                           ----------------       ----------------------       ----------------
                                            Amount    Ratio           Amount    Ratio           Amount    Ratio
                                           --------   -----          --------   -----          --------   -----
                                                                   As of March 31, 2004
<S>                                        <C>        <C>            <C>        <C>            <C>        <C>
Total  capital (to risk weighted assets)

Patriot Bank Corp.                         $ 80,905   12.01%         $ 53,896       8%         $ 67,370      10%
Patriot Bank                                 79,987   11.86%           53,954       8%           67,442      10%

Tier I capital (to risk-weighted assets)

Patriot Bank Corp.                           72,769   10.80%           26,948       4%           40,422       6%
Patriot Bank                                 71,833   10.65%           26,977       4%           40,465       6%

Tier I capital (to average assets)

Patriot Bank Corp.                           72,769    7.11%           40,938       4%           51,172       5%
Patriot Bank                                 71,833    6.99%           41,101       4%           51,376       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 March 31, 2005, based upon
the assets, liabilities and off-balance sheet financial instruments in existence
at March 31, 2004. 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 March 31, 2005 resulting from
changes in interest rates.

<TABLE>
<CAPTION>
Rate ramp to interest rates                 % change
---------------------------                 --------
<S>                                         <C>
           +2%                                   .15%
           -2%                                 (1.60%)
</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 March 31, 2004, resulting from shocks to interest rates.

<TABLE>
<CAPTION>
             Percent change   EVE Equity/
Rate shock     from base      EVE Assets
----------   --------------   -----------
<S>          <C>              <C>
   +2%                (3.70%)       13.58%

   +1%                 (.63%)       13.65%

  Base                              13.40%

   -1%                (9.01%)       11.99%

   -2%               (31.90%)        8.90%
</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.

The following table summarizes the amount of interest-earning assets and
interest-bearing liabilities outstanding at March 31, 2004, 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
March 31, 2004:

<TABLE>
<CAPTION>
                                 0-90   91-180   181-365
                                 Days    Days     Days
                                 ----   ------   -------
<S>                              <C>    <C>      <C>
GAP to Total Assets              4.50%    2.60%     2.67%
Cumulative GAP to Total Assets   4.50%    7.10%     9.77%
</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>

                       PATRIOT BANK CORP. AND SUBSIDIARIES

ITEM 4. CONTROLS AND PROCEDURES.

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-15 under the Securities Exchange
Act of 1934, as amended), based on their evaluation of these controls and
procedures as of March 31, 2004, are effective.

CHANGES IN INTERNAL CONTROLS. During the third quarter of 2003, Patriot's
internal control process uncovered what is believed to be a defalcation
perpetrated by a mid-level supervisory employee within Patriot's credit card
operation. The defalcation includes an alleged theft and the alleged
falsification and destruction of accounting records as well as the concealment
of credit card delinquencies and bankruptcies. The total amount of the alleged
theft was approximately $982,000. The company maintains an insurance policy
which management believes covers the majority of the alleged theft, and as a
result, Patriot has recorded an after-tax charge of $367,000 related to the
deductible on that insurance policy and losses and operating expenses associated
with the falsification and destruction of accounting records. The alleged
defalcation included the concealment of approximately $460,000 of unsecured
customer bankruptcies, which, since they were not material to any prior period,
were charged off during the third quarter of 2003 through Patriot's loan loss
reserve. An additional $26,454 of credit card delinquencies, which were subject
to normal collection procedures were charged off during the first quarter of
2004. At March 31, 2004, there were $63,000 of delinquent credit card
receivables remaining from the defalcation. Additional charge-offs may result
from these delinquent accounts.

Subsequent to the discovery of the alleged defalcation, Management has
implemented staffing changes designed to improve the training of the individuals
involved in the daily operations. Procedural changes were also implemented to
enhance the segregation of duties, which strengthen the review, authorization
and reconciliation process so that the probability of employee defalcations
occurring in the future is reduced. The Chief Executive Officer and Chief
Financial Officer believe that the corrective actions taken should be adequate
to remedy the aforementioned control inadequacies.

Except as discussed above, 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 of those controls.

                                       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

                  Not applicable.

      Item 5 OTHER INFORMATION

                  Not applicable.

      Item 6 EXHIBITS AND REPORTS ON FORM 8-K.

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

                  -- Exhibit 99.1 Section 906 Certifications

                  (b) Reports filed on Form 8K

                  -- On January 23, 2004, the registrant filed a Form 8-K
                  announcing earnings for the fourth quarter of 2003.

                  -- On January 30, 2004, the registrant filed a Form 8-K
                  reporting the declaration of a cash dividend of 14 cents per
                  share.

                                       26

<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 May 10, 2004
                                           -------------------------------------
                                                      Richard A. Elko
                                           President and Chief Executive Officer

Date May 10, 2004
                                           -------------------------------------
                                                        James G. Blume
                                                  Senior Vice President and
                                                   Chief Financial Officer

                                       27

<PAGE>

                                 CERTIFICATIONS

I, Richard A. Elko, Chief Executive Officer of Patriot Bank Corp, certify that:

1.    I have reviewed this quarterly report on Form 10-Q of Patriot Bank Corp.;

2.    Based on my knowledge, this quarterly report does not contain any untrue
      statement of a material fact or omit to state a material fact necessary to
      make the statements made, in light of the circumstances under which such
      statements were made, not misleading with respect to the period covered by
      this quarterly report;

3.    Based on my knowledge, the financial statements, and other financial
      information included in this quarterly report, fairly present in all
      material respects the financial condition, results of operations and cash
      flows of the registrant as of, and for, the periods presented in this
      quarterly report;

4.    The registrant's other certifying officers and I are responsible for
      establishing and maintaining disclosure controls and procedures (as
      defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we
      have:

      (a)   designed such disclosure controls and procedures to ensure that
            material information relating to the registrant, including its
            consolidated subsidiaries, is made known to us by others within
            those entities, particularly during the period in which this
            quarterly report is being prepared;

      (b)   evaluated the effectiveness of the registrant's disclosure controls
            and procedures as of a date within 90 days prior to the filing date
            of this quarterly report (the "Evaluation Date"); and

      (c)   presented in this quarterly report our conclusions about the
            effectiveness of the disclosure controls and procedures based on our
            evaluation as of the Evaluation Date;

5.    The registrant's other certifying officers and I have disclosed, based on
      our most recent evaluation, to the registrant's auditors and the audit
      committee of registrant's board of directors (or persons performing the
      equivalent function):

      (a)   all significant deficiencies in the design or operation of internal
            controls which could adversely affect the registrant's ability to
            record, process, summarize and report financial data and have
            identified for the registrant's auditors any material weaknesses in
            internal controls; and

      (b)   any fraud, whether or not material, that involves management or
            other employees who have a significant role in the registrant's
            internal controls; and

6.    The registrant's other certifying officers and I have indicated in this
      quarterly report whether or not there were significant changes in internal
      controls or in other factors that could significantly affect internal
      controls subsequent to the date of our most recent evaluation, including
      any corrective actions with regard to significant deficiencies and
      material weaknesses.

Date: May 10, 2004

                                             /s/ Richard A. Elko
                                           -------------------------------------
                                           Chief Executive Officer

                                       28

<PAGE>

                           CERTIFICATIONS (Continued)

I, James G. Blume , Chief Financial Officer of Patriot Bank Corp., certify that:

1.    I have reviewed this quarterly report on Form 10-Q of Patriot Bank Corp.;

2.    Based on my knowledge, this quarterly report does not contain any untrue
      statement of a material fact or omit to state a material fact necessary to
      make the statements made, in light of the circumstances under which such
      statements were made, not misleading with respect to the period covered by
      this quarterly report;

3.    Based on my knowledge, the financial statements, and other financial
      information included in this quarterly report, fairly present in all
      material respects the financial condition, results of operations and cash
      flows of the registrant as of, and for, the periods presented in this
      quarterly report;

4.    The registrant's other certifying officers and I are responsible for
      establishing and maintaining disclosure controls and procedures (as
      defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we
      have:

      (a)   designed such disclosure controls and procedures to ensure that
            material information relating to the registrant, including its
            consolidated subsidiaries, is made known to us by others within
            those entities, particularly during the period in which this
            quarterly report is being prepared;

      (b)   evaluated the effectiveness of the registrant's disclosure controls
            and procedures as of a date within 90 days prior to the filing date
            of this quarterly report (the "Evaluation Date"); and

      (c)   presented in this quarterly report our conclusions about the
            effectiveness of the disclosure controls and procedures based on our
            evaluation as of the Evaluation Date;

5.    The registrant's other certifying officers and I have disclosed, based on
      our most recent evaluation, to the registrant's auditors and the audit
      committee of registrant's board of directors (or persons performing the
      equivalent function):

      (a)   all significant deficiencies in the design or operation of internal
            controls which could adversely affect the registrant's ability to
            record, process, summarize and report financial data and have
            identified for the registrant's auditors any material weaknesses in
            internal controls; and

      (b)   any fraud, whether or not material, that involves management or
            other employees who have a significant role in the registrant's
            internal controls; and

6.    The registrant's other certifying officers and I have indicated in this
      quarterly report whether or not there were significant changes in internal
      controls or in other factors that could significantly affect internal
      controls subsequent to the date of our most recent evaluation, including
      any corrective actions with regard to significant deficiencies and
      material weaknesses.

Date: May 10, 2004

                                             /s/ James G. Blume
                                           -------------------------------------
                                           Chief Financial Officer

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