FORM 10-Q

                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549


(Mark One)

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

For the quarterly period ended March 31, 2000, OR
                               --------------

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

For the transition period from ____________ to ____________.

Commission File No. 0-12870.
                    -------


                        FIRST CHESTER COUNTY CORPORATION
                        --------------------------------
             (Exact name of Registrant as specified in its charter)


                      Pennsylvania                      23-2288763
                      ------------                      ----------
              (State or other jurisdiction of         (IRS Employer
               incorporation or organization)          Identification No.)


      9 North High Street, West Chester, Pennsylvania      19380
      -----------------------------------------------      -----
        (Address of principal executive office)         (Zip code)


                                 (610) 692-1423
              (Registrant's telephone number, including area code)

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

The number of shares outstanding of Common Stock of the Registrant as of May 15,
2000 was 4,524,918.



<PAGE>


                FIRST CHESTER COUNTY CORPORATION AND SUBSIDIARIES

                                      INDEX


<TABLE>
<CAPTION>
<S>                                                                                                                   <C>

                                                                                                                       PAGE

Part I.  FINANCIAL INFORMATION

                  Item 1 - Financial Statements
                             Consolidated Statements of Condition
                             March 31, 2000 and December 31, 1999                                                         3


                             Consolidated Statements of Income
                             Three-Months Ended March 31, 2000 and 1999                                                   4


                             Consolidated Statements of Stockholder's Equity                                              5


                             Consolidated Statements of Cash Flows
                             Three-Months Ended March 31, 2000 and 1999                                                   6


                             Notes to Consolidated Financial Statements                                                   7


                  Item 2 - Management's Discussion and Analysis of
                            Financial Condition and Results of Operations                                              8-21

                  Item 3 - Quantitative and Qualitative Disclosures About
                           Market Risk                                                                                   22

Part II. OTHER INFORMATION

                  Item 1 - Legal Proceedings                                                                             23
                  Item 2 - Changes in Securities                                                                         23
                  Item 3 - Defaults upon Senior Securities                                                               23
                  Item 4 - Submission of Matters to a Vote of Security Holders                                        23-24
                  Item 5 - Other Information                                                                             25
                  Item 6 - Exhibits and Reports on Form 8-K                                                              25


                  Signatures                                                                                             26

</TABLE>

<PAGE>




                FIRST CHESTER COUNTY CORPORATION AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CONDITION
<TABLE>
<CAPTION>

                                                                                       (Unaudited)
(Dollars in thousands)                                                                  March 31,          December 31,
                                                                                            2000                  1999
                                                                                       --------------      -----------
<S>                                                                                     <C>                  <C>

ASSETS
    Cash and due from banks                                                              $   27,852           $   27,257
    Federal funds sold                                                                           --                5,000
    Interest Bearing Deposits in banks                                                           76                   --
                                                                                          ---------            ---------

                Total cash and cash equivalents                                              27,928               32,257
                                                                                          ---------            ---------

    Investment securities held-to-maturity (market value of $3,495 and $4,535 at
        March 31, 2000 and December 31, 1999,
         respectively)                                                                        3,373                4,402

    Investment securities available-for-sale, at market value                               109,221              108,638

    Loans                                                                                   366,383              354,338
    Less:  Allowance for loan losses                                                         (6,412)              (6,261)
                                                                                          ---------            ---------

                Net loans                                                                   359,971              348,077

    Premises and equipment                                                                   10,522               10,444
    Other assets                                                                              8,996                8,084
                                                                                          ---------            ---------

                Total assets                                                             $  520,011           $  511,902
                                                                                          =========            =========

LIABILITIES
    Deposits
        Noninterest-bearing                                                              $   84,443           $   82,734
        Interest-bearing (including certificates of deposit over $100
           of $24,314 and $28,377 - March 31, 2000 and
           December 31, 1999 respectively)                                                  365,157              365,699
                                                                                          ---------            ---------

        Total deposits                                                                      449,600              448,433

    Securities sold under repurchase agreements                                               3,606                3,365
    Federal Home Loan Bank advances and other borrowings                                     22,297               16,667
        Other liabilities                                                                     5,795                5,255
                                                                                          ---------            ---------

        Total liabilities                                                                   481,298              473,720
                                                                                          ---------            ---------

STOCKHOLDERS' EQUITY
    Common stock, par value $1.00; authorized, 10,000,000 shares;
        outstanding, 4,799,666 at March 31, 2000 and December 31, 1999.                       4,800                4,800
    Additional paid-in capital                                                                  602                  602
    Retained earnings                                                                        39,517               38,652
    Accumulated other comprehensive income                                                   (2,884)              (2,893)
    Treasury stock, at cost:  275,748 shares and 254,509 shares
        at March 31, 2000 and December 31, 1999, respectively.                               (3,322)              (2,979)
                                                                                          ---------            ---------

                Total stockholders' equity                                                   38,713               38,182
                                                                                          ---------            ---------

                Total liabilities and stockholders' equity                               $  520,011           $  511,902
                                                                                          =========            =========

The accompanying notes are an integral part of these statements.
</TABLE>
                                       3
<PAGE>

                FIRST CHESTER COUNTY CORPORATION AND SUBSIDIARIES
                        CONSOLIDATED STATEMENTS OF INCOME
                                   (UNAUDITED)
<TABLE>
<CAPTION>

(Dollars in thousands - except per share)                                                        Three Months Ended
                                                                                                      March 31,
                                                                                            ----------------------------
                                                                                               2000               1999
                                                                                            ---------          ---------
<S>                                                                                        <C>                <C>
INTEREST INCOME
    Loans, including fees                                                                   $   7,645          $   6,636
    Investment securities                                                                       1,880              1,660
    Federal funds sold                                                                             28                 61
    Deposits in banks                                                                               1                 --
                                                                                             --------           --------

                Total interest income                                                           9,554              8,357
                                                                                             --------           --------

INTEREST EXPENSE
    Deposits                                                                                    3,557              3,411
    Securities sold under repurchase agreements                                                    36                 31
    Federal Home Loan Bank advances and other borrowings                                          335                 85
                                                                                             --------           --------

                Total interest expense                                                          3,928              3,527
                                                                                             --------           --------

                Net interest income                                                             5,626              4,830

    Provision for loan losses                                                                     290                138
                                                                                             --------           --------

                Net interest income after provision for possible loan losses                    5,336              4,692
                                                                                             --------           --------

NON-INTEREST INCOME
    Financial Management Services                                                                 786                629
    Service charges on deposit accounts                                                           249                245
    Investment securities gains (losses), net                                                     (43)                 4
    Other                                                                                         346                311
                                                                                             --------           --------

                Total non-interest income                                                       1,338              1,189
                                                                                             --------           --------

NON-INTEREST EXPENSE
    Salaries and employee benefits                                                              2,632              2,346
    Net occupancy, equipment and data processing                                                  990                958
    FDIC Bank insurance fund assessments                                                           22                 12
    Bank shares tax                                                                               106                100
    Other                                                                                         927                903
                                                                                             --------           --------

                Total non-interest expense                                                      4,677              4,319
                                                                                             --------           --------

                Income before income taxes and cumulative effect
                  of change in accounting for income taxes                                      1,997              1,562

INCOME TAXES                                                                                      566                476
                                                                                             --------           --------

NET INCOME                                                                                  $   1,431          $   1,086
                                                                                             ========           ========

PER SHARE DATA
    Basic earnings per common share                                                         $   0.320          $    0.24
                                                                                             ========           ========
    Diluted earnings per common share                                                       $   0.310          $    0.23
                                                                                             ========           ========
    Dividends declared                                                                      $   0.125          $   0.120
                                                                                             ========           ========

Basic weighted average shares outstanding                                                   4,537,464          4,598,887
                                                                                            =========          =========

Diluted weighted average shares outstanding                                                 4,557,461          4,673,886
                                                                                            =========          =========



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

                                       4

<PAGE>


                FIRST CHESTER COUNTY CORPORATION AND SUBSIDIARIES
            CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY

                                   (UNAUDITED)
<TABLE>
<CAPTION>

(Dollars in thousands)                                                                      2000                   1999
                                                                                        -----------            --------
<S>                                                                                       <C>                   <C>

Balance at January 1,                                                                      $ 38,182              $ 39,723

    Net income to date                                                                        1,431                 1,086
    Cash dividends declared                                                                    (566)                 (553)
    Net unrealized gain (loss) on securities available-for-sale                                   9                  (294)
    Paid-in capital from treasury stock transactions                                             --                    57
    Treasury stock transactions                                                                (343)                 (642)
                                                                                            -------               -------

Balance at March 31,                                                                       $ 38,713              $ 39,377

                                                                                          =======               =======

































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

                                       5
<PAGE>


                FIRST CHESTER COUNTY CORPORATION AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS

                                   (UNAUDITED)
<TABLE>
<CAPTION>
                                                                                                          March 31,
                                                                                              ---------------------------
(Dollars in thousands)                                                                           2000              1999
                                                                                              ---------          --------
<S>                                                                                         <C>                <C>

OPERATING ACTIVITIES
    Net Income                                                                               $    1,431         $   1,086
    Adjustments to reconcile net income to net cash
           provided by operating activities:
        Depreciation                                                                                406               342
        Provision for loan losses                                                                   290               138
        Amortization of investment security premiums
           and accretion of (discounts)                                                              33               119
        Amortization of deferred fees on loans                                                       61                14
        Investment securities (gains) losses, net                                                    43                (4)
        (Increase) in other assets                                                                 (904)             (587)
        Increase in other liabilities                                                               617             1,460
                                                                                              ---------          --------

           Net cash provided by operating activities                                              1,977             2,568
                                                                                              ---------          --------

INVESTING ACTIVITIES
    Increase in interest bearing deposits in banks                                                  (76)               --
    Increase in loans                                                                           (12,244)             (561)
    Proceeds from sale of investment securities available-for-sale                                2,013             2,441
    Proceeds from maturities of investment securities available-for-sale                          4,462             9,503
    Proceeds from maturities of investment securities held-to-maturity                                -             1,733
    Purchases of investment securities available-for-sale                                        (6,106)          (20,022)
    Purchase of premises and equipment, net                                                        (484)             (134)
                                                                                              ---------          --------

           Net cash provided by investing activities                                            (12,435)           (7,040)
                                                                                              ---------          --------

FINANCING ACTIVITIES
    Increase in Federal Home Loan Bank advances                                                   5,630             1,542
    Increase in deposits                                                                          1,167             3,536
    (Increase) decrease in securities sold under repurchase agreements                              241               (39)
    Cash dividends                                                                                 (566)             (553)
    Treasury stock transactions                                                                    (343)             (585)
                                                                                              ---------          --------

           Net cash provided by financing activities                                              6,129             3,901
                                                                                              ---------          --------


           NET DECREASE IN CASH AND CASH EQUIVALENTS                                             (4,329)             (571)

Cash and cash equivalents at beginning of year                                                   32,257            30,681
                                                                                              ---------          --------

Cash and cash equivalents at end of period                                                   $   27,928         $  30,110
                                                                                              =========          ========



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

                                       6
<PAGE>


                FIRST CHESTER COUNTY CORPORATION AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                                   (UNAUDITED)

1.       The  unaudited  financial  statements  have been prepared in accordance
         with generally  accepted  accounting  principles for interim  financial
         information.  In the opinion of Management, all adjustments (consisting
         only of normal recurring adjustments) necessary for a fair presentation
         of the financial position and the results of operations for the interim
         period presented have been included. These interim financial statements
         should  be  read  in  conjunction  with  the   consolidated   financial
         statements and footnotes  thereto included in our Annual Report on Form
         10-K for the fiscal year ended December 31, 1999.

2.       The results of operations  for the  three-month  period ended March 31,
         2000 are not  necessarily  indicative of the results to be expected for
         the full year.

3.       Earnings per share is based on the weighted average number of shares of
         common  stock  outstanding  during the  period.  Diluted net income per
         share includes the effect of options granted.

4.       We have adopted the  provisions of FASB issued SFAS No. 130,  Reporting
         of Comprehensive  Income, which establishes standards for reporting and
         display of comprehensive income and its components (revenues, expenses,
         gains and losses) in a full set of financial statements. This statement
         also requires  that all items that are required to be recognized  under
         accounting standards as components of year-end  comprehensive income be
         reported  in a  financial  statement  that is  displayed  with the same
         prominence as others financial  statements.  Other comprehensive income
         (loss) net of taxes for the three-month period ended March 31, 2000 was
         $9 thousand, compared to $(294) thousand in the same period last year.

5.       In June 1998, SFAS No. 133, "Accounting for Derivative  Instruments and
         Hedging Activities was issued.  Subsequent to this statement,  SFAS No.
         137 was issued,  which amended the effective date of SFAS No. 133 to be
         all fiscal  quarters of all fiscal years beginning after June 15, 2000.
         Based on our minimal use of derivatives at the current time, management
         does  not  anticipate  the  adoption  of  SFAS  No.  133  will  have  a
         significant impact on our earnings or financial position.  However, the
         impact from adopting SFAS No. 133 will depend on the nature and purpose
         of derivative instruments we may be using at that time.

6.       Certain  prior year  amounts have been  reclassified  to conform to the
         current year presentations.

                                      7
<PAGE>

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

         This  discussion  is  intended  to further  your  understanding  of the
consolidated  financial  condition  and results of  operations  of First Chester
County Corporation (the  "Corporation") and its wholly-owned  subsidiaries,  The
First  National Bank of Chester  County (the "Bank") and Turks Head  Properties,
Inc. It should be read in conjunction with the consolidated financial statements
included in this report.

         On February  17, 2000 the Board of  Directors of the First West Chester
Corporation  voted to modify  the name of the banks  holding  company's  banking
subsidiary to First  National Bank of Chester County and changed the name of the
bank's parent corporation to First Chester County Corporation.

         In addition to historical  information,  this  discussion  and analysis
contains  statements  relating  to future  results of the  Corporation  that are
considered  "forward-looking  statements"  within  the  meaning  of the  Private
Securities  Litigation  Reform  Act of  1995.  These  statements  can  often  be
identified  by the  use  of  forward-looking  terminology  such  as  "believes,"
"expects,"  "intends,"  "may,"  "will,"  "should"  "or  anticipates"  or similar
terminology.  These statements  involve risks and uncertainties and are based on
various assumptions. Investors and prospective investors are cautioned that such
statements are only projections.  The risks and uncertainties noted below, among
others, could cause the Corporation's actual future results to differ materially
from  those  described  in forward  looking  statements  made in this  report or
presented elsewhere by Management from time to time.

         These  risks and  uncertainties  include,  but are not  limited to, the
following:  (a) loan growth and/or loan margins may be less than expected due to
competitive  pressures in the banking  industry  and/or  changes in the interest
rate environment;  (b) general economic  conditions in the Corporation's  market
area may be less  favorable  than expected  resulting in, among other things,  a
deterioration in credit quality causing increased loan losses;  (c) costs of the
Corporation's   planned  training  initiatives,   product  development,   branch
expansion,  new technology and operating  systems may exceed  expectations;  (d)
volatility in the  Corporation's  market area due to recent mergers of competing
financial  institutions may have  unanticipated  consequences,  such as customer
turnover; (e) changes in the regulatory environment, securities markets, general
business  conditions  and  inflation  may be  adverse;  (f) impact of changes in
interest  rates on customer  behavior;  (h)  estimated  changes in net  interest
income; (i) anticipated pressure on net yields; and (j) branch locations.  These
risks and  uncertainties  are all  difficult  to predict and most are beyond the
control of the Corporation's Management.

         Although the Corporation  believes that its  expectations  are based on
reasonable  assumptions,  readers are cautioned  that such  statements  are only
projections.  The Corporation  undertakes no obligation to publicly  release any
revisions to the  forward-looking  statements to reflect events or circumstances
after the date of this report.

                          EARNINGS AND DIVIDEND SUMMARY

        Net income for the three months ended March 31, 2000 was $1.431 million,
an increase of $345 thousand or 31.8% from $1.086 million for the same period in
1999.  The  increase  in net income is the  direct  result of  increases  in net
interest  income and  increases  in  non-interest  income,  partially  offset by
increases in operating  expenses.  Basic earnings per share for the three months
ending March 31, 2000 were $0.32 per share,  a $0.08 or 33.3%  increase over the
same period in 1999.  Cash dividends  declared  during the first quarter of 2000
increased  $0.005 per share, a 4.2% increase  compared to $0.12 per share in the
first quarter of 1999. Over the past ten years, the  Corporation's  practice has
been to pay a dividend of at least 35.0% of net income.

                                       8
<PAGE>
           MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                            AND RESULTS OF OPERATIONS
<TABLE>
<CAPTION>

                                                              March                           December
                                                  -------------------------                   --------
                                                   2000              1999                        1999
                                                   ----              ----                     --------
      <S>                                        <C>               <C>                         <C>

        SELECTED RATIOS
       Return on average assets                    1.12%             0.93%                       1.14%
       Return on average equity                   14.90%            10.98%                      13.13%
       Earnings retained                          60.38%            49.08%                      57.26%
       Dividend payout ratio                      39.62%            50.92%                      42.74%
       Book value per share                       $8.56             $8.58                       $8.61
<FN>

The  "Consolidated  Average  Balance  Sheet" on page 13 may assist the reader in
following this discussion.
</FN>
</TABLE>

                               NET INTEREST INCOME

         Net  interest  income  is the  difference  between  interest  income on
interest-earning  assets and interest expense on  interest-bearing  liabilities.
Net interest income for each of the three-month periods ended March 31, 2000 and
1999,  on  a  tax  equivalent   basis,   was  $5.7  million  and  $4.9  million,
respectively.  The increase in net interest income is the result of a higher net
yield on  interest-earning  assets and an increase  in average  interest-earning
assets.  The average net yield on  interest-earning  assets, on a tax equivalent
basis was 4.78% for the  three-month  period  ended March 31,  2000  compared to
4.45% for the same period in 1999. The increase in the net interest  margin is a
direct result of increases in rates charged on the Corporations  loan portfolios
in the recent rising  interest rate  environment, partially offset by a marginal
increase in the average funding cost. Average  interest-earning assets increased
approximately  $39.4 million or 9.0% to $476.0 million  during the  twelve-month
period ending March 31, 2000,  compared to $436.7 million during the same period
last year.  The increase in average  funding  assets was the result of increased
loan  activity  during the first  quarter.  Despite the  increase in average net
yield for the period,  the Corporation  anticipates that there will be continued
pressure  on the net yield on  interest-earning  assets as  competition  for new
loans  remains  very strong and as the  incremental  cost of funds  continues to
increase.

               AVERAGE INTEREST RATES (ON A TAX EQUIVALENT BASIS)

<TABLE>
<CAPTION>
                                                                  Three-Months
                                                                 Ended March 31,
                                                             -----------------------
YIELD ON                                                     2000               1999
--------                                                     -----              ----
<S>                                                         <C>                <C>

Interest-Earning Assets                                      8.08%              7.68%
Interest Bearing Liabilities                                 4.03%              4.01%
                                                             ----               ----
Net Interest Spread                                          4.05%              3.67%
Contribution of Interest-Free Funds                          0.73%              0.78%
                                                             ----               ----
Net Yield on Interest-Earning Assets                         4.78%              4.45%
                                                             ====               ====
</TABLE>

                      INTEREST INCOME ON FEDERAL FUNDS SOLD

         Interest income on federal funds sold for the three-month  period ended
March 31, 2000 decreased  54.1% to $28 thousand when compared to the same period
in 1999.  This decrease is primarily the result of a decrease in average federal
funds sold of $3.0 million or 58.9%, from $5.1 million at March 31, 1999 to $2.1
million at March 31, 2000, partially offset by a 50 basis point (one basis point
is equal 1/100 of a percent) increase in interest rates.

                                       9
<PAGE>
           MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                            AND RESULTS OF OPERATIONS

                    INTEREST INCOME ON INVESTMENT SECURITIES

         On a tax equivalent  basis,  interest  income on investment  securities
increased 13.5% for the three-month period ended March 31, 2000 to approximately
$1.9  million  compared  to $1.7  million  during the same  period in 1999.  The
increase was primarily  the result of a 11.0% or 66 basis point  increase in the
yield  earned.  Also  contributing  to the  increase  was a 2.1% or $2.4 million
increase in the average  investment  security balance to $113.7 million on a tax
equivalent basis.

                            INTEREST INCOME ON LOANS

         Loan  interest  income,  on a tax  equivalent  basis,  generated by the
Corporation's loan portfolio increased 15.6% to $7.7 million for the three-month
period ended March 31, 2000 compared to $6.7 million for the same time period in
1999. The increase in interest income for the three-month period ended March 31,
2000 is the  direct  result of a 12.5%  increase  in  average  outstanding  loan
balances to $360.1 million and a 23 basis point or 2.8% increase on rates earned
on the portfolio.

                      INTEREST EXPENSE ON DEPOSIT ACCOUNTS

         Interest expense on deposit accounts increased 4.3% for the three-month
period ended March 31, 2000 to approximately $3.6 million,  compared to the same
period in 1999.  The increase is primarily  the result of an increase in average
interest-bearing deposits of $20.7 million,  partially offset by a 6 basis point
decrease in the rates paid on interest  bearing  deposits,  compared to the same
period in 1999.

         Competition for deposits from non-banking  institutions  such as credit
union and mutual fund companies continues to be strong. Despite the competition,
the  Corporation's  deposit  base  continues  to grow and growth is  expected to
continue as we continue to open new branches and attract new customers  with new
products and services.  Growth can be attributed to our four new limited service
retirement  community  branches  located in Chester and Delaware  counties.  New
branch sites are currently  under review.  New branch sites will help expand the
corporations deposit base. The Corporation's  effective rate on interest-bearing
deposits  decreased  from  3.97% in the first  quarter  of 1999 to 3.91% for the
first quarter of 2000.

         INTEREST EXPENSE ON SECURITIES SOLD UNDER REPURCHASE AGREEMENTS

         Interest  expense  on  securities  sold  under  repurchase   agreements
increased 16.1% to $36 thousand for the three-month  period ended March 31, 2000
compared to the same time period in 1999. The increase is  attributable  to a 92
basis point or 24.2%  increase on average  rates paid on  securities  sold under
repurchase  agreements,  partially offset by a 6.5% or $211 thousand decrease in
average securities sold under repurchase agreements for the comparable periods.

    INTEREST EXPENSE ON FEDERAL HOME LOAN BANK ADVANCES AND OTHER BORROWINGS

         Interest expense on borrowings increased $250 thousand to $335 thousand
for the  three-month  period  ended  March 31,  2000 from  $85.0  thousand  when
compared to the same period in 1999.  The need for  borrowing  increased  in the
first quarter of 2000 as a result of a steady increase in loan demand, which has
continued  since the second quarter of 1999. As a result,  average  Federal Home
Loan Bank ("FHLB") and other  borrowings  increased in the first quarter of 2000
to $22.6  million as  compared to $5.2  million  during the same period in 1999.

                                       10
<PAGE>

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

Borrowings  at any  time  may  consist  of one or  more of the  following:  FHLB
Overnight  or Term  Advances,  and  advances  under  line  agreements  with  our
correspondent banks.

                            PROVISION FOR LOAN LOSSES

         During  the first  quarter  of 2000,  the  Corporation  recorded a $290
thousand provision for loan losses compared to $138 thousand for the same period
in 1999. The increase in the provision expense for the three-month  period ended
March  31,  2000 can be  attributed  to the loan  growth  over the last  several
quarters and does not reflect an erosion of credit  quality.  The  allowance for
loan  losses as a  percentage  of total loans was 1.75% as of March 31, 2000 and
1.85% as of March 31, 1999. See the section  titled  "Allowance For Loan Losses"
for additional discussion.

                               NON-INTEREST INCOME

         Total non-interest income increased 12.5% to $1.3 million for the three
months  ended March 31, 2000,  compared to the same period in 1999.  The primary
component of non-interest income is Financial Management Services revenue, which
increased  $157  thousand or 25.0% to $786 thousand for the  three-months  ended
March 31,  2000  compared  with the same  period in 1999.  The  market  value of
Financial  Management  Services  assets under  management and custody grew $20.1
million or 4.9% from $409.9 million at March 31, 1999 to $430.0 million at March
31, 2000. The increase in Financial  Management  Services  revenue and growth in
assets  under   management  and  custody  is  primarily  the  result  of  market
appreciation and new account relationships acquired through strong marketing and
business development efforts.

        Service charges on deposit accounts increased approximately 1.6% to $249
thousand for the three-months ended March 31, 2000 compared to $245 thousand for
the same  period in 1999.  Other  non-interest  income  increased  11.3% to $346
thousand for the three-months ended March 31, 2000 compared to $311 thousand for
the same period in 1999. This increase can be attributed to several  factors,  a
one time fee  related  to a recent  Community  Development  Corporation  ("CDC")
investment,  increased property rental income and a higher volume of fee income
from our MAC and credit card products.

                              NON-INTEREST EXPENSE

        Total non-interest  expense for the first quarter of 2000 increased 8.3%
to $4.7 million  compared to the same period in 1999. The various  components of
non-interest expense are discussed below.

        First quarter 2000  salaries and employee  benefits  increased  12.2% to
$2.7 million for the  three-month  period  ended March 31, 2000  compared to the
same  period in 1999.  Annual  employee  raises and a  proportional  increase in
employee  benefits are primarily  responsible  for the  increase.  The hiring of
additional  staff for the Matlack Street and retirement home branches during the
second half of 1999 also  contributed  to this  increase.  At March 31, 2000 the
corporation  employed 207 full time and 37 part time  employees  compared to 187
full time and 37 part time at March 31, 1999.

        Net occupancy,  equipment and data processing  expense increased 3.3% to
$990  thousand for the  three-month  period ended March 31, 2000 compared to the
same period last year.  The increase is the direct result of increased  computer
and  related  equipment  costs  associated  with the  expansion,  upgrading  and
maintenance of personal computers and our networking  infrastructure.  Increases

                                       11
<PAGE>
           MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                            AND RESULTS OF OPERATIONS


in the  Corporations  facilities also  contributed  the increase.  See "Building
Improvements and Technology Projects" sections for more detail.

        Total other non-interest expense increased 2.7% to $927 thousand for the
three  months  ended  March 31, 2000  compared to the same period in 1999.  This
increase  can be  partially  attributed  to an  increase  in  the  Corporation's
marketing  efforts to attract new customers and new employees and to promote its
corporate  image,  and an  increase  in the  amount of  professional  consulting
services utilized by the corporation.

        Planning for additional branch sites continues. The Corporation believes
that the costs  associated  with the  opening  of new  branch  sites will have a
direct impact on all the components of non-interest  expense.  It is anticipated
that the  increases  in costs  will be  offset  over  time by  increases  in net
interest and fee income generated by business in the new marketing areas.

                                       12

<PAGE>

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

                       CONSOLIDATED AVERAGE BALANCE SHEET
             AND TAXABLE EQUIVALENT INCOME/EXPENSE AND RATES FOR THE
                          THREE MONTHS ENDED MARCH 31,
<TABLE>
<CAPTION>

(Dollars in thousands)                                                  2000                               1999
                                                           -----------------------------      ----------------------------
                                                             Daily                              Daily
                                                             Average                            Average
ASSETS                                                       Balance   Interest    Rate         Balance   Interest   Rate
------                                                       -------   --------    ----         -------   --------   ----
<S>                                                       <C>         <C>         <C>        <C>         <C>        <C>

    Federal funds sold                                     $    2,130  $    28     5.26%      $    5,181  $     61   4.71%
    Interest bearing deposits in banks                             75        1     5.33%              --        --     --
    Investment securities
        Taxable                                               111,465    1,853     6.65%         109,422     1,634   5.97%
        Tax-exempt(1)                                           2,265       42     7.34%           1,938        36   7.40%
                                                            ---------   ------                 ---------   -------
           Total investment securities                        113,730    1,895     6.66%         111,360     1,670   6.00%
                                                            ---------   ------                 ---------   -------
    Loans(2)
        Taxable                                               353,894    7,547     8.53%         316,716     6,568   8.30%
        Tax-exempt(1)                                           6,194      141     9.08%           3,412        84   9.89%
                                                            ---------   ------                 ---------   -------
           Total loans                                        360,088    7,689     8.54%         320,128     6,652   8.31%
                                                            ---------   ------                 ---------   -------
           Total interest-earning assets                      476,023    9,612     8.08%         436,669     8,383   7.68%
    Non-interest earning assets
        Allowance for possible loan losses                     (6,315)                            (5,913)
        Cash and due from banks                                20,630                             20,672
        Other assets                                           19,309                             15,816
                                                            ---------                          ---------
           Total assets                                    $  509,647                         $  467,244
                                                            =========                          =========

LIABILITIES AND STOCKHOLDERS' EQUITY
    Savings, NOWS & money market deposits                  $  224,869  $ 1,708     3.04%      $  194,008  $  1,393   2.87%
    Certificates of deposits and other time                   139,346    1,849     5.31%         149,531     2,018   5.40%
                                                            ---------   ------                 ---------   -------
        Total interest bearing deposits                       364,215    3,557     3.91%         343,539     3,411   3.97%
    Securities sold under repurchase agreements                 3,052       36     4.72%           3,263        31   3.80%
    Federal Home Loan Bank advances and
       other borrowings                                        22,585      335     5.93%           5,274        85   6.45%
                                                            ---------   ------                 ---------   -------
        Total interest bearing liabilities                    389,852    3,928     4.03%         352,076     3,527   4.01%
                                                            ---------   ------                 ---------   -------
    Non-interest bearing liabilities
        Non-interest bearing demand deposits                   75,615                             69,324
        Other liabilities                                       5,673                              6,285
                                                            ---------                          ---------
           Total liabilities                                  471,140                            427,685
    Stockholders' equity                                       38,507                             39,559
                                                            ---------                          ---------
           Total liabilities and stockholders' equity      $  509,647                         $  467,244
                                                            =========                          =========
    Net interest income                                                $ 5,684                            $ 4,856
                                                                        ======                             ======
    Net yield on interest earning assets                                           4.78%                             4.45%
                                                                                   ====                              ====




<FN>

(1) The indicated  income and annual rate are presented on a taxable  equivalent
    basis  using the federal  marginal  rate of 34%  adjusted  for the TEFRA 20%
    interest expense disallowance for 2000 and 1999.
(2) Non-accruing loans are included in the average balance.
</FN>
</TABLE>

                                       13
<PAGE>

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

                                  INCOME TAXES

        Income tax expense for the  three-month  period ended March 31, 2000 was
$566  thousand,  compared to $476  thousand  in the same period last year.  This
represents  an  effective  tax rate of 28.4% and 30.5% for the first  quarter of
2000 and 1999, respectively. This decrease can be attributed to the Corporations
increase in tax-free investments.

               LIQUIDITY MANAGEMENT AND INTEREST RATE SENSITIVITY

        The objective of liquidity  management is to ensure the  availability of
sufficient  cash flows to meet all  financial  commitments  and to capitalize on
opportunities  for  business  expansion.   Liquidity  management  addresses  the
Corporation's  ability  to meet  deposit  withdrawals  either  on  demand  or at
contractual  maturity,  to repay borrowings as they mature and to make new loans
and investments as  opportunities  arise.  Liquidity is managed on a daily basis
enabling  Senior  Management to effectively  monitor changes in liquidity and to
react  accordingly to fluctuations in market  conditions.  The primary source of
liquidity  for the  Corporation  is its  available-for-sale  portfolio of liquid
investment grade securities. Funding sources include NOW, money-market,  savings
and smaller  denomination  certificates  of deposit  accounts.  The  Corporation
considers funds from such sources to comprise its "core" deposit base because of
the historical  stability of such sources of funds.  Additional  liquidity comes
from the Corporation's  non-interest  bearing demand deposit accounts and credit
facilities.  Other deposit  sources  include a three-tiered  savings product and
certificates  of  deposit  in  excess of  $100,000.  Details  of core  deposits,
non-interest  bearing  demand  deposit  accounts and other  deposit  sources are
highlighted in the following table:

                                DEPOSIT ANALYSIS
<TABLE>
<CAPTION>

(Dollars in thousands)                          March 31, 2000         December 31, 1999            Average  Balance
                                           --------------------     ------------------------      -----------------------
                                            Average  Effective      Average       Effective        Dollar      Percentage
Deposit Type                                Balance      Yield      Balance          Yield        Variance      Variance
------------                                -------  ----------     --------      ----------      --------    -----------
<S>                                       <C>          <C>        <C>               <C>          <C>           <C>

NOW Accounts                               $ 62,683     1.72%      $ 58,356          1.71%        $ 4,327        7.41%
Money Market                                 28,071     2.89         27,139          2.90             932        3.43
Statement Savings                            49,563     2.96         49,144          3.00             419        0.85
Other Savings                                 2,112     2.84          2,280          2.76            (167)      -7.32
CD's Less than $100,000                     112,967     5.32        118,228          5.38          (5,261)      -4.45
                                            -------                 -------                        ------

Total Core Deposits                         255,396     3.69        255,147          3.79             250        0.10

Non-Interest Bearing
    Demand Deposit Accounts                  75,615        -         72,493             -           3,122        4.31
                                            -------                 -------                        ------

Total Core and Non-Interest
    Bearing Deposits                        331,011      2.85       327,640          2.95           3,372        1.03
                                            -------                 -------                        ------

Tiered Savings                               82,440      4.13        68,067          3.97          14,373       21.12
CD's Greater than $100,000                   26,379      5.26        28,863          5.19          (2,485)      -8.61
                                            -------                 -------                        ------

Total Deposits                             $439,830      3.23      $424,570          3.27         $15,260       3.59
                                            =======                 =======                        =======
</TABLE>
                                       14
<PAGE>
           MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                            AND RESULTS OF OPERATIONS

       The Bank, as a member of the FHLB, maintains a credit facility secured by
the Bank's mortgage-related assets. Additionally,  the FHLB offers several other
credit  related  products which are available to the Bank. As of March 31, 2000,
the amount  outstanding  under the Bank's line of credit with the FHLB was $22.2
million.  The Bank currently has a maximum  borrowing  capacity with the FHLB of
approximately  $119.0  million.  During the first quarter of 2000,  average FHLB
advances  were  approximately  $22.6  million  and  consisted  of term  advances
representing  a combination of  maturities.  The average  interest rate on these
advances was approximately 5.9%. FHLB advances are collateralized by a pledge on
the Bank's  entire  portfolio of  unencumbered  investment  securities,  certain
mortgage loans and a lien on the Bank's FHLB stock.

       The goal of interest rate sensitivity  management is to avoid fluctuating
net interest  margins,  and to enhance  consistent growth of net interest income
through periods of changing  interest rates. Such sensitivity is measured as the
difference  in the volume of assets and  liabilities  in the existing  portfolio
that are subject to  repricing in future time  periods.  The  Corporation's  net
interest rate  sensitivity  gap within one year is a negative  $213.6 million or
41.1% of total assets at March 31, 2000 compared with a negative  $165.7 million
or 34.7% of total assets at December 31, 1999. The Corporation's gap position is
one factor used to evaluate interest rate risk and the stability of net interest
margins.  Other factors include computer simulations of what might happen to net
interest income under various interest rate forecasts and scenarios.  Management
monitors  interest  rate  risk as a  regular  part of bank  operations  with the
intention of maintaining a stable net interest margin.

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

                          INTEREST SENSITIVITY ANALYSIS
                              AS OF MARCH 31, 2000
<TABLE>
<CAPTION>

                                                                One              Over
(Dollars in thousands)                       Within           through            five          Non-rate
                                            one year         five years          years         sensitive           Total
                                           ----------        ----------         --------       ---------         --------
<S>                                       <C>                <C>               <C>            <C>               <C>

ASSETS
    Federal funds sold                     $      --          $      --         $     --       $      --         $     --
    Investment securities                     20,785             59,685           32,124              --          112,594
    Interest bearing deposits in banks            --                 --               --              76               76
    Loans and leases                          90,408            214,020           61,955          (6,412)         359,971
    Cash and cash equivalents                     --                 --               --          27,852           27,852
    Premises and equipment                        --                 --               --          10,522           10,522
    Other assets                               4,258                 --               --           4,738            8,996
                                            --------           --------          -------        --------          -------
    Total assets                           $ 115,451          $ 273,705         $ 94,079       $  36,776         $520,011
                                            ========           ========          =======        ========          =======

LIABILITIES AND CAPITAL
    Non-interest bearing deposits          $      --          $      --         $     --       $  84,443         $ 84,443
    Interest bearing deposits                320,015             43,229            1,913              --          365,157
    Repurchase agreements                      3,606                 --               --              --            3,606
    FHLB advances and other
      borrowings                               5,524             11,824            4,949              --           22,297
    Other liabilities                             --                 --               --           5,795            5,795
    Capital                                       --                 --               --          38,713           38,713
                                            --------           --------          -------        --------          -------
    Total liabilities & capital            $ 329,145          $  55,053         $  6,862        $128,951         $520,011
                                            ========           ========          =======         =======          =======

    Net interest rate
      sensitivity gap                      $(213,694)          $218,652         $ 87,217        $(92,175)
                                            ========            =======          =======         =======
    Cumulative interest rate
      sensitivity gap                      $(213,694)        $    4,958         $ 92,175        $     --
                                            ========          =========          =======         =======
    Cumulative interest rate
      sensitivity gap divided
      by total assets                         (41.1%)              1.0%            17.7%
                                            ========          =========          =======
</TABLE>

                            ALLOWANCE FOR LOAN LOSSES

         The  allowance  for loan losses is an amount that  Management  believes
will be  adequate  to absorb  loan  losses on  existing  loans  that may  become
uncollectible   based  on  evaluations  of  the  collectibility  of  loans.  The
evaluations  take into  consideration  such factors as changes in the nature and
volume of the loan portfolio, overall portfolio quality, adequacy of collateral,
review of specific  problem  loans,  and current  economic  conditions  that may
affect the borrower's ability to pay.

                                       16

<PAGE>

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

          ANALYSIS OF CHANGES IN THE ALLOWANCE FOR POSSIBLE LOAN LOSSES
                       AND COMPARISON OF LOANS OUTSTANDING
<TABLE>
<CAPTION>

     (Dollars in thousands)                                                      March 31,                   December 31,
                                                                      --------------------------            ------------
                                                                          2000           1999                    1999
                                                                      -----------     ----------            ------------
    <S>                                                               <C>            <C>                     <C>

     Balance at beginning of period                                    $    6,261     $    5,877              $    5,877
                                                                        ---------      ---------               ---------

     Provision charged to operating expense                                   290            138                     799
                                                                        ---------      ---------               ---------

        Recoveries of loans previously charged-off                             43             48                     178
        Loans charged-off                                                    (182)          (126)                   (593)
                                                                        ---------      ---------               ---------

     Net loans charged-off                                                   (139)           (78)                   (415)
                                                                        ---------      ---------               ---------

     Balance at end of period                                          $    6,412     $    5,937              $    6,261
                                                                        =========      =========               =========

     Period-end loans outstanding                                      $  366,383     $  320,864              $  354,338

     Average loans outstanding                                         $  360,088     $  320,128              $  331,966

     Allowance for loan losses as a
        percentage of period-end loans outstanding                          1.75%          1.85%                   1.77%

     Ratio of net charge-offs to average loans
        Outstanding (annualized)                                            0.15%          0.10%                   0.13%
</TABLE>

              Non-performing loans include loans on non-accrual status and loans
     past due 90 days or more and still accruing.  The Bank's policy is to write
     down all  non-performing  loans to net  realizable  value  based on updated
     appraisals.  Non-performing  loans  are  generally  collateralized  by real
     estate and are in the process of collection. Management is not aware of any
     loans  other  than  those  included  in the  following  table that would be
     considered  potential  problem loans and cause Management to have doubts as
     to the borrower's ability to comply with loan repayment terms.

                                       17
<PAGE>
           MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                            AND RESULTS OF OPERATIONS

                         NON-PERFORMING LOANS AND ASSETS
<TABLE>
<CAPTION>

(Dollars in thousands)                                                March 31,                December 31,
                                                             ---------------------------       ------------
                                                                 2000            1999              1999
                                                                -----            ----              ----
<S>                                                          <C>               <C>             <C>

Past due over 90 days and still accruing                      $    338          $   909         $    175

Non-accrual loans                                                1,038            1,372            1,207
                                                               -------           ------          -------

Total non-performing loans                                       1,376            2,281            1,382

Other real estate owned                                            470              192              470
                                                               -------           ------          -------

Total non-performing assets                                   $  1,846          $ 2,473         $  1,852
0                                                              =======           ======          =======

Non-performing loans as a percentage
     of total loans                                              0.38%            0.71%            0.39%

Allowance for loan losses as a
   percentage of non-performing loans                          465.99%          260.28%          453.04%

Non-performing assets as a percentage of
   total loans and other real estate owned                       0.50%            0.77%            0.52%

Allowance for loan losses as a
  percentage of non-performing assets                          347.35%           240.1%          338.07%
</TABLE>

         The allowance for loan losses as a percentage of  non-performing  loans
indicates  that the  allowance  for  loan  losses  is  sufficient  to cover  the
principal of all non-performing loans at March 31, 2000. Other real estate owned
("OREO")  represents  residential  and  commercial  real estate  written down to
realizable  value  (net of  estimated  disposal  costs)  based  on  professional
appraisals.

                                 LOAN IMPAIRMENT

         The  bank  identifies  a loan  as  impaired  when it is  probable  that
interest and principal will not be collected  according to the contractual terms
of the loan agreement. The accrual of interest is discontinued on impaired loans
and no income is recognized until all recorded amounts of interest and principal
are recovered in full. The totals below are included in the non-performing loans
and assets table above.

         The balance of impaired  loans was $678 thousand,  $648  thousand,  and
$1,078  thousand at March 31,  2000,  December  31,  1998,  and March 31,  1999,
respectively.  The  associated  allowance for impaired  loans was $300 thousand,
$305 thousand and $333 thousand at March 31, 2000,  December 31, 1999, and March
31, 1999, respectively.

         For the three months ended March 31,  2000,  activity in the  allowance
for  impaired  loan losses  include a provision of $0, write offs of $5 thousand

                                       18
<PAGE>
           MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                            AND RESULTS OF OPERATIONS

and  recoveries of $0.  Interest  income of $0 was recorded for the period while
contractual  interest amounted to $17 thousand.  Cash collected on loans for the
period was $35 thousand all of which was applied to principal.

         For  the  twelve  months  ended  December  31,  1999,  activity  in the
allowance  for impaired loan losses  include a provision of $85 thousand,  write
offs of $70 thousand and  recoveries of $3 thousand.  Interest  income of $0 was
recorded for the period while  contractual  interest  amounted to $89  thousand.
Cash  collected  on loans  for the  period  was $188  thousand  all of which was
applied to principal.

         For the three months ended March 31,  1999,  activity in the  allowance
for impaired loan losses  include a provision of $50 thousand,  write offs of $3
thousand and recoveries of $0. Interest income of $0 was recorded for the period
while contractual interest amounted to $23 thousand. Cash collected on loans for
the period was $10 thousand all of which was applied to principal.

                  BUILDING IMPROVEMENTS AND TECHNOLOGY PROJECTS

         The  Corporation  acquired and opened  limited  access  branch  banking
facilities  in four  local  retirement  communities  in  December  of 1999.  The
locations include Granite Farms Estates, Lima Estates, and Kendal and Crosslands
Communities.  These branch  locations  will serve the residents and employees of
their  communities  and bring the total  number of branches in the  Corporations
network to twelve.

         The  Corporation is currently  working on four new branch sites.  These
branch sites,  which are in various  stages of  development,  are expected to be
completed and opened within the next six to eighteen months.

         In October of 1999,  the Bank  launched a full line of retail  Internet
banking  services,  "Net Teller" and  "BillPay".  These new  products  allow our
retail  customers the convenience to access their accounts and pay bills on-line
twenty-four  hours a day from home. Since it's release over 1,000 customers have
signed up for "Net  Teller".  A  commercial  version of "Net  Teller"  "Net Cash
Manager" was released in March of 2000. Other  technology  products include "FNB
Portfolio Link",  which gives our Financial  Management  Services  customers the
ability to access their  accounts over the Internet,  and the banks new web site
at www.fnbchestercounty.com.
   ------------------------

                                YEAR 2000 ISSUES

         To date,  our efforts to be  prepared  for the Year 2000 appear to have
been successful,  but if problems were to develop with our systems or with those
of our  suppliers  and  other  vendors,  we might be  unable to engage in normal
business  activities for a period of time or times.  Any such  disruption  could
cause our business to suffer. The Corporation  incurred direct Y2K project costs
of $134 thousand and indirect Y2K project  costs of $219 thousand  through March
31, 2000.

                                CAPITAL ADEQUACY

         The Corporation is subject to Risk-Based  Capital Guidelines adopted by
the Federal Reserve Board for bank holding  companies.  The Bank is also subject
to similar capital  requirements adopted by the Office of the Comptroller of the
Currency.  Under these  requirements,  the regulatory  agencies have set minimum
thresholds for Tier I Capital,  Total Capital, and Leverage ratios. At March 31,
2000,  both the  Corporation's  and the  Bank's  capital  exceeded  all  minimum

                                       19
<PAGE>
           MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                            AND RESULTS OF OPERATIONS


regulatory  requirements,  and were considered "well  capitalized" as defined in
the  regulations  issued  pursuant  to the FDIC  Improvement  Act of  1992.  The
Corporation's  Risk-Based  Capital  Ratios,  shown below,  have been computed in
accordance with regulatory accounting policies.

<TABLE>
<CAPTION>

                                                   March 31,                   December 31,
RISK-BASED                                 ----------------------              ------------        "Well Capitalized"
CAPITAL RATIOS                              2000             1999                1999                 Requirements
--------------                              ----             ----                ----              ------------------
<S>                                       <C>              <C>                  <C>                     <C>

   Corporation
   -----------
Leverage Ratio                              8.16%            8.43%                8.59%                   5.00%
Tier I Capital Ratio                       10.87%           11.44%               11.67%                   6.00%
Total Risk-Based Capital Ratio             12.13%           12.70%               12.95%                  10.00%
     Bank
     ----
Leverage Ratio                              8.08%            8.20%                8.36%                   5.00%
Tier I Capital Ratio                       10.72%           11.12%               11.35%                   6.00%
Total Risk-Based Capital Ratio             11.98%           12.37%               12.62%                  10.00%
</TABLE>


                                       20
<PAGE>
           MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                            AND RESULTS OF OPERATIONS

         The Bank is not under any agreement with the regulatory authorities nor
is it aware of any current  recommendations by the regulatory authorities which,
if they were to be  implemented,  would  have a  material  affect on  liquidity,
capital resources or operations of the Corporation.  The internal capital growth
for the  Corporation  was 0.44% and (0.87)% for the three months ended March 31,
2000 and 1999,  respectively.  The growth rate is computed  by  annualizing  the
change in equity  during the last period and dividing it by total  stockholder's
equity at March 31, 2000 and 1999, respectively.

                                       21

<PAGE>

           QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

         There have been no material changes in the Corporation's  assessment of
its sensitivity to market risk since its presentation in the 1999 Annual Report,
filed as an exhibit to its Form 10-K for the fiscal year ended December 31, 1999
with  the SEC via  EDGAR.  Please  refer  to the  "Management's  Discussion  and
Analysis"  section on pages 20-34 of the  Corporation's  Annual  Report for more
information.
                                       22

<PAGE>

                           PART II - OTHER INFORMATION

Item 1.  Legal Proceedings

         Various  actions and  proceedings  are  presently  pending to which the
         Corporation  is a party.  These  actions and  proceedings  arise out of
         routine  operations  and, in  Management's  opinion,  will not,  either
         individually or in the aggregate, have a material adverse effect on the
         consolidated   financial   position   of  the   Corporation   and   its
         subsidiaries.

Item 2.  Changes in Securities

         None

Item 3.  Defaults upon Senior Securities

         None

Item 4.  Submission of Matters to a Vote of Security Holders

         The Annual Meeting of Shareholders of the Corporation was held on March
         14,  2000  (the  "Meeting").  Notice  of  the  Meeting  was  mailed  to
         shareholders  of record on or about  February 15, 2000,  together  with
         proxy solicitation  materials prepared in accordance with Section 14(a)
         of the Securities Exchange Act of 1934, as amended, and the regulations
         promulgated thereunder.

         The matters submitted to a vote of shareholders at the meeting were the
         following:

         1.  The election of four Class I directors;

         2.  The approval of certain  amendments to the Corporation's 1995 Stock
             Option Plan to modify the  formula by which  options are awarded to
             non-employee directors of the Corporation;

         3.  The  ratification of the appointment of Grant Thornton,  LLP as the
             Corporation's  independent  public  accountants for the year ending
             December 31, 2000; and

         There was no solicitation in opposition to the nominees of the Board of
         Directors  for  election  to the  Board of  Directors.  All four of the
         nominees were elected. The number of votes cast for or withheld as well
         as the  number of  abstentions  and  broker  non-votes  for each of the
         nominees for election to the Board of Directors were as follows:


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<PAGE>


                     PART II - OTHER INFORMATION - CONTINUED

                                                               Abstentions and
         Nominee                 For              Withheld     Broker Non-Votes
         -------                 ---              --------     ----------------

    John J. Ciccarone         3,325,129            585,988            0

    Clifford E. DeBaptiste    3,321,567            589,550            0

    J. Carol Hanson           3,340,363            570,754            0

    John B. Waldron           3,336,687            574,430            0

    The  names of the  other  directors  whose  terms  of  office  as  directors
    continued  after the  Meeting  are as follows:  M.  Robert  Clarke,  John A.
    Featherman, III, John S. Halsted, David L. Peirce, and Charles E. Swope.

    The  proposal to make certain  amendments  to the  Corporation's  1995 Stock
    Option Plan was approved. The number of votes cast for or against as well as
    the number of  abstentions  and broker  non-votes  for the proposal  were as
    follows:

         For            Against           Abstentions           Broker non-votes
         ---            -------           -----------           ----------------

      3,760,888         93,492               56,787                    0

    The  proposal  to  ratify  the  appointment  of Grant  Thornton,  LLP as the
    Corporation's  independent  public  accountants for the year ending December
    31,  2000 was  ratified.  The number of votes cast for or against as well as
    the number of abstentions and broker non-votes for the ratification  were as
    follows:

         For            Against           Abstentions           Broker non-votes
         ---            -------           -----------           ----------------

      3,903,333         1,254                 6,530                    0

    There was no other business that came before the Meeting or matters incident
    to the conduct of the Meeting.

Item 5.  Other Information

                  On  February  18,  2000,  pursuant  to  the  approval  of  the
Corporation's  Board of  Directors,  the  Corporation  filed an amendment to its
Articles of  Incorporation  to change the  Corporation's  name to "First Chester
County  Corporation." In addition,  effective February 17, 2000, the name of the
Bank was changed to the First National Bank of Chester County.


                                       24
<PAGE>


                     PART II - OTHER INFORMATION - CONTINUED

Item 6.  Exhibits and Reports on Form 8-K


         (a) Exhibits

         3(i).   Certificate  of   Incorporation.   Copy  of  the  Corporation's
Certificate of Incorporation, as amended, is incorporated herein by reference to
Exhibit 3(i) to the Corporation's  Annual Report on Form 10-K for the year ended
December 31, 1999.

         3(ii). Bylaws of the Corporation, as amended. Copy of the Corporation's
Bylaws, as amended,  is incorporated herein by reference to Exhibit 3(ii) to the
Corporation's Annual Report on Form 10-K for the year ended December 31, 1998.

         10.      Material contracts.
                  ------------------

                  (a) Copy of the Corporation's  Amended and Restated 1995 Stock
Option  Plan,  is  incorporated  herein  by  reference  to the  appendix  to the
Corporation's  Proxy  Statement for the 2000 Annual Meeting of  Shareholders  as
filed with the SEC.

         27.      Financial Data Schedule.
                  -----------------------

                  (b) Reports on Form 8-K

                      A Form 8-K was  filed  with the SEC on  January  31,  2000
pertaining to a press release announcing 1999 earnings.

                      A Form 8-K was  filed  with the SEC on  February  2,  2000
                      pertaining to a press release  regarding a new interactive
                      web site.

                      A Form 8-K was  filed  with the SEC on  February  7,  2000
                      pertaining to a press release  regarding the initiation of
                      a stock repurchase program.

                                       25
<PAGE>


                                   SIGNATURES


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



                                            FIRST CHESTER COUNTY CORPORATION


                                            Charles E. Swope



                                            _____________________________
DATE:  May 15, 2000                         Charles E. Swope
                                            President



                                            J. Duncan Smith


                                            _____________________________
                                            J. Duncan Smith
                                            Treasurer
                                            (Principal Accounting
                                             and Financial Officer)



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