FORM 10-Q

                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549


(Mark One)

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

For the quarterly period ended March 31, 2004, OR
                               --------------

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

For the transition period from ____________ to ____________.

Commission File 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 May 10,
2004 was 4,535,331.
                                        1

<PAGE>



                FIRST CHESTER COUNTY CORPORATION AND SUBSIDIARIES

                                      INDEX
<TABLE>
<CAPTION>

                                                                                                                       PAGE

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

                  Item 1 -   Financial Statements
                             Consolidated Statements of Condition
                             March 31, 2004 (unaudited) and December 31, 2003                                             3


                             Consolidated Statements of Income
                             Three-Months Ended March 31, 2004 and 2003 (unaudited)                                       4


                             Consolidated Statements of Cash Flows
                             Three-Months Ended March 31, 2004 and 2003 (unaudited)                                       5


                             Notes to Consolidated Financial Statements                                                 6-8


                  Item 2 -   Management's Discussion and Analysis of
                             Financial Condition and Results of Operations                                             9-22

                  Item 3 -   Quantitative and Qualitative Disclosures About Market Risk                                  23

                  Item 4 -   Controls & Procedures                                                                    23-24

Part II. OTHER INFORMATION

                  Item 1 -    Legal Proceedings                                                                          25
                  Item 2 -    Changes in Securities, Use of Proceeds and Issuer Purchases of
                              Equity Securities                                                                          25
                  Item 3 -    Defaults Upon Senior Securities                                                            25
                  Item 4 -    Submission of Matters to a Vote of Security Holders                                     25-26
                  Item 5 -    Other Information                                                                          27
                  Item 6 -    Exhibits and Reports on Form 8-K                                                           27


                  Signatures                                                                                             28
</TABLE>

                                       2
<PAGE>


                          PART I. FINANCIAL INFORMATION

ITEM 1.  Financial Statements

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

 (Dollars in thousands)                                                                  March 31,
                                                                                            2004              December 31,
                                                                                        (unaudited)              2003*
                                                                                        -----------           ------------
<S>                                                                                       <C>                  <C>

ASSETS
    Cash and due from banks                                                               $  28,509            $  27,738

    Federal funds sold and other overnight investments                                       13,700                2,500
    Interest bearing deposits in banks                                                          412                  374
                                                                                           --------             --------

                Total cash and cash equivalents                                              41,850               31,383
                                                                                           --------             --------

    Investment securities held-to-maturity (fair value of $15
        at March 31, 2004 and $20 at December 31, 2003, respectively)                            14                   19

    Investment securities available-for-sale, at fair value                                 123,910              130,710

    Loans and leases                                                                        525,160              511,249
    Less:  Allowance for loan and lease losses                                               (6,000)              (5,864)
                                                                                           --------             --------
                Net loans and leases                                                        519,160              505,385

    Premises and equipment                                                                   12,836               13,168
    Other assets                                                                              9,156                8,545
                                                                                           --------             --------
                Total assets                                                              $ 706,926            $ 689,210
                                                                                           ========             ========
LIABILITIES
    Deposits
        Noninterest-bearing                                                               $ 128,036            $ 114,307
        Interest-bearing (including certificates of deposit over $100
           of $21,591 and $21,346 - March 31, 2004 and
           December 31, 2003 respectively)                                                  463,261              463,007
                                                                                           --------             --------

        Total deposits                                                                      591,297              577,314

    Federal Home Loan Bank advances and other borrowings                                     42,237               40,543
    Junior subordinated debentures                                                           15,450                    -
    Guaranteed preferred beneficial interest in Corporation's subordinated debentures             -               15,000
    Other liabilities                                                                         4,585                4,603
                                                                                           --------             --------

        Total liabilities                                                                 $ 653,569            $ 637,460
                                                                                           ========             ========

STOCKHOLDERS' EQUITY
    Common stock, par value $1.00; authorized, 25,000,000 shares;
        outstanding, 4,799,666 at March 31, 2004 and December 31, 2003                        4,800                4,800
    Additional paid-in capital                                                                2,161                1,877
    Retained earnings                                                                        51,617               50,116
    Accumulated other comprehensive income                                                      317                  307
    Treasury stock, at cost:  264,762 shares and 283,144 shares
       at March 31, 2004 and December 31, 2003, respectively                                 (5,538)              (5,350)
                                                                                           --------             --------

                Total stockholders' equity                                                   53,357               51,750
                                                                                           --------             --------

                Total liabilities and stockholders' equity                                $ 706,926            $ 689,210
                                                                                           ========             ========


<FN>

The accompanying notes are an integral part of these statements.

* Derived fromour audited,  consolidated  financial  statements  included in our
  Annual Report on Form 10-K for the fiscal year ended 12/31/03.
</FN>
</TABLE>
                                       3
<PAGE>

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

(Dollars in thousands - except per share)                                                        Three Months Ended
                                                                                             ---------------------------
                                                                                                        March 31,
                                                                                                        ---------
                                                                                                2004               2003
                                                                                              -------            -------
<S>                                                                                         <C>                <C>
INTEREST INCOME
    Loans and leases, including fees                                                        $   7,332          $   7,007
    Investment securities                                                                       1,287              1,222
    Federal funds sold                                                                             19                 93
    Deposits in banks                                                                               1                  1
                                                                                             --------           --------
                Total interest income                                                           8,639              8,323
                                                                                             --------           --------
INTEREST EXPENSE
    Deposits                                                                                    1,180              1,695
    Securities sold under repurchase agreements                                                     -                  3
    Junior subordinated debentures                                                                165                  -
    Guaranteed preferred beneficial interest in Corporation's
       subordinated debentures                                                                      -                 63
    Federal Home Loan Bank advances and other borrowings                                          324                180
                                                                                             --------           --------

                Total interest expense                                                          1,669              1,941
                                                                                             --------           --------

                Net interest income                                                             6,970              6,382

    Provision for loan losses                                                                     300                394
                                                                                             --------           --------

                Net interest income after provision for possible loan losses                    6,670              5,988
                                                                                             --------           --------

NON-INTEREST INCOME
    Trust and Investment Services                                                                 947                783
    Service charges on deposit accounts                                                           524                533
    Investment securities gains, net                                                               53                 58
    Operating lease rental income                                                                 193                251
    Gain on the sale of premises and other real estate owned                                       25                  -
    Gains and fees on the sale of residential mortgages                                           141                411
    Gains and fees on the sale of credit card portfolio                                             -                306
    Other                                                                                         503                527
                                                                                             --------           --------

                Total non-interest income                                                       2,386              2,869
                                                                                             --------           --------

NON-INTEREST EXPENSE
    Salaries and employee benefits                                                              3,875              3,678
    Net occupancy, equipment and data processing                                                1,330              1,343
    Depreciation expense on operating leases                                                      172                171
    Bank shares tax                                                                               125                109
    Professional services                                                                         334                257
    Other                                                                                       1,077              1,082
                                                                                             --------           --------
                Total non-interest expense                                                      6,913              6,640
                                                                                             --------           --------

                Income before income taxes                                                      2,143              2,217

INCOME TAXES                                                                                      642                664
                                                                                             --------           --------

NET INCOME                                                                                  $   1,501          $   1,553
                                                                                             ========           ========

PER SHARE DATA
    Basic earnings per common share                                                         $    0.33          $    0.35
                                                                                             ========           ========
    Diluted earnings per common share                                                       $    0.32          $    0.34
                                                                                             ========           ========
    Dividends declared                                                                      $  0.1375          $  0.1350
                                                                                             ========           ========

Basic weighted average shares outstanding                                                   4,524,048          4,437,965
                                                                                            =========          =========

Diluted weighted average shares outstanding                                                 4,720,860          4,514,025
                                                                                            =========          =========
The accompanying notes are an integral part of these statements.
</TABLE>
                                       4
<PAGE>


                FIRST CHESTER COUNTY CORPORATION AND SUBSIDIARIES

                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (UNAUDITED)
<TABLE>
<CAPTION>

                                                                                                 Three Months Ended
 (Dollars in thousands)                                                                                March 31,
                                                                                            ------------------------------
                                                                                              2004                2003
                                                                                              ----                -----
<S>                                                                                         <C>                  <C>
OPERATING ACTIVITIES
    Net Income                                                                              $   1,501            $   1,553
    Adjustments to reconcile net income to net cash
           provided by operating activities:
    Depreciation                                                                                  622                  708
    Provision for loan and lease losses                                                           300                  394
    Amortization of investment security premiums
           and accretion of discounts                                                             179                  492
    Amortization of deferred fees on loans                                                        (38)                (169)
    Investment securities gains, net                                                              (53)                 (58)
    Decrease in other assets                                                                      662                  130
    Decrease in other liabilities                                                                 (18)                 (84)
                                                                                             --------             --------

           Net cash provided by operating activities                                        $   3,155            $   2,966
                                                                                             --------             --------

INVESTING ACTIVITIES
    (Increase) decrease in loans                                                              (13,979)               9,950
    Proceeds from sales of investment securities available-for-sale                            12,195                1,140
    Proceeds from maturities of investment securities available-for-sale                        8,187               22,175
    Proceeds from maturities of investment securities held to maturity                              1                   --
    Purchases of investment securities available-for-sale                                     (13,944)             (23,827)
    Purchase of premises and equipment, net                                                      (290)                (383)
                                                                                             --------             --------

    Net cash (used in) provided by investing activities                                     $   7,830            $  (9,055)
                                                                                             --------             --------

FINANCING ACTIVITIES
    Proceeds (repayments) from FHLB advances and other
         short term borrowings                                                                  1,114                 (403)
    Proceeds (repayments) from FHLB advances and other
         long term borrowings                                                                     580                   --
    Increase in deposits                                                                       13,983               18,422
    Cash dividends paid                                                                          (631)                (600)
    Treasury stock transactions                                                                    96                  240
                                                                                             --------             --------

           Net cash provided by (used in) financing activities                                 15,142               17,659
                                                                                             --------             --------

           NET INCREASE IN CASH AND CASH
               EQUIVALENTS                                                                     10,467               29,680

Cash and cash equivalents at beginning of year                                                 31,383               48,867
                                                                                             --------             --------

Cash and cash equivalents at end of period                                                  $  41,850            $  78,547
                                                                                              =======            =========


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

                                       5
<PAGE>


                FIRST CHESTER COUNTY CORPORATION AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                                   (UNAUDITED)

1.       The  unaudited  financial  statements  have been prepared in accordance
         with generally  accepted  accounting  principles for interim  financial
         information.  In the opinion of Management, all adjustments (consisting
         only of normal recurring adjustments) necessary for a fair presentation
         of the financial position and the results of operations for the interim
         period presented have been included. These interim financial statements
         should  be  read  in  conjunction  with  the   consolidated   financial
         statements and footnotes  thereto included in our Annual Report on Form
         10-K for the fiscal year ended December 31, 2003.

2.       The results of operations  for the  three-month  period ended March 31,
         2004 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 March 31, 2004.

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  follows 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.  Other comprehensive income (loss) net of taxes for
         the three-month  period ended March 31, 2004 was $641 thousand compared
         to ($213)  thousand in the same period last year.  Total  comprehensive
         income (which is the sum of net income and other  comprehensive  income
         mentioned above), for the three-month ended March 31, 2004 and 2003 was
         $2.142 million and $1.340 million, respectively.

5.       The Corporation  adopted SFAS No. 142,  "Goodwill and Other  Intangible
         Assets," on January 1, 2002. SFAS 142 requires that, upon its adoption,
         amortization of goodwill will cease and instead,  the carrying value of
         goodwill  will be evaluated  for  impairment  on an annual  basis.  The
         Corporation  has no goodwill or intangible  assets that are affected by
         this provision; therefore, the adoption of SFAS No. 142 did not have an
         impact on the Corporation's financial condition,  results of operations
         or cash flows.


                                       6
<PAGE>


                FIRST CHESTER COUNTY CORPORATION AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued

                                   (UNAUDITED)

6.       Management has  determined  that First Chester County Capital Trust I &
         II qualify  as a variable  interest  entity  under FASB  Interpretation
         Number  ("FIN") 46, as revised.  First Chester County Capital Trust I &
         II issued mandatory  redeemable preferred stock to investors and loaned
         the proceeds to the Company.  First Chester County Capital Trust I & II
         is included in the Company's  consolidated balance sheet and statements
         of income as of and for the year ended December 31, 2003. Subsequent to
         the  issuance  of FIN 46 in  January  2003,  the FASB  issued a revised
         interpretation,   FIN  46(R)   "Consolidation   of  Variable   Interest
         Entities," the provisions of which must be applied to certain  variable
         interest entities by March 31, 2004. The Company adopted the provisions
         under  the  revised  interpretation  in  the  first  quarter  of  2004.
         Accordingly,  as of March 31, 2004, the Company no longer  consolidates
         First Chester County Capital Trust I & II. The deconsolidation  results
         in the  investment in the common stock of First Chester  County Capital
         Trust I & II entity to being  included in other  assets as of March 31,
         2004 and a corresponding increase in outstanding debt of $450 thousand.
         In  addition,  the  income  received  on  the  Company's  common  stock
         investment is included in other income. The adoption of FIN 46R did not
         have a  material  impact  on  the  financial  position  or  results  of
         operations.  The  banking  regulatory  agencies  have  not  issued  any
         guidance  that would change the  regulatory  capital  treatment for the
         trust-preferred securities issued by First Chester County Capital Trust
         I & II based on the  adoption  of FIN  46(R).  However,  as  additional
         interpretations  from the  available,  management  will  reevaluate its
         potential  impact  to  its  Tier  I  capital   calculation  under  such
         interpretations.

7.       Stock-based Compensation

         At March 31, 2004, the Bank had one stock-based  employee  compensation
         plan.  The Bank  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  employee
         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 following table provides the disclosures required by SFAS No. 148,
         "Accounting for Stock-Based Compensation-Transition and Disclosure" and
         illustrates the effect on net income and earnings per share if the
         Corporation had applied the fair value recognition provisions of SFAS
         No. 123 to stock-based employee compensation.

<TABLE>
<CAPTION>
                                                                                  3/31/04            3/31/03
                                                                                  -------            -------
         <S>                                                                       <C>               <C>

         Net income (in thousands)             As reported                         $  1,501          $   1,553
                Stock-based compensation costs determined
                under fair value method for all awards                                   17                 35
                                                                                    -------           --------
                                               Pro forma net income                $  1,484          $  1,518

         Earnings per share (Basic)            As reported                         $   0.33          $   0.35
                                               Pro forma                           $   0.33          $   0.34
         Earnings per share (Diluted)          As reported                         $   0.32          $   0.34
                                               Pro forma                           $   0.32          $   0.33
         There were no options granted in the first quarter of 2004 or 2003.
</TABLE>

                                       7
<PAGE>


                FIRST CHESTER COUNTY CORPORATION AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued

                                   (UNAUDITED)

8.       On March 31, 2004,  the  Financial  Accounting  Standards  Board (FASB)
         issued a proposed  Statement,  "Share-Based  Payment,"  an Amendment of
         FASB  Statements No. 123 and APB No. 95, that addresses the accounting
         for share-based  payment  transactions in which an enterprise  receives
         employee  services  in  exchange  for  (a)  equity  instruments  of the
         enterprise or (b)  liabilities  that are based on the fair value of the
         enterprise's  equity instruments or that may be settled by the issuance
         of such equity  instruments.  Under the FASB's  proposal,  all forms of
         share-based  payments to employees,  including  employee stock options,
         would be treated the same as other forms of compensation by recognizing
         the  related  cost in the income  statement.  The  expense of the award
         would  generally  be measured at fair value at the grant date.  Current
         accounting  guidance  requires  that the expense  relating to so-called
         fixed plan employee stock options only be disclosed in the footnotes to
         the  financial  statements.  The  proposed  Statement,  which  would be
         effective for fiscal years  beginning  after  December 15, 2004,  would
         eliminate   the  ability  to  account  for   share-based   compensation
         transactions  using APB Opinion No. 25, "Accounting for Stock Issued to
         Employees."  The  Corporation  is currently  evaluating  this  proposed
         statement and its effects on its results of operations.

9.       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  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  (non-accretable  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.

10.      The  SEC  recently   released  Staff   Accounting   Bulletin  No.  105,
         "Application  of Accounting  Principles to Loan  Commitments."  SAB 105
         provides guidance about the measurement of loan commitments  recognized
         at fair value under FASB  Statement No. 133,  Accounting for Derivative
         Instruments and Hedging Activities.  SAB 105 also requires companies to
         disclose their accounting  policy for those loan commitments  including
         methods  and  assumptions  used to estimate  fair value and  associated
         hedging  strategies.  SAB 105 is  effective  for all  loan  commitments
         accounted  for as  derivatives  that are  entered  into after March 31,
         2004. The adoption of SAB 105 is not expected to have a material effect
         on our consolidated financial statements.

                                        8
<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,  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,  First Chester County Capital Trust I, and First Chester County Capital
Trust II,  (collectively,  the "Corporation").  It should be read in conjunction
with the consolidated financial statements included in this report.

     In  addition  to  historical  information,  this  discussion  and  analysis
contains  statements  relating  to future  results of the  Corporation  that are
considered  "forward-looking  statements"  within  the  meaning  of the  Private
Securities  Litigation  Reform  Act of  1995.  These  statements  can  often  be
identified  by the  use  of  forward-looking  terminology  such  as  "believes,"
"expects,"  "intends," "may," "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 (including changes in banking
law and accounting rules),  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;  and (k) our  ability to
manage the risks involved in the foregoing.  These risks and  uncertainties  are
all  difficult  to predict and most are beyond the control of the  Corporation's
Management.

     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 with 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.

                                        9
<PAGE>


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

     ALLOWANCE   FOR  CREDIT   LOSSES  The   Corporation   considers   that  the
determination  of the  allowance  for loan  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 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 months ended March 31, 2004 was $1.50  million,  a
decrease  of $52  thousand  or 3.4 % from $1.55  million  for the same period in
2003.  The  decrease in net income is the direct  result of an after tax gain of
$214 thousand  from the sale of the Bank's  credit card  portfolio in 2003 which
was not present in 2004. The decrease in net income for the  three-month  period
ended March 31, 2004 was  impacted by a decrease in  non-interest  income due to
lower  gains and fees on the sale of  residential  mortgages  and an increase in
non-interest  expense partially offset by increases in net-interest  income. The
specific components of non-interest income and expense are discussed on pages 14
and 15. Basic  earnings per share for the three months ending March 31, 2004 and
2003 were  $0.33 and $0.35 per  share,  respectively.  Cash  dividends  declared
during the  three-month  period ended March 31, 2004 were $0.1375 an increase of
1.85%  from  $0.135  per  share for the same  period in 2003.  Over the past ten
years, the  Corporation's  practice has been to pay a dividend of at least 35.0%
of net income.
<TABLE>
<CAPTION>

                                                              March                           December
                                                  -------------------------                   ---------
                                                   2004              2003                        2003
                                                   ----              ----                        ----
        <S>                                      <C>                <C>                       <C>

        SELECTED RATIOS
        Return on average assets                   0.87%              0.98%                     0.88%
        Return on average equity                  11.37%             12.53%                    11.48%
        Earnings retained                         57.96%             61.37%                    58.07%
        Dividend payout ratio                     42.04%             38.63%                    41.93%
        Book value per share                     $11.77             $11.16                    $11.46

</TABLE>

The  table  of  "Consolidated  Average  Balance  Sheet  and  Taxable  Equivalent
Income/Expense  and Rates" on page 15 may  assist  the  reader in the  following
discussion.

                                       10
<PAGE>


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


                               NET INTEREST INCOME

     Net interest  income is the difference  between  interest  income earned on
interest-earning   assets  and  interest   expense   paid  on   interest-bearing
liabilities.  Net interest income on a tax equivalent  basis for the three-month
periods  ended March 31, 2004 was $7.1  million,  an increase of 10.6% from $6.4
million for the same period in 2003. The increase in tax equivalent net interest
income  can  be   attributed   to  an  increase   in  the  average   balance  of
interest-earning  assets when  compared to the same period last year,  partially
offset by  decreases  in the average  interest  rate earned on  interest-earning
asset and a decrease in the yields paid on interest-bearing liability.

     The average net yield on interest-earning assets, on a tax equivalent basis
was 4.34% for the three-month period ended March 31, 2004, compared to 4.31% for
the same period in 2003, an increase of 0.70% or 3 basis points (one basis point
is equal to 1/100 of a percent).  The average yield on  interest-earning  assets
decreased  4.5% or 25 basis  points to 5.36% in 2004  compared to 5.61% in 2003.
The decrease is primarily due to a 71 basis point or 11.1%  decrease in yield on
loans and leases partially offset by a 40 basis point or 10.4% increase in yield
on the  investment  securities.  The  average  yield  paid  on  interest-bearing
liabilities  decreased  21.0% or 34 basis  points to 1.28% in 2004 from 1.62% in
2003.  The  decrease is due to the  lowering  of interest  rates paid on deposit
accounts. Interest rates and pricing competition may continue to put pressure on
our net-interest  margin and may adversely impact  net-interest income in future
time periods.

     Average  interest-earning  assets increased  approximately $58.9 million or
9.9% to $654.4  million  during the  three-month  period  ending March 31, 2004,
compared to $595.4  million  during the same period last year.  The  increase in
average  interest-earning  assets  was  the  result  of a $1.9  million  or 1.5%
increase  in  investment  securities  and a $78.5  million or 17.9%  increase in
average total loans,  partially  offset by a $21.5 million or 74.0%  decrease in
average federal funds sold and other overnight investments.

     Average interest-bearing  liabilities increased approximately $41.3 million
or 8.6% to $521.5 million during the  three-month  period ending March 31, 2004,
compared to $480.2  million  during the same period last year.  The  increase in
average  interest-bearing  liabilities was the result of a $12.9 million or 2.8%
increase in interest-bearing  deposits and an $18.5 million or 82.5% increase in
Federal Home Loan Bank  advances  and other  borrowings,  partially  offset by a
11.1% or $13.8  million  decrease in  certificates  of  deposits  and other time
deposits.

                      NET YIELD ON INTEREST EARNING ASSETS
<TABLE>
<CAPTION>

                                                                                     Three-Months
                                                                                    Ended March 31,
                                                                                ----------------------
                                                                                2004              2003
                                                                                ----              ----
<S>                                                                             <C>              <C>

Yield on Interest-Earning Assets                                                5.36%            5.61%
Yield on Interest Bearing Liabilities                                           1.28%            1.62%
                                                                                -----            -----
Net Interest Spread                                                             4.08%            3.99%
Contribution of Interest-Free Funds                                             0.26%            0.32%
                                                                                -----            -----
Net Yield on Interest-Earning Assets                                            4.34%            4.31%
                                                                                =====            =====
</TABLE>
                                       11

<PAGE>


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

      INTEREST INCOME ON FEDERAL FUNDS SOLD AND OTHER OVERNIGHT INVESTMENTS

     Interest income on federal funds sold and other  overnight  investments for
the three-month period ended March 31, 2004 decreased $74.0 thousand or 79.6% to
$19  thousand  when  compared  to the same  period  in 2003.  This  decrease  is
primarily the result of a $21.5 million or 74.0% decrease in the average balance
of federal funds sold and other overnight investments from $29.1 million in 2003
to $7.6 million in 2004 and a 21.9% or 28 basis point  decrease on rates earned.
The  decrease  in the  average  balance  of  federal  funds  sold and  overnight
investments  can be  attributed  to strong loan  growth in the first  quarter of
2004.

                    INTEREST INCOME ON INVESTMENT SECURITIES

     On a  tax  equivalent  basis,  interest  income  on  investment  securities
increased 11.8% for the three-month period ended March 31, 2004 to approximately
$1.4  million  compared  to $1.2  million  during the same  period in 2003.  The
increase was primarily  the result of a 10.4% or 40 basis point  increase on the
rates earned on such  investments as well as a 1.5% or $ 1.8 million increase in
the  average  balance  of  investment  securities  to  $129.0  million  on a tax
equivalent basis. The increase in average  investment  securities was the result
of the Corporation's increased cash position due to increased deposits generated
by our new and existing  branch  locations and  Management's  decision to invest
excess liquidity in investment securities.

                       INTEREST INCOME ON LOANS AND LEASES

     Interest  income on loans,  on a tax  equivalent  basis,  generated  by the
Corporation's loan portfolio  increased 4.8% to $7.4 million for the three-month
period  ended March 31, 2004  compared to $7.0  million at March 31,  2003.  The
increase in interest income for the  three-month  period ended March 31, 2004 is
the direct result of a $78.5 million or 17.9% increase in the average balance of
loans and leases  outstanding  compared  to the same  period in 2003,  partially
offset by a 11.1% or 71 basis point  decrease on rates earned on the  portfolio.
The low  interest  rate  environment  has resulted in  substantial  decreases in
interest rates earned on loans and leases as loans have been repriced to current
market  rates due both to  contractual  terms and  negotiation  or  refinancing.
Interest rate competition may result in the continuation of lowering yields.

                      INTEREST EXPENSE ON DEPOSIT ACCOUNTS

     Interest  expense on deposit  accounts  decreased 30.4% for the three-month
period  ended  March 31, 2004 to  approximately  $1.2  million  compared to $1.7
million for the same period in 2003.  The decrease is primarily  the result of a
32.7% or 49 basis  point  decrease on rates paid on  interest-bearing  deposits.
This  decrease  was  partially  offset by a 2.8% or $12.9  million  increase  in
average  interest-bearing  deposits to $465.1  million when compared to the same
period in 2003.

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

                                       12

<PAGE>


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

    INTEREST EXPENSE ON FEDERAL HOME LOAN BANK ADVANCES AND OTHER BORROWINGS

     Interest  expense on Federal Home Loan Bank  ("FHLB") and other  borrowings
increased  $144  thousand or 80.0% to $324 thousand for the  three-month  period
ended  March 31,  2004 from $180  thousand  when  compared to the same period in
2003.  The need for borrowing has  increased  over the last several  quarters to
support loan growth.  FHLB  borrowing  has been a good low cost  alternative  to
deposits to support loan growth.  Average FHLB and other borrowings increased to
$41.0  million as of March 31, 2004  compared to $22.5  million  during the same
period  in  2003.  Borrowings  at any  time  may  consist  of one or more of the
following:  FHLB Overnight or Term Advances and advances under  agreements  with
our correspondent banks.

                       PROVISION FOR LOAN AND LEASE LOSSES

     During the first quarter of 2004, the Corporation  recorded a $300 thousand
provision  for loan and lease  losses  compared  to $394  thousand  for the same
period  in 2003,  a  decrease  of  23.9%.  The  allowance  for loan  losses as a
percentage of total loans was 1.14% as of March 31, 2004,  1.46% as of March 31,
2003, and 1.15% as of December 31, 2003.  Management believes that the allowance
for loan losses is  adequate  based on its current  assessment  of probable  and
estimated  losses.  See the section titled "Allowance For Loan and Lease Losses"
for additional discussion.


                               NON-INTEREST INCOME

     Total  non-interest  income  decreased  16.8% to $2.4 million for the three
months  ended March 31,  2004,  compared  to $2.9  million in the same period of
2003. The various components of non-interest income are discussed below.

     The primary reason for the decrease in total non-interest income is that in
2003, the Corporation sold its Credit Card portfolio to Elan Financial  Services
and  recognized a gain of $306  thousand.  This was a one-time  transaction  and
there  was no  comparable  transaction  in  2004.  Also,  gains  and fee  income
generated on the sale of residential  mortgages for the three-month period ended
March 31, 2004  decreased  $270  thousand  from $411  thousand to $141  thousand
compared to the same period in 2003.  The decrease is  primarily  due to a lower
volume of originations of residential  mortgages during the  three-months  ended
March 31, 2004 as compared to the same period in 2003.

     The  largest  component  of  non-interest  income is Trust  and  Investment
Services  revenue,  which increased $164 thousand or 21.0% to $ 947 thousand for
the  three-months  ended March 31, 2004  compared  with the same period in 2003.
Trust and Investment  Services  income is based primarily on the market value of
assets under management.  The increase in Trust and Investment  Services revenue
is  the  result  of a 12.4 %  increase  in the  market  value  of  assets  under
management, from $494.3 million at March 31, 2003 to $555.7 million at March 31,
2004. Trust and Investment Services revenue also increased due to an increase in
estate revenue recognized during the quarter.

     Gains on the sale of  investment  securities  decreased $5 thousand for the
three-month  period  ended  March 31,  2004 to $53  thousand  as compared to $58
thousand  in the same period in 2003.  These gains were  realized as a result of
normal portfolio management.


                                       13
<PAGE>


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

     The Corporation has operating lease agreements with several customers;  the
income on these  leases is  classified  as  "Rental  Income".  Rental  Income on
operating  lease  agreements  for the  three-month  period  ended March 31, 2004
decreased  $58 thousand from $251 thousand to $193 thousand when compared to the
same period in 2003. The Corporation did not add any significant volume of these
types of leases in 2003 or for the three-month  period ended March 31, 2004. See
related depreciation expense in the non-interest expense section.

     Gains on the sale of premises and other real estate owned ("OREO") were $25
thousand for the three-months  ended March 31, 2004. There were no gains on sale
of premises  and OREO for the  three-month  period  ended March 31,  2003.  OREO
balances increased $1.1 million from March 31, 2003 to $1.5 million at March 31,
2004 as our Credit Administration  Department continues to reduce non-performing
loans.

         Other non-interest income includes ATM surcharge revenue, STAR / Visa
Check Card revenue, safe deposit box income, merchant services income, loan fee
income, miscellaneous loan income, rental income and other miscellaneous income.
Other non-interest income decreased $24 thousand for the three-month period
     ended March 31, 2004 when compared to the same period in 2003.

                              NON-INTEREST EXPENSE

     Total non-interest  expense for the first quarter of 2004 increased 4.1% to
$6.9  million  compared to the same period in 2003.  The various  components  of
non-interest expense are discussed below.

     First quarter 2004 salaries and employee  benefits  increased  5.4% to $3.9
million for the  three-month  period  ended March 31, 2004  compared to the same
period in 2003.  Higher  employment and annual employee  salary  increases and a
proportional  increase in employee  benefits are primarily  responsible  for the
increase.  At March 31, 2004, the Corporation employed 270 full time and 26 part
time employees compared to 238 full time and 44 part time employees at March 31,
2003.  The  additional  employees  were  needed for our new  branches  and other
departments.

     Net occupancy,  equipment and data  processing  expense  decreased 0.97% to
$1.3 million for the  three-month  period  ended March 31, 2004  compared to the
same period last year.  The decrease is the result of decreases in  depreciation
on core systems and hardware expense.

     Depreciation  on operating  leases  increased 0.6% to $172 thousand for the
three-month  period ended March 31, 2004 from $171 thousand when compared at the
same  period last year.  This  depreciation  expense is the result of  operating
lease  agreements the Corporation has with several of our customers.  The income
associated with these operating leases is classified as Rental Income.

     Expenses for professional  services increased $77 thousand or 30.0% to $334
thousand for the  three-month  period ended March 31, 2004  compared to the same
period in 2003. The increase is the result of increased consultant,  accounting,
and legal fees.

     Other non-interest  expense includes marketing expenses to promote our full
array of products and services and our corporate image. Total other non-interest
expense decreased 0.4% to $1.0 million for the three months ended March 31, 2004
compared to the same period in 2003.

                                       14
<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 MARCH 31,
<TABLE>
<CAPTION>

(Dollars in thousands)                                                  2004                                2003
                                                           ------------------------------      ----------------------------
                                                            Daily                              Daily
                                                            Average                            Average
ASSETS                                                      Balance    Interest    Rate        Balance    Interest   Rate
                                                            -------    --------    ----        -------    --------   ----
   <S>                                                       <C>        <C>        <C>          <C>         <C>      <C>

     Federal funds sold                                      $  7,577   $   19     1.00%        $ 29,107    $   93   1.28%
     Interest-bearing deposits in banks                           372        1     1.08%             242         1   1.65%
     Investment securities
        Taxable                                               104,196    1,103     4.23%         125,979     1,208   3.84%
        Tax-exempt(1)                                          24,826      271     4.36%           1,194        21   6.94%
                                                              -------    -----                   -------     -----
           Total investment securities                        129,022    1,374     4.26%         127,173     1,229   3.86%
                                                              -------    -----                   -------     -----
     Loans and leases (2)
        Taxable                                               508,487    7,247     5.70%         434,304     6,949   6.40%
        Tax-exempt(1)                                           8,935      124     5.57%           4,619        86   7.44%
                                                              -------    -----                   -------     -----
           Total loans and leases                             517,422    7,371     5.70%         438,923     7,035   6.41%
                                                              -------    -----                   -------     -----
           Total interest-earning assets                      654,393    8,765     5.36%         595,445     8,358   5.61%
    Non-interest earning assets
        Allowance for possible loan losses                     (5,959)                            (6,230)
        Cash and due from banks                                21,949                             24,325
        Other assets                                           22,546                             21,024
                                                              -------                            -------
           Total assets                                      $692,929                           $634,564
                                                              =======                            =======

LIABILITIES AND STOCKHOLDERS' EQUITY
     Savings, NOWS & money market deposits                   $354,632   $  497     0.56%        $327,980    $  727   0.89%
    Certificates of deposits and other time                   110,470      683     2.47%         124,525       968   3.12%
                                                              -------    -----                   -------     -----
     Total interest bearing deposits                          465,102    1,180     1.01%         452,232     1,695   1.50%
     Securities sold under repurchase agreements                    -        -     -                 540         3   2.22%
     Junior subordinated debentures                            15,450      165     4.27%               -         -   -
     Guaranteed Preferred beneficial interest in
        Corporation's subordinated debentures                       -        -     -               5,000        63   5.04%
     Federal Home Loan Bank advances and
       other borrowings                                        40,985      324     3.16%          22,461       180   3.21%
                                                              -------    -----                   -------     -----
           Total interest bearing liabilities                 521,538    1,669     1.28%         480,233     1,941   1.62%
                                                              -------    -----                   -------     -----
     Non-interest bearing liabilities
        Non-interest bearing demand deposits                  113,347                             99,417
        Other liabilities                                       5,244                              5,346
                                                             --------                            -------
           Total liabilities                                  640,128                            584,996
    Stockholders' equity                                       52,801                             49,568
                                                             --------                            -------
           Total liabilities and stockholders' equity        $692,929                           $634,564
                                                              =======                            =======
     Net interest income                                                $7,096                              $6,417
                                                                         =====                               =====
     Net yield on interest earning assets                                          4.34%                             4.31%
                                                                                   =====                             =====

<FN>

(1)  The indicated income and annual rate are presented on a taxable equivalent
     basis using the federal marginal rate of 34% adjusted for the TEFRA 20%
     interest expense disallowance for 2004 and 2003.
(2)  Non-accruing loans are included in the average balance.
</FN>
</TABLE>
                                       15

<PAGE>


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

                                  INCOME TAXES

     Income tax expense for the three-month period ended March 31, 2004 was $642
thousand,  compared  to  $664  thousand  in the  same  period  last  year.  This
represents  an  effective  tax rate of 30.0% for the first  quarter  of 2004 and
2003.

               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  Management to monitor changes in liquidity and to react accordingly to
fluctuations  in market  conditions.  The primary  sources of liquidity  for the
Corporation is funding available from, deposit growth,  FHLB Borrowings and cash
flow  from  the  investment  and  loan  portfolios.  Deposits  consist  of  NOW,
money-market,  savings,  tiered savings,  large and small dollar certificates of
deposit and  non-interest  bearing  demand  deposit  accounts.  The  Corporation
considers funds from NOW, money market,  savings and certificates less than $100
thousand as "core" deposit  because of the historical  stability of such sources
of funds. Details of core deposits, non-interest bearing demand deposit accounts
and other deposit sources are highlighted in the following table:

<TABLE>
<CAPTION>

                                                               DEPOSIT ANALYSIS

(Dollars in thousands)                       March 31, 2004            December 31, 2003          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                             $ 93,834        0.13%          $ 88,518     0.19%        $  5,316        6.01%
Money Market                               27,345        0.48%            26,051     0.70%           1,294        4.97%
Statement Savings                          65,011        0.54%            63,032     0.77%           1,979        3.14%
Other Savings                               1,343        0.60%             1,522     0.79%            (179)     (11.76%)
CD's Less than $100,000                    88,978        2.31%            96,773     2.93%          (7,795)      (8.05%)
                                          -------                        -------                    ------

Total Core Deposits                       276,511        0.96%           275,896     1.33%             615        0.22%

Non-Interest Bearing
     Demand Deposit Accounts              113,347                        107,334       -             6,013        5.60%
                                          -------                        -------                    ------

Total Core and Non-Interest
     Bearing Deposits                     389,858        0.68%           383,230     0.96%           6,628        1.73%
                                          -------                        -------                    ------

Tiered Savings                            167,099        0.82%           159,220     1.04%           7,879        4.95%
CD's Greater than $100,000                 21,492        3.16%            22,365     2.48%            (873)      (3.90%)
                                          -------                        -------                    ------

Total Deposits                           $578,449        0.82%          $564,815     1.04%         $13,634        2.41%
                                          =======                        =======                    ======

</TABLE>
                                       16
<PAGE>


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

     The Bank, as a member of the FHLB,  maintains  several  credit  facilities.
During the first quarter of 2004, average FHLB advances were approximately $41.0
million and consisted of term advances with a variety of maturities. The average
interest rate on these advances was approximately  3.13%. The Bank currently has
a maximum borrowing capacity with the FHLB of approximately $139.6 million. FHLB
advances are  collateralized by a pledge on the Bank's portfolio of unencumbered
investment  securities,  certain  mortgage  loans and a lien on the Bank's  FHLB
stock.

     The goal of interest rate  sensitivity  management is to avoid  fluctuating
net interest  margins,  and to enhance  consistent growth of net interest income
through periods of changing  interest rates. Such sensitivity is measured as the
difference  in the volume of assets and  liabilities  in the existing  portfolio
that are subject to  repricing in a future time period.  The  Corporation's  net
interest rate  sensitivity  gap within one year is a negative  $213.2 million or
(30.2%)  of total  assets at March 31,  2004  compared  with a  negative  $134.2
million or 20.4% of total  assets at December 31, 2003.  The  Corporation's  gap
position is one tool used to evaluate  interest  rate risk and the  stability of
net interest  margins.  Another tool that management  uses to evaluate  interest
rate risk is a computer  simulation model that assesses the impact of changes in
interest rates on net interest  income,  net-income  under various interest rate
forecasts and scenarios. Management has set acceptable limits of risk within its
Asset  Liability  Committee  ("ALCO")  policy and  monitors  the  results of the
simulations  against these limits  quarterly.  As of the most recent quarter end
all  results  are within  policy  limits and  indicate  an  acceptable  level of
interest rate risk.  Management monitors interest rate risk as a regular part of
corporate  operations  with the  intention of  maintaining a stable net interest
margin.

                                       17
<PAGE>


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

                          INTEREST SENSITIVITY ANALYSIS
                              AS OF MARCH 31, 2004
<TABLE>
<CAPTION>

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

   Federal funds sold                      $  13,700          $      --        $      --      $       --        $  13,700
   Investment securities                      22,807             51,614           49,503              --          123,924
   Interest bearing deposits in banks            412                 --               --              --              412
   Loans and leases                          195,249            235,824           94,087          (6,000)         519,160
   Cash and due from banks                        --                 --               --          27,738           27,738
   Premises and equipment                         --                 --               --          12,836           12,836
   Other assets                                   --                 --               --           9,156            9,156
                                           ---------           --------         --------       ---------         --------
   Total assets                           $  232,168          $ 287,438        $ 143,590      $   43,730        $ 706,926
                                           =========           ========         ========       =========         ========

LIABILITIES AND CAPITAL
   Non-interest bearing deposits          $      --           $      --        $      --      $  128,036        $ 128,036
   Interest bearing deposits                426,934              27,456            8,871              --          463,261
   FHLB term advance                          2,858              36,677            2,702              --           42,237
   Junior subordinated debentures               450                  --               --              --              450
   Guaranteed preferred beneficial
     Interest in Corporation's
     Subordinated debentures                 15,000                  --               --              --           15,000
   Other liabilities                            138                  --            4,447              --            4,585
   Capital                                       --                  --               --          53,357           53,357
                                           --------            --------         --------       ---------         --------
   Total liabilities & capital            $ 445,380           $  64,133        $  16,020      $  181,393        $ 706,926
                                           ========            ========         ========       =========         ========
   Net interest rate
     sensitivity gap                      $(213,212)          $ 223,305        $ 127,570      $ (137,663)
                                           ========            ========         ========       =========
   Cumulative interest rate
     sensitivity gap                      $(213,212)          $ 10,093         $ 137,663      $       --
                                           ========            =======          ========       ==========
   Cumulative interest rate
     sensitivity gap divided
     by total assets                         (30.2%)              1.4%             19.5%
                                          =========        ==========         =========
</TABLE>

                       ALLOWANCE FOR LOAN AND LEASE LOSSES

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

                                       18
<PAGE>

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

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

     (Dollars in thousands)                                            March 31,                      December 31,
                                                                -------------------------        ----------------------
                                                                   2004          2003                     2003
                                                                -----------   -----------        ----------------------
     <S>                                                        <C>            <C>                     <C>

     Balance at beginning of period                             $    5,864     $    6,230              $    6,230
                                                                 ---------      ---------               ---------

     Provision for loan and lease losses                               300            394                   2,519
                                                                 ---------      ---------               ---------

        Recoveries of loans previously charged-off                      41            120                     214
        Loans charged-off                                             (205)          (355)                 (3,099)
                                                                 ---------      ---------               ---------

     Net loans charged-off                                            (164)          (235)                 (2,885)
                                                                 ---------      ---------               ---------

     Balance at end of period                                   $    6,000     $    6,389              $    5,864
                                                                 =========      =========               =========

     Period-end loans outstanding                               $  525,160     $  436,348              $  511,249

     Average loans outstanding                                  $  517,422     $  438,923              $  470,413

     Allowance for loan and lease losses as a
        percentage of period-end loans outstanding                   1.14%          1.46%                   1.15%

     Ratio of net charge-offs to average loans
        outstanding (annualized)                                     0.13%          0.21%                   0.61%
</TABLE>

     Non-performing loans include loans on non-accrual status and loans past due
90 days or more and still accruing.  The  Corporation's  policy is to write down
all non-performing loans to net realizable value based on current assessments of
the value of collateral securing such loans and leases. Non-performing loans are
primarily collateralized by real estate and are in the process of collection. As
of March 31, 2004, the level of non-performing  loans has decreased $3.6 million
from March 31,  2003,  and  non-performing  loans  decreased  $1.3  million from
December  31,  2003.  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.  Non-performing  loans and leases reduce the Corporation's
earnings  because  interest income is not earned on such assets.  Management has
taken aggressive steps to control current and future credit quality issues.  The
following chart represents detailed information  regarding  non-performing loans
and leases.

                                       19
<PAGE>


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

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

(Dollars in thousands)                                                 March 31,                       December 31,
                                                                -------------------------             -------------
                                                                   2004          2003                       2003
                                                                -----------   -----------                 -------
<S>                                                              <C>             <C>                     <C>    <C>

Past due over 90 days and still accruing                         $      79       $     72                $    597

Non-accrual loans and leases                                         2,339          5,965                   3,093
                                                                  --------        -------                 -------

Total non-performing loans and leases                                2,418          6,037                   3,690

Other real estate owned                                              1,464            368                     965
                                                                  --------        -------                 -------

Total non-performing assets                                      $   3,882       $  6,405                $  4,655
                                                                  ========        =======                 =======

Non-performing loans and leases as a percentage
        of total loans and leases                                    0.46%          1.38%                   0.72%

Allowance for loan and lease losses as a percentage
        of non-performing loans and leases                         248.06%        105.83%                 158.92%

Non-performing assets as a percentage of
        total loans and other real estate owned                      0.74%          1.47%                   0.91%

Allowance for loan and lease losses as a
        percentage of non-performing assets                        154.51%         99.75%                 125.97%
</TABLE>

     Other real estate owned ("OREO") represents residential and commercial real
estate  that had secured  non-performing  loans that the Bank  acquired  through
foreclosure or other collection  efforts and that is held for sale. The value of
OREO has been written down to realizable value (net of estimated disposal costs)
based on professional appraisals.  The increase in OREO in the first quarter was
due to the addition of one property.  The Corporation is actively  marketing all
OREO property.

                                 LOAN IMPAIRMENT

     The  Corporation  identifies  a loan as impaired  when it is probable  that
interest and principal will not be collected  according to the contractual terms
of the loan agreement. The accrual of interest is discontinued on impaired loans
and no income is recognized until all recorded amounts of interest and principal
are recovered in full.

     FASB 114  "Accounting  by Creditors for  Impairment of Loans"  requires the
Corporation  to  examine  commercial  and  non-residential   mortgage  loans  on
non-accrual  status  for  impairment.  The  balance of  impaired  loans was $2.3
million,  $3.1 million,  and $5.8 million at March 31, 2004,  December 31, 2003,
and March 31, 2003,  respectively.  The associated  allowance for impaired loans
was $231 thousand,  $309 thousand and $938 thousand at March 31, 2004,  December
31, 2003, and March 31, 2003, respectively.

                                       20
<PAGE>


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

     For the three months ended March 31, 2004,  activity in the  allowance  for
impaired loan losses included a provision of $19 thousand, principal payments of
$45  thousand,  charge offs of $8 thousand and  recoveries  of $0. There was $23
thousand  applied  towards  accrued but not paid  interest  for the  three-month
period ended March 31, 2004 while contractual interest amounted to $52 thousand.
Total cash  collected on loans for the  three-month  period ended March 31, 2004
was $449  thousand,  $426 thousand was applied to principal and $23 thousand was
applied to interest.

     For the three months ended March 31, 2003,  activity in the  allowance  for
impaired loan losses  included a provision of $203 thousand,  charge offs of $30
thousand and recoveries of $10 thousand.  There was no interest  income recorded
for the  three-month  period  ended  March 31, 2003 while  contractual  interest
amounted to $104  thousand.  Total cash  collected on loans for the  three-month
period  ended March 31, 2003 was $756  thousand,  $655  thousand  was applied to
principal and $101 thousand was applied to recovery.

                                  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 March  31,  2004,  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 decreased from March 31, 2003 due to lower than expected earnings in
2003, have been computed in accordance with regulatory accounting policies.
<TABLE>

                                                   March 31,                  December 31,
RISK-BASED                                --------------------------        -----------------          "Well Capitalized"
CAPITAL RATIOS                              2004             2003                 2003                    Requirements
--------------                            ----------      ----------              ----               ----------------------
<S>                                        <C>              <C>                  <C>                        <C>

     Corporation
Leverage Ratio                              9.73%            8.42%                9.71%                      5.00%
Tier I Capital Ratio                       11.87%           11.14%               12.01%                      6.00%
Total Risk-Based Capital Ratio             12.93%           12.39%               13.07%                     10.00%
     Bank
Leverage Ratio                              8.82%            8.16%                8.68%                      5.00%
Tier I Capital Ratio                       10.74%           10.80%               10.72%                      6.00%
Total Risk-Based Capital Ratio             11.80%           12.05%               11.79%                     10.00%

</TABLE>
                                       21
<PAGE>


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

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

     The  Corporation and the Bank's  risk-based  capital ratios were positively
impacted  by the July 11,  2002 ($5.0  million)  and  November  13,  2003 ($10.0
million)   issuance  of  guaranteed   preferred   beneficial   interest  in  the
Corporation's  subordinated debentures. The banking regulatory agencies have not
issued any guidance that would change the regulatory  capital  treatment for the
trust-preferred  securities  issued by First Chester County Capital Trust I & II
based on the adoption of FIN 46(R). However, as additional  interpretations from
the available,  management  will  reevaluate its potential  impact to its Tier I
capital calculation under such interpretations.


                                       22
<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 2003 Annual  Report,
filed with the SEC via EDGAR as an exhibit to its Form 10-K for the fiscal  year
ended  December  31,  2003.  Please refer to the  "Management's  Discussion  and
Analysis"  section on pages 18-30 of the  Corporation's  Annual  Report for more
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 and financial officers (the "Principal Officers") and
our  President and our  Controller  (our  principal  accounting  officer).  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.


                                       23
<PAGE>


ITEM 4.  CONTROLS AND PROCEDURES - Continued

Among  the  matters  our   Principal   Officers   certify  in  the  Section  302
Certifications are whether all "significant deficiencies" or "material weakness"
in the design or operation of our internal control over financial reporting that
are likely to adversely  affect our ability to record,  process,  summarize  and
report  financial  information have been disclosed to our auditors and the Audit
Committee of our Board of  Directors.  "Significant  deficiencies"  has the same
meaning as the term "reportable  conditions" in auditing literature.  Both terms
represent  deficiencies  in the design or  operation  of internal  control  over
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 errors and all
fraud. A control system, no matter how well conceived and operated,  can provide
only  reasonable,  as opposed to absolute,  assurance that the objectives of the
control system are met. Further, the design of a control system must reflect the
fact that there are resource  constraints,  and the benefits of controls must be
considered relative to their costs.  Because of the inherent  limitations in all
control systems,  no evaluation of controls can provide absolute  assurance that
all control  issues and instances of fraud,  if any,  within an entity have been
detected.  These  inherent  limitations  include the realities that judgments in
decision-making  can be faulty,  and that breakdowns can occur because of simple
error or mistake.  Additionally,  controls can be circumvented by the individual
acts of some  persons,  by  collusion of two or more  people,  or by  management
override of the control.  The design of any system of controls  also is based in
part upon certain  assumptions about the likelihood of future events,  and there
can be no assurance  that any design will succeed in achieving  its stated goals
under all  potential  future  conditions;  over time,  a system of controls  may
become inadequate because of changes in conditions,  or the degree of compliance
with the  policies  or  procedures  may  deteriorate.  Because  of the  inherent
limitations in a cost-effective  control system,  misstatements  due to error or
fraud may occur and not be detected.

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

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

                                       24

<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, Use of Proceeds and Issuer Purchases of
            Equity Securities
            -------------------------------------------------------------------

                      ISSUER PURCHASES OF EQUITY SECURITIES

<TABLE>
<CAPTION>

                                            (a)             (b)                 (c)                           (d)
                                           Total          Average        Total Number of Shares        Maximum Number (or
                                          Number        Price Paid       (or Units) Purchased         Approximate Dollar Value) of
         Period                          of Shares       per Share       as Part of Publicly          Shares (or Units) that may be
                                         Purchased       (or unit)     Announced Plans or Programs    may Yet Be Purchased
                                         ---------      ----------     ---------------------------    -----------------------------
<S>                                        <C>             <C>               <C>                          <C>


January 1 to January 31, 2004
                                             3,000         $26.24             3,000                        $8,713,470

February 1 to February 29, 2004
                                            12,180         $26.17            12,180                        $8,394,706

March 1 to March 31, 2004                     --             --                --                          $8,394,706

Total                                       15,180         $26.21            15,180                        $8,394,706

</TABLE>

*All of the foregoing shares were purchased pursuant to the Corporation's
program to repurchase up to $10.0 million of the Corporation's common stock that
was publicly announced on October 16, 2003.

Item 3.     Defaults upon Senior Securities
            -------------------------------
                  None

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

                  The Annual Meeting of Shareholders of the Corporation was held
                  on April 27, 2004 (the  "Meeting").  Notice of the Meeting was
                  mailed to  shareholders  of record on or about March 24, 2004,
                  together  with  proxy   solicitation   materials  prepared  in
                  accordance  with Section 14(a) of the Securities  Exchange Act
                  of 1934, as amended,  and the  regulations  promulgated  there
                  under.

                                       25
<PAGE>


                     PART II - OTHER INFORMATION - CONTINUED

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

1.                The election of three Class II  directors,  with each director
                  to serve until the 2007  Annual  Meeting of  Shareholders  and
                  until the election and  qualification of his or her respective
                  success; and

2.                The approval of an amendment to the Corporation's  Articles of
                  Incorporation  to increase the number of authorized  shares of
                  the   Corporation's   common  stock,  par  value  $1.00,  from
                  10,000,000 to 25,000,000; and

3.                The ratification of the appointment of Grant Thornton,  LLP as
                  the Corporation's  independent public accountants for the year
                  ending December 31, 2004; and

4.                The  transaction  of such other  business as may properly come
                  before the Annual  Meeting and any  adjournment  thereof,  and
                  matters incident to the conduct of the Annual Meeting.

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

                  Nominee                          For                 Withheld
                  -------                          ---                 --------

                  David L. Peirce                  3,482,794           265,344

                  M. Robert Clarke                 3,497,633           250,505

                  Kevin C. Quinn                   3,499,743           248,395

                  The  names of the  other  directors  whose  terms of office as
                  directors continued after the Meeting are as follows:  John A.
                  Featerman  III,  John S.  Halsted,  J. Carol  Hanson,  John J.
                  Ciccarone, Clifford E. DeBaptiste and John B. Waldron.

                  The proposal of an amendment to the Corporation's  Articles of
                  Incorporation  to increase the number of authorized  shares of
                  the  Corporation's  common  stock,  par value of  $1.00,  from
                  10,000,000 to 25,000,000.

                  For          Against       Abstentions       Broker Non-votes
                  ---          -------       -----------       ----------------

                  3,490,236    219,501          38,401                0

                  The proposal to ratify the appointment of Grant Thornton,  LLP
                  as the Corporation's  independent  public  accountants for the
                  year ending  December  31, 2004 was  ratified.  The numbers of
                  votes cast for or against as well as the number of abstentions
                  and broker non-votes for the ratification were as follows:

                  For          Against       Abstentions       Broker Non-votes
                  ---          -------       -----------       ----------------

                  3,719,019    17,871           11,248                0

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

                                       26
<PAGE>


                     PART II - OTHER INFORMATION - CONTINUED

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.

         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     Rule 13a-14(a) Certification of Chief Executive Officer
         31.2     Rule 13a-14(a) Certification of President
         31.3     Rule 13a-14(a) Certification of Treasurer
         31.4     Rule 13a-14(a) Certification of Assistant Treasurer

         32.1     Section 906 Certification of the Chief Executive Officer
         32.2     Section 906 Certification of the President
         32.3     Section 906 Certification of the Treasurer
         32.4     Section 906 Certification of the Assistant Treasurer

                  (b) Reports on Form 8-K
                      -------------------
                      A Form 8-K was filed with the SEC on January 26, 2004
                      furnished information related to the earnings for the
                      year ended December 31, 2003.

                                       27

<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





                                                    /s/ John A Featherman III
                                                    --------------------------
May 14, 2004                                        John A. Featherman
                                                    Chief Executive Officer




May 14, 2004                                         /s/ J. Duncan Smith
                                                     -------------------
                                                     J. Duncan Smith
                                                     Treasurer
                                                     (Principal Accounting
                                                      and Financial Officer)


                                       28
<PAGE>



                                INDEX TO EXHIBITS

     The  following is a list of the exhibits  filed with,  or  incorporated  by
reference  into,  this Report (those  exhibits marked with an asterisk are filed
herewith):


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


         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     Rule 13a-14(a) Certification of Chief Executive Officer
*        31.2     Rule 13a-14(a) Certification of President
*        31.3     Rule 13a-14(a) Certification of Treasurer
*        31.4     Rule 13a-14(a) Certification of Assistant Treasurer

*        32.1     Section 906 Certification of the Chief Executive Officer
*        32.2     Section 906 Certification of the President
*        32.3     Section 906 Certification of the Treasurer
*        32.4     Section 906 Certification of the Assistant Treasurer


                                       29