November 14, 2003
                                 VIA: EDGARLINK

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

                        FIRST CHESTER COUNTY CORPORATION

                         Commission File Number 0-12870

Gentlemen:

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



                                                      Very truly yours,

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

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

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

     Rick Huff, CPA, Grant Thornton, Philadelphia, PA

     Ward Johnson, VP, Wachovia Bank, Philadelphia, PA

     James Shilling,  VP, Kish Bank, Belleville, PA


<PAGE>



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

                                    FORM 10-Q
(Mark One)

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

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

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

For the transition period from ____________ to ____________.

Commission File No. 0-12870.


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

        Pennsylvania                                         23-2288763
        ------------                                         ----------

   (State or other jurisdiction of                          (IRS Employer
    incorporation or organization)                           Identification No.)


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


                                 (484) 881-4000
              (Registrant's telephone number, including area code)

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

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

The  number  of  shares  outstanding  of Common  Stock of the  Registrant  as of
November 10, 2003 was 4,519,405.


<PAGE>


                FIRST CHESTER COUNTY CORPORATION AND SUBSIDIARIES

                                      INDEX

<TABLE>
<CAPTION>

<S>              <C>                                                                                             <C>

                                                                                                                       PAGE

Part I.  FINANCIAL INFORMATION

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


                             Consolidated Statements of Income
                             Three and Nine-Months Ended September 30, 2003 and 2002                                      4


                             Consolidated Statements of Cash Flows
                             Nine-Months Ended September 30, 2003 and 2002                                                5


                             Notes to Consolidated Financial Statements                                                 6-9


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

                  Item 3 -   Quantitative and Qualitative Disclosures About Market Risk                                  27

                  Item 4 -  Controls and Procedures                                                                 27 - 28


Part II. OTHER INFORMATION

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

                  Signatures                                                                                             31
                  Exhibit Index                                                                                          32
                  Certifications                                                                                    33 - 40




</TABLE>



<PAGE>


                          PART I. FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS

                FIRST CHESTER COUNTY CORPORATION AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CONDITION
<TABLE>
<CAPTION>
                                                                                        (Unaudited)
(Dollars in thousands)                                                                 September 30,       December 31,
                                                                                           2003                2002*
                                                                                       -------------       ------------
<S>                                                                                    <C>                <C>
ASSETS
    Cash and due from banks                                                             $    27,320          $    31,777
    Federal funds sold and other overnight investments                                            -               17,000
    Interest Bearing Deposits in banks                                                          550                   90
                                                                                           --------            ---------

                Total cash and cash equivalents                                              27,870               48,867
                                                                                           --------            ---------
    Investment securities held-to-maturity (market value of $31 at
    September 30, 2003 and $34 at December 31, 2002, respectively)                               29                   31
                                                                                           --------            ---------

    Investment securities available-for-sale, at market value                               138,785              128,344
                                                                                           --------            ---------

    Loans                                                                                   502,377              447,682
    Less:  allowance for possible loan and lease losses                                      (5,473)              (6,230)
                                                                                           --------            ---------

                Net loans                                                                   496,904              441,452
                                                                                           --------            ---------

    Premises and equipment                                                                   13,714               13,944
    Other assets                                                                             10,568                7,372
                                                                                           --------            ---------

                Total assets                                                              $ 687,870           $  640,010
                                                                                           ========            =========
LIABILITIES
    Deposits
        Noninterest-bearing                                                               $ 116,468           $  109,012
        Interest-bearing (including certificates of deposit over $100                       457,707              449,726
                                                                                           --------            ---------
           of $21,956 and $22,845 - September 30, 2003 and
           December 31, 2002 respectively)


        Total deposits                                                                      574,175              558,738

    Securities sold under repurchase agreements                                                   -                    -
    Federal Home Loan Bank advances and other borrowings                                     52,958               22,678
    Guaranteed preferred beneficial interest in Corporation's subordinated
          debentures                                                                          5,000                5,000
    Other liabilities                                                                         4,474                4,982
                                                                                           --------            ---------

        Total liabilities                                                                   636,607              591,398
                                                                                           --------            ---------

STOCKHOLDERS' EQUITY
    Common stock, par value $1.00; authorized, 10,000,000 shares;
        outstanding, 4,799,666 at September 30, 2003 and December 31, 2002.                   4,800                4,800
    Additional paid-in capital                                                                1,490                  860
    Retained earnings                                                                        48,849               46,746
    Accumulated other comprehensive income                                                      618                1,378
    Treasury stock, at cost: September 30, 2003 - 281,201 December 31,
        2002 - 307,202                                                                       (4,494)              (5,172)
                                                                                           --------            ---------

                Total stockholders' equity                                                   51,263               48,612
                                                                                           --------            ---------

                Total liabilities and stockholders' equity                                $ 687,870            $ 640,010
                                                                                           ========             ========

* Derived from audited, consolidated financial statements included in Annual
Report on Form 10-K for the fiscal year ended 12/31/02. The accompanying notes
are an integral part of these statements.

</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,
                                                                         -------------------                   -------------------
                                                                           2003             2002              2003         2002
                                                                          -----             ----              ----         ----
<S>                                                                    <C>              <C>               <C>           <C>
INTEREST INCOME
    Loans, including fees                                               $  7,270         $  7,854          $ 21,416      $ 24,276
    Investment securities                                                  1,084            1,315             3,318         3,526
    Federal funds sold and other overnight investments                        24              104               205           304
    Deposits in Banks                                                          1                -                 2             3
                                                                         -------          -------           -------      --------

                Total interest income                                      8,379            9,273            24,941        28,109
                                                                         -------          -------           -------      --------

INTEREST EXPENSE
    Deposits                                                               1,390            2,301             4,659         7,385
    Securities sold under repurchase agreements                                -                6                 3            18
    Guaranteed preferred beneficial interest in corporations
       subordinated debentures                                                61               65               190            65
    Federal Home Loan Bank advances and other borrowings                     270              262               628           878
                                                                         -------          -------           -------      --------

                Total interest expense                                     1,721            2,634             5,480         8,346
                                                                         -------          -------           -------      --------

                Net interest income                                        6,658            6,639            19,461        19,763

    Provision for possible loan and lease losses                             860              875             1,627         1,655
                                                                         -------          -------           -------      --------

                Net interest income after provision
                  for possible loan and lease losses                       5,798            5,764            17,834        18,108
                                                                         -------          -------           -------      --------
NON-INTEREST INCOME
    Financial management services                                            825              799             2,477         2,361
    Service charges on deposit accounts                                      495              489             1,540         1,358
    Investment securities gains, net                                         130                -               389           121
    Operating lease rental income                                            221              194               669           563
    Gains and fees on the sale of residential mortgages                      131              279               935           469
    Gain on the sale of credit card portfolio                                  -                -               306             -
    Other                                                                    584              607             1,635         1,717
                                                                         -------          -------           -------      --------
                Total non-interest income                                  2,386            2,368             7,951         6,589
                                                                         -------          -------           -------      --------
NON-INTEREST EXPENSE
    Salaries and employee benefits                                         3,660            3,398            11,161        10,273
    Net occupancy, equipment and date processing                           1,394            1,225             4,105         3,669
    Depreciation expense on operating leases                                 172              176               511           494
    FDIC deposit insurance                                                    23               22                66            65
    Bank shares tax                                                          131              126               362           354
    Professional services                                                    306              289               816           916
    Other                                                                  1,058              925             3,175         2,983
                                                                         -------          -------           -------      --------
                Total non-interest expense                                 6,744            6,161            20,196        18,754
                                                                         -------          -------           -------      --------
                Income before income taxes and cumulative effect
                of change in accounting for income taxes                   1,440            1,971             5,589         5,943

INCOME TAXES                                                                 431              569             1,677         1,719
                                                                         -------          -------           -------      --------
NET INCOME                                                              $  1,009         $  1,402          $  3,912     $   4,224
                                                                         =======          =======           =======      ========
PER SHARE DATA
    Basic earnings per common share                                    $    0.22        $    0.32         $    0.88    $     0.96
                                                                        ========         ========          ========     =========
    Diluted earnings per common share                                  $    0.22        $    0.32         $    0.86    $     0.95
                                                                        ========         ========          ========     =========
    Dividends declared                                                  $  0.135         $  0.130          $  0.405     $   0.390
                                                                         =======          =======           =======      ========

Basic weighted average shares outstanding                              4,489,097        4,442,544         4,462,303     4,422,813
                                                                      ==========        =========         =========     =========
Diluted weighted average shares outstanding                            4,639,712        4,436,555         4,573,152     4,448,101
                                                                      ==========        =========         =========     =========

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)                                                                              2003                2002
                                                                                                    ----                ----
<S>                                                                                            <C>                <C>

OPERATING ACTIVITIES
    Net Income                                                                                  $    3,912         $    4,224
    Adjustments to reconcile net income to net cash
           provided by operating activities:
        Depreciation                                                                                 2,128              1,962
           Provision for possible loan and lease losses                                              1,627              1,655
    Amortization of investment security premiums
           and accretion of discounts                                                                1,551                367
    Amortization of deferred fees on loans                                                             277               (260)
    Investment securities gains, net                                                                  (389)              (121)
    (Increase) decrease in other assets                                                             (3,956)               531
    Decrease in other liabilities                                                                     (508)              (608)
                                                                                                  --------           --------

           Net cash provided by operating activities                                            $    4,642         $    7,750
                                                                                                  --------           --------

INVESTING ACTIVITIES
    (Increase) Decrease in loans                                                                   (56,717)             4,837
    Proceeds from sales of investment securities available-for-sale                                 15,604             20,066
    Proceeds from maturities of investment securities available-for-sale                            63,261              8,578
    Purchases of investment securities available-for-sale                                          (91,105)           (63,783)
    Purchase of premises and equipment, net                                                         (1,898)              (626)
                                                                                                  --------           --------
      Net cash (used in) investing activities                                                    $ (70,855)         $ (30,928)
                                                                                                  --------           --------

FINANCING ACTIVITIES
    Increase (decrease) in Federal Home Loan Bank advances                                          30,280             (3,766)
    Increase in deposits                                                                            15,437             33,746
    Decrease in securities sold under repurchase agreement                                               -            (13,674)
    Cash dividends paid                                                                             (1,809)            (1,726)
    Proceeds from issuance of guaranteed preferred beneficial interest in Corporation's
        subordinated debentures                                                                          -              5,000
    Treasury stock transactions                                                                      1,308                 24
                                                                                                  --------           --------

           Net cash provided by financing activities                                                45,216             19,604
                                                                                                  --------           --------

           NET INCREASE IN CASH AND CASH EQUIVALENTS                                               (20,997)            (3,574)

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

Cash and cash equivalents at end of period                                                       $  27,870          $  34,659
                                                                                                  ========           ========




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,
           2002.

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

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

4.         The  Corporation  adopted the provisions of FASB issued SFAS No. 130,
           "Reporting of Comprehensive Income", on January 1, 2002. SFAS No. 130
           establishes  standards  for  reporting  and display of  comprehensive
           income and its components (revenues, expenses, gains and losses) in a
           full set of financial  statements.  This statement also requires that
           all  items  that  are  required  to be  recognized  under  accounting
           standards as components of year-end  comprehensive income be reported
           in a financial  statement that is displayed with the same  prominence
           as other financial statements.  Other comprehensive income (loss) net
           of taxes for the three- and  nine-month  periods ended  September 30,
           2003 was  ($557)  thousand  and  ($761)  thousand,  compared  to $435
           thousand  and  $1.1  million  in the same  period  last  year.  Total
           comprehensive  income  (which  is the  sum of net  income  and  other
           comprehensive  income mentioned above), for the three- and nine-month
           periods ended  September 30, 2003 was $452 thousand and $3.2 million,
           compared  to $1.8  million  and $5.3  million in the same period last
           year.

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

<PAGE>

                FIRST CHESTER COUNTY CORPORATION AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued

                                   (UNAUDITED)

6.         The Corporation adopted SFAS No. 144,  "Accounting for the Impairment
           or Disposal of Long-Lived  Assets",  on January 1, 2002. SFAS No. 144
           retains  the  existing  requirements  to  recognize  and  measure the
           impairment of long-lived assets to be held and used or to be disposed
           of by sale. SFAS

           No. 144 changes the requirements relating to reporting the effects of
           a  disposal  or  discontinuation  of a  segment  of a  business.  The
           adoption  of this  statement  did not have a  material  impact on the
           financial condition or results of operations of the Corporation.

7.         The Corporation  adopted FASB Interpretation 45 (FIN 45) "Guarantor's
           Accounting  and Disclosure  Requirements  for  Guarantees,  including
           Indirect  Guarantees of  Indebtedness of Others," on January 1, 2003.
           FIN 45 requires a guarantor  entity,  at the inception of a guarantee
           covered by the  measurement  provisions FIN 45, to record a liability
           for the fair  value  of the  obligation  undertaken  in  issuing  the
           guarantee.  The  Corporation  has issued  financial  and  performance
           letters  of  credit.   Financial   letters  of  credit   require  the
           Corporation  to make payment if the  customer's  financial  condition
           deteriorates,  as defined in the agreements.  Performance  letters of
           credit require the Corporation to make payments if the customer fails
           to  perform  certain  non-financial   contractual  obligations.   The
           Corporation  previously  did not record an initial  liability,  other
           than the fees received for these letters of credit,  unless it became
           probable that the Corporation  would have to perform under the letter
           of credit.  Under FIN 45, the  Corporation  will  record a  liability
           equal to the initial fair value of the  liability  for the letters of
           credit.  The  Corporation  defines  the  initial  fair value of these
           letters  of  credit as the fee  received  from the  customer.  FIN 45
           applies  prospectively to letters of credit the Corporation issues or
           modifies  subsequent  to December  31,  2002.  The maximum  potential
           undiscounted   amounts  of  future  payments  of  letters  of  credit
           outstanding  as of  September  30, 2003 were $9.5  million,  and they
           expire  through May 31,  2007.  Amounts  due under  these  letters of
           credit would be reduced by any proceeds that the Corporation would be
           able to  obtain  in  liquidating  the  collateral  for the  letter of
           credit,  which varies depending on the customer.  The adoption of the
           provisions of FIN 45 is not expected to have a material impact on the
           financial condition or results of operation of the Corporation.

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

<PAGE>

                FIRST CHESTER COUNTY CORPORATION AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued

                                   (UNAUDITED)


           expected  to have a material  impact on the  financial  condition  or
           results of operation of the Corporation.

           The  Corporation  has  evaluated  the  impact  of FIN 46 on  variable
           interest  entities  consolidated  by  the  Corporation  prior  to the
           issuance of FIN 46.  Management  has  determined  that First  Chester
           County Capital Trust I qualifies as a variable  interest entity under
           FIN  46.  First  Chester  County  Capital  Trust I  issued  mandatory
           redeemable  preferred  stock to investors  and loaned the proceeds to
           the  Corporation.  First Chester County Capital Trust I holds, as its
           sole asset,  subordinated  debentures  issued by the  Corporation  in
           2002.  The  timing  and  amount  of  payments  on  the   subordinated
           debentures are the same as the timing and amount of payments by First
           Chester County Capital Trust I on the mandatory  redeemable preferred
           stock.  First Chester County Capital Trust I is currently included in
           the  Corporation's  consolidated  balance  sheet  and  statements  of
           income. Management believes that First Chester County Capital Trust I
           should  continue  to be included  in the  Corporation's  consolidated
           financial  statements after the effective date of FIN 46. However, as
           additional  interpretations  related  to  entities  similar  to First
           Chester  County  Capital Trust I become  available,  management  will
           reevaluate its  conclusion  that First Chester County Capital Trust I
           should be included in the consolidated  financial  statements and its
           potential  impact  to  its  Tier I  capital  calculation  under  such
           interpretations.  On November 13,  2003,  the  Corporation  issued an
           additional  $10.0  million  of  subordinated  debentures.  Management
           intends to treat this new  issuance the same as the one held by First
           Chester County Capital Trust I.

9.         Stock-based Compensation

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

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

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



<PAGE>


                FIRST CHESTER COUNTY CORPORATION AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued

                                   (UNAUDITED)
<TABLE>
<CAPTION>

                                                                            Three Months Ended            Nine Months Ended
                                                                                September 30,                 September 30,
                                                                          ------------------------      -----------------------
                                                                           2003           2002            2003           2002
                                                                           ----           ----            ----           ----
        <S>                                                              <C>         <C>                <C>          <C>

         Net income (in thousands)      As reported                       $  1,009     $ 1,402            $ 3,912     $ 4,224
         Stock-based compensation costs determined
           under fair value method for all awards                         $    (35)    $  (182)           $  (104)    $  (313)
                                                                           -------      ------             -----       ------
                                            Pro forma net income          $    974     $ 1,220            $ 3,808     $ 3,911

         Earnings per share (Basic)      As reported                      $   0.22     $  0.32            $  0.88     $  0.96
                                            Pro forma                     $   0.21     $  0.28            $  0.86     $  0.89
         Earnings per share (Diluted)   As reported                       $   0.22     $  0.32            $  0.86     $  0.95
                                            Pro forma                     $   0.21     $  0.28            $  0.84     $  0.88

         Note:  There were no options  granted  during the three-and  nine-month
         periods ended September 30, 2003.
</TABLE>

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

11.        In May 2003,  the FASB issued SFAS No. 150,  "Accounting  for Certain
           Financial  Instruments with  Characteristics  of both Liabilities and
           Equity." SFAS No. 150 changes the  classification in the statement of
           financial  position  of certain  common  financial  instruments  from
           either equity or mezzanine  presentation  to liabilities and requires
           an issuer of those financial  statements to recognize changes in fair
           value or redemption amount, as applicable,  in earnings. SFAS No. 150
           is effective for public companies for financial  instruments  entered
           into or modified after May 31, 2003 and is effective at the beginning
           of the first interim period beginning after June 15, 2003. Management
           has not entered into any  financial  instruments  that would  qualify
           under  SFAS  No.  150.  The  Corporation   currently  classifies  the
           guaranteed   preferred   beneficial  interest  in  the  Corporation's
           subordinated  debt  held  by the  Trust  referred  to in  Note 7 as a
           liability.  As a result,  management does not anticipate the adoption
           of  SFAS  No.  150 to have a  material  impact  on the  Corporation's
           financial position or results of operations.

12.        In October 2003, the AICPA issued SOP 03-3,  "Accounting for Loans or
           Certain Debt Securities  Acquired in a Transfer." SOP 03-3 applies to
           a loan with evidence of deterioration in credit quality subsequent to
           its  origination  that is acquired by  completion  of a transfer  (as
           defined in SOP 03-3), for which it is probable at acquisition of such
           loan,  that the acquirer will be unable to collect all  contractually
           required  payments  receivable.  SOP 03-3  requires that the acquirer
           recognize the excess of all cash flows expected at  acquisition  over
           the investor's  initial  investment

<PAGE>

               FIRST CHESTER COUNTY CORPORATION AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued

                                   (UNAUDITED)

           in the loan as interest  income on a level-yield  basis over the life
           of the loan as the accretable yield. The loan's contractual  required
           payments  receivable  in  excess  of the  amount  of its  cash  flows
           expected  at  acquisition  (nonaccretable  difference)  should not be
           recognized as an  adjustment to yield,  a loss accrual or a valuation
           allowance for credit risk.  SOP 03-3 is effective for loans  acquired
           in fiscal years beginning after December 31, 2004.  Early adoption is
           permitted.  Management is currently  evaluating the provisions of SOP
           03-3.

<PAGE>


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

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

     It is with deepest  regret that First Chester  County  Corporation  and its
wholly-owned  subsidiary,  First National Bank of Chester County, announced that
on  November  8, 2003,  Dr.  Charles E.  Swope,  Chairman,  President  and Chief
Executive  Officer  passed away.  On November  13, 2003,  the Board of Directors
announced the election of John A.  Featherman,  III, as Chief Executive  Officer
and  Chairman  of the Boards of the  Corporation  and the Bank and Mr.  Kevin C.
Quinn as  President  of the  Corporation  and the Bank.  Mr.  Quinn was also and
elected to the Boards of Directors of the Corporation and the Bank.

     Mr. Featherman,  former President of the Chester County Bar Association and
former Chairman of the Chester County  Community  Foundation,  is active in many
community  organizations.  Mr. Featherman was most recently with the law firm of
MacElree  Harvey,  Ltd.,  and has  served  on the  Boards  of the  bank  and the
corporation  since 1985. Kevin Quinn, a respected banker and community leader in
Chester  County,  has more than 25 years of  banking  and  financial  management
experience and is well known in the banking industry throughout Pennsylvania. He
joined First National Bank of Chester County in 1983 and has held several senior
posts since then.  In 1990,  Quinn was  promoted  to Senior Vice  President  and
managed the bank's Trust and Investment  Services  Division.  In 1997, Quinn was
promoted  to  Executive  Vice  President.  In  2002,  he was  promoted  to Chief
Operating  Officer.  Since then,  Quinn has been  responsible for the day-to-day
operations of the Bank.

                             RISKS AND UNCERTAINTIES

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

     These  risks  and  uncertainties  include,  but are  not  limited  to,  the
following:  (a) loan growth and/or loan margins may be less than expected due to
competitive  pressures in the banking  industry  and/or  changes in the interest
rate environment;  (b) general economic  conditions in the Corporation's  market
area may be less  favorable  than expected  resulting in, among other things,  a
deterioration in credit quality causing increased loan losses;  (c) costs of the
Corporation's   planned  training  initiatives,   product  development,   branch
expansion,  new technology and operating  systems may exceed  expectations;  (d)
competition among financial and non-financial  institutions in the Corporation's
market  area that may  result in  customer  turnover  and  lower  interest  rate
margins; (e) changes in the regulatory environment,  securities markets, general
business  conditions  and  inflation may  adversely  affect loan demand,  credit
quality,  consumer  spending and saving habits,  and interest rate margins;  (f)
impact of changes in  interest  rates on  customer  behavior;  (g) the impact of
changes in demographics on branch  locations;  (h)  technological  changes;  (i)
changes in the value of securities and investments managed for others may affect
the growth level of the Corporation's  non-interest  income;  (j) changes in the
credit of our  borrowers,  the  collateral  securing  assets or other aspects of
credit  quality;  (k) our ability to manage the risks involved in the foregoing;
and (l) the accuracy of the assumptions and estimates used in the preparation of
our financial  statements.  These risks and  uncertainties  are all difficult to
predict and most are beyond the control of the Corporation's Management.
<PAGE>
           MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                      AND RESULTS OF OPERATIONS (Continued

     The Corporation  undertakes no obligation to publicly release any revisions
to the  forward-looking  statements to reflect events or circumstances after the
date of this report.

              CRITICAL ACCOUNTING POLICIES, JUDGMENTS AND ESTIMATES

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



<PAGE>


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

                      ALLOWANCE FOR POSSIBLE CREDIT LOSSES

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

                                  INCOME TAXES

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

                          EARNINGS AND DIVIDEND SUMMARY

     Net income for the  three-month  period ended September 30, 2003 was $1.009
million,  a decrease of $393 thousand or 28.03% from $1.402 million for the same
period in 2002.  Net income for the nine-month  period ended  September 30, 2003
was $3.912 million, a decrease of $312 thousand or 7.39% from $4.224 million for
the same period in 2002. Earnings for the three-month period ended September 30,
2003  include  gains  and fees of $131  thousand  from  the sale of  residential
mortgages  and  gains of $130  thousand  on the sale of  investment  securities.
Earnings for the  nine-months  ended  September  30, 2003 include  gains of $306
thousand  from  the sale of the  $2.7  million  credit  card  portfolio  to Elan
Financial Services, $389 thousand on the sale of investment securities, and $935
thousand in gains and fees from the sale of residential mortgages.  For both the
three- and nine-month  periods ended September 30, 2003,  gains were offset by a
decrease in net interest income yields  resulting from the current interest rate
environment and by increased operating costs. Additionally,  net income for both
periods was impacted by additions to the  provision  for possible loan and lease
losses. The additional provisions were made, in part due, to the recent flooding
and hurricane  related  weather in Chester  County.  Subsequent to September 30,
2003,  there was a sale of two OREO (Other Real Estate Owned)  properties with a
gain of  $1.031  million.  In  addition,  $10.0  million  in  preferred  capital
securities were issued for the purpose of raising additional capital for general
corporate  purposes.  Please see section  titled "Post Balance Sheet Events" for
more details.

     Basic earnings per share were $0.22 and $0.88 for the three- and nine-month
periods ended September 30, 2003, respectively,  compared to $0.32 and $0.96 for
the same periods in 2002. Cash dividends  declared during the second quarters of
2003 were  $0.135 and $0.405  per share for the  three- and  nine-month  periods
compared to $0.130 per share and $0.390 per share for the three- and  nine-month
periods ended  September 30, 2002.  Over the past ten years,  the  Corporation's
practice has been to pay a dividend of at least 35.0% of net income.


<PAGE>


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

                             AVERAGE INTEREST RATES
<TABLE>
<CAPTION>

                                                                     Three Months Ended             Nine Months Ended
                                                                        September 30,                  September 30,
                                                                 ------------------------          ----------------------
                                                                  2003              2002            2003            2002
                                                                 ------            ------          ------          ------
          <S>                                                  <C>               <C>              <C>            <C>

           SELECTED RATIOS
           Return on Average Assets                              0.60%              0.92%             0.80%         0.95%
           Return on Average Equity                              8.01%             11.86%            10.39%        12.26%
           Net Interest Margin*                                  4.32%              4.71%             4.28%         4.76%
           Earnings Retained                                    39.84%             58.92%            53.76%        59.14%
           Dividend Payout Ratio                                60.16%             41.08%            46.24%        40.86%
           Book Value Per Share                                $11.35             $10.73            $11.35        $10.73

            * On a tax equivalent basis
</TABLE>

The "Consolidated Average Balance Sheet" on pages 19 and 20 may assist the
reader in understanding the following 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,
2003, on a tax equivalent basis, was $6.8 million and $19.6 million, compared to
$6.7 million and $19.8 million for the same periods in 2002.  This represents an
increase  of 1.7% for the three  month  period,  and a decrease  of 1.0% for the
nine-month  period,  ended  September 30, 2003 compared to the same periods last
year. The increase in the three-month period can be attributed to an increase in
the  average   interest-earning   asset   balances  and  lower  yields  paid  on
interest-earning liabilities, partially offset by a decrease in the net-yield in
interest-earning  assets  and an  increase  in the  volume  of  interest-bearing
liabilities.  The  decrease  in the  nine-month  period can be  attributed  to a
decrease in the net yield on  interest-earning  assets when compared to the same
period last year,  partially  offset by  increases  in average  interest-earning
asset balances and lower yields paid on interest-bearing liabilities.

     The average net yield on interest-earning assets, on a tax equivalent basis
for the three- and nine-month period ended September 30, 2003 decreased 8.28% or
39 basis  points (one basis point is equal to 1/100 of a percent)  and 10.08% or
48 basis  points to 4.32% and  4.28%,  compared  to 4.71% and 4.76% for the same
periods in 2002, respectively.  The average yield on interest-earning assets for
the three- and nine-month period ended September 30, 2003 decreased 17.6% or 116
basis points and 19.1% or 129 basis points to 5.42% and 5.48%  compared to 6.58%
and  6.77%  for  the  same   periods  in  2002.   The  average   yield  paid  on
interest-bearing   liabilities  for  the  three-  and  nine-month  period  ended
September  30,  2003  decreased  40.9% or 94 basis  points and 39.7% or 98 basis
points to 1.36% and 1.49%  compared  to 2.30% and 2.47% for the same  periods in
2002, respectively. Yields on interest-earning assets decreased primarily due to
the  falling  interest  rate   environment.   Additionally,   the  low  interest
environment has resulted in a substantial  decrease in yields as loans have been
repriced at current  market  rates on both  contractual  and  negotiated  basis.
Yields on interest-bearing  liabilities  decreased primarily due to the lowering
of rates paid on deposit  accounts as the  Corporation  reacted to external rate
changes  and tried to off-set  the  decreases  in asset  yields.  Continued  low
interest  rates and pricing  competition  has put  pressure on our  net-interest
margin and will continue to adversely impact  net-interest income in future time
periods.


<PAGE>


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

     Average  interest-earning  assets for the third quarter of 2003 were $627.4
million  an   increase  of  10.9%   compared   to  $565.7   million  of  average
interest-earning  assets in the same period last year. For the nine-months ended
September 30, 2003,  average  interest-earning  assets increased 10.0% to $610.1
million  compared to $554.4  million of average  interest-earning  assets in the
same period last year.

     Average interest-bearing  liabilities increased approximately $50.1 million
or 11.0% to $507.4 million for the  three-months  ended September 30, 2003, from
$457.3 million in the same period last year. For the nine-months ended September
30, 2003, average  interest-bearing  liabilities increased $40.7 million or 9.0%
to $490.9 million from $450.2 million in the same period last year. The increase
in  average  interest-bearing  liabilities  for the  three-month  period was the
result of a 6.5% or $28.1 million  increase in  interest-bearing  deposits and a
120.9% or $22.1  million  increase in FHLB  advances and other  borrowings.  The
increase in average  interest-bearing  liabilities for the nine-month period was
the result of a 7.9% or $33.4  million  increase in  interest-bearing  deposits,
23.1% or $5.4 million  increase in FHLB advances and other  borrowings,  and the
funds obtained from the issuance of the trust preferred securities.

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

                                                                   Three Months Ended                Nine Months Ended
                                                                       September 30,                   September 30,
                                                                 -------------------------         ---------------------
                                                                   2003             2002             2003           2002
                                                                 ------            ------           -------        ------
          <S>                                                   <C>                <C>              <C>            <C>

           YIELD ON
           Interest-Earning Assets                               5.42%              6.58%             5.48%         6.77%
           Interest Bearing Liabilities                          1.36%              2.30%             1.49%         2.47%
                                                                 ----               ----              ----          ----
           Net Interest Spread                                   4.06%              4.28%             3.99%         4.30%
           Contribution of Interest-Free Funds                   0.26%              0.43%             0.29%         0.46%
                                                                 ----               ----              ----          ----
           Net Yield on Interest-Earning Assets                  4.32%              4.71%             4.28%         4.76%
                                                                 ====               ====              ====          ====
</TABLE>

               FEDERAL FUNDS SOLD AND OTHER OVERNIGHT INVESTMENTS

     Interest income on Federal funds sold and other  overnight  investments for
the three- and nine-month periods ended September 30, 2003,  decreased 76.9% and
32.3% to $24 thousand and $205 thousand, respectively, when compared to the same
periods in 2002. The decrease in interest income on Federal funds sold and other
overnight  investments  for the  three-month  period  is the  direct  result  of
decreases  in the  average  balance  of federal  funds sold and other  overnight
investments  of $13.2  million or 58.5% and an 82 basis point  decrease in rates
earned on such  investments.  The decrease in interest  income on Federal  funds
sold and other  overnight  investments  for the nine-month  period is the direct
result of a 35.5% or 67 basis point decrease in rates earned partially offset by
a 5.2%  increase  in the  average  balance.  Decreases  for both  periods can be
attributed  to excess funds being used to support  loan growth and  management's
decision to deploy any excess funds into higher yielding security.


                              INVESTMENT SECURITIES

     On a tax equivalent basis, interest income on investment securities for the
three-month  period ended September 30, 2003 decreased 12.3% to $1.2 million and
3.2% to $3.4 million for the nine-month  period ended  September 30, 2003,  when
compared  to the same  periods in 2002.  The  decreases  in  interest  income on
investment  securities for the three- and nine-month periods ended September 30,
2003 are  primarily  the
<PAGE>

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

result of a 30.0% or 152 basis point  decrease in the  three-month  period and a
31.0% or 160 basis point decrease in the yield earned on investment  securities,
partially offset by a 25.1% and a 40.2% increase,  respectively,  in the average
investment security balance when compared to the same period last year. Interest
income on investment securities was also negatively impacted by rapid prepayment
of  mortgage  backed  securities  during the  period.  Increases  in the average
investment security balances for the three- and nine-month period are the result
of the  Corporation's  increased  cash  position due to the  increased  deposits
generated by our new and existing branch locations and management's  decision to
invest excess funds in higher yielding security.

                                LOANS AND LEASES

     Interest  income on loans,  on a tax  equivalent  basis,  generated  by the
Corporation's loan portfolio  decreased 7.1% and 11.8% to $7.3 million and $21.4
million  for the  three- and  nine-month  periods  ending  September  30,  2003,
respectively,  compared to the same  periods  last year.  The  decrease for both
periods is the direct  result of 117 and 111 basis point  decreases in the yield
earned on the portfolio  partially  offset by an increase in average balances of
$48.3 million or 11.0% for the three-month  period and $17.4 million or 4.0% for
the  nine-month  period as compared to the same periods in 2002,  reflecting  in
part, the Bank's continued focus to attract quality loans. Additionally, the low
interest rate  environment  has resulted in  substantial  decreases in yields as
loans  have been  repriced  at  current  market  rates on both  contractual  and
negotiated  basis  as well as  refinancing.  The  continuation  of the low  rate
environment  will  continue  to bring the yield down  further.  These  increases
include  the effect of the sale of the Bank's  credit card  portfolio  to "Elan"
Financial Services. See "Non-Interest Income" for more details.

                                DEPOSIT ACCOUNTS

     Interest expense on deposit  accounts for the three- and nine-month  period
ended  September  30, 2003  decreased  39.5% and 36.9% to $1.4  million and $4.7
million, respectively,  when compared to the same periods in 2002. The decreases
are the  result  of a 92 and 96 basis  point,  or 43.4%  and  41.4%,  decreases,
respectively,  in rates paid on interest-bearing  deposits,  partially offset by
6.5% and 7.9%,  respectively,  increases in the average interest-bearing deposit
balance to $462.0  million  and  $457.0  million  for the three- and  nine-month
period ended September 30, 2003, 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.  On  September  2,  2003,  the  Corporation
officially  opened its 17th Branch  Office at the Giunta's  Supermarket  in West
Chester.  This  Branch is open  seven  days a week  (9:00  a.m.  to 7:00  p.m.),
providing  full-service  banking  and  financial  services.  In June  2003,  the
Corporation  also  opened its 16th  Branch  Office  located at 258 East  Lincoln
Highway in Coatesville.

              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, 2003 increased 3.1% to
$270  thousand  from $262  thousand  compared to the same  period in 2002.  This
increase is primarily the result of a 120.9%  increase in the average balance on
such borrowings partially offset by a 306 basis point or 53.3% decrease in rates
paid on such

<PAGE>


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

borrowings.  The interest  expense on FHLB advances and other borrowings for the
nine-month period ended September 30, 2003 decreased $252 thousand or 28.7%. The
decrease can be attributed  to a 211 basis point or 42.0%  decrease in the rates
paid partially offset by a $5.4 million or 23.1% increase in the average balance
of such borrowings.  Borrowings have increased during the third quarter of 2003,
as the  Corporation  has taken  advantage of the low  interest  rates to support
increases in interest-earning assets.  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 POSSIBLE LOAN AND LEASE LOSSES

     The Corporation recorded a provision for possible loan and lease losses for
the three- and nine-month  periods ended September 30, 2003 of $860 thousand and
$1.6 million,  respectively,  compared to $875 thousand and $1.7 million for the
same periods in 2002.  The  allowance  for loan losses as a percentage  of total
loans was 1.09% at September 30, 2003,  1.44% at September 30, 2002 and 1.39% at
December 31, 2002,  respectively.  The addition to the provisions  were made, in
part due,  to the  recent  flooding  and  hurricane  related  weather in Chester
County. 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 Possible Loan and Lease Losses" for additional discussion.



<PAGE>


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

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

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

                                                      Daily                                      Daily
                                                     Average                                    Average
                                                     Balance         Interest    Rate           Balance     Interest     Rate
                                                     -------         --------    ----           -------     --------     ----
<S>                                                  <C>           <C>         <C>            <C>          <C>         <C>

ASSETS
Federal funds sold and other overnight investments    $  9,405      $    24     1.02%          $ 22,651      $   104     1.84%
Interest bearing deposits in banks                         617            1     0.65%               224            1     1.79%
Investment securities

    Taxable                                            109,200          917     3.36%           102,782        1,293     5.03%
    Tax-exempt (1)                                      21,650          245     4.53%             1,796           32     7.18%
                                                       -------       ------                     -------       ------
        Total investment securities                    130,850        1,162     3.55%           104,578        1,325     5.07%
                                                       -------       ------                     -------       ------
Loans (2)
    Taxable                                            476,879        7,182     6.02%           435,956        7,822     7.18%
    Tax-exempt (1)                                       9,652          130     5.39%             2,254           47     8.39%
                                                       -------       ------                     -------       ------
        Total loans                                    486,531        7,312     6.01%           438,210        7,869     7.18%
                                                       -------       ------                     -------       ------
        Total interest-earning assets                  627,403        8,499     5.42%           565,663        9,300     6.58%
Non-interest earning assets
    Allowance for possible loan losses                  (6,223)                                  (6,565)
    Cash and due from banks                             27,562                                   25,606
    Other assets                                        25,129                                   22,882
                                                       -------                                  -------
        Total assets                                  $673,871                                 $607,586
                                                       =======                                  =======

LIABILITIES AND STOCKHOLDERS' EQUITY
Savings, NOWS & money market deposits                 $344,644      $   591     0.69%          $301,854      $ 1,033     1.37%
Certificates of deposits and other time                117,394          800     2.73%           132,108        1,268     3.84%
                                                       -------       ------                     -------       ------
   Total interest bearing deposits                     462,038        1,391     1.20%           433,962        2,301     2.12%
Securities sold under repurchase agreements                  -         -        -                   591            6     4.06%
Guaranteed preferred beneficial interest in
   Corporation's subordinated debentures                 5,000           61     4.81%             4,457           65     5.75%
Federal Home Loan Bank advances and
      other borrowings                                  40,335          270     2.68%            18,262          262     5.74%
                                                       -------       ------                     -------       ------

   Total interest bearing liabilities                  507,373        1,722     1.36%           457,272        2,634     2.30%
                                                       -------       ------                     -------       ------
Non-interest bearing liabilities
    Non-interest bearing demand deposits               111,154                                   97,647
    Other liabilities                                    4,967                                    5,401
                                                       -------                                  -------
        Total liabilities                              623,494                                  560,320
Stockholders' equity                                    50,377                                   47,266
                                                       -------                                  -------
        Total liabilities and stockholders' equity    $673,871                                 $607,586
                                                       =======                                  =======
Net interest income                                                 $ 6,777                                  $ 6,666
                                                                     ======                                   ======
Net yield on interest earning assets                                            4.32%                                    4.71%
                                                                                ====                                     ====




(1) The indicated income and annual rate are presented on a taxable equivalent
    basis using the Federal marginal rate of 34% adjusted for the TEFRA penalty
    for 2003 and 2002.
(2) Non-accruing loans are included in the average balance.
</TABLE>


<PAGE>


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

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

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

                                                        Daily                                   Daily
                                                       Average                                  Average
                                                       Balance     Interest      Rate           Balance     Interest     Rate
                                                       -------     --------      ----           -------     --------     ----
<S>                                                  <C>           <C>          <C>           <C>           <C>         <C>

ASSETS
Federal funds sold and other overnight investments    $ 22,435      $   205      1.22%         $ 21,320      $   303     1.89%
Interest bearing deposits in banks                         386            2      0.69%              210            3     1.90%
Investment securities
Taxable                                                118,252        3,069      3.46%           90,182        3,460     5.12%
    Tax-exempt (1)                                      10,698          377      4.70%            1,787          100     7.44%
                                                       -------       ------                     -------       ------
        Total investment securities                    128,950        3,446     3.56%            91,969       3,560     5.16%
                                                       -------       ------                     -------       ------
Loans (2)
    Taxable                                            451,297       21,078      6.23%          438,541       24,135     7.34%
    Tax-exempt (1)                                       7,009          338      6.42%            2,347          141     7.98%
                                                       -------       ------                     -------       ------
        Total loans                                    458,306       21,416      6.23%          440,888       24,276     7.34%
                                                       -------       ------                     -------       ------
Total interest-earning assets                          610,077       25,069      5.48%          554,387       28,142     6.77%
Non-interest earning assets
    Allowance for possible loan losses                  (6,390)                                  (6,605)
    Cash and due from banks                             25,651                                   23,963
    Other assets                                        22,886                                   23,987
                                                       -------                                  -------
        Total assets                                  $652,224                                 $594,732
                                                       =======                                  =======

LIABILITIES AND STOCKHOLDERS' EQUITY
Savings, NOWS & money market deposits                 $335,570      $ 1,990      0.79%         $286,529      $ 3,012     1.40%
Certificates of deposits and other time                121,432        2,669      2.93%          137,111        4,373     4.25%
                                                       -------       ------                     -------       ------
Total interest bearing deposits                        457,002        4,659      1.36%          423,640        7,385     2.32%
Securities sold under repurchase agreements                178            5      3.75%              835           18     2.87%
Guaranteed preferred beneficial interest in
   Corporation's subordinated debentures                 5,000          190      5.07%            2,384           65     5.75%
Federal Home Loan Bank advances and                     28,724          626      2.91%           23,338          878     5.02%
                                                       -------       ------                     -------       ------
     other borrowings
   Total interest bearing liabilities                  490,904        5,480      1.49%          450,197        8,346     2.47%
                                                       -------       ------                     -------       ------
Non-interest bearing liabilities
    Non-interest bearing demand deposits               105,932                                   94,251
    Other liabilities                                    5,163                                    4,344
                                                       -------                                  -------
        Total liabilities                              601,999                                  548,792
Stockholders' equity                                    50,225                                   45,940
                                                       -------                                  -------
        Total liabilities and stockholders' equity    $652,224                                 $594,732
                                                       =======                                  =======
Net interest income                                                 $19,589                                  $19,796
                                                                     ======                                   ======
Net yield on interest earning assets                                             4.28%                                   4.76%
                                                                                 ====                                    ====






(1) The indicated income and annual rate are presented on a taxable equivalent
    basis using the Federal marginal rate of 34% adjusted for the TEFRA penalty
    for 2003 and 2002.
(2) Non-accruing loans are included in the average balance.
</TABLE>

<PAGE>


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

                               NON-INTEREST INCOME

     Total  non-interest  income for the three- and nine-month  periods ended is
September  30,  2003,  increased  0.8% or $18 thousand and 20.7% or $1.4 million
compared to the same periods in 2002,  respectively.  The various  components of
non-interest income are discussed below.

     The  largest  component  of  non-interest  income is  Financial  Management
Services  ("FMS")  revenue,  which  increased 3.3% and 4.9% to $825 thousand and
$2.5 million for the three- and nine-month  periods  ending  September 30, 2003,
respectively,  compared to September  30,  2002.  The market value of FMS assets
under  management  custody grew $22.7 million,  or 4.6%,  from $495.6 million at
September  30,  2002 to $518.2  million at  September  30,  2003.  In spite of a
volatile stock market and the loss of a $38 million  relationship early in 2003,
the value of FMS assets  under  management  and  custody has  continued  to grow
through 2003.  With the volatility in the financial  markets,  the portfolio has
not grown as expected,  which in turn has led to lower than expected fee income.
Better  performance  in recent  months as well as  strong  business  development
efforts should improve this component.

     Service charges on deposit accounts  increased  approximately  1.2% to $495
thousand for the three-months ended September 30, 2003 compared to $489 thousand
for the same period in 2002. For the nine-month period ended September 30, 2003,
service charges on deposit accounts  increased 13.4% to $1.5 million compared to
$1.4 million for the same period in 2002. The increase in service charge revenue
for both periods is primarily the result of an increase in the number of deposit
accounts.  Implementation of a new fee schedule which became effective  February
15, 2003 also contributed to the increases.

     Gains on the sale of investment securities also contributed to the increase
in non-interest  income.  For the  three-month  period ended September 30, 2003,
gains on the sale of investment  securities  were $130 thousand,  as compared to
zero for the same period last year.  For the nine-month  period ended  September
30, 2003,  gains on sale of  investment  securities  increased  221.5% from $121
thousand to $389 thousand, when compared to the same period in 2002. These gains
were realized as a result of normal portfolio management.

     The Corporation has operating lease agreements with several customers; this
income is  classified  as "Rental  Income".  Rental  income on  operating  lease
agreements  for the  three-month  period ended  September 30, 2003 increased $27
thousand or 13.9% from $194  thousand to $221 thousand when compared to the same
period in 2002. For the nine-month period, rental income increased $106 thousand
or 18.8% from $563 thousand to $669 thousand when compared to the same period in
2002. The  depreciation  associated with these operating leases is classified as
depreciation on operating leases, as other expense.

     Gains and fee income  generated in the sale of  Residential  Mortgage loans
for the three-month period ended September 30, 2003 decreased $148 thousand from
$279  thousand to $131  thousand  compared  to the same period in 2002.  For the
nine-month  period,  gains  on  sale of  residential  mortgages  increased  $466
thousand  from $469  thousand to $935  thousand when compared to the same period
last year. The decrease in the  three-month  period is primarily the result of a
rapid  increase in mortgage  rates  which  resulted in a decline in  refinancing
activity during the period.  The increase in the nine-month  period is primarily
the  result  of a high  volume  of  residential  mortgage  sales  due to  higher
originations of residential mortgage resulting from record low mortgage interest
rates.
<PAGE>

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

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

     Other  non-interest  income decreased $23 thousand and $82 thousand for the
three- and  nine-months  ended  September  30,  2003 when  compared  to the same
periods in 2002 from $607  thousand and $1.7  million to $584  thousand and $1.6
million, respectively.  Other non-interest income decreased as a result of lower
gains on sale of fixed assets and OREO when  compared to the  previous  year and
decreases in miscellaneous loan fee income.

                              NON-INTEREST EXPENSE

     Total  non-interest  expense for the three- and  nine-month  periods  ended
September 30, 2003  increased  9.5% to $6.7 million and $7.7% to $20.2  million,
compared to the same periods in 2002.  The various  components  of  non-interest
expense are discussed below.

     Employee  salaries and benefits  increased 7.7% to $3.7 million and 8.6% to
$11.2 million for the  three-month  and nine-month  periods ended  September 30,
2003,  respectively,  compared to the same periods in 2002.  Increased staff for
our Customer Contact Center,  Loan  Administration  department,  and our two new
branches,  annual  employee  raises,  and a  proportional  increase  in employee
benefits are primarily responsible for the increases. At September 30, 2003, the
Corporation  employed 258 full time and 34 part time  employees  compared to 235
full time and 49 part-time in September 30, 2002.

     Net occupancy,  equipment,  and data processing  expense increased 13.8% to
$1.4  million and 11.9% to $4.1  million for the three- and  nine-month  periods
ended September 30, 2003, respectively,  compared to the same periods last year.
The increases are the direct result of the opening of two full service  branches
during 2003. The increases are also the result of increased building maintenance
cost  and  asset  depreciation  expense.  Additionally,  computers  and  related
equipment  costs  associated  with the expansion,  upgrading and  maintenance of
personal  computers  and  our  networking  infrastructure   contributed  to  the
increase.

     Depreciation on operating  leases decreased 2.3% from $176 thousand to $172
thousand for the three-month period ended September 30, 2003. For the nine-month
period,  depreciation on operating  leases  increased 3.4% from $494 thousand to
$511 thousand compared to the same period last year. This  depreciation  expense
is the result of operating lease  agreements the Corporation has with several of
its customers.  The income  associated with these operating leases is classified
as Rental Income.

     Professional  Services  increased 5.9% to $306 thousand for the three-month
period  ended   September  30,  2003  compared  to  the  same  period  in  2002.
Professional  services  for the  nine-month  period  decreased  10.9%  from $916
thousand to $816 thousand compared to the same period last year. The increase in
the  three-month  period is the result of increased  legal fees compared to last
year.  The  decrease  in the  nine-month  period is the result of a decrease  in
consultant and employee recruiting costs compared to the previous year.
<PAGE>

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

     Total other  non-interest  expense increased 14.4% and 6.4% to $1.1 million
and $3.2 million for the three- and nine-month  period ended  September 30, 2003
compared to the same  periods  last year,  respectively.  The  increase for both
periods is  partially  attributed  to  increases  in  operating  supplies,  bank
telephone,  and general operating expenses related to the opening of our two new
branches.

     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.

                                  INCOME TAXES

     Income tax expense for the three- and  nine-month  periods ended  September
30, 2003 was $431 thousand and $1.7 million,  compared to $569 thousand and $1.7
million in the same periods last year.  This  represents  effective tax rates of
29.9% and 30.0% for the three- and nine-month  periods ended September 30, 2003,
respectively. The effective tax rate for the three- and nine-month periods ended
September 30, 2002 were 28.8% 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  source  of
liquidity for the  Corporation is funding  available from deposit  growth,  FHLB
borrowings,  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 deposits to comprise its "core"  deposit base because
of the historical  stability of such funds.  Additional liquidity comes from the
Corporation's   non-interest   bearing  demand   deposit   accounts  and  credit
facilities.   Other  deposit  sources  include  a  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:



<PAGE>


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

                                DEPOSIT ANALYSIS
<TABLE>
<CAPTION>

(Annualized)
(Dollars in thousands)                   September 30, 2003               December 31, 2002              Average Balance
                                      -------------------------        -------------------------     ------------------------
                                      Average         Effective        Average         Effective     Dollar       Percentage
DEPOSIT TYPE                          Balance            Yield          Balance           Yield      Variance      Variance
------------                          -------         ----------       ---------       ----------    --------      ----------
<S>                                     <C>              <C>            <C>            <C>           <C>           <C>

NOW Accounts                             $87,550          0.22%          $ 79,587       0.38%         $  7,963      10.01%
Money Market                              25,977          0.76%            25,430       1.37%              547       2.15%
Statement Savings                         62,535          0.83%            53,754       1.44%            8,781      16.34%
Other Savings                              1,597          0.92%             1,567       1.34%               30       1.91%
CD's Less than $100,000                   98,709          3.02%           109,362       4.18%          (10,653)     (9.74%)
                                         -------                          -------                       ------

Total Core Deposits                      276,368          1.41%           269,700       2.23%            6,668       2.47%

Non-Interest Bearing
Demand Deposit Accounts                  105,932             -             97,266          -             8,666       8.91%
                                         -------                          -------                       ------

Total Core and Non-Interest
  Bearing Deposits                       382,300          1.02%           366,966       1.64%           15,334       4.18%
                                         -------                          -------                       ------

Tiered Savings                           157,911          1.10%           132,108       1.84%           25,803      19.53%
CD's Greater than $100,000                22,723          2.55%            25,644       3.52%           (2,921)    (11.39%)
                                         -------                          -------                       ------

Total Deposits                          $562,934                         $524,718                      $38,216       7.28%
                                         =======                          =======                       ======
</TABLE>

     The  Corporation,  as a  member  of  the  FHLB,  maintains  several  credit
facilities with the FHLB. As of September 30, 2003, the amount outstanding under
the Corporation's  line of credit with the FHLB was $0.  Additionally,  the FHLB
offers  several  other  credit  related  products  which  are  available  to the
Corporation. The Corporation currently has a maximum borrowing capacity with the
FHLB of approximately  $134.7 million.  During the three- and nine-month periods
ending  September  30, 2003,  average FHLB  advances  were  approximately  $40.3
million  and  $28.7  million,  respectively,  and  consisted  of  term  advances
representing  a combination of maturities in each period.  The average  interest
rate on these  advances was  approximately  2.68% and 2.91%  respectively.  FHLB
advances  are  collateralized  by a pledge  on the  Corporation's  portfolio  of
unencumbered  investment  securities,  certain  mortgage loans and a lien on the
Corporation's FHLB stock.

     The goal of interest rate  sensitivity  management is to avoid  fluctuating
net interest  margins,  and to enhance  consistent growth of net interest income
through periods of changing  interest rates. Such sensitivity is measured as the
difference  in the volume of assets and  liabilities  in the existing  portfolio
that are subject to  repricing in a future time period.  The  Corporation's  net
interest rate  sensitivity  gap within one year is a negative  $108.3 million or
15.7% of total  assets at  September  30, 2003  compared  with a negative  $80.8
million or 13.3% of total assets at September 30, 2002.  The  Corporation's  gap
position is one tool used to evaluate  interest  rate risk and the  stability of
net interest  margins.  Another tool that management  uses to evaluate  interest
rate risk is a computer  simulation model that assesses the impact of changes in
interest rates on net interest  income,  net-income  under various interest rate
forecasts and scenarios. Management has set acceptable limits of risk within its
Asset  Liability  Committee  ("ALCO")  policy and  monitors  the  results of the
simulations  against these limits quarterly.  As of the most recent

<PAGE>

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

quarter  end,  results  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.

                          INTEREST SENSITIVITY ANALYSIS
                            AS OF SEPTEMBER 30, 2003
<TABLE>
<CAPTION>

(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 and other
       overnight investments                   $         --    $         --       $        --       $       --    $        --
    Investment securities                            49,929          27,659            61,226               --        138,814
    Interest bearing deposits in banks                 550               --               --                --            550
    Loans and leases                                181,711         234,643            86,023           (5,473)       496,904
    Cash and due from banks                              --              --                --           27,320         27,320
    Premises & equipment                                 --              --                --           13,714         13,714
    Other assets                                         --              --                --           10,568         10,568
                                                -----------      ----------        ----------        ---------     ----------
       Total assets                            $    232,190    $    262,302       $   147,249       $   46,129    $   687,870
                                                ===========     ===========        ==========        =========     ===========

LIABILITIES AND CAPITAL
    Interest bearing deposits                  $         --    $         --       $        --       $  116,468    $   116,468
    Non-interest bearing deposit                    311,903          29,014           116,790               --        457,707
    FHLB advances and other
       borrowings                                    23,604          17,583            11,771               --         52,958
    Guaranteed Preferred Securities                   5,000              --                --               --          5,000
    Other liabilities                                    --              --                --            4,474          4,474
    Capital                                             --               --                --           51,263         51,263
                                                -----------      ----------        ----------       ----------     ----------
       Total liabilities & capital             $    340,507     $    46,597       $   128,561      $   172,205    $   687,870
                                                ===========      ==========        ==========       ==========     ==========
    Net interest rate
      sensitivity gap                          $  (108,317)     $   215,705       $    18,688      $ ( 126,076)   $        --
                                                ==========       ==========        ==========       ==========     ==========
    Cumulative interest rate
      sensitivity gap                          $  (108,317)     $   107,388       $   126,076      $        --    $        --
                                                ==========       ==========        ==========       ==========     ==========
    Cumulative interest rate
      sensitivity gap divided
      by total assets                                (15.7%)          15.6%             18.3%
                                                 ==========      ==========         =========
</TABLE>

                  ALLOWANCE FOR POSSIBLE LOAN AND LEASE LOSSES

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


<PAGE>


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

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

<TABLE>
<CAPTION>
                                                                          Three Months                       Nine Months
                                                                              Ended                             Ended
                                                                           September 30,                     September 30,
                                                                           -------------                     -------------

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

Balance at beginning of period                                     $  6,156         $ 6,561         $   6,230       $  6,344
                                                                    -------          ------

Provision charged to operating expense                                  860             875             1,627          1,655
                                                                    -------          ------          --------

    Recoveries of loans previously charged-off                           32              23             176              305
    Loans charged-off                                                (1,575)         (1,084)          (2,560)         (1,929)
                                                                    -------          ------          -------        --------

Net loans charged-off                                                (1,543)          (1,061)         (2,383)         (1,624)
                                                                    -------          -------         -------        --------

Balance at end of period                                           $  5,473         $  6,375        $  5,473        $  6,375
                                                                    =======          =======         =======
Period-end loans outstanding                                       $502,377         $442,504        $502,377        $442,504
Average loans outstanding                                          $486,531         $438,210        $458,306        $440,888
Allowance for loan losses as a
  Percentage of period-end loans outstanding                          1.09%            1.44%           1.09%           1.44%

Net charge-offs to average loans
    Outstanding                                                       0.32%            0.24%           0.52%           0.37%
</TABLE>

     Non-performing loans include loans on non-accrual status and loans past due
90 days or more and still accruing.  The  Corporation's  policy is to charge-off
all  non-performing  loans to net realizable value based on updated  appraisals.
Non-performing  loans are  generally  collateralized  and are in the  process of
collection.  Through  the  nine-month  period the  increase  in  charge-offs  is
principally due to  management's  decision to write-down  additional  amounts on
loans previously  recognized as  non-performing.  Management is not aware of any
loans other than those included in the following  table that would be considered
potential problem loans and cause Management to have doubts as to the borrower's
ability  to  comply  with  loan  repayment  terms.  Our  Credit   Administration
department  should assist in improving the  components of the allowance of loans
and lease losses such as provision expense, recoveries, and charged-off loans.


<PAGE>


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

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

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

Past due over 90 days and still accruing                        $   714          $   270          $   321

Non-accrual loans                                                 4,624            5,410            5,216
                                                                 ------           ------           ------

Total non-performing loans                                        5,338            5,680            5,537

Other real estate owned                                           3,218              473              368
                                                                 ------           ------           ------

Total non-performing assets                                     $ 8,556          $ 6,153          $ 5,905
                                                                 ======           ======           ======

Non-performing loans as a percentage
   of total loans (gross)                                         1.06%            1.28%            1.24%

Non-performing assets as a
   percentage of non-performing loans                           102.53%          112.24%          112.52%

Allowance for loan losses as a
   percentage of total loans and other real
   estate owned                                                   1.69%            1.39%            1.32%

Allowance for loan losses as a
   percentage of non-performing assets                           63.97%          103.61%          105.50%
</TABLE>

     The allowance for loan losses as a percentage of non-performing loans ratio
indicates  that the  allowance  for  loan  losses  is  sufficient  to cover  the
principal of all  non-performing  loans at September 30, 2003. Other Real Estate
Owned  represents  residential  and  commercial  real  estate  that had  secured
non-performing  loans that the Corporation acquired through foreclosure or other
collection efforts and that is held for sale. The increase in OREO from December
31, 2002 to September 30, 2003 is  attributable  to three loans in the aggregate
principal  amount of $3.2  million,  which had  previously  been  classified  as
performing. The value of all OREO has been written down to realizable value (net
of estimated  disposal  costs) based on professional  appraisals.  OREO property
with a total book value of $2.3 million was sold  subsequent  to  September  30,
2003.  Net proceeds from the sale were $3.3 million  resulting in a gain of $1.0
million, which will be recorded in the fourth quarter of 2003.

                                 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.


<PAGE>



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

     FASB 114  "Accounting  by Creditors for  Impairment of Loans"  requires the
Corporation  to  examine  commercial  and  non-residential   mortgage  loans  on
non-accrual  status  for  impairment.  The  balance of  impaired  loans was $4.6
million,  $4.9  million,  and $5.9 million at September  30, 2003,  December 31,
2002, and September 30, 2002 respectively. The associated allowance for impaired
loans was $462 thousand,  $834 thousand and $700 thousand at September 30, 2003,
December 31, 2002 and September 30, 2002, respectively.

     For the  three-month  and  nine-month  period  ended  September  30,  2003,
activity in the allowance  for impaired loan losses  include a provision of $237
thousand and $765  thousand,  charge offs of $126  thousand  and $216  thousand,
recoveries of $2 thousand and $32 thousand,  respectively.  Contractual interest
amounted to $79 thousand for the three-months  ended September 30, 2003 and $277
thousand for the  nine-months  ended September 30, 2003. Cash collected on loans
for the  three-month  and  nine-month  period ended  September 30, 2003 was $380
thousand and $2.4  million,  respectively.  The amount  applied to principal was
$364  thousand  and  $2.1  million  for  the  three-  and   nine-month   period,
respectively,  of which $0 thousand and $46 thousand was applied to interest for
the three- and nine-month period ended September 30, 2003, respectively.

     For the  three-month  and  nine-month  period  ended  September  30,  2002,
activity in the allowance for impaired loan losses  include a provision of $233,
write  offs of $103 and  $190  thousand,  respectively,  and  recoveries  of $0,
respectively.  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. Cash collected on loans for the three- and nine-month period
ended September 30, 2002 was $110 thousand and $570 thousand,  respectively, all
of which  $110  thousand  and $345  thousand  was  applied to  principal  and no
interest income was recorded.

                        BRANCHING AND TECHNOLOGY PROJECTS

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

                                CAPITAL ADEQUACY

     The Corporation is subject to Risk-Based  Capital Guidelines adopted by the
Federal  Reserve Board ("FRB") for bank holding  companies.  The  Corporation is
also  subject  to  similar  capital  requirements  adopted  by the Office of the
Comptroller of the Currency.  Under these requirements,  the regulatory agencies
have set minimum  thresholds  for Tier I Capital,  Total  Capital,  and Leverage
ratios.  At September 30, 2003,  both the  Corporation's  and the Bank's capital
exceeded  all  minimum  regulatory  requirements,   and  were  considered  "well
capitalized"  as  defined  in  the  regulations  issued  pursuant  to  the  FDIC
Improvement Act of 1992. The  Corporation's  Risk-Based  Capital  Ratios,  shown
below, have been computed in accordance with regulatory accounting policies. The
decreases in the Bank capital ratios from

<PAGE>

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

December  31, 2002 to  September  30, 2003 are results of an upstream of cash to
the holding  company to fund OREO  related  costs.  On November  13,  2003,  the
Corporation  issued  $10.0  million  of  preferred  capital  securities.   These
securities  are  structured  so  that  they  qualify  as Tier 1  Capital  of the
Corporation. See "Post Balance Sheet Events" for further discussion.

<TABLE>
<CAPTION>

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

<S>                                      <C>                <C>                   <C>                      <C>

    Corporation
    -----------
Leverage Ratio                             8.26%              8.44%                 8.29%                    5.00%
Tier I Capital Ratio                      10.19%             10.79%                10.83%                    6.00%
Total Risk-Based Capital Ratio            11.19%             12.04%                12.08%                   10.00%

     Bank
     ----
Leverage Ratio                             7.62%              8.22%                 8.05%                    5.00%
Tier I Capital Ratio                       9.34%             10.51%                10.53%                    6.00%
Total Risk-Based Capital Ratio            10.34%             11.76%                11.78%                   10.00%

</TABLE>

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

                            POST BALANCE SHEET EVENTS

     On November 13, 2003,  the  Corporation  issued $10.0  million of preferred
capital  securities  for the purpose of raising  additional  capital for general
corporate  purposes.  These  securities,  which could include the  repurchase of
shares as described in the next  paragraph,  were issued  through  First Chester
County  Capital  Trust II (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 2.95%. The capital
securities will be redeemed on 2033; however,  the Corporation has the option to
shorten the maturity  date to a date not earlier than  November 13, 2008.  These
securities  have been  structured  so that they qualify as Tier 1 Capital of the
Corporation.  Because  this  transaction  did not occur until  November of 2003,
these numbers are not reflected in the September 30, 2003  financial  statements
or the notes thereof.

     On October 16, 2003,  the Board of Directors  approved the repurchase of up
to an aggregate amount of $10.0 million of the Corporation's  outstanding common
stock over the course of the next two years. Such purchases will be made through
open  market  and  private  transactions.  Stock  repurchased  could  be held as
Treasury Stock,  available for reissuance in connection  with option  exercises,
401-K, employee purchase and other corporate purposes.

     Subsequent to September 30, 2003, two OREO  properties with a book value of
$2.3 million were sold.  Net proceeds from the sale were $3.2 million  resulting
in a gain of $1.0 million which will be recorded in the fourth quarter of 2003.



<PAGE>



ITEM 3.   QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

     There have been no material changes in the Corporation's  assessment of its
sensitivity to market risk since its  presentation  in the 2002 Annual Report of
the Corporation,  filed as an exhibit to its Form 10-K for the fiscal year ended
December  31,  2002 with the SEC via EDGAR.  Please  refer to the  "Management's
Discussion and Analysis" section on pages 24-38 of the Corporation's 2002 Annual
Report for additional information.

ITEM 4. CONTROLS AND PROCEDURES

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

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

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

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

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

Among  the  matters  our   Principal   Officers   certify  in  the  Section  302
Certifications   are  whether  all   "significant   deficiencies"  or  "material
weaknesses" in the design or operation of our internal control over
<PAGE>

                       CONTROLS AND PROCEDURES - Continued

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

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

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

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


<PAGE>



                           PART II - OTHER INFORMATION

Item 1.  Legal Proceedings

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

Item 2.  Changes in Securities

                  None

Item 3.  Defaults upon Senior Securities

                  None

Item 4.  Submission of Matters to Vote of Security Holders


                  None

Item 5.  Other Information

                  None

Item 6.  Exhibits and Reports on Form 8-K

(a)      Exhibits

         3(i).*   Certificate  of  Incorporation.   Copy  of  the  Corporation's
                  Articles  of  Incorporation,   as  amended,   is  incorporated
                  -----------------------------  herein by  reference to Exhibit
                  3(i) to the  Corporation's  Annual Report on Form 10-K for the
                  year ended December 31, 2000.

         3(ii).*  Bylaws  of  the   Corporation,   as   amended.   Copy  of  the
                  Corporation's  Bylaws, as amended,  is incorporated  herein by
                  reference to Exhibit 3(ii) to the Corporation's  Annual Report
                  on Form 10-K for the year ended December 31, 2000.

         31.1     Certification  of Chief  Executive  Officer  pursuant  to Rule
                  13a-14(a).

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

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

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

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

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

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

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

* Indicates document previously filed
<PAGE>

        PART II - OTHER INFORMATION - Continued

(b)      Reports on Form 8-K

         A Form 8-K was  filed  with the SEC on July 25,  2003  pertaining  to a
         press release announcing the Second Quarter 2003 earnings.

         A Form 8-K was filed with the SEC on October 24, 2003  pertaining  to a
         press  release  announcing  the Third  Quarter 2003  earnings and Stock
         Repurchase program.

         A Form 8-K was filed with the SEC on November  10, 2003  pertaining  to
         the death of Dr. Charles E. Swope, President and CEO.

         A Form 8-K was filed with the SEC on November 13, 2003,  pertaining  to
         the  election of John A.  Featherman,  III, as the new Chief  Executive
         Officer and Chairman of the Board of the  Corporation and the Bank, and
         Kevin C. Quinn as President of the Corporation and the Bank.  Quinn was
         also  elected to the Boards of  Directors  of the  Corporation  and the
         Bank.

         A Form 8-K was filed with the SEC on November 13, 2003, pertaining to a
         press  release  announcing  the  issuance  of  $10.0  million  in trust
         preferred securities.



<PAGE>


                                   SIGNATURES


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



                        FIRST CHESTER COUNTY CORPORATION





November 14, 2003                           /s/ John A. Featherman, III
                                            ---------------------------
                                            John A. Featherman, III
                                            Chief Executive Officer






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



<PAGE>


                                  Exhibit Index

         3(i).*   Certificate  of  Incorporation.   Copy  of  the  Corporation's
Articles of Incorporation,  as amended,  is incorporated  herein by reference to
Exhibit 3(i) to the Corporation's  Annual Report on Form 10-K for the year ended
December 31, 2000.

         3(ii).*  Bylaws  of  the   Corporation,   as   amended.   Copy  of  the
Corporation's Bylaws, as amended, is incorporated herein by reference to Exhibit
3(ii) to the  Corporation's  Annual  Report  on Form  10-K  for the  year  ended
December 31, 2000.

         31.1     Certification  of Chief  Executive  Officer  pursuant  to Rule
13a-14(a).

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

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

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

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

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

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

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


* Indicates document previously filed


<PAGE>


                                  Exhibit 31.1
                                  CERTIFICATION

I, John A. Featherman, III, Chief Executive Officer of the Corporation,  certify
   -----------------------
that:

1. I have  reviewed  this  quarterly  report on Form 10-Q for the period  ending
September 30, 2003 of First Chester County Corporation;

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

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

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

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

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

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

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

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

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

November 14, 2003

/s/ John A. Featherman, III
---------------------------
John A. Featherman, III
Chief Executive Officer


<PAGE>


                                  Exhibit 31.2
                                  CERTIFICATION

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

1. I have  reviewed  this  quarterly  report on Form 10-Q for the period  ending
September 30, 2003 of First Chester County Corporation;

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

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

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

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

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

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

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

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

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


November 14, 2003



/s/ Kevin C. Quinn
------------------
Kevin C. Quinn
President

<PAGE>


                                  Exhibit 31.3
                                  CERTIFICATION

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

1. I have reviewed this quarterly report on Form 10-Q for the period ending
September 30, 2003 of First Chester County Corporation;

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

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

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

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

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

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

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

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

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

November 14, 2003



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


<PAGE>


                                  Exhibit 31.4
                                  CERTIFICATION

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

1. I have reviewed this quarterly report on Form 10-Q for the period ending
September 30, 2003 of First Chester County Corporation;

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

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

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

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

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

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

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

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

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

November 14, 2003



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


<PAGE>



                                  EXHIBIT 32.1

                        FIRST CHESTER COUNTY CORPORATION


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


In connection with the Quarterly Report of First Chester County Corporation (the
"Company") on Form 10-Q for the period  ending  September 30, 2003 as filed with
the Securities  and Exchange  Commission on the date hereof (the  "Report"),  I,
John A.  Featherman,  III,  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.



November 14, 2003                           /s/ John A. Featherman, III
                                            ---------------------------
                                            John A. Featherman, III
                                            Chief Executive Officer


<PAGE>


                                  EXHIBIT 32.2
                        FIRST CHESTER COUNTY CORPORATION


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


In connection with the Quarterly Report of First Chester County Corporation (the
"Company") on Form 10-Q for the period  ending  September 30, 2003 as filed with
the Securities  and Exchange  Commission on the date hereof (the  "Report"),  I,
Kevin C. Quinn,  President 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.



November 14, 2003                           /s/ Kevin C. Quinn
                                            ------------------
                                            Kevin C. Quinn
                                            President


<PAGE>



                                  EXHIBIT 32.3
                        FIRST CHESTER COUNTY CORPORATION


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


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

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

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



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


<PAGE>



                                  EXHIBIT 32.4

                        FIRST CHESTER COUNTY CORPORATION


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


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

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

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



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