August 14, 2003
                                 VIA: EDGARLINK

OFIS Filer Support
SEC Operations Center
6432 General Green Way
Alexandria, VA  22312

                        FIRST CHESTER COUNTY CORPORATION

                         Commission File Number 0-12870

Gentlemen:

Pursuant to the reporting  requirements  of the  Securities  and Exchange Act of
1934, we are filing herewith the above listed  Registrant's  Quarterly Report on
Form 10-Q for the period ended June 30, 2003.



                                Very truly yours,

                               /s/ J. Duncan Smith
                               -------------------
                               J. Duncan Smith, Treasurer
                               (Principal Accounting
                               and Financial Officer)
JDS/wad
Enclosures

cc: John A. Featherman, III, Esquire, MacElree, Harvey, Ltd., West Chester, PA

    Patricia A. Gritzan, Esquire, Saul Ewing LLP, Philadelphia, PA

    Rick Huff, CPA, Grant Thornton, Philadelphia, PA

    Ward Johnson, VP, First Union Bank, Philadelphia, PA

    James Shilling,  VP, Kish Bank, Belleville, PA


<PAGE>




                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                    FORM 10-Q
(Mark One)

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

For the quarterly period ended June 30, 2003, OR
                               -------------

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

For the transition period from ____________ to ____________.

Commission File 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)


                                 (484) 881-4000
               (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

Indicate  by check mark  whether  the  registrant  is an  accelerated  filer (as
defined in Rule 12b-2 of the Exchange Act). Yes ___ No X

The number of shares  outstanding of Common Stock of the Registrant as of August
12, 2002 was 4,481,229.

                                      -1-
<PAGE>


                FIRST CHESTER COUNTY CORPORATION AND SUBSIDIARIES

                                      INDEX


                                                                         PAGE

Part I.  FINANCIAL INFORMATION

         Item 1 -  Financial Statements
                   Consolidated Statements of Condition
                   June 30, 2003 and December 31, 2002                      3


                   Consolidated Statements of Income
                   Three and Six-Months Ended June 30, 2003 and 2002        4


                   Consolidated Statements of Cash Flows
                   Six-Months Ended June 30, 2003 and 2002                  5


                   Notes to Consolidated Financial Statements             6-9


         Item 2 -  Management's Discussion and Analysis of
                   Financial Condition and Results of Operations      10 - 26

         Item 3 -  Quantitative and Qualitative Disclosures About
                   Market Risk                                             27

         Item 4 -  Controls and Procedures                            27 - 28


Part II. OTHER INFORMATION

         Item 1 -  Legal Proceedings                                       29
         Item 2 -  Changes in Securities                                   29
         Item 3 -  Defaults upon Senior Securities                         29
         Item 4 -  Submission of Matters to a Vote of Security Holders     29
         Item 5 -  Other Information                                       29
         Item 6 -  Exhibits and Reports on Form 8-K                   29 - 30

         Signatures                                                        31
         Exhibit Index                                                     32
         Certifications                                               33 - 40






                                      -2-
<PAGE>
<TABLE>
<CAPTION>

                          PART I. FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS

                FIRST CHESTER COUNTY CORPORATION AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CONDITION

                                                                                       (Unaudited)
(Dollars in thousands)                                                                     June 30,         December 31,
                                                                                             2003                2002*
                                                                                        ------------        ------------
ASSETS
<S>                                                                                    <C>                  <C>
    Cash and due from banks                                                             $    38,220         $     31,777
    Federal funds sold and other overnight investments                                       22,500               17,000
    Interest Bearing Deposits in banks                                                          391                   90
                                                                                         -----------         ------------

                Total cash and cash equivalents                                              61,111               48,867
                                                                                         -----------         ------------
    Investment securities held-to-maturity (market value of $32 at
    June 30, 2003 and $34 at December 31, 2002, respectively)                                    30                   31
                                                                                         -----------         ------------

    Investment securities available-for-sale, at market value                               123,636              128,344
                                                                                         -----------         ------------

    Loans                                                                                   462,438              447,682
    Less:  Allowance for loan losses                                                         (6,156)              (6,230)
                                                                                         -----------         ------------

                Net loans                                                                   456,282              441,452
                                                                                         -----------         ------------

    Premises and equipment                                                                   13,645               13,944
    Other assets                                                                             10,135                7,372
                                                                                         -----------         ------------

                Total assets                                                            $   664,839         $    640,010
                                                                                         ===========         ============
LIABILITIES
    Deposits
        Noninterest-bearing                                                             $   118,964         $    109,012
        Interest-bearing (including certificates of deposit over $100
           of $23,479 and $22,845 - June 30, 2003 and
           December 31, 2002 respectively)                                                  453,647              449,726
                                                                                         -----------         ------------

        Total deposits                                                                      572,611              558,738

    Federal Home Loan Bank advances and other borrowings                                     31,368               22,678
    Guaranteed preferred beneficial interest in Corporation's subordinated
          debentures                                                                          5,000                5,000
    Other liabilities                                                                         5,038                4,982
                                                                                         -----------         ------------

        Total liabilities                                                                   614,017              591,398
                                                                                         -----------         ------------

STOCKHOLDERS' EQUITY
    Common stock, par value $1.00; authorized, 10,000,000 shares;
        outstanding, 4,799,666 at June 30, 2003 and December 31, 2002.                        4,800                4,800
    Additional paid-in capital                                                                1,164                  860
    Retained earnings                                                                        48,446               46,746
    Accumulated other comprehensive income                                                    1,305                1,378
    Treasury stock, at cost: 330,918 shares and 370,202 shares
        at June 30, 2003 and December 31, 2002, respectively.                                (4,893)              (5,172)
                                                                                         -----------         ------------

                Total stockholders' equity                                                   50,822               48,612
                                                                                         ----------          ------------

                Total liabilities and stockholders' equity                              $   664,839         $    640,010
                                                                                         ===========         ============
<FN>
The accompanying notes are an integral part of these statements.
* Derived from audited, consolidated financial statements included in Annual
Report on Form 10-K for the fiscal year ended 12/31/02.
</FN>
</TABLE>
                                      -3-
<PAGE>
<TABLE>
<CAPTION>
                FIRST CHESTER COUNTY CORPORATION AND SUBSIDIARIES
                        CONSOLIDATED STATEMENTS OF INCOME

                                   (UNAUDITED)

(Dollars in thousands - except per share data)                            Three Months Ended                  Six  Months Ended
                                                                                June 30,                           June 30,
                                                                         -------------------------          ---------------------
                                                                         2003                 2002          2003             2002
                                                                         ----                 ----          ----             ----
INTEREST INCOME
<S>                                                                    <C>              <C>               <C>           <C>
    Loans, including fees                                                $ 7,138          $ 8,056           $14,146       $16,423
    Investment securities                                                  1,011            1,179             2,233         2,211
    Federal funds sold                                                        89              105               181           199
    Deposits in Banks                                                          1                1                 2             3
                                                                         -------          -------           -------       -------

                Total interest income                                      8,239            9,341            16,562        18,836
                                                                         -------          -------           -------       -------
INTEREST EXPENSE
    Deposits                                                               1,574            2,486             3,269         5,084
    Securities sold under repurchase agreements                               -                 5                 3            12
    Interest on Trust preferred securities                                    66                -               129             -
    Federal Home Loan Bank advances and other borrowings                     178              281               358           615
                                                                         -------          -------           -------       -------

                Total interest expense                                     1,818            2,772             3,759         5,711
                                                                         -------          -------           -------       -------

                Net interest income                                        6,421            6,569            12,803        13,125

    Provision for loan losses                                                373              310               767           780
                                                                         -------          -------           -------       -------

                Net interest income after provision
                for possible loan losses                                   6,048            6,259            12,036        12,345
                                                                         -------          -------           -------       -------

NON-INTEREST INCOME
    Financial management services                                            870              757             1,652         1,562
    Service charges on deposit accounts                                      512              437             1,045           869
    Investment securities gains, net                                         200              121               259           121
    Operating lease rental income                                            196              189               447           369
    Gains and fees on the sale of residential mortgages                      394               72               804           190
    Gain on the sale of credit card portfolio                                  -                -               306             -
    Other                                                                    524              483             1,051         1,134
                                                                         -------          -------           -------       -------
                Total non-interest income                                  2,696            2,059             5,564         4,245
                                                                         -------          -------           -------       -------
NON-INTEREST EXPENSE
    Salaries and employee benefits                                         3,823            3,527             7,501         6,875
    Net occupancy, equipment and date processing                           1,368            1,239             2,711         2,443
    Depreciation expense on operating leases                                 167              117               338           318
    FDIC deposit insurance                                                    22               21                44            43
    Bank shares tax                                                          122              126               230           228
    Professional service                                                     253              455               510           665
    Other                                                                  1,057            1,041             2,117         2,046
                                                                         -------          -------           -------       -------
                Total non-interest expense                                 6,812            6,526            13,451        12,618
                                                                         -------          -------           -------       -------

                Income before income taxes and cumulative effect
                of change in accounting for income taxes                   1,932            1,792             4,149         3,972

INCOME TAXES                                                                 582              509             1,246         1,150
                                                                         -------          -------           -------       -------
NET INCOME                                                               $ 1,350          $ 1,283           $ 2,903       $ 2,822
                                                                         =======          =======           =======       =======

PER SHARE DATA
    Basic earnings per common share                                      $ 0.300          $ 0.290           $ 0.650       $ 0.640
                                                                         =======          =======           =======       =======
    Diluted earnings per common share                                    $ 0.300          $ 0.290           $ 0.640       $ 0.630
                                                                         =======          =======           =======       =======
    Dividends declared                                                   $ 0.135          $ 0.130           $ 0.270       $ 0.260
                                                                         =======          =======           =======       =======

Basic weighted average shares outstanding                              4,459,286        4,422,323         4,448,684     4,422,950
                                                                       =========        =========         =========     =========
Diluted weighted average shares outstanding                            4,565,503        4,466,067         4,531,232     4,459,403
                                                                       =========        =========         =========     =========
The accompanying notes are an integral part of these statements.
</TABLE>
                                      -4-
<PAGE>
<TABLE>
<CAPTION>
                FIRST CHESTER COUNTY CORPORATION AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (UNAUDITED)
                                                                                                        Six Months Ended
                                                                                                             June 30,
                                                                                                    -------------------------
(Dollars in thousands)                                                                                2003              2002
                                                                                                    -------            ------
OPERATING ACTIVITIES
<S>                                                                                             <C>                <C>
    Net Income                                                                                   $   2,903          $  2,822
    Adjustments to reconcile net income to net cash
           provided by operating activities:
        Depreciation                                                                                 1,416             1,271
           Provision for loan losses                                                                   767               780
    Amortization of investment security premiums
           and accretion of discounts                                                                1,084               220
    Amortization of deferred fees on loans                                                             187              (168)
    Investment securities gains, net                                                                  (259)             (121)
    (Increase) decrease in other assets                                                             (2,836)              835
    Increase (decrease) in other liabilities                                                            56              (373)
                                                                                                 ----------         ---------

           Net cash provided by operating activities                                             $   3,318          $  5,266
                                                                                                 ----------         ---------

INVESTING ACTIVITIES
    (Decrease) Increase in loans                                                                   (15,249)            8,426
    Proceeds from sales of investment securities available-for-sale                                 47,076            12,419
    Proceeds from maturities of investment securities available-for-sale                            12,913             7,925
    Purchases of investment securities available-for-sale                                          (56,640)          (34,663)
    Purchase of premises and equipment, net                                                         (1,117)           (1,013)
                                                                                                 ----------         ---------
      Net cash (used in) investing activities                                                    $ (13,017)         $ (6,906)
                                                                                                 ----------         ---------

FINANCING ACTIVITIES
    Increase (decrease) in Federal Home Loan Bank advances                                           8,690            (4,209)
    Increase in deposits                                                                            13,873            28,512
    Decrease in securities sold under repurchase agreement                                               -           (13,279)
    Cash dividends                                                                                  (1,203)           (1,150)
    Treasury stock transactions                                                                        583                27
                                                                                                 ----------         ---------

           Net cash provided by financing activities                                                21,943             9,901
                                                                                                 ----------         ---------

           NET INCREASE IN CASH AND CASH EQUIVALENTS                                                12,244             8,261

Cash and cash equivalents at beginning of period                                                    48,867            38,233
                                                                                                 ----------         ---------

Cash and cash equivalents at end of period                                                       $  61,111          $ 46,494
                                                                                                 =========          =========




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


                                      -5-
<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,
           2002.

2.         The results of operations for the three- and six-month  periods ended
           June 30,  2003 are not  necessarily  indicative  of the results to be
           expected  for  the  full  year.   Information   regarding  risks  and
           uncertainties that could cause actual results to vary materially from
           our prior  performance  may be found in  Management's  Discussion and
           Analysis of Financial  Condition and Results of Operations in Part I,
           Item 2 of our  Quarterly  Report on Form 10-Q for the  period  ending
           June 30, 2003.

3.         Earnings per share are 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.         The  Corporation  adopted the provisions of FASB issued SFAS No. 130,
           "Reporting of Comprehensive Income", on January 1, 2002. SFAS No. 130
           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- and six-month periods ended June 30, 2003 was
           $139 thousand and ($72) thousand,  compared to $880 thousand and $680
           thousand  in the same period last year.  Total  comprehensive  income
           (which  is the  sum of net  income  and  other  comprehensive  income
           mentioned above), for the three- and six-month periods ended June 30,
           2003 was $1.50 million and $2.83  million,  compared to $2.16 million
           and $3.50 million in the same period last year.

5.         The Corporation  adopted SFAS No. 141,  "Business  Combinations",  on
           January 1, 2002.  SFAS 141  requires  all  business  combinations  be
           accounted for by a single method--the purchase method. The provisions
           of this SFAS No.  141 apply to all  business  combinations  initiated
           after June 30, 2002.  The adoption of the  provisions of SFAS No. 141
           did not have an  impact  on the  Corporation's  financial  condition,
           results of operations or cash flows. The Corporation adopted SFAS No.
           142, "Goodwill and Other Intangible Assets", on January 1, 2002. SFAS
           142 requires that,  upon its adoption,  amortization of goodwill will
           cease and instead,  the carrying  value of goodwill will be evaluated
           for impairment on an annual basis. The Corporation has no goodwill or
           intangible assets that are affected by this provision; therefore, the
           adoption of SFAS No. 142 did not have an impact on the  Corporation's
           financial condition, results of operations or cash flows.

6.         The Corporation adopted SFAS No. 144,  "Accounting for the Impairment
           or Disposal of Long-Lived  Assets",  on January 1, 2002. SFAS No. 144
           retains  the  existing  requirements  to  recognize  and  measure the
           impairment of long-lived assets to be held and used or to be disposed
           of by  sale.  SFAS No.  144  changes  the  requirements  relating  to
           reporting the effects of a disposal or  discontinuation  of a segment
           of a business. The adoption of this statement did not have a material
           impact on the  financial  condition or results of  operations  of the
           Corporation.

                                      -6-
<PAGE>

                FIRST CHESTER COUNTY CORPORATION AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued

                                   (UNAUDITED)

7.         On July 11, 2002, the  Corporation  issued $5.0 million (net proceeds
           of $4.82 million) of preferred capital  securities for the purpose of
           raising  additional  capital for general  corporate  purposes.  These
           securities  were issued  through First Chester County Capital Trust I
           (the "Trust"),  a  special-purpose  statutory trust created expressly
           for the issuance of these  securities  and  investing the proceeds in
           junior  subordinated  debentures of the  Corporation.  The securities
           provide for quarterly cash  distributions  calculated at a rate based
           on the  three-month  London  Inter-bank  Offering Rate ("LIBOR") plus
           3.65%. As of June 30, 2003, the effective interest rate was 5.28% and
           5.16% for the three- and six-month  periods.  The capital  securities
           will be redeemed on October 7, 2032;  however  the  Corporation  does
           have the option to shorten  the  maturity  date to a date not earlier
           than October 7, 2007.  These  securities have been structured so that
           they qualify as Tier 1 Capital of the Corporation.

8.         The Corporation  adopted FASB Interpretation 45 (FIN 45) "Guarantor's
           Accounting  and Disclosure  Requirements  for  Guarantees,  including
           Indirect  Guarantees of  Indebtedness of Others," on January 1, 2003.
           FIN 45 requires a guarantor  entity,  at the inception of a guarantee
           covered by the  measurement  provisions FIN 45, to record a liability
           for the fair  value  of the  obligation  undertaken  in  issuing  the
           guarantee.  The  Corporation  has issued  financial  and  performance
           letters  of  credit.   Financial   letters  of  credit   require  the
           Corporation  to make payment if the  customer's  financial  condition
           deteriorates,  as defined in the agreements.  Performance  letters of
           credit require the Corporation to make payments if the customer fails
           to  perform  certain  non-financial   contractual  obligations.   The
           Corporation  previously  did not record an initial  liability,  other
           than the fees received for these letters of credit,  unless it became
           probable that the Corporation  would have to perform under the letter
           of credit.  Under FIN 45, the  Corporation  will  record a  liability
           equal to the initial fair value of the  liability  for the letters of
           credit.  The  Corporation  defines  the  initial  fair value of these
           letters  of  credit as the fee  received  from the  customer.  FIN 45
           applies  prospectively to letters of credit the Corporation issues or
           modifies  subsequent  to December  31,  2002.  The maximum  potential
           undiscounted   amounts  of  future  payments  of  letters  of  credit
           outstanding  as of June 30, 2003 were $6.9  million,  and they expire
           through May 8, 2007.  Amounts due under these letters of credit would
           be  reduced by any  proceeds  that the  Corporation  would be able to
           obtain in liquidating the collateral for the letter of credit,  which
           varies  depending on the customer.  The adoption of the provisions of
           FIN 45 is not  expected  to have a material  impact on the  financial
           condition or results of operation of the Corporation.

9.         In January  2003,  the FASB issued FASB  Interpretation  46 (FIN 46),
           "Consolidation of Variable  Interest  Entities." FIN 46 clarifies the
           application  of  Accounting   Research  Bulletin  51,   "Consolidated
           Financial  Statements",   for  certain  entities  that  do  not  have
           sufficient  equity at risk for the entity to finance  its  activities
           without additional  subordinated financial support from other parties
           or in which  equity  investors do not have the  characteristics  of a
           controlling   financial  interest  ("variable  interest   entities").
           Variable  interest  entities  within  the  scope  of FIN 46  will  be
           required to be consolidated by their primary beneficiary. The primary
           beneficiary  of a variable  interest  entity is  determined to be the
           party  that  absorbs a  majority  of the  entity's  expected  losses,
           receives a majority of its expected returns,  or both. FIN 46 applies
           immediately to variable  interest  entities created after January 31,
           2003,  and to  variable  interest  entities  in which  an  enterprise
           obtains an interest  after that date.  It applies in the first fiscal
           year or interim  period  beginning  after June 15, 2003,  to variable
           interest  entities in which an enterprise  holds a variable  interest
           that it acquired  before  February 1, 2003.The  Corporation is in the
           process of  determining  what  impact,  if any;  the  adoption of the
           provisions  of FIN 46 will  have  upon  its  financial  condition  or
           results of operations.
                                      -7-
<PAGE>



                FIRST CHESTER COUNTY CORPORATION AND SUBSIDIARIES


             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued

                                   (UNAUDITED)


          The  Corporation has also evaluated the impact  of FIN 46 on  variable
          interest  entities  consolidated  by  the  Corporation  prior  to  the
          issuance  of FIN 46.  Management  has  determined  that First  Chester
          County Capital Trust I qualifies as a variable  interest  entity under
          FIN  46.  First  Chester  County  Capital  Trust  I  issued  mandatory
          redeemable preferred stock to investors and loaned the proceeds to the
          Corporation.  First Chester County Capital Trust I holds,  as its sole
          asset,  subordinated debentures issued by the Corporation in 2002. The
          timing and amount of payments on the  subordinated  debentures are the
          same as the timing  and amount of  payments  by First  Chester  County
          Capital Trust I on the mandatory  redeemable  preferred  stock.  First
          Chester  County   Capital  Trust  I  is  currently   included  in  the
          Corporation's  consolidated  balance  sheet and  statements of income.
          Management  believes that First Chester  County Capital Trust I should
          continue to be included in the  Corporation's  consolidated  financial
          statements after the effective date of FIN 46. However,  as additional
          interpretations  related to entities  similar to First Chester  County
          Capital  Trust I become  available,  management  will  reevaluate  its
          conclusion  that  First  Chester  County  Capital  Trust I  should  be
          included in the  consolidated  financial  statements and its potential
          impact to its Tier I capital calculation under such interpretations.

10.        Stock-based Compensation

           At June 30, 2003, the Corporation had one stock-based compensation
           plan. The Corporation accounts for that plan under the  recognition
           and measurement  principles of APB 25,  "Accounting  for Stock Issued
           to Employees", and related interpretations.  No stock-based
           compensation cost is reflected in net income, as all options  granted
           under the plan  had  an  exercise price  equal  to  the market  value
           of the underlying common stock on the date of grant.

           The Financial Accounting Standards Board issued Statement of
           Financial Accounting Standards No. 148 "Accounting for Stock-Based
           Compensation-Transition and Disclosure" ("SFAS No. 148") in December
           2002. SFAS No. 148 amends the disclosure and certain transition
           provisions of Statement of Financial Accounting Standards No. 123
           "Accounting for Stock Based Compensation". The new disclosure
           provisions are effective for financial statements for fiscal years
           ending after December 15, 2002 and for financial reports containing
           condensed financial statements for interim periods beginning after
           December 15, 2002.

           The following table provides the disclosures required by SFAS No. 148
           and illustrates the effect on net income and earnings per share if
           the Corporation had applied the fair value recognition provisions of
           SFAS No. 123 to stock-based employee compensation.
<TABLE>
<CAPTION>

                                                                                  6/30/03            6/30/02
                                                                                  -------            -------
<S>                                                                               <C>                <C>
            Net income (in thousands)      As reported                            $ 1,350            $ 1,283
                Stock-based compensation costs determined
                under fair value method for all awards                            $   (34)           $   (66)
                                                                                  --------           --------
                                               Pro forma net income               $ 1,316            $ 1,217

            Earnings per share (Basic)      As reported                           $  0.30            $  0.29
                                               Pro forma                          $  0.29            $  0.27
            Earnings per share (Diluted)   As reported                            $  0.30            $  0.29
                                               Pro forma                          $  0.29            $  0.27

           Note: There were no options granted during the three- and six-month periods ended June 30, 2003.
</TABLE>
                                      -8-
<PAGE>



                FIRST CHESTER COUNTY CORPORATION AND SUBSIDIARIES


             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued

                                   (UNAUDITED)


11.        The Corporation  adopted SFAS No. 149, "Amendment of Statement 133 on
           Derivative Instruments and Hedging Activities", on July 1, 2003. SFAS
           No. 149 clarifies and amends SFAS No. 133 for  implementation  issues
           raised by constituents  and includes the  conclusions  reached by the
           FASB on certain FASB Staff Implementation Issues.  Statement 149 also
           amends  SFAS  No.  133 to  require  a  lender  to  account  for  loan
           commitments  related to mortgage  loans that will be held for sale as
           derivatives.  SFAS No. 149 is effective for contracts entered into or
           modified after June 30, 2003.  The  Corporation  periodically  enters
           into commitments with its customers,  which it intends to sell in the
           future.  Management  does not anticipate the adoption of SFAS No. 149
           to have a material impact on the Corporation's  financial position or
           results of operations.

12.        In May 2003,  the FASB issued SFAS No. 150,  "Accounting  for Certain
           Financial  Instruments with  Characteristics  of both Liabilities and
           Equity." SFAS No. 150 changes the  classification in the statement of
           financial  position  of certain  common  financial  instruments  from
           either equity or mezzanine  presentation  to liabilities and requires
           an issuer of those financial  statements to recognize changes in fair
           value or redemption amount, as applicable,  in earnings. SFAS No. 150
           is effective for public companies for financial  instruments  entered
           into or modified after May 31, 2003 and is effective at the beginning
           of the first interim period beginning after June 15, 2003. Management
           has not entered into any  financial  instruments  that would  qualify
           under  SFAS  No.  150.  The  Corporation   currently  classifies  its
           Guaranteed   Preferred   Beneficial  Interest  in  the  Corporation's
           Subordinated  Debt as a liability.  As a result,  management does not
           anticipate the adoption of SFAS No. 150 to have a material  impact on
           the Corporation's financial position or results of operations.



                                      -9-
<PAGE>


ITEM 2.   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 and its direct and indirect  wholly-owned  subsidiaries,  The
First  National Bank of Chester  County (the "Bank"),  FNB Property  Management,
LLC, First National Insurance Services, LLC, Turks Head Properties,  Inc., Turks
Head   Properties   II,  LLC,  and  First  Chester   County   Capital  Trust  I,
(collectively,  the  "Corporation").  It should be read in conjunction  with the
consolidated financial statements included in this report.

                             RISKS AND UNCERTAINTIES

         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. Although the Corporation believes that its expectations are
based  on  reasonable  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 our  historic  results or the results  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)
competition among financial and non-financial  institutions in the Corporation's
market  area that may  result in  customer  turnover  and  lower  interest  rate
margins; (e) changes in the regulatory environment,  securities markets, general
business  conditions  and  inflation may  adversely  affect loan demand,  credit
quality,  consumer  spending and saving habits,  and interest rate margins;  (f)
impact of changes in  interest  rates on  customer  behavior;  (g) the impact of
changes in demographics on branch  locations;  (h)  technological  changes;  (i)
changes in the value of securities and investments managed for others may affect
the growth level of the Corporation's  non-interest  income;  (j) changes in the
credit of our  borrowers,  the  collateral  securing  assets or other aspects of
credit  quality;  (k) our ability to manage the risks involved in the foregoing;
and (l) the accuracy of the assumptions and estimates used in the preparation of
our financial  statements.  These risks and  uncertainties  are all difficult to
predict and most are beyond the control of the Corporation's Management.

         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.

            CRITICAL ACCOUNTING POLICIES, JUDGMENTS AND ESTIMATES

         The accounting and reporting policies of the Corporation conform to the
accounting  principals  generally  accepted in the United  States of America and
general practices within the financial services industry. The preparation of the
financial statements in conformity with accounting principles generally accepted
in the United  States of  America  requires  management  to make  estimates  and
assumptions that affect the amounts reported in the financial statements and the
accompanying notes. Actual results could differ from those estimates.


                                      -10-
<PAGE>


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

                           ALLOWANCE FOR CREDIT LOSSES

         The Corporation  considers that the  determination of the allowance for
loan and lease losses  involves a higher degree of judgment and complexity  than
its other significant accounting policies. The balance in the allowance for loan
losses is determined  based on  Management's  review and  evaluation of the loan
portfolio in relation to past loss  experience,  the size and composition of the
portfolio,  current economic events and conditions, and other pertinent factors,
including  Management's  assumptions as to future delinquencies,  recoveries and
losses.  All of these factors may be susceptible to significant  change.  To the
extent actual outcomes differ from Management's estimates, additional provisions
for loan and lease losses may be required that would  adversely  impact earnings
in future periods.

                                  INCOME TAXES

         Under the liability  method,  deferred tax assets and  liabilities  are
determined based on the difference between the financial statement and tax bases
of assets and  liabilities.  Deferred  tax assets  are  subject to  Management's
judgment  based upon available  evidence that future  realization is more likely
than not. If Management determines that the Corporation may be unable to realize
all or part of the net  deferred  tax assets in the future,  a direct  charge to
income tax  expense  may be  required  to reduce the  recorded  value of the net
deferred tax asset to the expected realizable amount.

                          EARNINGS AND DIVIDEND SUMMARY

         Net income for the  three-month  period  ended June 30, 2003 was $1.350
million,  an increase of $67 thousand or 5.22% from $1.283  million for the same
period in 2002.  Net income for the  six-month  period  ended June 30,  2003 was
$2.903 million, an increase of $81 thousand or 2.87% from $2.822 million for the
same period in 2002.  Earnings  for the  three-month  period ended June 30, 2003
include gains and fees of $394 thousand from the sale of  residential  mortgages
and gains of $200  thousand on the sale of investment  securities.  Earnings for
the six-months  ended June 30, 2003 include gains of $306 thousand from the sale
of the $2.7 million credit card  portfolio to Elan  Financial  Services and $804
thousand gains and fees from the sale of residential mortgages. These gains were
offset by a decrease in net interest income  resulting from the current interest
rate  environment and increased  operating  costs.  Basic earnings per share was
$0.30 and $0.65 for the  three-  and  six-month  periods  ended  June 30,  2003,
respectively,  compared  to $0.29 and $0.64 for the same  periods in 2002.  Cash
dividends declared during the second quarters of 2003 were $0.135 and $0.270 per
share for the  three- and  six-month  periods  compared  to $0.130 per share and
$0.260 per share for the three- and six-month  periods ended June 30, 2002. Over
the past ten years, the Corporation's  practice has been to pay a dividend of at
least 35.0% of net income.

                                      -11-
<PAGE>



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

               AVERAGE INTEREST RATES (ON A TAX EQUIVALENT BASIS)
<TABLE>
<CAPTION>
                                                                         Three Months Ended           Six Months Ended
                                                                             June 30,                        June 30,
                                                                 --------------------------------   -----------------------
                                                                   2003                 2002          2003           2002
                                                                 --------------------------------   -----------------------
           SELECTED RATIOS
           ---------------
          <S>                                                  <C>                <C>               <C>           <C>
           Return on Average Assets                              0.83%              0.87%             0.91%         0.96%
           Return on Average Equity                             10.65%             11.25%            11.58%        12.47%
           Net Interest Margin                                   4.28%              4.78%             4.30%         4.80%
           Earnings Retained                                    55.41%             55.19%            58.59%        59.25%
           Dividend Payout Ratio                                44.59%             44.81%            41.41%        40.75%
            Book Value Per Share                                $11.37             $10.45            $11.37        $10.45

The "Consolidated Average Balance Sheet" on pages 17 and 18 may assist the
reader in understanding the following discussion.
</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 the three- and six-month  periods ended June 30, 2003 on
a tax equivalent basis, was $6.5 million and $12.9 million,  respectively.  This
represents a decrease of 1.5% and 2.0% when compared to the three- and six-month
net  interest  income of $6.6  million  and  $13.2  million,  respectively.  The
decrease  in  tax  equivalent  net  interest  income  for  both  periods  can be
attributed  to a  decrease  in the net  yield on  interest-earning  assets  when
compared to the same period last year,  partially offset by increases in average
interest-earning  asset  balances  and  lower  yields  paid on  interest-bearing
liabilities.

         The average net yield on interest  earning assets,  on a tax equivalent
basis for the three- and six-month  period ended June 30, 2003 decreased  10.46%
and 10.42% or 50 basis  points  (one basis point is equal to 1/100 of a percent)
to 4.28% and 4.30%,  compared  to 4.78% and 4.80% for the same  periods in 2002,
respectively.  The average yield on  interest-earning  assets for the three- and
six-month  period  ended June 30, 2003  decreased  19.3% or 131 basis points and
19.5% or 134 basis points to 5.47% and 5.55% compared to 6.78% and 6.89% for the
same periods in 2002. The average yield paid on interest-bearing liabilities for
the three- and six-month  period ended June 30, 2003 decreased 39.5% or 98 basis
points and 39.3% or 101 basis  points to 1.50% and 1.56%  compared  to 2.48% and
2.57% for the same  periods in 2002,  respectively.  Yields on  interest-bearing
liabilities  decreased  primarily  due to the  lowering of rates paid on deposit
accounts  as the  Corporation  reacted to  external  rate  changes  and tried to
off-set the decreases in asset yields.  Continued low interest rates and pricing
competition  may  continue to put  pressure on our  net-interest  margin and may
adversely impact net-interest income in future time periods.


                                      -12-
<PAGE>


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

         Average  interest-earning  assets increased approximately $54.9 million
or 9.9% to $607.0 million for the  three-months  ended June 30, 2003 from $552.1
million in the same period last year.  For the six months  ended June 30,  2003,
average interest-earning assets increased approximately $52.6 or 9.6% million to
$601.3 million from $548.7 million in the same period last year. The increase in
average  interest-earning assets for the three- and six-month periods ended June
30, 2003, was primarily due to increases in the average  investment  securities,
additionally,  increases in average loans outstanding, and excess funds invested
in Federal funds and other overnight investments contributed to the increase.

         Average  interest-bearing  liabilities  increased  approximately  $38.2
million or 8.5% to $484.8 million for the three-months ended June 30, 2003, from
$446.7  million in the same period last year.  For the six-month  ended June 30,
2003, average  interest-bearing  liabilities  increased $37.3 million or 8.4% to
$482.5 million from $445.3 million in the same period last year. The increase in
average  interest-bearing  liabilities for the three-month period was the result
of a 7.4%  increase  in  interest-bearing  deposits  and 10.3%  increase in FHLB
advances  and  other  borrowings.   The  increase  in  average  interest-bearing
liabilities  for the  six-month  period  was the result of an 8.6%  increase  in
interest-bearing  deposits and the additional funds from the issuance of a trust
preferred security.
<TABLE>
<CAPTION>

               AVERAGE INTEREST RATES (ON A TAX EQUIVALENT BASIS)

                                                                        Three Months Ended           Six Months Ended
                                                                             June 30,                        June 30,
                                                                 --------------------------------   -----------------------
                                                                   2003                 2002          2003           2002
                                                                 --------------------------------   -----------------------
           YIELD ON
           --------
          <S>                                                   <C>                <C>               <C>           <C>
           Interest-Earning Assets                               5.47%              6.78%             5.55%         6.89%
           Interest Bearing Liabilities                          1.50%              2.48%             1.56%         2.57%
                                                                 -----              -----             -----         -----
           Net Interest Spread                                   3.97%              4.30%             3.99%         4.32%
           Contribution of Interest-Free Funds                   0.31%              0.48%             0.31%         0.48%
                                                                 -----              -----             -----         -----
           Net Yield on Interest-Earning Assets                  4.28%              4.78%             4.30%         4.80%
                                                                 =====              =====             =====         =====
</TABLE>


      INTEREST INCOME ON FEDERAL FUNDS SOLD AND OTHER OVERNIGHT INVESTMENTS

         Interest income on federal funds sold and other  overnight  investments
for the three- and six-month  periods ended June 30, 2003,  decreased  15.2% and
9.0% to $89 thousand and $181 thousand,  respectively, when compared to the same
periods in 2002. The decrease in interest income on Federal funds sold and other
overnight investments is the direct result of 35.9% or 69 basis points and 35.2%
or 68 basis  points  decrease on rates  earned  partially  offset by a 32.6% and
40.8% increase in the average  balance of federal funds sold and other overnight
investments  for the  three-  and  six-  month  periods  ended  June  30,  2003,
respectively.  The  increase  in the average  balance of federal  funds sold and
overnight  investments can be attributed to the increased  liquidity provided by
increases in deposit  balances from our new and existing  branches and cash flow
from the investment  portfolio which includes sales,  maturities,  pay downs and
pay-offs.


                                      -13-
<PAGE>


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


                    INTEREST INCOME ON INVESTMENT SECURITIES

         On a tax equivalent  basis,  interest  income on investment  securities
decreased 12.2% to $1.0 million for the three-month  period ended June 30, 2003,
and increased 1.9% to $2.3 million for the six-month period ended June 30, 2003,
respectively,  when  compared to the same periods in 2002.  The decrease for the
three-month  period is primarily  due to a 206 basis point or 38.9%  decrease on
interest rates on such investments  partially offset by a 43.7% or $39.2 million
increase  in the average  investment  security  balance.  The  increase  for the
six-month  period ended June 30, 2003 is the result of a 49.6% or $42.4  million
increase in the average  investment  security balance  partially offset by a 166
basis point or 31.8%  decrease in the yield  earned  compared to the same period
last year.  Increases in the average investment security balances for the three-
and six-month period are the result of the Corporation's increased cash position
due to  the  increased  deposits  generated  by  our  new  and  existing  branch
locations.

                            INTEREST INCOME ON LOANS

         Interest income on loans, on a tax equivalent  basis,  generated by the
Corporation's loan portfolio decreased 11.1% and 13.6% to $7.2 million and $14.2
million for the three- and six-month  periods  ended June 30, 2003,  compared to
the same  periods in 2002,  respectively.  The  decrease in interest  income for
these periods is the direct result of 94 and 104 basis points or 12.8% and 14.0%
decrease in rates  earned on the  portfolio  as compared to last year  partially
offset by a 1.9% and 0.4% increase in the average  balance of outstanding  loans
for the three- and six-month periods ended June 30, 2003, respectively. The sale
of the Bank's credit card portfolio to "Elan" Financial Services accounted for a
significant portion of the decrease in average loan balances.  See "Non-Interest
Income" for more details.

                      INTEREST EXPENSE ON DEPOSIT ACCOUNTS

         Interest expense on deposit accounts  decreased 36.7% and 35.7% for the
three- and  six-month  periods  ended  June 30,  2003 to $1.6  million  and $3.3
million, compared to $2.5 million and $5.1 million for the same periods in 2002.
The decrease for the three-month period is primarily the result of a 41.0% or 96
basis point decrease on rates paid on interest-bearing deposits partially offset
by a 7.4% or $31.6 million  increase in the average  interest  bearing  deposits
balance.  The decrease  for the  six-month  period is primarily  the result of a
40.7% or 99 basis  point  decrease  on rates paid on  interest-bearing  deposits
partially  offset by a 8.6% or $36.1  million  increase in the average  interest
bearing   deposits   balance   compared  to  the  same  period  last  year.  The
corporation's effective rate on interest-bearing deposits decreased to 1.38% for
the three-month period ended June 30, 2003 from 2.34% in 2002. The Corporation's
effective rate on interest bearing deposits decreased to 1.44% for the six-month
period ended June 30, 2003 from 2.43% in 2002.

         Competition  for  deposits  from  local  community  banks  as  well  as
non-banking  institutions  such  as  credit  union  and  mutual  fund  companies
continues to be a strong factor.  Despite this  competition,  the  Corporation's
deposit  base  continues  to grow  and is  expected  to  continue  to grow as we
continue to open new branches and attract new customers with new services. Total
deposits  continue to grow at our new branches as well as at our existing sites.
Our newest branch  office in  Coatesville,  located at 258 East Lincoln  Highway
opened for  business in June 2003.  Other new branch sites are  currently  under
review,  which if opened,  should continue to expand the  Corporation's  deposit
base.


                                      -14-
<PAGE>


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


         INTEREST EXPENSE ON SECURITIES SOLD UNDER REPURCHASE AGREEMENTS

         Interest  expense  on  securities  sold  under  repurchase   agreements
decreased  100.0% and 75.0% to $0 thousand  and $3  thousand  for the three- and
six-month  periods  ended  June 30,  2003,  respectively,  compared  to the same
periods in 2002.  The decreases are primarily  attributable  to $584 million and
$691 million  decrease in average  balance for the three- and  six-month  period
compared  to the  same  periods  in 2002,  respectively.  The  decrease  is also
attributable to the popularity of the Bank's  overnight cash sweep and tri-party
repo  programs  totaled were $86.2 million at June 30, 2003 and $57.2 million at
June  30,  2002.  These  programs  represent  funds  of our  customers  invested
overnight  with third parties and therefore do not appear on our balance  sheet.
The Corporation earns a fee of approximately 25 basis points on these balances.

    INTEREST EXPENSE ON FEDERAL HOME LOAN BANK ADVANCES AND OTHER BORROWINGS

         Interest   expense  on  Federal  Home  Loan  Bank  ("FHLB")  and  other
borrowings  decreased $103 thousand to $178 thousand for the three-month  period
ended June 30, 2003 from $281 thousand when compared to the same period in 2002.
The  decrease  is the  direct  result of 42.6% or 228 basis  point  decrease  in
average rates paid on borrowings for the three-month period ending June 30, 2003
when  compared  to the same  period last year.  Interest  expense on  borrowings
decreased $257 thousand to $358 thousand for the six-month period ended June 30,
2003 from $615 thousand  when compared to the same period in 2002.  The decrease
is a direct result of 33.9% or a 161 basis point decrease on rates paid. Average
FHLB borrowings for the  three-month  period ended June 30, 2003 increased 10.3%
to $23.2  million from $21.0 million when compared to the same period last year.
Average  FHLB  borrowings  for the  six-month  period  decreased  11.9% to $22.8
million  from  $25.9  million  when  compared  to the same  period in 2002.  The
decrease in borrowing levels for the six-month period ended June 30, 2003 is the
result of funding demand being met by current  deposit growth and cash flow from
other  sources.  For the  three-month  period  ended June 30,  2003,  borrowings
increased  in  response  to  increased  loan and  investment  portfolio  growth.
Borrowings  at any  time  may  consist  of one or  more of the  following:  FHLB
Overnight or Term Advances and advances under agreements with our  correspondent
banks.

                            PROVISION FOR LOAN LOSSES

         During the three-  and  six-month  periods  ended  June 30,  2003,  the
Corporation  recorded a $373  thousand and a $767  thousand  provision  for loan
losses  compared to a $310  thousand and a $780 thousand for the same periods in
2002.  The allowance for loan losses as a percentage of total loans was 1.33% at
June  30,  2003,  1.49%  at June  30,  2002 and  1.39%  at  December  31,  2002,
respectively.  See the section titled "Allowance For Loan Losses" for additional
discussion.

                               NON-INTEREST INCOME

         Total  non-interest  income  increased  30.9% to $2.7  million  for the
three-  month  period  ended June 30,  2003 when  compared to the same period in
2002. For the six- month period ended June 30, 2003, total  non-interest  income
increased 31.1% to $5.6 million when compared to the same period in 2002.

                                      -15-
<PAGE>


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


         The primary  component of non-interest  income is Financial  Management
Services  ("FMS")  revenue,  which increased 14.9% and 5.8% to $870 thousand and
$1.7  million  for the  three-  and  six-month  periods  ended  June  30,  2003,
respectively,  compared  to the same  periods in 2002.  The market  value of FMS
assets  under  management  and  custody  grew $24.3  million or 4.9% from $491.4
million  on June 30,  2002 to $515.7  million  on June 30,  2003.  In spite of a
volatile stock market and the loss of a $38 million  relationship early in 2003,
the value of FMS assets under  management and custody has continued to grow from
period to period.  With the volatility in the financial  markets,  the portfolio
has not grown as  expected,  which in turn has led to lower  than  expected  fee
income.

         Service charges on deposit accounts  increased  approximately  17.2% to
$512 thousand for the three-months ended June 30, 2003 compared to $437 thousand
for the same  period in 2002.  For the  six-month  period  ended June 30,  2003,
service charges on deposit accounts increased 20.3% to $1.05 million compared to
$869  thousand  for the same  period in 2002.  The  increase  in service  charge
revenue for both periods is primarily the result of an increase in the number of
deposit  accounts.  Implementation  of new fee schedule  which became  effective
February 15, 2003 also contributed to the increases.

         Investment  securities  gains  also  contributed  to  the  increase  in
non-interest income. For the three-month period ended June 30, 2003,  investment
security gains increased $79 thousand from $121 thousand to $200 thousand,  when
compared to the same period in 2002.  For the  six-month  period  ended June 30,
2003,  investment  security gains  increased $138 thousand from $121 thousand to
$259  thousand,  when  compared  to the same  period in 2002.  These  gains were
realized as a result of normal portfolio management.

         The  Corporation  has operating  lease  agreements  with several of our
customers;  this  income is  classified  as "Rental  Income".  Rental  income on
operating  lease  agreements for the three- and six-month  period ended June 30,
2003  increased  3.7% and 21.1% to $196  thousand  and $447  thousand  from $189
thousand  and $369  thousand  when  compared  to the same  periods in 2002.  See
related  depreciation  expense  in the  non-interest  expense  section  for more
details.

         Gains and fee income generated in the sale of residential mortgages for
the three- and six-month  period ended June 30, 2003 increased 447.2% and 323.2%
to $394 thousand and $804 thousand from $72 thousand and $190 thousand  compared
to the same periods last year.  The increase is primarily due to a higher volume
of  originations  of residential  mortgage  resulting from the current  mortgage
interest rate environment.

         Gains on the sale of credit  card  portfolio  also  contributed  to the
increase in  non-interest  income.  During the first  quarter of 2003, a gain of
$306 thousand on the sale of credit card portfolio to Elan  Financial  Services.
The  simultaneous  establishment  of an agency agreement with Elan enables us to
offer  enhanced  service  to  our  credit  card  holders.  Elan  processes  card
transactions for more than 1,200 financial  institutions.  Management  considers
this gain to be non-recurring and is not expected in future time periods.

                                      -16-
<PAGE>



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

         Other  non-interest  income  increased  8.5% to $524  thousand  for the
three-months  ended June 30, 2003  compared to $483 thousand for the same period
in 2002. For the six-month period ended June 30, 2003, other non-interest income
decreased  7.3% from $1.13  million to $1.05  million when  compared to the same
period in 2002. The increase in other  non-interest  income for the  three-month
period can be attributed to increases in miscellaneous income and fees.

                              NON-INTEREST EXPENSE

         Total  non-interest  expense for the three- and six-month periods ended
June 30, 2003 increased 4.4% to $6.8 million and 6.6% to $13.5 million, compared
to the same periods in 2002. The various components of non-interest  expense are
discussed below.

         Employee salaries and benefits  increased 8.4% to $3.8 million and 9.1%
to $7.5 million for the  three-month  and six-month  periods ended June 30, 2003
compared to the same periods in 2002.  Increased staffs due to the establishment
of our  Credit  Administration  area and the  opening  of our  Customer  Contact
Center, annual employee raises, and a proportional increase in employee benefits
are primarily  responsible  for the increase.  At June 30, 2003, the Corporation
employed 253 full time and 46 part time employees  compared to 233 full time and
53 part time employees at June 30, 2002.

         Net occupancy,  equipment,  and data processing expense increased 10.4%
and 11.0% to $1.4 million and $2.7 million for the three- and six-month  periods
ended June 30, 2003, compared to the same periods last year,  respectively.  The
increase  is the  result  of  increased  building  maintenance  cost  and  asset
depreciation  expense.  Additionally,  computers  and  related  equipment  costs
associated with the expansion,  upgrading and maintenance of personnel computers
and our networking infrastructure contributed to the increase.

         Depreciation  on  operating  leases  increased  42.7%  and 6.3% to $167
thousand and $338 thousand for the three- and  six-month  periods ended June 30,
2003,  compared to the same periods last year,  respectively.  This depreciation
expense is the result of operating  lease  agreements the  Corporation  has with
several of our customers.  The income  associated with these operating leases is
classified as Rental Income.

         Professional  Services  decreased  44.4% and 23.3% to $253 thousand and
$510 thousand for the three- and six-month  periods ended June 30, 2003 compared
to the same  periods  in 2002.  The  decrease  is the  result of a  decrease  in
consultant, employee recruiting, and legal fees compared to the previous year.

         Total  other  non-interest  expense  increased  1.5%  and  3.5% to $1.1
million and $2.1 million for the three- and six-month period ended June 30, 2003
compared  to the same  periods  last year,  respectively.  The  increase  can be
attributed to increases in general operating expenses.

         The Corporation has entered into a lease agreement to open a new branch
office in East Bradford at a local supermarket during the third quarter of 2003.
This and other 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 an  increase in net  interest  and fee income  generated  by
business in the new marketing areas.

                                      -17-
<PAGE>


   MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
                             OPERATIONS - Continued
<TABLE>
<CAPTION>

                       CONSOLIDATED AVERAGE BALANCE SHEET
             AND TAXABLE EQUIVALENT INCOME/EXPENSE AND RATES FOR THE
                           THREE MONTHS ENDED JUNE 30,

(Dollars in thousands)                                                2003                                   2002
                                                     --------------------------------        ----------------------------------

                                                       Daily                                    Daily
                                                     Average                                    Average
                                                     Balance         Interest    Rate           Balance     Interest       Rate
ASSETS                                               -------         --------    ----           -------     --------       ----
<S>                                                <C>             <C>         <C>          <C>            <C>          <C>
Federal funds sold and other overnight investments  $   29,009      $    89     1.23%        $   21,877     $    105      1.92%
Interest bearing deposits in banks                         296            1     1.35%               182            1      2.20%
Investment securities

    Taxable                                            119,763          943     3.15%            87,810        1,156      5.27%
    Tax-exempt (1)                                       9,024          100     4.41%             1,784           32      7.21%
                                                     ---------      -------                  ----------     --------
        Total investment securities                    128,787        1,043     3.24%            89,594        1,188      5.30%
                                                     ---------      -------                  ----------     --------
Loans (2)
    Taxable                                            442,242        7,061     6.39%           438,170        8,028     7.33%
    Tax-exempt (1)                                       6,699          114     6.81%             2,279           41     7.24%
                                                     ---------      -------                  ----------     --------
        Total loans                                    448,941        7,175     6.39%           440,449        8,069     7.33%
                                                     ---------      -------                  ----------     --------
        Total interest-earning assets                  607,033        8,308     5.47%           552,102        9,363     6.78%
Non-interest earning assets
    Allowance for possible loan losses                  (6,479)                                  (6,668)
    Cash and due from banks                             25,030                                   23,563
    Other assets                                        22,222                                   22,863
                                                     ---------                               ----------
        Total assets                                $  647,806                               $  591,860
                                                     =========                               ==========

LIABILITIES AND STOCKHOLDERS' EQUITY
Savings, NOWS & money market deposits               $  333,905      $   672     0.81%        $  277,114     $  1,020     1.47%
Certificates of deposits and other time                122,723          902     2.94%           147,943        1,466     3.96%
                                                     ---------      -------                  ----------     --------
   Total interest bearing deposits                     456,628        1,574     1.38%           425,057        2,486     2.34%
Securities sold under repurchase agreements               -            -        0.00%               584            5     3.42%
Guaranteed preferred beneficial interest in
   Corporation's subordinated debentures                 5,000           66     5.28%              -             -
Federal Home Loan Bank advances and
      other borrowings                                  23,180          178     3.05%            21,011          281     5.35%
                                                     ---------      -------                  ----------     --------

   Total interest bearing liabilities                  484,808        1,818     1.50%           446,652        2,772     2.48%
                                                     ---------      -------                  ----------     --------
Non-interest bearing liabilities
    Non-interest bearing demand deposits               107,095                                   94,514
    Other liabilities                                    5,181                                    5,090
                                                     ---------                               ----------
        Total liabilities                              597,084                                  546,256
Stockholders' equity                                    50,722                                   45,604
                                                     ---------                               ----------
        Total liabilities and stockholders' equity  $  647,806                               $  591,860
                                                     =========                               ==========
Net interest income                                                 $ 6,491                                 $  6,591
                                                                    =======                                 ========
Net yield on interest earning assets                                            4.28%                                    4.78%
                                                                                =====                                    =====








<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 penalty
    for 2003 and 2002.
(2) Non-accruing loans are included in the average balance.
</FN>
</TABLE>
                                      -18-
<PAGE>


   MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
                             OPERATIONS - Continued
<TABLE>
<CAPTION>

                       CONSOLIDATED AVERAGE BALANCE SHEET
             AND TAXABLE EQUIVALENT INCOME/EXPENSE AND RATES FOR THE
                            SIX MONTHS ENDED JUNE 30,

(Dollars in thousands)                                              2003                                      2002
                                                     ---------------------------------      -----------------------------------

                                                        Daily                                   Daily
                                                       Average                                  Average
                                                       Balance     Interest      Rate           Balance     Interest       Rate
ASSETS                                                 -------     --------      ----           -------     --------       ----
<S>                                                  <C>         <C>            <C>           <C>           <C>           <C>
Federal funds sold and other overnight investments    $ 29,058    $     181      1.25%         $ 20,644      $   199       1.93%
Interest bearing deposits in banks                         269            2      1.49%              203            3       2.96%
Investment securities
Taxable                                                122,853        2,151      3.50%           83,777        2,168       5.18%
    Tax-exempt (1)                                       5,131          124      4.83%            1,783           65       7.29%
                                                       -------     --------                     -------       ------
        Total investment securities                    127,984        2,275      3.56%           85,560        2,233       5.22%
                                                       -------     --------                     -------       ------
Loans (2)
    Taxable                                            438,295       14,011      6.39%          439,856       16,362       7.44%
    Tax-exempt (1)                                       5,665          204      7.20%            2,393           92       7.70%
                                                       -------     --------                     -------       ------
        Total loans                                    443,960       14,215      6.40%          442,249       16,454       7.44%
                                                       -------     --------                     -------       ------
Total interest-earning assets                          601,271       16,673      5.55%          548,656       18,889       6.89%
Non-interest earning assets
    Allowance for possible loan losses                  (6,475)                                  (6,626)
    Cash and due from banks                             24,679                                   23,128
    Other assets                                        21,747                                   23,041
                                                       -------                                  -------
        Total assets                                  $641,222                                 $588,199
                                                       =======                                  =======

LIABILITIES AND STOCKHOLDERS' EQUITY
Savings, NOWS & money market deposits                 $330,959     $  1,399      0.85%         $278,739      $ 1,980     1.42%
Certificates of deposits and other time                123,484        1,870      3.03%          139,654        3,104     4.45%
                                                       -------     --------                     -------       ------
Total interest bearing deposits                        454,443        3,269      1.44%          418,393        5,084     2.43%
Securities sold under repurchase agreements                268            3      2.24%              959           12     2.50%
Guaranteed preferred beneficial interest in
   Corporation's subordinated debentures                 5,000          129      5.16%               -             -     0.00%
Federal Home Loan Bank advances and                     22,823          358      3.14%           25,918          615     4.75%
                                                       -------     --------                     -------       ------
     other borrowings
   Total interest bearing liabilities                  482,534        3,759      1.56%          445,270        5,711     2.57%
                                                       -------     --------                     -------       ------
Non-interest bearing liabilities
    Non-interest bearing demand deposits               103,277                                   92,525
    Other liabilities                                    5,263                                    5,138
                                                       -------                                  -------
        Total liabilities                              591,074                                  542,933
Stockholders' equity                                    50,148                                   45,266
                                                       -------                                  -------
        Total liabilities and stockholders' equity    $641,222                                 $588,199
                                                       =======                                  =======
Net interest income                                                $ 12,914                                  $13,178
                                                                    =======                                  =======
Net yield on interest earning assets                                             4.30%                                   4.80%
                                                                                 =====                                   =====










<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 penalty
    for 2003 and 2002.
(2) Non-accruing loans are included in the average balance.
</FN>
</TABLE>
                                      -19-
<PAGE>


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

                                  INCOME TAXES

         Income tax expense for the three- and six-month  periods ended June 30,
2003 was $582  thousand  and $1.2  million,  compared to $509  thousand and $1.2
million in the same periods last year.  This  represents  effective tax rates of
30.1% and 30.0% for the  three-  and  six-month  periods  ended  June 30,  2003,
respectively.  The effective tax rate for the three- and six-month periods ended
June 30, 2002 were 28.4% and 29.0%, respectively.

               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  monitor  changes  in  liquidity  and to  react
accordingly  to  fluctuations  in  market  conditions.  The  primary  source  of
liquidity for the Corporation is funding  available from,  deposit growth,  FHLB
and cash flow from the investment and loan portfolios. In addition, new deposits
to NOW, money-market,  savings, and smaller denomination certificates of deposit
accounts provide additional liquidity. 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:
<TABLE>
<CAPTION>
                                                             DEPOSIT ANALYSIS

(Dollars in thousands)                         June 30, 2003              December 31, 2002              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                         $  84,581          0.25%          $  79,587         0.38%       $  4,994        6.27%
Money Market                            26,324          0.81%             25,430         1.37%            894        3.52%
Statement Savings                       61,781          0.90%             53,754         1.44%          8,027       14.93%
Other Savings                            1,513          0.93%              1,567         1.34%            (54)      (3.45%)
CD's Less than $100,000                100,888          2.86%            109,362         4.18%         (8,474)      (7.75%)
                                       -------                          --------                      -------

Total Core Deposits                    275,087          1.41%            269,700         2.23%          5,387        2.00%

Non-Interest Bearing
Demand Deposit Accounts                103,277           -                97,266           -            6,011        6.18%
                                       -------                          --------                      -------

Total Core and Non-Interest
  Bearing Deposits                     378,364          1.02%            366,966         1.64%         11,398        3.11%
                                       -------                          --------                      -------

Tiered Savings                         156,760          1.15%            132,108         1.84%        24,6520       18.66%
CD's Greater than $100,000              22,596          3.80%             25,644         3.52%         (3,048)     (11.89%)
                                       -------                          --------                      -------

Total Deposits                         557,720          1.17%            524,718         1.78%         33,002        6.29%
                                       =======                           =======                       ======
</TABLE>
                                      -20-
<PAGE>


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


         The  Corporation,  as a member of the FHLB,  maintains  several  credit
facilities.  As of June 30, 2003 the amount  outstanding under the Corporation's
line of credit with the FHLB was $0. Additionally, the FHLB offers several other
credit related products which are available to the Corporation.  The Corporation
currently has a maximum borrowing capacity with the FHLB of approximately $217.3
million.  During the three- and six-month periods ending June 30, 2003,  average
FHLB advances were approximately $23.2 million and $22.8 million,  respectively,
and consisted of term advances  representing a combination of maturities in each
period. The average interest rate on these advances was approximately  3.05% and
3.14%  respectively.  FHLB  advances  are  collateralized  by a  pledge  on  the
Corporation's portfolio of unencumbered investment securities,  certain mortgage
loans and a lien on the Corporation'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 a future time period.  The
Corporation's  net interest rate  sensitivity  gap within one year is a negative
$154.3  million  or 23.2% of total  assets  at June  30,  2003  compared  with a
negative  $190.7  million  or 31.9%  of  total  assets  at June  30,  2002.  The
Corporation's  gap position is one tool used to evaluate  interest rate risk and
the  stability of net interest  margins.  Another tool that  management  uses to
evaluate  interest  rate risk is a computer  simulation  model that assesses the
impact of changes in interest  rates on net interest  income,  net-income  under
various  interest rate  forecasts and  scenarios.  Management has set acceptable
limits of risk within its Asset Liability Committee ("ALCO") policy and monitors
the results of the simulations  against these limits  quarterly.  As of the most
recent  quarter  end,  all  results  are within  policy  limits and  indicate an
acceptable level of interest rate risk.  Management  monitors interest rate risk
as a regular part of corporate  operations  with the intention of  maintaining a
stable net interest margin.

                                      -21-
<PAGE>


         MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
                        RESULTS OF OPERATIONS - Continued
<TABLE>
<CAPTION>

                          INTEREST SENSITIVITY ANALYSIS
                               AS OF JUNE 30, 2003

(Dollars in thousands)
                                                                    One              Over
                                                   Within        through              five          Non-rate
                                                  one year      five years            years         sensitive        Total
                                                ------------    ----------        ------------      ---------       -------
ASSETS
<S>                                             <C>             <C>              <C>               <C>             <C>
    Federal funds sold and other
       overnight investments                     $  22,500       $     --         $       --        $      --       $ 22,500
    Investment securities                           52,613         22,502             48,551               --        123,666
    Interest bearing deposits in banks                 391             --                 --               --            391
    Loans and leases                               193,210        218,295             50,933           (6,156)       456,282
    Cash and cash equivalents                           --             --                 --           38,220         38,220
    Premises & equipment                                --             --                 --           13,645         13,645
    Other assets                                        --             --                 --           10,135         10,135
                                                  --------        -------          ---------         --------        -------
       Total assets                                268,714       $240,797         $   99,484        $  55,844       $664,839
                                                  ========        =======          =========         ========        =======

LIABILITIES AND CAPITAL
    Interest bearing deposits                    $      --       $    --          $       --        $ 118,964       $118,964
    Non-interest bearing deposit                   416,004         37,643                 --               --        453,647
    FHLB advances and other
       borrowings                                    1,910          2,820             26,638               --         31,368
    Guaranteed Preferred Securities                  5,000             --                 --               --          5,000
    Other liabilities                                  117             --              4,921               --          5,038
    Capital                                             --             --                 --           50,822         50,822
                                                  --------        -------          ---------         --------        -------
       Total liabilities & capital               $ 423,031       $ 40,463         $   31,559        $ 169,786       $664,839
                                                  ========        =======          =========         ========        =======
    Net interest rate
      sensitivity gap                            $(154,317)      $200,334         $   67,925        $(113,942)      $     --
                                                 =========        =======          =========         ========        =======
    Cumulative interest rate
      sensitivity gap                            $(154,317)      $ 46,017         $  113,942        $      --       $     --
                                                  ========        =======          =========         ========        =======
    Cumulative interest rate
      sensitivity gap divided
      by total assets                               (23.2%)          6.9%              17.1%
                                                  ========        =======          =========
</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 upon Management's periodic evaluations of the collectibility
of loans.  These periodic  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.

                                      -22-
<PAGE>


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

<TABLE>
<CAPTION>

              ANALYSIS OF CHANGES IN THE ALLOWANCE FOR LOAN LOSSES
                       AND COMPARISON OF LOANS OUTSTANDING

                                                                       Three Months                      Six Months
                                                                           Ended                             Ended
                                                                          June 30,                          June 30,

(Dollars in thousands)                                                  2003            2002            2003             2002
<S>                                                                <C>             <C>              <C>             <C>

Balance at beginning of period                                      $  6,389        $  6,746         $  6,230        $  6,344
                                                                     -------         -------          -------         -------

Provision charged to operating expense                                   373             310              767             780
                                                                     -------         -------          -------         -------

    Recoveries of loans previously charged-off                            24              15              144             281
    Loans charged-off                                                   (630)           (510)            (985)           (844)
                                                                     -------         -------          -------         -------

Net loans charged-off                                                   (606)           (495)            (841)           (563)
                                                                     -------         -------          -------         -------

Balance at end of period                                            $  6,156        $  6,561         $  6,156        $  6,561
                                                                     =======         =======          =======         =======
Period-end loans outstanding                                        $462,438        $439,625         $462,438        $439,625
Average loans outstanding                                           $448,941        $440,449         $443,960        $442,249
Allowance for loan losses as a
  Percentage of period-end loans outstanding                           1.33%           1.49%            1.33%          1.49%

Net charge-offs to average loans
    Outstanding                                                        0.13%           0.11%            0.19%          0.13%
</TABLE>

         Non-performing loans include loans on non-accrual status and loans past
due 90  days  or  more  and  still  accruing.  The  Corporation's  policy  is to
charge-off all  non-performing  loans to net  realizable  value based on updated
appraisals.  Non-performing  loans are generally  collateralized  and are in the
process of collection.  Through the six-month period the increase in charge-offs
is principally due to management's  decision to write-down additional amounts on
a loan previously  recognized as a non-performing loan.  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.   Our  Credit
Administration  area should assist in improving the  components of the allowance
of loans and lease losses such as provision expense, recoveries, and charged-off
loans.

                                      -23-
<PAGE>


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

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

                                                       June 30,                 December 31,
(Dollars in thousands)                           2003             2002             2002
                                                 ----             ----             ----
<S>                                           <C>              <C>              <C>

Past due over 90 days and still accruing       $  600           $  143           $  321

Non-accrual loans                               3,883            2,771            5,216
                                                -----            -----            -----

Total non-performing loans                      4,483            2,914            5,537

Other real estate owned                         3,218              368              368
                                                -----            -----           ------

Total non-performing assets                    $7,701           $3,282           $5,905
                                                =====            =====            =====

Non-performing loans as a percentage
   of total loans (gross)                       0.97%            0.66%            1.24%

Allowance for loan losses as a
   percentage of non-performing loans         137.32%          225.19%          112.52%

Allowance for loan losses as a
   percentage of total loans and other real
   estate owned                                 1.65%            0.75%            1.32%

Allowance for loan losses as a
   percentage of non-performing assets         79.94%          199.94%          105.50%
</TABLE>

         The allowance for loan losses as a percentage of  non-performing  loans
ratio  indicates  that the  allowance for loan losses is sufficient to cover the
principal of all non-performing  loans at June 30, 2003. Other real estate owned
("OREO")  represents  residential  and  commercial  real estate that had secured
non-performing  loans that the Corporation acquired through foreclosure or other
collection efforts and that is held for sale. The increase in OREO from December
31, 2002 to June 30, 2003 is  attributable  to two loan in principal  amounts of
$3.2 million,  which had previously been classified as performing.  The value of
all OREO has been written down to  realizable  value (net of estimated  disposal
costs) based on professional appraisals.

                                 LOAN IMPAIRMENT

         The Corporation  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.

         FASB 114 "Accounting by Creditors for Impairment of Loans" requires the
Corporation  to  examine  commercial  and  non-residential   mortgage  loans  on
non-accrual  status  for  impairment.  The  balance of  impaired  loans was $3.9
million, $4.9 million, and $3.2 million at June 30, 2003, December 31, 2002, and
June 30, 2002 respectively. The associated allowance for impaired loans was $388
thousand,  $834 thousand and $733  thousand at June 30, 2003,  December 31, 2002
and June 30, 2002, respectively.

                                      -24-
<PAGE>


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

         For the three-month and six-month period ended June 30, 2003,  activity
in the allowance  for impaired loan losses  include a provision of $325 thousand
and $528 thousand,  charge offs of $60 thousand and $90 thousand,  recoveries of
$20 thousand and $30 thousand,  respectively.  Contractual  interest amounted to
$94 thousand for the three-months  ended June 30, 2003 and $198 thousand for the
six-months  ended June 30, 2003. Cash collected on loans for the three-month and
six-month  period  ended  June  30,  2003  was $1.3  million  and $2.0  million,
respectively.  The amount applied to principal was $1.0 million and $1.7 million
for the three- and six- month  period,  respectively,  of which $23 thousand and
$47 thousand was applied to interest for the three- and  six-month  period ended
June 30, 2003, respectively.

         For the three-month and six-month period ended June 30, 2002,  activity
in the allowance for impaired loan losses  include a provision of $0, write offs
of $80 and $87  thousand,  respectively,  and  recoveries  of $0,  respectively.
Contractual  interest amounted to $102 thousand for the three- months ended June
30,  2002 and $241  thousand  for the  six-months  ended  June  30,  2002.  Cash
collected on loans for the three-month and six-month  period ended June 30, 2002
was $445  thousand  and $460  thousand,  respectively.  The  amount  applied  to
principal  was $220  thousand  and $235  thousand  for the three- and  six-month
period, respectively, of which $225 thousand was applied to interest.

                        BRANCHING AND TECHNOLOGY PROJECTS

         In June 2003, the  Corporation  opened its sixteenth  branch located at
258 East  Lincoln  Highway in  Coatesville.  In the third  quarter of 2003,  the
Corporation will open its seventeenth branch. This branch office will be located
in a local supermarket in East Bradford.  The Corporation  continually  explores
new branch  opportunities  and has several  additional  sites under review.  The
Corporation  opened a new  Customer  Contact  Center in March 2003.  This Center
promotes  the  Corporation's  array of products  and  services  and develops new
business  through  proactive  call center  inbound  opportunities  and  outbound
campaigns.  In the first quarter of 2003, the Corporation installed a new system
to expedite the consumer  loan process and other  technology  projects that will
improve service to our customer's base and allow us to operate more efficiently.

                                CAPITAL ADEQUACY

         The Corporation is subject to Risk-Based  Capital Guidelines adopted by
the Federal Reserve Board ("FRB") for bank holding companies. The Corporation 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 June 30, 2003, both the Corporation's and the Bank's capital exceeded
all minimum 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.  The  decreases  in the Bank
capital  ratios  from  December  31,  2002 to June 30,  2003 are  results  of an
upstream of cash to the holding company to fund OREO related costs.

                                      -25-
<PAGE>


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

<TABLE>
<CAPTION>


                                                  June 30,                      December 31,           "Well Capitalized"
RISK-BASED                                 -----------------------              ------------
CAPITAL RATIOS                             2003               2002                  2002                 Requirements
--------------                             ----               ----                  ----               ------------------

 Corporation
 -----------
<S>                                      <C>                <C>                   <C>                      <C>
Leverage Ratio                             8.42%              7.68%                 8.29%                    5.00%
Tier I Capital Ratio                      10.67%              9.65%                10.83%                    6.00%
Total Risk-Based Capital Ratio            11.87%             10.90%                12.08%                   10.00%

       Bank
Leverage Ratio                             7.71%              7.43%                 8.05%                    5.00%
Tier I Capital Ratio                       9.77%              9.33%                10.53%                    6.00%
Total Risk-Based Capital Ratio            10.98%             10.57%                11.78%                   10.00%
</TABLE>


         The  Corporation  is  not  under  any  agreement  with  the  regulatory
authorities  nor is it aware of any current  recommendations  by the  regulatory
authorities  that, if they were to be implemented,  would have a material affect
on liquidity, capital resources or operations of the Corporation.


                                      -26-


<PAGE>



ITEM 3.   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 2002 Annual Report
of the  Corporation,  filed as an exhibit  to its Form 10-K for the fiscal  year
ended  December  31,  2002  with  the  SEC  via  EDGAR.   Please  refer  to  the
"Management's   Discussion   and  Analysis"   section  on  pages  24-38  of  the
Corporation's 2002 Annual Report for additional information.

ITEM 4. CONTROLS AND PROCEDURES

Certifications. Included with this Quarterly Report as Exhibits 31.1, 31.2, 31.3
and 31.4 are four certifications (the "Section 302 Certifications"), one by each
of our principal  executive,  financial and accounting  officers (the "Principal
Officers"). This section of the Quarterly Report contains information concerning
the evaluations of our disclosure  controls and procedures and internal  control
over financial reporting that are referred to in the Section 302 Certifications.
This   information   should  be  read  in  conjunction   with  the  Section  302
Certifications for a more complete understanding of the topics presented.

Evaluation  of Our  Disclosure  Controls  and  Procedures.  The  Securities  and
Exchange  Commission  (the  "SEC")  requires  that as of the end of the  quarter
covered by this Report, the Principal Officers evaluate the effectiveness of the
design and operation of our disclosure controls and procedures and report on the
effectiveness  of the  design  and  operation  of our  disclosure  controls  and
procedures.

"Disclosure controls and procedures" mean the controls and other procedures that
are designed  with the  objective of ensuring  that  information  required to be
disclosed in our reports  filed under the  Securities  Exchange Act of 1934 (the
"Exchange  Act"),  such  as  this  Quarterly  Report,  is  recorded,  processed,
summarized and reported within the time periods specified in the rules and forms
promulgated  by the SEC.  Disclosure  controls and  procedures are also designed
with the  objective  of  ensuring  that  such  information  is  accumulated  and
communicated  to  our   management,   including  the  Principal   Officers,   as
appropriate, to allow timely decisions regarding required disclosure.

Evaluation  of Our  Internal  Control  Over  Financial  Reporting.  The SEC also
requires that the  Principal  Officers  certify  certain  matters  regarding our
internal control over financial reporting.

"Internal  control over financial  reporting"  means the process designed by, or
under the supervision of, our Principal  Officers,  and effected by our board of
directors,  management  and other  personnel,  to provide  reasonable  assurance
regarding  the  reliability  of  financial  reporting  and  the  preparation  of
financial statements for external purposes in accordance with generally accepted
accounting  principles  and includes  those  policies and  procedures  that: (i)
pertain to the maintenance of records that in reasonable  detail  accurately and
fairly reflect the  transactions  and  dispositions of the assets of the issuer;
(ii) provide reasonable assurance that transactions are recorded as necessary to
permit preparation of financial statements in accordance with generally accepted
accounting  principles,  and that  receipts and  expenditures  of the issuer are
being made only in accordance with authorizations of management and directors of
the issuer;  and (iii)  provide  reasonable  assurance  regarding  prevention or
timely detection of unauthorized acquisition, use or disposition of the issuer's
assets that could have a material effect on the financial statements.

Among  the  matters  our   Principal   Officers   certify  in  the  Section  302
Certifications are whether all "significant deficiencies" or "material weakness"
in the design or operation of our internal control over financial reporting that
are likely to adversely  affect our ability to record,  process,  summarize  and
report  financial  information have been disclosed to our auditors and the Audit
Committee of our Board of  Directors.  "Significant  deficiencies"  has the same
meaning as the term "reportable  conditions" in auditing literature.  Both terms
represent  deficiencies  in the design or  operation  of internal  control  over
                                      -27-
<PAGE>



                       CONTROLS AND PROCEDURES - Continued

financial  reporting that could adversely affect a company's  ability to record,
process,  summarize and report  financial data consistent with the assertions of
management in a company's financial statements. A "material weakness" is defined
in the auditing literature as a particularly  serious reportable condition where
the design or operation of one or more internal control over financial reporting
components does not reduce to a relatively low level the risk that misstatements
caused by error or fraud may occur in amounts that would be material in relation
to the  financial  statements  and not be  detected  within a timely  period  by
employees  in the  normal  course of  performing  their  assigned  functions.  A
"material  weakness"  constitutes  a  greater  deficiency  than  a  "significant
deficiency,  but an  aggregation of  significant  deficiencies  may constitute a
material weakness in a company's internal control over financial reporting.

Limitations on the  Effectiveness  of Controls.  Our  management,  including the
Principal Officers,  does not expect that our disclosure controls and procedures
or our internal control over financial  reporting will prevent all error and all
fraud. A control system, no matter how well conceived and operated,  can provide
only  reasonable,  as opposed to absolute,  assurance that the objectives of the
control system are met. Further, the design of a control system must reflect the
fact that there are resource  constraints,  and the benefits of controls must be
considered relative to their costs.  Because of the inherent  limitations in all
control systems,  no evaluation of controls can provide absolute  assurance that
all control  issues and instances of fraud,  if any,  within an entity have been
detected.  These  inherent  limitations  include the realities that judgments in
decision-making  can be faulty,  and that breakdowns can occur because of simple
error or mistake.  Additionally,  controls can be circumvented by the individual
acts of some  persons,  by  collusion of two or more  people,  or by  management
override of the control.  The design of any system of controls  also is based in
part upon certain  assumptions about the likelihood of future events,  and there
can be no assurance  that any design will succeed in achieving  its stated goals
under all  potential  future  conditions;  over time,  a system of controls  may
become inadequate because of changes in conditions,  or the degree of compliance
with the  policies  or  procedures  may  deteriorate.  Because  of the  inherent
limitations in a cost-effective  control system,  misstatements  due to error or
fraud may occur and not be detected.

Conclusions about the  Effectiveness of the Disclosure  Controls and Procedures.
As required by Rule  13a-15(b),  the  Corporation's  management,  including  our
Principal Officers,  conducted an evaluation as of the end of the period covered
by this report, of the effectiveness of the  Corporation's  disclosure  controls
and procedures. Based on that evaluation, the Principal Officers concluded that,
subject to the limitations  noted above, our disclosure  controls and procedures
are effective to provide reasonable  assurance that the disclosure  controls and
procedures will meet their objectives.

Changes in  Internal  control  over  financial  reporting.  As  required by Rule
13a-15(d),  the  Corporation's  management,  including  the  Principal  Officers
conducted an evaluation of the  Corporation's  internal  control over  financial
reporting to determine whether any changes occurred during the period covered by
this  report  that  have  materially  affected,  or  are  reasonably  likely  to
materially affect, the Corporation's  internal control over financial reporting.
Based on that  evaluation,  there has been no such  change  during  the  quarter
covered by this report.

                                      -28-
<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 Vote of Security Holders

                  None

Item 5.  Other Information

                  None

Item 6.  Exhibits and Reports on Form 8-K

(a)      Exhibits

         3(i).* Certificate of Incorporation. Copy of the Corporation's Articles
                ----------------------------
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, 2000.

         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, 2000.

         31.1   Certification of President pursuant to Rule 13a-14(a).
                -------------
         31.2   Certification of Assistant Treasurer pursuant to Rule 13a-14(a).
                -------------
         31.3   Certification of Treasurer pursuant to Rule 13a-14(a).
                -------------
         31.4   Certification of Assistant Treasurer pursuant to Rule 13a-14(a).
                -------------
         32.1   Certification of President pursuant to 18 U.S.C. Section 1350,
                -------------
                as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of
                2002.
         32.2   Certification of Assistant Treasurer pursuant to 18 U.S.C.
                -------------
                Section 1350, as adopted pursuant to Section 906 of the
                Sarbanes-Oxley Act of 2002.
         32.3   Certification of Treasurer pursuant to 18 U.S.C. Section 1350,
                -------------
                as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of
                2002.
         32.4   Certification of Assistant Treasurer pursuant to 18 U.S.C.
                -------------
                Section 1350, as adopted pursuant to Section 906 of the
                Sarbanes-Oxley Act of 2002.

* Indicates document previously filed

                                      -29-
<PAGE>




                     PART II - OTHER INFORMATION - Continued

(b)      Reports on Form 8-K
         -------------------
         A Form 8-K was filed with the SEC on April 28, 2003 pertaining to a
         press release announcing the First Quarter 2003 earnings (the
         "First 8-K").

         A Form 8-K was filed with the SEC on April 28, 2003 with corrected
         financial information (the "Second 8-K").

         A Form 8-K/A was filed with the SEC on May 1, 2003 to amend the First
         8-K to correct certain financial information consistent with the Second
         8-K and to amend and restate Item 9.



                                      -30-
<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


August 14, 2003                 /s/ Charles E. Swope
                                --------------------
                                Charles E. Swope
                                President and CEO



                                J. Duncan Smith


August 14, 2003                 /s/ J. Duncan Smith
                                -------------------
                                J. Duncan Smith
                                Treasurer
                                (Principal Accounting
                                and Financial Officer)




                                      -31-
<PAGE>


                                  Exhibit Index

         3(i).*   Certificate of  Incorporation.  Copy of the  Corporation's
                  -----------------------------
Articles 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, 2000.

         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, 2000.

         31.1   Certification of President pursuant to Rule 13a-14(a).

         31.2   Certification of Assistant Treasurer pursuant to Rule 13a-14(a).

         31.3   Certification of Treasurer pursuant to Rule 13a-14(a).

         31.4   Certification of Assistant Treasurer pursuant to Rule 13a-14(a).

         32.1   Certification of President pursuant to 18 U.S.C. Section 1350,
         as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

         32.2   Certification of Assistant Treasurer pursuant to 18 U.S.C.
         Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley
         Act of 2002.

         32.3   Certification of Treasurer pursuant to 18 U.S.C. Section 1350,
         as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

         32.4   Certification of Assistant Treasurer pursuant to 18 U.S.C.
         Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley
         Act of 2002.


* Indicates document previously filed


                                      -32-
<PAGE>


                                  Exhibit 31.1
                                  CERTIFICATION

I, Charles E. Swope, President and CEO of the Corporation, certify that:
   ----------------

1. I have reviewed this quarterly report on Form 10-Q of June 30, 2003 of First
Chester County Corporation;

2. Based on my knowledge, this 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 report;

3. Based on my knowledge, the financial statements, and other financial
information included in this 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 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-15(e) and 15d-15(e)) for the registrant and have:

         (a) Designed such disclosure controls and procedures, or caused such
disclosure controls and procedures to be designed under our supervision, 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 report is being prepared;

         (b) Evaluated the effectiveness of the registrant's disclosure controls
and procedures and presented in this report our conclusions about the
effectiveness of the disclosure controls and procedures, as of the end of the
period covered by this report based on such evaluation; and

         (c) Disclosed in this report any change in the registrant's internal
control over financial reporting that occurred during the registrant's most
recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an
annual report) that has materially affected, or is reasonably likely to
materially affect, the registrant's internal control over financial reporting;
and

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

         (a) All significant deficiencies and material weaknesses in the design
or operation of internal control over financial reporting which are reasonably
likely to adversely affect the registrant's ability to record, process,
summarize and report financial information; and

         (b) Any fraud, whether or not material, that involves management or
other employees who have a significant role in the registrant's internal control
over financial reporting.

August 14, 2003

/s/ Charles E. Swope
Charles E. Swope
President and CEO

                                      -33-
<PAGE>




                                  Exhibit 31.2
                                  CERTIFICATION
                                  -------------

I, Kevin C. Quinn, Assistant Treasurer of the Corporation, certify that:
   --------------

1. I have reviewed this quarterly report on Form 10-Q of June 30, 2003 of First
                                                         -------------
Chester County Corporation;

2. Based on my knowledge, this 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 report;

3. Based on my knowledge, the financial statements, and other financial
information included in this 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 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-15(e) and 15d-15(e)) for the registrant and have:

         (a) Designed such disclosure controls and procedures, or caused such
disclosure controls and procedures to be designed under our supervision, 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 report is being prepared;

         (b) Evaluated the effectiveness of the registrant's disclosure controls
and procedures and presented in this report our conclusions about the
effectiveness of the disclosure controls and procedures, as of the end of the
period covered by this report based on such evaluation; and

         (c) Disclosed in this report any change in the registrant's internal
control over financial reporting that occurred during the registrant's most
recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an
annual report) that has materially affected, or is reasonably likely to
materially affect, the registrant's internal control over financial reporting;
and

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

         (a) All significant deficiencies and material weaknesses in the design
or operation of internal control over financial reporting which are reasonably
likely to adversely affect the registrant's ability to record, process,
summarize and report financial information; and

         (b) Any fraud, whether or not material, that involves management or
other employees who have a significant role in the registrant's internal control
over financial reporting.

August 14, 2003


/s/ Kevin C. Quinn
------------------
Kevin C. Quinn
Assistant Treasurer

                                      -34-
<PAGE>


                                  Exhibit 31.3
                                  CERTIFICATION
                                  -------------

I, J. Duncan Smith, Treasurer of the Corporation, certify that:
   ---------------

1. I have reviewed this quarterly report on Form 10-Q of June 30, 2003 of First
Chester County Corporation;

2. Based on my knowledge, this 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 report;

3. Based on my knowledge, the financial statements, and other financial
information included in this 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 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-15(e) and 15d-15(e)) for the registrant and have:

         (a) Designed such disclosure controls and procedures, or caused such
disclosure controls and procedures to be designed under our supervision, 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 report is being prepared;

         (b) Evaluated the effectiveness of the registrant's disclosure controls
and procedures and presented in this report our conclusions about the
effectiveness of the disclosure controls and procedures, as of the end of the
period covered by this report based on such evaluation; and

         (c) Disclosed in this report any change in the registrant's internal
control over financial reporting that occurred during the registrant's most
recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an
annual report) that has materially affected, or is reasonably likely to
materially affect, the registrant's internal control over financial reporting;
and

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

         (a) All significant deficiencies and material weaknesses in the design
or operation of internal control over financial reporting which are reasonably
likely to adversely affect the registrant's ability to record, process,
summarize and report financial information; and

         (b) Any fraud, whether or not material, that involves management or
other employees who have a significant role in the registrant's internal control
over financial reporting.

August 14, 2003



/s/ J. Duncan Smith
-------------------
J. Duncan Smith
Treasurer

                                      -35-
<PAGE>


                                  Exhibit 31.4
                                  CERTIFICATION
                                  -------------

I, T. Benjamin Marsho, Assistant Treasurer of the Corporation, certify that:
   ------------------

1. I have reviewed this quarterly report on Form 10-Q of June 30, 2003 of First
Chester County Corporation;

2. Based on my knowledge, this 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 report;

3. Based on my knowledge, the financial statements, and other financial
information included in this 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 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-15(e) and 15d-15(e)) for the registrant and have:

         (a) Designed such disclosure controls and procedures, or caused such
disclosure controls and procedures to be designed under our supervision, 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 report is being prepared;

         (b) Evaluated the effectiveness of the registrant's disclosure controls
and procedures and presented in this report our conclusions about the
effectiveness of the disclosure controls and procedures, as of the end of the
period covered by this report based on such evaluation; and

         (c) Disclosed in this report any change in the registrant's internal
control over financial reporting that occurred during the registrant's most
recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an
annual report) that has materially affected, or is reasonably likely to
materially affect, the registrant's internal control over financial reporting;
and

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

         (a) All significant deficiencies and material weaknesses in the design
or operation of internal control over financial reporting which are reasonably
likely to adversely affect the registrant's ability to record, process,
summarize and report financial information; and

         (b) Any fraud, whether or not material, that involves management or
other employees who have a significant role in the registrant's internal control
over financial reporting.

August 14, 2003



/s/ T. Benjamin Marsho
----------------------
T. Benjamin Marsho
Assistant Treasurer

                                      -36-
<PAGE>



                                  EXHIBIT 32.1

                        FIRST CHESTER COUNTY CORPORATION


                            CERTIFICATION PURSUANT TO
                               18 U.S.C. ss. 1350,
                             AS ADOPTED PURSUANT TO
                  SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002


In connection with the Quarterly Report of First Chester County Corporation (the
"Company")  on Form 10-Q for the period  ending  June 30, 2003 as filed with the
Securities and Exchange Commission on the date hereof (the "Report"), I, Charles
E. Swope, President and CEO of the Company,  certify,  pursuant to 18 U.S.C. ss.
1350,  as adopted  pursuant  to Section 906 of the  Sarbanes-Oxley  Act of 2002,
that:

(1) The Report fully complies with the requirements of section 13(a) or 15(d) of
the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material
respects, the financial condition and result of operations of the Company.



August 14, 2003                             /s/ Charles E. Swope
                                            --------------------
                                            Charles E. Swope
                                            President and CEO




                                      -37-
<PAGE>



                                  EXHIBIT 32.2

                        FIRST CHESTER COUNTY CORPORATION


                            CERTIFICATION PURSUANT TO
                               18 U.S.C. ss. 1350,
                             AS ADOPTED PURSUANT TO
                  SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002


In connection with the Quarterly Report of First Chester County Corporation (the
"Company")  on Form 10-Q for the period  ending  June 30, 2003 as filed with the
Securities and Exchange  Commission on the date hereof (the "Report"),  I, Kevin
C. Quinn, Assistant Treasurer of the Company, certify, pursuant to 18 U.S.C. ss.
1350,  as adopted  pursuant  to Section 906 of the  Sarbanes-Oxley  Act of 2002,
that:

(1) The Report fully complies with the requirements of section 13(a) or 15(d) of
the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material
respects, the financial condition and result of operations of the Company.



August 14, 2003                             /s/ Kevin C. Quinn
                                            -------------------
                                            Kevin C. Quinn
                                            Assistant Treasurer




                                      -38-
<PAGE>



                                  EXHIBIT 32.3
                        FIRST CHESTER COUNTY CORPORATION


                            CERTIFICATION PURSUANT TO
                               18 U.S.C. ss. 1350,
                             AS ADOPTED PURSUANT TO
                  SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002


In connection with the Quarterly Report of First Chester County Corporation (the
"Company")  on Form 10-Q for the period  ending  June 30, 2003 as filed with the
Securities  and Exchange  Commission  on the date hereof (the  "Report"),  I, J.
Duncan Smith, Treasurer of the Company, certify, pursuant to 18 U.S.C. ss. 1350,
as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Report fully complies with the requirements of section 13(a) or 15(d) of
the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material
respects, the financial condition and result of operations of the Company.



August 14, 2003                  /s/ J. Duncan Smith
                                 -------------------
                                 J. Duncan Smith
                                 Treasurer




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<PAGE>



                                  EXHIBIT 32.4

                        FIRST CHESTER COUNTY CORPORATION


                            CERTIFICATION PURSUANT TO
                               18 U.S.C. ss. 1350,
                             AS ADOPTED PURSUANT TO
                  SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002


In connection with the Quarterly Report of First Chester County Corporation (the
"Company")  on Form 10-Q for the period  ending  June 30, 2003 as filed with the
Securities  and Exchange  Commission  on the date hereof (the  "Report"),  I, T.
Benjamin Marsho,  Assistant  Treasurer of the Company,  certify,  pursuant to 18
U.S.C. ss. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of
2002, that:

(1) The Report fully complies with the requirements of section 13(a) or 15(d) of
the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material
respects, the financial condition and result of operations of the Company.



August 14, 2003                             /s/ T. Benjamin Marsho
                                            ----------------------
                                            T. Benjamin Marsho
                                            Assistant Treasurer






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