November 14, 2002
                                                              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 September 30, 2002.



                                Very truly yours,


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

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

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

         Rick Huff, CPA, Grant Thornton LLP, Philadelphia, PA

         Joseph T.McGough, 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 10Q

(Mark One)

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

For the quarterly period ended September 30, 2002, 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

The  number  of  shares  outstanding  of Common  Stock of the  Registrant  as of
November 8, 2002 was 4,424,948.


<PAGE>
<TABLE>
<CAPTION>


                FIRST CHESTER COUNTY CORPORATION AND SUBSIDIARIES

                                      INDEX
                                      -----

                                                                                           PAGE
                                                                                           ----
<S>                                                                                     <C>
Part I.  FINANCIAL INFORMATION

     Item 1 - Financial Statements
              Consolidated Statements of Condition
              September 30, 2002 and December 31, 2001                                       4

              Consolidated Statements of Income
              Three- and Nine-Months Ended September 30, 2002 and 2001                       5


              Consolidated Statements of Cash Flows
              Nine-Months Ended September 30, 2002 and 2001                                  6


              Notes to Consolidated Financial Statements                                    7-8


     Item 2 - Management's Discussion and Analysis of
                             Financial Condition and Results of Operations                  9-25

     Item 3 - Quantitative and Qualitative Disclosures About Market Risk                    26

     Item 4 - Controls & Procedures                                                        26-27


Part II. OTHER INFORMATION

     Item 1 -   Legal Proceedings                                                           28
     Item 2 -   Changes in Securities                                                       28
     Item 3 -   Defaults upon Senior Securities                                             28
     Item 4 -   Submission of Matters to a Vote of Security Holders                         28
     Item 5 -   Other Information                                                           28
     Item 6 -   Exhibits and Reports on Form 8-K                                           28-29

     Signatures                                                                             30

</TABLE>

<PAGE>
                FIRST CHESTER COUNTY CORPORATION AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CONDITION
<TABLE>
<CAPTION>
(Dollars in thousands - except per share data)
                                                                                              (Unaudited)
                                                                                             September 30,         December 31,
                                                                                                  2002                  2001*
                                                                                             ------------          ------------
<S>                                                                                         <C>                    <C>
ASSETS
    Cash and due from banks                                                                   $    29,510           $    25,595
    Federal funds sold                                                                              4,950                12,400
    Interest bearing deposits in banks                                                                199                   238
                                                                                                  -------               -------

           Total cash and cash equivalents                                                         34,659                38,233
                                                                                                  -------               -------

    Investment securities held-to-maturity (market value of $543 at September
        30, 2002 and $547 December 31,
        2001, respectively)                                                                           538                   531
                                                                                                 --------              --------
    Investment securities available-for-sale at market value                                      115,617                80,210
                                                                                                 --------              --------
    Loans                                                                                         442,504               448,110
    Less allowance for loan losses                                                                 (6,375)               (6,344)
                                                                                                 --------              --------

           Net loans                                                                              436,129               441,766
                                                                                                 --------              --------
    Premises and equipment, net                                                                    14,248                15,584
    Other assets                                                                                    7,477                 8,008
                                                                                                 --------              --------
           TOTAL ASSETS                                                                         $ 608,668             $ 584,332
                                                                                                 ========              ========
LIABILITIES
    Deposits
        Non-interest bearing                                                                    $ 104,391            $   95,107
        Interest-bearing (including certificates of deposit over $100 of
           $24,545 and $28,463 - September 30, 2002 and December 31, 2001,
              respectively)                                                                     $ 428,180               403,718
                                                                                                 --------              --------

           Total deposits                                                                         532,571               498,825

    Securities sold under repurchase agreements                                                     1,003                 4,769
    Federal Home Loan Bank advances and other borrowings                                           18,077                31,751
    Guaranteed preferred beneficial interest in Corporation's
        subordinated debentures                                                                     5,000                   -
    Other liabilities                                                                               4,540                 5,148
                                                                                                 --------              --------

           Total liabilities                                                                      561,191               540,493
                                                                                                 --------              --------

STOCKHOLDERS' EQUITY
    Common stock, par value $1.00; authorized, 10,000,000 shares;                                   4,800                 4,800
        Outstanding, 4,799,666 shares at September 30, 2002 and
        December 31, 2001.
    Additional paid-in capital                                                                        820                   773
    Retained earnings                                                                              45,896                43,367
    Accumulated other Comprehensive Income (Loss)                                                   1,169                    84
    Treasury stock, at cost: September 30, 2002 - 375,341 and
        December 31, 2001 - 377,721                                                                (5,208)               (5,185)
                                                                                                 --------              --------

           Total stockholders' equity                                                              47,477                43,839
                                                                                                 --------              --------

           Total liabilities and stockholders' equity                                           $ 608,668             $ 584,332
                                                                                                 ========              ========
The accompanying notes are an integral part of these statements.
* Derived from our audited, consolidated financial statements included in our
Annual Report on Form 10-K for the fiscal year ended 12/31/01.

</TABLE>
<PAGE>
                FIRST CHESTER COUNTY CORPORATION AND SUBSIDIARIES
                        CONSOLIDATED STATEMENTS OF INCOME

                                   (UNAUDITED)
<TABLE>
<CAPTION>

(Dollars in thousands - except per share data)                       Three Months Ended                  Nine Months Ended
                                                                         September 30,                     September  30,
                                                                     ------------------                 --------------------
                                                                   2002              2001                2002           2001
                                                                   ----              ----                ----           ----
<S>                                                          <C>               <C>                 <C>           <C>
INTEREST INCOME
    Loans, including fees                                         7,854             8,203              24,276         25,288
    Investment securities                                         1,315             1,280               3,526          4,028
    Federal funds sold                                              104                30                 304            181
    Deposits in banks                                                 -                 1                   3              5
                                                               --------          --------            --------       --------

                Total interest income                             9,273             9,514              28,109         29,502
                                                               --------          --------            --------       --------

INTEREST EXPENSE
    Deposits                                                      2,301             3,501               7,385         11,226
    Securities sold under repurchase agreements                       6                22                  18             80
    Interest on Trust-Preferred Securities                           65                 -                  65              -
Federal Home Loan Bank advances and other borrowings                262               259                 878            961
                                                               --------          --------            --------       --------

                Total interest expense                            2,634             3,782               8,346         12,267
                                                               --------          --------            --------       --------

                Net interest income                               6,639             5,732              19,763         17,235

    Provision for loan losses                                       875             1,400               1,655          1,770
                                                               --------          --------            --------       --------

                Net interest income after provision
                   for possible loan losses                       5,764             4,332              18,108         15,465
                                                               --------          --------            --------       --------
NON-INTEREST INCOME
    Financial Management Services                                   799               735               2,361          2,213
    Service charges on deposit accounts                             489               422               1,358            991
    Investment securities gains, net                                  -                16                 121             81
    Rental income on operating leases                               212                48                 867            177
Gains on Sale of Fixed Assets                                       140                 4                 140              4
Gains on Sale of Loans                                              279                 6                 469            110
    Other                                                           449               338               1,331          1,053
                                                               --------          --------            --------       --------
                Total non-interest income                         2,368             1,569               6,647          4,629
                                                               --------          --------            --------       --------
NON-INTEREST EXPENSE
    Salaries and employee benefits                                3,398             3,013              10,273          8,971
    Net occupancy, equipment, and data processing                   777               727               2,373          2,051
    Depreciation expense on operating leases                        624               393               1,788          1,142
    FDIC deposit insurance                                           22                21                  65             64
    Bank shares tax                                                 126               119                 354            363
    Professional Services                                           289               231                 978            736
    Other                                                           925             1,165               2,981          2,892
                                                               --------          --------            --------       --------

                Total non-interest expense                        6,161             5,669              18,812         16,219
                                                               --------          --------            --------       --------

                Income before income taxes                        1,971               232               5,943          3,875

INCOME TAXES                                                        569               130               1,719          1,123
                                                               --------          --------            --------       --------

                NET INCOME                                   $    1,402       $       102          $    4,224       $  2,752
                                                               ========          ========            ========       ========

PER SHARE DATA
    Basic earnings per common share                          $     0.32       $      0.02          $     0.96     $     0.62
                                                              =========         =========           =========      =========
    Diluted earnings per common share                        $     0.32       $      0.02          $     0.95     $     0.61
                                                              =========         =========           =========      =========
    Dividends declared                                       $     0.13       $      0.13          $     0.39     $     0.39
                                                              =========         =========           =========      =========

Basic weighted average shares outstanding                     4,442,544         4,416,814           4,422,813      4,444,229
                                                              =========         =========           =========      =========

Diluted weighted average shares outstanding                   4,436,555         4,468,294           4,448,101      4,495,091
                                                              =========         =========           =========      =========

The accompanying notes are an integral part of these statements.

</TABLE>

<PAGE>




                FIRST CHESTER COUNTY CORPORATION AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS

                                   (Unaudited)
<TABLE>
<CAPTION>

                                                                                           Nine Months Ended
                                                                                              September 30,
                                                                                    -------------------------------
(Dollars in thousands)                                                                  2002                2001
                                                                                        ----                ----

<S>                                                                                <C>                  <C>
OPERATING ACTIVITIES
    Net Income                                                                       $ 4,224              $ 2,752
    Adjustments to reconcile net income to net cash
        provided by operating activities:
    Depreciation                                                                       1,962                1,323
    Provision for loan losses                                                          1,655                1,770
    Amortization of investment security premiums
        and accretion of discounts                                                       367                  252
    Amortization of deferred fees on loans                                              (260)                 278
    Investment securities gains, net                                                    (121)                 (81)
    Decrease (Increase) in other assets                                                  531                 (214)
    (Decrease) in other liabilities                                                     (608)              (1,595)
                                                                                     --------             --------
           Net cash provided by operating activities                                   7,750                4,486
                                                                                     --------             --------

INVESTING ACTIVITIES
    Decrease (Increase) in loans                                                       4,837              (30,035)
    Proceeds from sales of investment securities available-for-sale                   20,066               15,187
    Proceeds from maturities of investment securities available-for-sale               8,578               26,101
    Purchases of investment securities available-for-sale                            (63,783)             (30,177)
    Purchase of premises and equipment, net                                             (626)              (4,823)
                                                                                     --------             --------

           Net cash used in investing activities                                     (30,928)             (23,747)
                                                                                     --------             --------

FINANCING ACTIVITIES
    (Decrease) Increase in securities sold under repurchase agreements               (13,674)               1,059
    Increase in deposits                                                              33,746                4,821
    (Decrease) Increase in Federal Home Loan Bank advances and other borrowings       (3,766)               3,629
    Cash dividends                                                                    (1,726)              (1,744)
    Proceeds from issuance of Guaranteed preferred beneficial interest in
      Corporation's
       Subordinated debentures                                                         5,000                   --
    Treasury stock transactions                                                           24                 (944)
                                                                                     --------             --------

           Net cash provided by financing activities                                  19,604                6,821
                                                                                     --------             --------
              NET INCREASE (DECREASE) IN CASH AND CASH
                   EQUIVALENTS                                                        (3,574)             (12,440)

Cash and cash equivalents at beginning of period                                      38,233               37,973
                                                                                     --------             --------

Cash and cash equivalents at end of period                                          $ 34,659             $ 25,533
                                                                                     ========             ========







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


<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, 2001.

2.   The  results of  operations  for the three- and  nine-month  periods  ended
     September  30,  2002 are not  necessarily  indicative  of the results to be
     expected for the full year.

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

4.   Other  comprehensive  income  (loss)  net  of  taxes  for  the  three-  and
     nine-month  periods  ended  September  30, 2002 was $435  thousand and $1.1
     million,  compared to $1.4 million and $1.7 million in the same period last
     year. Total comprehensive  income (which is the sum of net income and other
     comprehensive  income  described in the preceding  sentence) for the three-
     and nine-month  periods ended  September 30, 2002 was $1.8 million and $5.3
     million,  compared to $1.5 million and $4.5 million in the same period last
     year.

5.   On July 20, 2001, FASB issued SFAS 141, and SFAS 142. SFAS 141 is effective
     for all business  combinations  completed  after June 30, 2001. SFAS 142 is
     effective  for fiscal years  beginning  after  December 15, 2001;  however,
     certain provisions of this Statement apply to goodwill and other intangible
     assets  acquired  between July 1, 2001 and the effective  date of SFAS 142.
     Major  provisions of these  Statements  and their  effective  dates for the
     Company are as follows: All business combinations  initiated after June 30,
     2001 must use the purchase  method of  accounting.  The pooling of interest
     method of accounting is prohibited except for transactions initiated before
     July 1, 2001.  Intangible assets acquired in a business combination must be
     recorded  separately from goodwill if they arise from  contractual or other
     legal rights or are  separable  from the  acquired  entity and can be sold,
     transferred,  licensed, rented or exchanged, either individually or as part
     of a related contract, asset or liability.  Goodwill, as well as intangible
     assets with  indefinite  lives,  acquired after June 30, 2001,  will not be
     amortized.  Effective January 1, 2002, all previously  recognized  goodwill
     and intangible  assets with indefinite lives will be tested for impairment.
     The Corporation has no goodwill or intangible assets that would be affected
     by this provision.




<PAGE>


                FIRST CHESTER COUNTY CORPORATION AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued

                                   (UNAUDITED)

6.   In August 2001, the FASB issued SFAS 144, "Accounting for the Impairment or
     Disposal  of  Long-lived  Assets".   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.  However,  SFAS 144 makes
     changes  to the scope and  certain  measurement  requirements  of  existing
     accounting  guidance.  SFAS 144 also changes the  requirements  relating to
     reporting  the effects of a disposal or  discontinuation  of a segment of a
     business.  SFAS 144 is effective for financial statements issued for fiscal
     years  beginning  after December 15, 2001 and interim  periods within those
     fiscal  years.  The  adoption of this  statement  is not expected to have a
     significant  impact on the financial  condition or results of operations of
     the Company.

7.   On January 1, 2002, the Company  adopted  Statement of Position (SOP) 01-6,
     Accounting by Certain  Entities  That Lend to or Finance the  Activities of
     Others,   which  reconciles  and  conforms  existing   differences  in  the
     accounting  and  financial  reporting  guidance  in  the  AICPA  Audit  and
     Accounting Guides, Banks and Savings Institutions, Audits of Credit Unions,
     and  Audits  of  Finance  Companies.  It also  carries  forward  accounting
     guidance  for   practices   deemed  to  be  unique  to  certain   financial
     institutions.  The  adoption  of this SOP had no  impact  on the  Company's
     financial position or results of operations.

8.   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 September 30, 2002, the effective interest
     rate was 5.75%. 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. 1.

<PAGE>


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



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

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

     These  risks  and  uncertainties  include,  but are  not  limited  to,  the
following:  (a) loan  growth  and/or  interest  rate  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 and level of the Corporation's non-interest income;
(j) changes in the credit of our borrowers,  the collateral  securing our assets
or other  aspects  of credit  quality;  and (k) our  ability to manage the risks
involved in the foregoing.  These risks and  uncertainties  are all difficult to
predict and most are beyond the control of the Corporation's Management.

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

                          EARNINGS AND DIVIDEND SUMMARY

     Net income for the  three-month  period ended  September  30, 2002 was $1.4
million,  an increase of $1.3 million as compared to $102 thousand earned during
the same period in 2001.  Net income for the nine-month  period ended  September
30, 2002 was $4.2 million,  an increase of $1.5 million or 53.49% as compared to
$2.8 million  earned  during the same period in 2001.  Earnings for both periods
benefited   from   increases   in  net   interest   income  as  the   volume  of
interest-earning  assets  and the net yield  earned on those  assets  increased.
Contributing  to the  increase  in 2002 net income was a $99  thousand  and $274
thousand  non-recurring after tax gain on the sale of real estate assets for the
three- and nine-month period ended September 30, 2002, respectively, compared to
$2  thousand  and $44  thousand  for the three-  and  nine-month  periods  ended
September 30, 2001, respectively.  Also contributing to the increase in 2002 net
income is an after tax gain of $198
<PAGE>
thousand and $333 thousand on the sale of  residential  mortgage  assets for the
three- and nine-month period ended September 30, 2002, respectively, compared to
$3  thousand  and $78  thousand  for the three-  and  nine-month  periods  ended
September 30, 2001,  respectively.  The large percentage  increase in net income
for the three- and nine-month  periods compared to the same periods last year is
primarily attributed to the fact that 2001 earnings were affected by a series of
interest rate  decreases  and by large  increases in the provision for loan loss
expense.  Net income for the balance of 2002 and for future time  periods may be
adversely  impacted by the recent  (November  7, 2002) 50 basis point  reduction
(one basis point is equal to 1/100 of a percent)  in the federal  funds rate and
by credit quality issues.

     Basic earnings per share were $0.32 and $0.96 for the three- and nine-month
periods ended September 30, 2002,  respectively  compared to $0.02 and $0.62 per
share for the same periods in 2001. Over the past ten years,  the  Corporation's
practice has been to pay a dividend of at least 35.0% of net income.

     During the first half of the year,  the  Corporation  performed a review of
its lending  structure,  resulting  in the  creation of two new  divisions,  the
Personal  Banking  Division  which will  focus its effort on the branch  system,
consumer lending, residential mortgage, credit cards, and small business lending
and the Business  Banking  Division which will focus its attention on commercial
mortgage,   commercial  lending,   leasing,  loan  administration,   and  credit
administration.   Management   believes   this  will  enhance   asset   quality,
underwriting  practices  and  productivity.  Improvement  in credit  quality and
credit  administration  remains a high priority leading to improved  performance
and reduced risk.

               AVERAGE INTEREST RATES (ON A TAX EQUIVALENT BASIS)
<TABLE>
<CAPTION>

                                                    Three Months Ended                  Nine Months Ended
                                                        September 30,                      September 30,
                                                  -------------------------         --------------------------
                                                     2002            2001             2002              2001
                                                     ----            ----             ----              ----
        <S>                                     <C>            <C>              <C>               <C>
           SELECTED RATIOS
           Return on Average Assets                  0.92%           0.07%            0.95%             0.67%
           Return on Average Equity                 11.86%           0.90%           12.26%             8.19%
           Net interest margin                       4.71%           4.47%            4.76%             4.53%
           Earnings Retained                        58.92%        -464.71%           59.14%            36.66%
            Dividend Payout Ratio                   41.08%         564.71%           40.86%            63.34%
            Book Value Per Share                  $ 10.73         $ 10.12          $ 10.73           $ 10.12
</TABLE>

The  "Consolidated  Average  Balance  Sheet" on pages 16 and 17 may  assist  the
reader in following this discussion.

                               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 nine-month  periods ended  September 30,
2002, on a tax equivalent basis, was $6.6 million and $19.8 million, compared to
$5.7  million  and $17.3  million for the same  periods in 2001,  an increase of
15.7% and 14.6%,  respectively.  The  increase in tax  equivalent  net  interest
income   for  both   periods   was  the  result  of  an   increase   in  average
interest-earning  assets and lower yields paid on interest-earning  liabilities,
partially  offset  by  a  decrease  in  the  average  yield  earned  on  average
interest-earning  assets.  The  Corporation  anticipates  the continued,  strong
pricing competition


<PAGE>

for new high quality loan business will keep pressure on the net yield earned on
interest-earning assets in future time periods.

     Average  interest-earning  assets for the third quarter of 2002 were $565.7
million an  increase  of 9.7%  compared  to $515.5  million of average  interest
earning assets in the same period last year. For the nine months ended September
30,  2002,  average  interest-earning  assets  increased  to  $554.4  or 9.0% as
compared to $508.6 million of average interest-earning assets in the same period
last year.  The increase in average  interest-earning  assets for both the three
and nine month  periods  was the direct  result of  increases  in average  loans
outstanding,  funds invested in Federal funds and other  overnight  investments,
and  investment  securities.  The recent  (November 7, 2002) 50 basis point rate
decrease may  adversely  impact this portion of net income for the  remainder of
2002 and 2003.

     Net yields on  interest-earning  assets,  on a tax equivalent  basis,  were
4.71% and 4.76% for the three- and nine-month  periods ended September 30, 2002,
respectively,  compared  to 4.47%  and 4.53% for the same  periods  in 2001,  an
increase  of 24 and 23  basis  points  or 5.37%  and  5.08%,  respectively.  The
increase in the average net-yield on interest-earning  assets for the three- and
nine-month  periods in 2002 was primarily the result of a rapid  decrease in the
average yield on interest-bearing  liabilities that outpaced the decrease in the
yield on interest-earning assets.  Additionally,  the yields on interest-earning
assets  in 2001  were  affected  by the  reversal  of  interest  and fee  income
associated with a large loan balances that was placed on non-accrual  during the
third  quarter of 2001.  The average  yield  earned on interest  earning  assets
decreased  2.5% or 82 basis points to 6.58% and 4.7% or 97 basis points to 6.77%
for the three- and nine-month  periods ended  September 30, 2002 compared to the
same periods in 2001.  The average  yield paid on  interest-bearing  liabilities
decreased  30.4% or 121 basis  points to 2.32% and 32.0% or 152 basis  points to
2.48% for the three- and nine-month periods ended September 30, 2002 compared to
the same periods in 2001.

<TABLE>
<CAPTION>
               AVERAGE INTEREST RATES (ON A TAX EQUIVALENT BASIS)

                                                     Three Months               Nine Months
Yield On:                                        Ended September 30,          Ended September 30,
---------                                        -------------------          -------------------
                                                   2002       2001             2002         2001
                                                   ----       ----             ----         ----
<S>                                                <C>        <C>              <C>          <C>
Interest Earning Assets                            6.58%      7.40%            6.77%        7.74%
Interest Bearing Liabilities                       2.30%      3.53%            2.47%        4.00%
                                                   ----       ----             ----         ----
Net Interest Spread                                4.28%      3.87%            4.30%        3.74%
Contribution of Interest Free Funds                0.43%      0.60%            0.46%        0.79%
                                                   ----       ----             ----         ----
Net Yield on Interest Earning Assets               4.71%      4.47%            4.76%        4.53%
                                                   ====       ====             ====         ====
</TABLE>


                      INTEREST INCOME ON FEDERAL FUNDS SOLD

     Interest income on Federal funds sold and other  overnight  investments for
the three- and nine-month periods ended September 30, 2002, increased 246.7% and
67.4% to $104  thousand and $304  thousand,  respectively,  when compared to the
same periods in 2001. The increase in interest  income on Federal funds sold and
other  overnight  investments  is the direct  result of increases in the average
balance of federal funds sold and other overnight  investments $19.1 million, or
538.2%,  and a $15.9,  million or 290.5%,  for the three- and nine-month periods
ended  September 30, 2002,  respectively,  when compared to the same period last
year. The average balance of federal funds sold and other overnight  investments
increased  more due to deposit  growth from our three new  branches and existing
branches,  while loan  growth  this year has  increased  more  slowly due to the
general  slowdown in demand  through the third quarter and  competition  for new

<PAGE>

loans.  The  increase  in  interest  income  earned on  federal  funds  sold was
partially  offset by a 154 and 253 basis point  decrease in rates earned on such
investments  for the three- and  nine-month  periods  ended  September 30, 2002,
respectively.

                    INTEREST INCOME ON INVESTMENT SECURITIES

     On a tax equivalent basis, interest income on investment securities for the
three-month period ended September 30, 2002 increased 2.7% to $1.3 million,  and
decreased  12.4% to $3.6 million for the nine-month  period ended  September 30,
2002, when compared to the same periods in 2001. The increase in interest income
on investment  securities for the three-month  period is primarily the result of
an increase in the average investment security balance of $17.3 million or 19.8%
partially offset by an 84 basis point, or 14.2%, decrease in the yield earned on
investment  securities compared to the same period last year. For the nine-month
period, the decrease in interest income on investment securities was due to a 91
basis point,  or 15.0%,  decrease in the yield  earned,  partially  offset by an
increase  in the average  balance of 3.0% when  compared to the same period last
year.
                            INTEREST INCOME ON LOANS

     Interest  income on loans,  on a tax  equivalent  basis,  generated  by the
Corporation's  loan portfolio  decreased 4.3% and 4.0% to $7.9 million and $24.3
million  for the  three- and  nine-month  periods  ending  September  30,  2002,
respectively,  compared to the same  periods  last year.  The  decrease for both
periods  is the direct  result of 57 and 81 basis  point  decrease  in the yield
earned on the portfolio  partially  offset by an increase in average balances of
$13.7  million or 3.2% and $27.1 million or 6.6% as compared to the same periods
in 2001.  In addition,  a large  recovery of past due accrued  interest and late
charges related to the  restructuring of one large commercial loan  relationship
in 2002 partially offset the decrease in the interest income earned on loans for
both periods.

                      INTEREST EXPENSE ON DEPOSIT ACCOUNTS

     Interest expense on deposit  accounts for the three- and nine-month  period
ended  September  30, 2002  decreased  34.3% and 34.2% to $2.3  million and $7.4
million,  respectively,  when compared to the same periods in 2001. The decrease
in both  periods  is a result of 133 and 158 basis  point,  or 38.6% and  40.5%,
decreases in rates paid on  interest-bearing  deposits  partially offset by 7.0%
and 10.3%  increases in the average  interest-bearing  deposit balance to $434.0
million and $423.6 million for the three- and nine-month  period ended September
30, 2002, respectively, compared to the same periods last year.

     Competition  for deposits from local community banks as well as non-banking
institutions  such as credit  union and mutual fund  companies  continues  to be
strong.  Despite this competition,  the Corporation's  deposit base continues to
grow and is expected to grow as we continue to open new branches and attract new
customers with new services. Total deposits continue to grow in our new branches
as well as at our existing sites. The Corporation  continually  explores for new
branch sites to expand its core deposit base.

<PAGE>



         INTEREST EXPENSE ON SECURITIES SOLD UNDER REPURCHASE AGREEMENTS

     Interest  expense on securities  sold under  repurchase  agreements for the
three-month  period ended September 30, 2002 decreased 72.7% to $6 thousand from
$22 thousand in 2001. This decrease is primarily the result of an 80.0% decrease
in the average balance on securities sold under repurchase  agreements partially
offset  by an  increase  of 108  basis  point or  36.2%  on  rates  paid on such
contracts,  compared to the rates paid in September 30, 2001. For the nine-month
period ending  September  30, 2002,  interest  expense on securities  sold under
repurchase agreements decreased 77.5% from $80 thousand to $18 thousand compared
to the same period in 2001.  Decreases for this period are the result of a 70.0%
decrease  in the  average  balance  and a 96 basis  point or 25.1%  decrease  on
interest  paid on such  contracts.  The  decrease  is also  attributable  to the
popularity of our overnight  cash sweep and tri-party repo program which totaled
$82.8  million at September  30, 2002 and $47.8  million at September  30, 2001.
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)  advances  and other
borrowings for the three-month period ended September 30, 2002 increased 1.2% to
$262  thousand  from $259  thousand  compared to the same  period in 2001.  This
increase is primarily the result of a 62 basis point or 12.1%  increase in rates
paid on such borrowings  partially  offset by a 9.7% or $2.0 million decrease in
the average balance of such  borrowings.  The interest  expense on FHLB advances
and  other  borrowings  for the  nine-month  period  ended  September  30,  2002
decreased  $83 thousand or 8.6%.  The decrease can be  attributed to an 85 basis
point or 14.5% decrease in the rates paid partially  offset by a $1.5 million or
70.6%  increase  in the  average  balance  of  such  borrowings.  The  need  for
borrowings  has  decreased  during  2002 as a  result  of  slower  loan  growth,
increased  deposits,  and funds  obtained from sales of  investment  securities.
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

     The  Corporation  recorded a  provision  for loan losses for the three- and
nine-month  period ended September 30, 2002 of $875 thousand and a $1.7 million,
respectively,  compared to $1.4 million and $1.8 million for the same periods in
2001.  The  increased  provision  for loan losses taken in 2002 is the result of
amounts  included  for loan  write-downs  in the  third  quarter  of  2002.  The
provisions  for  loan  losses  taken  during  2001  included  amounts  for  loan
write-downs  and  charge-offs of several  commercial  loans to borrowers who had
some operating  difficulties and/or had been impacted by changes in the economy.
Additionally, the provision was increased in both years to provide for increased
levels of  delinquent  loans and for normal loan growth.  The allowance for loan
losses as a percentage of total loans was 1.44% at September 30, 2002,  1.45% at
September  30, 2001 and 1.42% at December  31,  2001,  respectively.  Management
believes  that the  allowance  for loan losses is adequate  based on its current
assessment of probable and estimated  losses.  See the section titled "Allowance
for  Loan  Losses"  and   "Non-Performing   Loans  and  Assets"  for  additional
discussion.
<PAGE>



                               NON-INTEREST INCOME

     Total  non-interest   income  increased  50.9%  to  $2.4  million  for  the
three-month  period ended September 30, 2002 when compared to the same period in
2001. For the nine-month  period ended  September 30, 2002,  total  non-interest
income increased 43.6% to $6.6 million when compared to the same period in 2001.

     The  primary  component  of  non-interest  income is  Financial  Management
Services  ("FMS")  revenue,  which  increased 8.7% and 6.7% to $799 thousand and
$2.4 million for the three- and nine-month  periods  ending  September 30, 2002,
respectively,  compared to September  30,  2001.  The market value of FMS assets
under  management  custody grew $26.2 million,  or 5.6%,  from $469.4 million at
September  30, 2001 to $495.6  million at September  30,  2001.  The increase in
Financial  Management Services revenue and growth in assets under management and
custody can be attributed to strong  business  development  efforts  focusing on
local  individuals,  businesses,  and political and  governmental  units,  which
generated new asset management accounts,  partially offset by declines in equity
values due to stock market fluctuations.

     Service charges on deposit accounts increased  approximately  15.9% to $489
thousand for the three-months ended September 30, 2002 compared to $422 thousand
for the same period in 2001. For the nine-month period ended September 30, 2002,
service charges on deposit accounts  increased 37.0% to $1.4 million compared to
$991  thousand for the same period in 2001.  This  increase can be attributed to
the growth in the number and volume of deposit  accounts and the introduction of
"Bounce  Protection" a  deposit-related  service,  which was  introduced in July
2001.  Management  expects this component of non-interest  income to continue to
grow as deposits grow.

     Gains on the sale of investment securities also contributed to the increase
in non-interest  income.  For the  three-month  period ended September 30, 2002,
gains on the sale of investment  securities were less than one thousand dollars.
For the nine-month  period ended September 30, 2002, gains on sale of investment
securities increased 49.4% from $81 thousand to $121 thousand,  when compared to
the same  period  in 2001.  These  gains  were  realized  as a result  of normal
portfolio management and to take advantage of the current rate environment.

     The Corporation has an operating lease agreement with one of its customers,
its income is classified as "Rental  Income".  Rental income on operating  lease
agreements for the  three-month  period ended  September 30, 2002 increased $164
thousand  from $48 thousand to $212 thousand when compared to the same period in
2001. For the nine-month period, rental income increased $690 thousand from $177
thousand to $867 thousand when compared to the same period in 2001.

     Gains on the sale of fixed  assets  for the three-  and  nine-month  period
ended  September  30,  2002  increased  $136  thousand  from $4 thousand to $140
thousand  when  compared to the same periods last year.  The increase was due to
the sale of a piece  real  property  adjacent  to its  Lionville  branch  and is
non-recurring.

     Gains and fee income  generated in the sale of  Residential  Mortgage loans
for the three-month period ended September 30, 2002 increased $273 thousand from
$6  thousand  to $279  thousand  compared  to the same  period in 2001.  For the
nine-month  period,  gains on sale of loans  increased  $359  thousand from $110
thousand to $469 thousand when compared to the same period last year.  Increases
in both  periods  are  primarily  the  result of a high  volume  of  residential
mortgage sales due to higher  originations of residential  mortgage resulting of
record low mortgage interest rates.
<PAGE>

     Other non-interest income increased $111 thousand and $278 thousand for the
three- and nine-month periods ended September 30, 2002 when compared to the same
periods in 2001. The primary  component of the increase in the nine-month period
can be  attributable  to gains on the sale of Other Real Estate Owned  (`OREO').
Gains on the sale of OREO for the  nine-month  period ended  September  30, 2002
increased  $187 thousand from $58 thousand to $245 thousand when compared to the
same  periods  last  year.  The  gain was the  result  of the sale of a piece of
foreclosed  property  that  occurred  in the first  quarter  of this  year.  The
increases  in other  non-interest  income  can  also be  attributed  to  revenue
increases  in ATM,  MAC debit card,  merchant  income,  safe deposit box income,
wealth advisory, and other miscellaneous income.



                              NON-INTEREST EXPENSE

     Total  non-interest  expense for the three- and  nine-month  periods  ended
September 30, 2002  increased  8.7% to $6.2 million and $16.0% to $18.8 million,
compared to the same periods in 2001.  The various  components  of  non-interest
expense changes are discussed below.

     Employee salaries and benefits increased 12.8% to $3.4 million and 14.5% to
$10.3 million for the  three-month  and nine-month  periods ended  September 30,
2002  compared to the same periods in 2001.  Increased  staff,  annual  employee
raises,  promotions  and  a  proportional  increase  in  employee  benefits  are
primarily responsible for the increases.  At September 30, 2002, the Corporation
employed 235 full time and 49 part time employees  compared to 208 full time and
53 part-time in September 30, 2001.

     Net occupancy,  equipment,  and data processing  expense  increased 6.9% to
$777  thousand and 15.7% to $2.4 million for the three- and  nine-month  periods
ended September 30, 2002, respectively,  compared to the same periods last year.
The increase is the direct result of the opening of three full service  branches
during 2001. A 31.6% and 40.5% increase in building  depreciation for the three-
and nine-month  periods ended  September 30, 2002 as well as increased  computer
and  related  equipment  costs  associated  with the  expansion,  upgrading  and
maintenance of personnal computers and our networking infrastructure contributed
to the increase.

     Depreciation on operating leases increased 58.8% to $624 thousand and 56.6%
to $1.8 million for the three- and nine-month  periods ended September 30, 2002,
respectively, compared to the same periods in 2001. This depreciation expense is
the result of an operating  lease  agreement the Corporation has with one of its
customers.  The income  associated  with this  operating  lease is classified as
Rental Income.

     Professional  Services  increased  25.1% to $289 thousand and 32.9% to $978
thousand  for the  three-  and  nine-month  period  ended  September  30,  2002,
respectively,  compared to the same periods in 2001.  The increase is the result
increased audit, accounting, consultant fees, and legal fees related to work-out
activities involving one large loan relationship.

     Total other  non-interest  expense decreased 20.6% to $925 thousand for the
three month period  ended  September  30, 2002  compared to the same period last
year.  For  the  nine-month   period  ended  September  30,  2002,  total  other
non-interest  expense increased 3.1% to $3.0 million compared to the same period
in 2001. The increase for the nine-month period is the result of an increases in
loan related costs,  deposit costs,  purchased  services,  marketing and general
operating expenses related to the opening of our three new branches.

     As discussed above, the Corporation has established a Credit Administration
department.  The  Corporation  believes  that the  establishment  of this Credit
Administration  area as well as other  procedural  and policy changes will allow
the  Corporation to improve its performance  and  productivity  and reduce risk.
These  changes  are  anticipated  to have an  impact  on this  component  of the

<PAGE>

Corporations   Income  Statement.   Management   believes  that  over  time  the
efficiencies  created by this department should reduce the overhead cost of loan
underwriting.

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


<PAGE>


                       CONSOLIDATED AVERAGE BALANCE SHEET
             AND TAXABLE EQUIVALENT INCOME/EXPENSE AND RATES FOR THE
                        THREE MONTHS ENDED SEPTEMBER 30,
<TABLE>
<CAPTION>

(Dollars in thousands)                                               2002                                     2001
                                                     --------------------------------------   ----------------------------------

                                                        Daily                                   Daily
                                                       Average                                  Average
                                                       Balance     Interest      Rate           Balance     Interest       Rate
                                                       -------     --------      ----           -------     --------       ----
ASSETS
<S>                                               <C>           <C>             <C>          <C>        <C>               <C>
Federal funds sold                                 $    22,651   $      104      1.84%        $   3,549  $        30       3.38%
Interest bearing deposits in banks                         224            1      1.79%              141            1       2.84%
Investment securities
    Taxable                                            102,782        1,293      5.03%           85,491        1,258       5.89%
    Tax-exempt (1)                                       1,796           32      7.18%            1,822           32       6.96%
                                                      --------     --------                    --------     --------
        Total investment securities                    104,578        1,325      5.07%           87,313        1,290       5.91%
                                                      --------     --------                    --------     --------
Loans (2)
    Taxable                                            435,956        7,822      7.18%          422,143        8,164       7.74%
    Tax-exempt (1)                                       2,254           47      8.39%            2,391           57       9.52%
                                                      --------     --------                    --------     --------
        Total loans                                    438,210        7,869      7.18%          424,534        8,221       7.75%
                                                      --------     --------                    --------     --------
        Total interest earning assets                  565,663        9,300      6.58%          515,537        9,542       7.40%
Non-interest earning assets
    Allowance for possible loan losses                  (6,565)                                  (6,724)
    Cash and due from banks                             25,606                                   21,574
    Other assets                                        22,882                                   21,159
                                                      --------                                 --------
        Total assets                                $  607,586                                $ 551,546
                                                     =========                                 ========

LIABILITIES AND STOCKHOLDERS' EQUITY
Savings, NOWS & money market deposits               $  301,854   $    1,033      1.37%        $ 242,516   $    1,437       2.37%
Certificates of deposits and other time                132,108        1,268      3.84%          162,892        2,064       5.07%
                                                      --------     --------                    --------     --------
   Total interest bearing deposits                     433,962        2,301      2.12%          405,408        3,501       3.45%
Securities sold under repurchase agreements         $      591   $        6      4.06%        $   2,957   $       22       2.98%
Guaranteed Preferred beneficial interest in
  Corporation's subordinated debentures                  4,457           65      5.75%               --           --         --
Federal Home Loan Bank advances and
   other borrowings                                     18,262          262      5.74%           20,228          259       5.12%
                                                      --------     --------                    --------     --------
   Total interest bearing liabilities                  453,195        2,634      2.30%          428,593        3,782       3.53%
                                                      --------    ---------                    --------     --------
Non-interest bearing liabilities
    Non-interest bearing demand deposits                97,647                                   72,259
    Other liabilities                                    9,478                                    5,492
                                                      --------                                 --------
        Total liabilities                              560,320                                  506,344
Stockholders' equity                                    47,266                                   45,202
                                                      --------                                 --------

        Total liabilities and stockholders' equity  $  607,586                               $  551,546
                                                     =========                                =========

Net interest income                                                  $6,666                                   $5,760
                                                                      =====                                    =====

Net yield on interest earning assets                                             4.71%                                   4.47%
                                                                                 =====                                   =====






<FN>
(1) The indicated income and annual rate are presented on a taxable equivalent
    basis using the Federal marginal rate of 34% adjusted for the TEFRA 20%
    interest expense disallowance for 2002 and 2001.
(2)      Non-accruing loans are included in the average balance.
</FN>
</TABLE>
<PAGE>

<TABLE>
<CAPTION>
                       CONSOLIDATED AVERAGE BALANCE SHEET
             AND TAXABLE EQUIVALENT INCOME/EXPENSE AND RATES FOR THE
                         NINE MONTHS ENDED SEPTEMBER 30,

(Dollars in thousands)                                               2002                                      2001
                                                     --------------------------------------   -----------------------------------
                                                        Daily                                    Daily
                                                       Average                                  Average
                                                       Balance     Interest      Rate           Balance     Interest       Rate
                                                       -------     --------      ----           -------     --------       ----
ASSETS
<S>                                                <C>             <C>          <C>          <C>            <C>           <C>
Federal funds sold                                  $   21,320      $   303      1.89%        $   5,460      $   181       4.42%
Interest bearing deposits in banks                         210            3      1.90%              129            5       5.17%
Investment securities
    Taxable                                             90,182        3,460      5.12%           87,453        3,961       6.04%
    Tax-exempt (1)                                       1,787          100      7.44%            1,815          101       7.42%
                                                      --------     --------                    --------     --------
        Total investment securities                     91,969        3,560      5.16%           89,268        4,062       6.07%
                                                      --------     --------                    --------     --------
Loans (2)
    Taxable                                            438,541       24,135      7.34%          410,821       25,068       8.14%
    Tax-exempt (1)                                       2,347          141      7.98%            2,961          220       9.92%
                                                      --------     --------                    --------     --------
        Total loans                                    440,888       24,276      7.34%          413,782       25,288       8.15%
                                                      --------     --------                    --------     --------
Total Interest Earning Assets                          554,387       28,142      6.77%          508,639       29,536       7.74%
Non-interest earning assets
    Allowance for possible loan losses                  (6,605)                                  (6,661)
    Cash and due from banks                             23,963                                   23,504
    Other assets                                        23,987                                   19,736
                                                      --------                                 --------
        Total assets                                 $ 594,732                                 $545,218
                                                      ========                                 ========

LIABILITIES AND STOCKHOLDERS' EQUITY
Savings, NOWS & money market deposits                $ 286,529       $3,012      1.40%         $237,167       $4,820       2.71%
Certificates of deposits and other time                137,111        4,373      4.25%          147,010        6,406       5.81%
                                                      --------     --------                    --------     --------
   Total interest bearing deposits                     423,640        7,385      2.32%          384,177       11,226       3.90%
Securities sold under repurchase agreements                835           18      2.87%            2,782           80       3.83%
Guaranteed Preferred beneficial interest in
 Corporation's subordinated debentures                   2,384           65      5.75%               --           --          --
Federal Home Loan Bank advances and
   other borrowings                                     23,338          878      5.02%           21,815          961       5.87%
                                                      --------     --------                    --------     --------
   Total interest bearing liabilities                  447,941        8,346      2.47%          408,774       12,267       4.00%
                                                      --------     --------                    --------     --------
Non-interest bearing liabilities
    Non-interest bearing demand deposits                94,251                                   86,010
    Other liabilities                                    6,600                                    5,843
                                                      --------                                 --------
        Total liabilities                              548,792                                  500,627
Stockholders' equity                                    45,940                                   44,791
                                                      --------                                 --------
        Total liabilities and stockholders' equity   $ 594,732                                $ 545,218
                                                      ========                                 ========
Net interest income                                                 $19,796                                  $17,269
                                                                     ======                                   ======
Net yield on interest earning assets                                             4.76%                                   4.53%
                                                                                 =====                                   =====











<FN>
(1) The indicated income and annual rate are presented on a taxable equivalent
    basis using the Federal marginal rate of 34% adjusted for the TEFRA 20%
    interest expense disallowance for 2002 and 2001.
(2) Non-accruing loans are included in the average balance.
</FN>
</TABLE>

<PAGE>

                                  INCOME TAXES

     Income tax expense for the three- and  nine-month  periods ended  September
30, 2002 was $569 thousand and $1.7 million,  compared to $130 thousand and $1.1
million in the same periods last year.  This  represents  effective tax rates of
28.8% and 28.9% for the three- and nine-month  periods ended September 30, 2002,
respectively. The effective tax rate for the three- and nine-month periods ended
September 30, 2001 was 56.0% and 28.9%, 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  sources  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

                                                   (Annualized)
(Dollars in thousands)                           September 30, 2002            December 31, 2001             Average Balance
                                              ------------------------     ------------------------     -------------------------
                                              Average       Effective      Average       Effective        Dollar      Percentage
                                              Balance          Yield       Balance          Yield       Variance       Variance
                                              -------       ----------     -------       ----------     --------      -----------
<S>                                         <C>               <C>         <C>              <C>         <C>              <C>
NOW Accounts                                 $ 79,063          0.41%       $ 71,034         1.13%       $ 8,029          11.30%
Money Market                                   25,216          1.45          22,490         2.37          2,726          12.12
Statement Savings                              52,832          1.51          47,077         2.53          5,755          12.22
Other Savings                                   1,644          1.38           1,758         2.39           (114)         (6.48)
CD's Less than $100,000                       111,138          4.38         117,282         5.73         (6,144)         (5.24)
                                             --------                      --------                    --------

Total Core Deposits                           269,893          2.36         259,641         3.58         10,252           3.95

Non-Interest bearing
  Demand Deposit Accounts                      94,251            --          88,923           --          5,328           5.99
                                             --------                      --------                    --------

Total Core and Non-Interest
  Bearing Deposits                            364,144          1.75         348,564         2.67         15,580           4.47
                                             --------                      --------                    --------

Tiered Savings                                127,774          1.96          97,641         3.38         30,133          30.86
CD's Greater than $100,000                     25,973          3.70          29,734         5.36         (3,761)        (12.65)
                                             --------                      --------                    --------

Total Deposits                              $ 517,891          1.90       $ 475,939         2.98       $ 41,952           8.81
                                             ========                      ========                    ========
</TABLE>
<PAGE>

     The Bank, as a member of the FHLB, maintains several credit facilities.  As
of  September  30, 2002 the amount  outstanding  under the Bank's line of credit
with the FHLB was $ -0-.  Additionally,  the FHLB offers  several  other  credit
related  products  which are  available to the bank.  The Bank  currently  has a
maximum borrowing capacity with the FHLB of approximately $128.4 million. During
the three- and  nine-month  periods  ending  September  30,  2002,  average FHLB
advances  were  approximately  $18.3  million and $23.3  million,  respectively,
consisting of term  advances  representing  a combination  of maturities in each
period.  The average interest rates on these advances were  approximately  7.16%
and 5.39% during the three- and nine-month  periods  ending  September 30, 2002,
respectively.  FHLB  advances  are  collateralized  by a  pledge  on the  Bank's
portfolio of unencumbered  investment  securities,  certain mortgage loans and a
lien on the Bank's FHLB stock.

     The goal of interest rate  sensitivity  management is to avoid  fluctuating
net interest  margins,  and to enhance  consistent growth of net interest income
through periods of changing  interest rates. Such sensitivity is measured as the
difference  in the volume of assets and  liabilities  in the existing  portfolio
that are subject to  repricing in a future time period.  The  Corporation's  net
interest  rate  sensitivity  gap within one year is a negative  $80.8 million or
13.3% of total  assets at September  30, 2002,  compared  with  negative  $190.4
million or 34.0% at September  30, 2001,  respectively.  The  Corporation's  gap
position is just 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.



<PAGE>

<TABLE>
<CAPTION>

                          INTEREST SENSITIVITY ANALYSIS
                            AS OF SEPTEMBER 30, 2002

(Dollars in thousands)
                                                                    One              Over
                                                   Within         through            five           Non-rate
                                                  one year       five years          years          sensitive         Total
                                                ------------    ------------      ------------    -------------    -----------
<S>                                           <C>             <C>               <C>              <C>            <C>
ASSETS
    Federal funds sold                         $      4,950     $        --       $        --      $        --    $     4,950
    Investment securities                            36,771          42,555            36,829               --        116,155
    Interest bearing deposits in banks                  199              --                --               --            199
    Loans and leases                                178,950         234,922            28,632           (6,375)       436,129
    Cash and cash equivalents                            --              --                --           29,510         29,510
    Premises & equipment                                 --              --                --           14,248         14,248
    Other assets                                         --              --                --            7,477          7,477
                                                  ---------       ---------         ---------        ---------     ----------
       Total assets                            $    220,870     $   277,477       $    65,461      $    44,860    $   608,668
                                                  =========       =========         =========        =========     ==========

LIABILITIES AND CAPITAL
    Non-interest bearing deposit               $         --     $        --       $        --      $   104,391    $   104,391
    Interest bearing deposits                       285,419          39,433           103,328               --        428,180
    Borrowed funds                                    1,003              --                --               --          1,003
    FHLB Term Advance                                10,257           1,201             6,619               --         18,077
    Guaranteed Preferred Securities                   5,000              --                --               --          5,000
    Other liabilities                                    --              --                --            4,540          4,540
    Capital                                             --               --                --           47,477         47,477
                                                  ---------       ---------         ---------        ---------      ---------
       Total liabilities & capital             $    301,679     $    40,634       $   109,947      $   156,408    $   608,668
                                                  =========       =========         =========        =========      =========
    Net interest rate
      sensitivity gap                          $    (80,809)    $   236,843       $  (44,486)      $ (111,548)    $        --
                                                  =========       =========         =========        =========      =========
    Cumulative interest rate
      sensitivity gap                          $    (80,809)    $   156,034       $   111,548      $        --    $        --
                                                  =========       =========         =========        =========      =========
    Cumulative interest rate
      sensitivity gap divided
      by total assets                                (13.3%)          25.6%              18.3%
                                                  =========       =========         ==========
</TABLE>

                            ALLOWANCE FOR LOAN LOSSES

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



<PAGE>

<TABLE>
<CAPTION>

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

                                                                        Three Months                        Nine Months
                                                                           Ended                               Ended
                                                                        September 30,                       September 30,
                                                                    -----------------------           -------------------------
(Dollars in thousands)                                               2002             2001              2002              2001
                                                                     ----             ----              ----              ----

<S>                                                            <C>              <C>                <C>                 <C>
Balance at beginning of period                                   $   6,561        $  6,704           $  6,344            $ 6,609
                                                                   -------         -------            -------            -------
Provision charged to operating expense                                 875           1,400              1,655              1,770
                                                                   -------         -------            -------            -------
    Recoveries of loans previously charged-off                          23              18                305                147
    Loans charged-off                                               (1,084)         (1,840)            (1,929)            (2,244)
                                                                   -------         -------            -------            -------
Net loans charged-off                                               (1,061)         (1,822)            (1,624)            (2,097)
                                                                   -------         -------            -------            -------
Balance at end of period                                         $   6,375        $  6,282           $  6,375            $ 6,282
                                                                   =======         =======            =======            =======

Period-end loans outstanding                                     $ 442,504       $ 434,549          $ 442,504          $ 434,549

Average loans outstanding                                        $ 438,210       $ 424,534          $ 440,888           $413,782

Allowance for possible loan losses as a
    percentage of period-end loans outstanding                        1.44%           1.45%              1.44%             1.45%

Ratio of net charge-offs to average loans
    outstanding (annualized)                                          0.24%           0.43%              0.37%             0.51%
</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 write down
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.  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. As of September 30, 2002, the levels of  non-performing  loans
and assets  have been  reduced  from the levels in 2001.  However,  the level of
non-performing   loans  has   increased   $2.8   million  from  June  30,  2002.
Non-performing  loans reduce the Corporation's  earnings because interest income
is not earned on such assets.  Management has taken  aggressive steps to correct
the downward  trend and correct and control  current and future  credit  quality
issues. The newly formed Credit Administration  department is intended to assist
management to improve the  components of the allowance of loans and lease losses
including  the  provision for loan and lease loss,  recoveries,  and  charge-off
loans.   The  following  chart   represents   detailed   information   regarding
non-performing loans:
<PAGE>









<TABLE>
<CAPTION>

                         NON-PERFORMING LOANS AND ASSETS

                                                                September 30,              December 31,
                                                                -------------              ------------


Dollars in thousands)                                      2002             2001               2001
                                                           ----             ----               ----

<S>                                                    <C>              <C>                 <C>
Past due over 90 days and still accruing                $    270         $     58            $   174

Non-accrual loans                                          5,410            9,092              7,630
                                                         -------          -------            -------
Total non-performing loans                                 5,680            9,150              7,804

Other real estate owned                                      473              727                831
                                                         -------          -------            -------

Total non-performing assets                              $ 6,153          $ 9,877            $ 8,635
                                                         =======          =======            =======

Non-performing loans as a percentage
     of total loans                                         1.28%            2.11%              1.74%

Allowance for possible loan losses as a
   percentage of non-performing loans                     112.24%           68.66%             81.29%

Non-performing assets as a percentage
   of total loans and other real estate owned               1.39%            2.27%              1.92%

Allowance for possible loan losses as a
  percentage of non-performing assets                     103.61%           63.60%             73.47%
</TABLE>

     Even though the above ratios  indicate the  allowance  for loan losses as a
percentage of non-performing loans does not exceed the principal balances of all
non-performing loans at September 30, 2002,  management feels that the allowance
for loan losses is adequate based on Management's current assessment of probable
estimated losses.  Other Real Estate Owned ("OREO")  represents  residential and
commercial real estate owned by the Corporation  following  default by borrowers
and has been written down to realizable value (net of estimated  disposal costs)
based  on  professional  appraisals.  The  newly  formed  Credit  Administration
department  should  assist in  improving  loans  past due over 90 days and still
accruing, non-accrual loans, as well as other real estate owned.

                                 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.

     FASB114  "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 such impaired loans was $5.9
million,  $7.4  million,  and $8.6 million at September  30, 2002,  December 31,
2001, and September 30, 2001 respectively. The associated allowance for impaired
loans was $500  thousand,  $820  thousand  $865  thousand at September 30, 2002,
December 31, 2001, and September 30, 2001, respectively.
<PAGE>

     For the  three-month  and  nine-month  periods  ended  September  30, 2002,
activity in the allowance  for impaired loan losses  include a provision of $233
and write off's of $103 thousand and $190 thousand, respectively, and recoveries
of $0 for both  periods.  For the three- and nine- month period ended  September
30, 2001, activity in the allowance for impaired loan losses include a provision
of $680 thousand and write off's of $30 thousand and $57 thousand, respectively,
and  recoveries of $0 for both  periods.  Contractual  interest  amounted to $95
thousand for the three-months ended September 30, 2002 and $336 thousand for the
nine-months  ended  September 30, 2002 compared to $99 thousand and $57 thousand
in  2001,  respectively.  Cash  collected  on  loans  for  the  three-month  and
nine-month  period  ended  September  30,  2002  was  $110  and  $570  thousand,
respectively,  all of which  $110  thousand  and $345  thousand  was  applied to
principal and no interest  income was recorded.  Cash collected on loans for the
three-month and nine-month  period ended September 30, 2001 was $57 thousand and
$65  thousand,  respectively,  all of which  was  applied  to  principal  and no
interest income was recorded.

                        BRANCHING AND TECHNOLOGY PROJECTS

     The  Corporation is planning to open a new branch in the  Coatesville  area
during the next 12  months.  The  Corporation  continually  explores  new branch
opportunities  and has several  additional sites under review. In June 2002, the
Corporation  installed a new check imaging  system that is  integrated  into the
core  banking  system that  enables our  customers to see images of their checks
online  through  the  Bank's  Net Teller  and Net Cash  Manager  online  banking
services.  In  addition,  the  Corporation  introduced a new  integrated  branch
platform  system in September 2002 which should  streamline the account  opening
process for our customers and improve back office efficiencies.

                                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 OCC.  Under these
requirements,  the  regulatory  agencies have set minimum  thresholds for Tier I
Capital,  Total Capital,  and Leverage  ratios.  At September 30, 2002, 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  1991.  The
Corporation's  Risk-Based  Capital  Ratios,  shown below,  have been computed in
accordance with regulatory accounting policies.



<PAGE>
<TABLE>
<CAPTION>


RISK-BASED                                      September 30,               December 31,         "Well Capitalized"
                                         -------------------------         -------------
CAPITAL RATIOS                             2002               2001              2001                 Requirements
--------------                             ----               ----              ----            --------------------
Corporation
-----------
<S>                                     <C>                <C>                <C>                    <C>
Leverage Ratio                             8.44%              7.74%              7.65%                  5.00%
Tier I Capital Ratio                      10.79%             10.06%              9.50%                  6.00%
Total Risk-Based Capital Ratio            12.04%             11.33%             10.75%                 10.00%

Bank
Leverage Ratio                             8.22%              7.66%              7.42%                  5.00%
Tier I Capital Ratio                      10.51%              9.81%              9.22%                  6.00%
Total Risk-Based Capital Ratio            11.76%             11.06%             10.47%                 10.00%
</TABLE>

     The Bank 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.

     The Corporations  and the Banks  Risk-Based  Capital ratios were positively
impacted by the July 11, 2002 issuance of preferred capital securities (see note
8 on page 8 for more detail).




<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 2001 Annual Report of
the Corporation,  filed as an exhibit to its Form 10-K for the fiscal year ended
December 31,  2001,  with the SEC via EDGAR.  Please refer to the  "Management's
Discussion and Analysis" section on pages 24-38 of the Corporation's 2001 Annual
Report for additional information.

                         ITEM 4. CONTROLS AND PROCEDURES

     Appearing  immediately following the "Signatures" section of this Quarterly
Report  there  are  four  certifications,  one by  each of our  Chief  Executive
Officer,  Chief Operating Officer,  Chief Financial Officer,  and our Controller
(the "Section 302  Certifications").  This section of the Quarterly Report which
you are currently reading contains information  concerning the evaluation of the
Corporation's  disclosure  controls and  procedures  and matters  regarding  our
internal controls 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.

     The Securities and Exchange  Commission (the "SEC") requires that within 90
days  prior to the  filing  of this  Quarterly  Report on Form  10-Q,  the Chief
Executive  Officer and the Chief Financial Officer evaluate the effectiveness of
the  design  and  operation  of  the  Corporation's   "disclosure  controls  and
procedures" and report their  conclusions on the effectiveness of the design and
operation of the Company's disclosure controls and procedures in this report.

     "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  Securities  and  Exchange   Commission  (the  "SEC").  Our
disclosure  controls and  procedures  are also  designed  with the  objective of
ensuring  that  such   information  is  accumulated  and   communicated  to  our
Management,  including the CEO and CFO, as appropriate to allow timely decisions
regarding required disclosure.

     The  SEC  also  requires  that  the CEO and  CFO  certify  certain  matters
regarding the Company's "internal controls."

     "Internal  controls"  mean  our  procedures  which  are  designed  with the
objective  of  providing  reasonable  assurance  that (1) our  transactions  are
properly  authorized;  (2) our assets are  safeguarded  against  unauthorized or
improper use; and (3) our transactions are properly  recorded and reported,  all
to permit  the  preparation  of our  financial  statements  in  conformity  with
generally accepted accounting principles. The Corporation evaluates its internal
controls annually as banking regulations dictate.

     Among the matters our CEO, COO, CFO, and Controller  certify in the Section
302  Certifications  are whether all  "significant  deficiencies"  or  "material
weaknesses"  in the  Company's  internal  controls  have been  disclosed  to the
Corporation's  auditors and the audit  committee of the  Corporation's  Board of
Directors. In the professional auditing literature,  "significant  deficiencies"
are referred to as "reportable conditions";  these are control issues that could
have a significant adverse effect on the ability to record,  process,  summarize
and report financial data in the financial statements.  A "material weakness" is
defined  in  the  auditing  literature  as  a  particularly  serious  reportable
condition  where the internal  control does not reduce to a relatively low level
the risk that  misstatements  caused by error or fraud may occur in amounts that

<PAGE>

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.

     The Corporation's management,  including the CEO, COO, CFO, and Controller,
does not expect that our  disclosure  controls  and  procedures  or our internal
controls will prevent all error and all fraud. A control  system,  no matter how
well  conceived  and  operated,  can  provide  only  reasonable,  not  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 the Corporation  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,  control 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.

     Based upon their evaluation of the disclosure controls and procedures,  our
CEO, COO, CFO, and Controller  have concluded  that,  subject to the limitations
noted above,  our  disclosure  controls and  procedures are effective to provide
reasonable  assurance that material  information relating to the Corporation and
its  consolidated  subsidiaries is made known to management,  including the CEO,
COO, CFO, and Controller, on a timely basis.

There were no significant  changes to our internal  controls or in other factors
that could significantly affect our internal controls, subsequent to the date of
our last evaluation of our internal  controls,  including any corrective actions
with regard to significant deficiencies and material weaknesses.




<PAGE>



                           PART II - OTHER INFORMATION

Item 1.  Legal Proceedings

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

Item 2.  Changes in Securities

               None

Item 3.  Defaults upon Senior Securities

               None

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

               None

Item 5.  Other Information

               None

Item 6.  Exhibits and Reports on Form 8-K

               (a) Exhibits

               The following is a list of exhibits to this report:

     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.

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

99.1     Certification of President and Chief Executive Officer
99.2     Certification of Chief Operating Officer
99.3     Certification of Treasurer and Principal Accounting and Financial
         Officer
99.4     Certification of Assistant Treasurer/ Controller

               (b) Reports on Form 8-K

     A Form 8-K was filed with the SEC on July 23,  2002  pertaining  to a press
release announcing second quarter earnings.

     A Form 8-K was filed with the SEC on August 28,  2002  pertaining  to James
McLaughlin's promotion to Senior Vice President.
<PAGE>

     A Form 8-K was filed  with the SEC on  September  24,  2002  pertaining  to
Michelle Venema's promotion to Senior Vice President.

     A Form 8-K was filed with the SEC on October 24, 2002 pertaining to a press
release announcing third quarter earnings.


<PAGE>



                                   SIGNATURES


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



                        FIRST CHESTER COUNTY CORPORATION





November 14, 2002                           /s/ Charles E. Swope
                                            --------------------
                                            Charles E. Swope
                                            President and Chief Executive
                                            Officer






November 14, 2002                           /s/ J. Duncan Smith
                                            -------------------
                                            J. Duncan Smith
                                            Treasurer
                                            (Principal Accounting
                                            and Financial Officer)






<PAGE>
I,  Charles E. Swope,  President  and Chief  Executive  Officer of the  Company,
    ----------------
certify that:

1. I have  reviewed  this  quarterly  report on Form 10-Q of September 30, 2002;
                                                             -------------------

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

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

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

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

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

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

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

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

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

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

DATE:


/s/ Charles E. Swope
Charles E. Swope
President and Chief Executive Officer



<PAGE>
I,  Kevin  Quinn,  Chief  Operating  Officer  of  the  Company,   certify  that:
    ------------

1. I have  reviewed  this  quarterly  report on Form 10-Q of September 30, 2002;
                                                             -------------------

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

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

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

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

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

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

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

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

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

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

DATE:


/s/ Kevin Quinn
Kevin Quinn
Chief Operating Officer
<PAGE>



I, J. Duncan Smith,  Treasurer  (Principal  Accounting and Financial Officer) of
   ---------------
the Company, certify that:

1. I have  reviewed  this  quarterly  report on Form 10-Q of September 30, 2002;
                                                             -------------------

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

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

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

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

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

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

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

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

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

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

DATE:


/s/ J. Duncan Smith
J. Duncan Smith
Treasurer (Principal Accounting and Financial Officer)
<PAGE>



I,  T.   Benjamin   Marsho,   Assistant   Treasurer/Controller,   certify  that:
    ----------------------

1. I have  reviewed  this  quarterly  report on Form 10-Q of September 30, 2002;
                                                             -------------------

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

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

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

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

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

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

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

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

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

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

DATE:


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


<PAGE>






                                  EXHIBIT 99.1

                        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  September 30, 2002 as filed with
the Securities  and Exchange  Commission on the date hereof (the  "Report"),  I,
Charles E. Swope, President and Chief Executive Officer 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.



Date:    __________, 2002                   /s/ Charles E. Swope
                                            --------------------
                                            Charles E. Swope
                                            President and Chief Executive
                                            Officer





<PAGE>



                                  EXHIBIT 99.2

                        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  September 30, 2002 as filed with
the Securities  and Exchange  Commission on the date hereof (the  "Report"),  I,
Charles E. Swope, President and Chief Operating Officer 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.



Date:    __________, 2002                   /s/ Kevin Quinn
                                             Kevin Quinn
                                             Chief Operating Officer






<PAGE>



                                  EXHIBIT 99.3

                        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  September 30, 2002 as filed with
the Securities and Exchange Commission on the date hereof (the "Report"),  I, J.
Duncan Smith,  Treasurer  (Principal  Accounting  and Financial  Officer) 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.



Date:    __________, 2002                   /s/ J. Duncan Smith
                                            -------------------
                                            J. Duncan Smith
                                            Treasurer (Principal Accounting
                                            and Financial Officer)





<PAGE>




                                  EXHIBIT 99.4

                        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  September 30, 2002 as filed with
the Securities and Exchange Commission on the date hereof (the "Report"),  I, T.
Benjamin  Marsho,  Assistant   Treasurer/Controller  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.



Date:    __________, 2002                   /s/ T. Benjamin Marsho
                                            ----------------------
                                            T. Benjamin Marsho
                                            Assistant Treasurer/Controller