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FORM 11-K
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
(Mark One)
[x] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934 [NO FEE REQUIRED]
For the fiscal year ended December 31, 1999, OR
-----------------
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 [NO FEE REQUIRED]
For the transition period from ____________________ to ______________________
Commission File No. 0-12870
THE FIRST NATIONAL BANK OF CHESTER COUNTRY RETIREMENT SAVINGS PLAN (FORMERLY
KNOWN AS THE FIRST NATIONAL BANK OF WEST CHESTER RETIREMENT SAVINGS PLAN
------------------------------------------------------------------------
(full title of the plan)
FIRST CHESTER COUNTY CORPORATION (FORMERLY KNOWN AS
FIRST WEST CHESTER CORPORATION
---------------------------------------------------
(Name of Issuer of the securities held pursuant to the plan)
9 North High Street, West Chester, Pennsylvania 19380
-----------------------------------------------------
(Address of principal executive offices)
<PAGE>
REQUIRED INFORMATION
1. The following financial statements are filed as part of this report and
included after the signature page hereof:
(a) Audited statements of net assets available for benefits as of
the end of the latest two fiscal years of the plan (December
31, 1999 and 1998).
(b) An audited statement of changes in net assets available for
benefits, and supplemental schedules for each of the latest
three fiscal years of the plan (1999, 1998, & 1997).
2. Exhibit. The following exhibits are filed with this Report:
Exhibit No. Description
----------- -----------
23.1 Consent of Dittmer & Battaglia 1999 and 1998 Reports
23.2 Consent of Ogorek & Graham 1998 and 1997 Reports
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the trustees (or other persons who administer the plan) have duly caused this
annual report to be signed by the undersigned thereunto duly authorized.
THE FIRST NATIONAL BANK OF
CHESTER COUNTY - 401(k) PLAN
DATE June 29, 1999 BY:/s/William D. Wagenmann, Jr.
------------- -------------------------------
William D. Wagenmann, Jr.
Plan Administrator
<PAGE>
THE FIRST NATIONAL BANK OF CHESTER COUNTY -
RETIREMENT SAVINGS PLAN
AUDITED FINANCIAL STATEMENTS
DECEMBER 31, 1999 AND 1998
<PAGE>
CONTENTS
--------
INDEPENDENT AUDITORS' REPORT PAGE 1
AUDITED FINANCIAL STATEMENTS
Statements of Net Assets Available
for Benefits 2
Statement of Changes in Net Assets
Available for Benefits 3
Notes to Financial Statements 4 - 8
OTHER FINANCIAL INFORMATION
Supplemental Schedules 9 - 11
<PAGE>
INDEPENDENT AUDITORS' REPORT
----------------------------
To the Board of Trustees of
The First National Bank of Chester County -
Retirement Savings Plan
West Chester, PA 19381
We have audited the accompanying statements of net assets available for benefits
of The First National Bank of Chester County - Retirement Savings Plan as of
December 31, 1999 and 1998, and the related statement of changes in net assets
available for benefits, for the year then ended, December 31, 1999. These
financial statements are the responsibility of the Trustees of The First
National Bank of Chester County - Retirement Savings Plan. Our responsibility is
to express an opinion on these financial statements based on our audit.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by the
trustees as well as evaluating the overall financial statement presentation. We
believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets available for benefits of the Retirement
Savings Plan as of December 31, 1999 and 1998, and the changes in net assets
available for benefits for the year then ended December 31, 1999, in conformity
with generally accepted accounting principles.
Our audits were performed for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedules are presented
for the purpose of additional analysis and are not a required part of the basic
financial statements but are supplementary information required by the
Department of Labor's Rules and Regulations for Reporting and Disclosures under
the Employee Retirement Income Security Act of 1974. These supplemental
schedules are the responsibility of the Plan's management. The supplemental
schedules have been subjected to the auditing procedures applied in the audits
of the basic financial statements and, in our opinion, are fairly stated in all
material respects in relation to the basic financial statements taken as a
whole.
/s/ DITTMER & BATTAGLIA
----------------------------
DITTMER & BATTAGLIA
CERTIFIED PUBLIC ACCOUNTANTS
June 4, 2000
<PAGE>
THE FIRST NATIONAL BANK OF CHESTER COUNTY -
RETIREMENT SAVINGS PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
DECEMBER 31, 1999 AND 1998
<TABLE>
<CAPTION>
ASSETS 1999 1998
---- ----
<S> <C> <C>
Investments, at fair value
Mutual funds $3,514,643 $2,887,893
Bank certificates of deposit 645,000 695,000
Common stock 2,237,544 2,088,680
Notes receivable 125,838 121,425
---------- ---------
TOTAL INVESTMENTS 6,523,025 5,792,998
---------- ---------
Receivables
Employer's fixed contributions 218,344 210,403
Employees' contributions 16,109 15,694
Employer matching contribution 7,912 8,209
Accrued interest income 5,060 6,630
Accrued dividend income 18,971 15,557
---------- ---------
TOTAL RECEIVABLES 266,396 256,493
---------- ---------
Cash and cash equivalents 161,823 119,942
---------- ---------
TOTAL ASSETS 6,951,244 6,169,433
---------- ---------
NET ASSETS AVAILABLE FOR BENEFITS $ 6,951,244 $ 6,169,433
========== ==========
<FN>
---------------------------------------
The accompanying notes are an integral part of these financial statements.
</FN>
</TABLE>
-2-
<PAGE>
THE FIRST NATIONAL BANK OF CHESTER COUNTY -
RETIREMENT SAVINGS PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
(WITH FUND INFORMATION)
FOR THE YEAR ENDED DECEMBER 31, 1999
<TABLE>
<CAPTION>
Federated Fidelity Advisor
Short-Term FNB of West Fidelity Equity Growth
US Government Chester Income II Opportunities
Fund CD Fund Fund Fund
------------- ----------- --------------- ---------------
<S> <C> <C> <C> <C>
ADDITIONS TO NET ASSETS ATTRIBUTED TO:
INVESTMENT INCOME
Net appreciation/(depreciation) in
Fair value of investments $ - $ - $ (78,675) $ (90,369)
Interest - 38,798 -
Dividends 8,627 - 120,007 152,061
--------- --------- --------- ---------
TOTAL INVESTMENT INCOME 8,627 38,798 41,332 61,692
--------- --------- --------- ---------
CONTRIBUTIONS
Employer's fixed contribution - - - -
Employer's 2,870 14,518 32,181 38,556
Employee's 5,226 36,024 78,007 93,850
Rollovers 10,037 - 18,268 32,710
--------- --------- --------- ---------
TOTAL CONTRIBUTIONS 18,133 50,542 128,456 165,116
--------- --------- --------- ---------
TOTAL ADDITIONS 26,760 89,340 169,788 226,808
--------- --------- --------- ---------
DEDUCTIONS FROM NET ASSETS ATTRIBUTED TO:
Benefits paid to participants 5,511 161,595 124,754 140,223
--------- --------- --------- ---------
TOTAL DEDUCTIONS 5,511 161,595 124,754 140,223
--------- --------- --------- ---------
NET INCREASE PRIOR TO INTERFUND TRANSFERS 21,249 (72,255) 45,034 86,585
Interfund transfers 20,632 22,255 31,654 39,224
--------- --------- --------- ---------
NET INCREASE/(DECREASE) 41,881 (50,000) 76,688 125,809
NET ASSETS AVAILABLE FOR BENEFITS:
Beginning of year 119,942 695,000 900,055 1,298,265
--------- --------- --------- ---------
End of year $ 161,823 $ 645,000 $ 976,743 $1,424,074
<FN>
---------------------------------------
The accompanying notes are an integral part of these financial statements.
</FN>
</TABLE>
-3-
<PAGE>
<TABLE>
<CAPTION>
Fidelity Partic-
T. Rowe Price FNB of Vanguard Emerging ipants
International Chester County Index 500 Market Notes
Stock Fund Stock Fund Fund Fund Fund Other Total
-------------- -------------- ------------ -------- -------- -------- ---------
<S> <C> <C> <C> <C> <C> <C>
$ 66,418 $ 23,098 $ 108,044 $ 7,197 $ - $ - $ 35,713
- - - - 8,541 5,060 52,399
- 39,781 12,570 - - 18,971 352,017
------- --------- -------- ------- ------ -------- ---------
66,418 62,879 120,614 7,197 8,541 24,031 440,129
------- --------- -------- ------- ------ -------- ---------
- - - - - 218,344 218,344
10,328 63,723 51,596 - - 7,912 221,684
23,617 84,726 93,508 - - 16,109 431,067
13,005 6,218 46,045 - - - 126,283
------- --------- -------- ------- ------ -------- ---------
46,950 154,667 191,149 - - 242,365 997,378
------- --------- -------- ------- ------ -------- ---------
113,368 217,546 311,763 7,197 8,541 266,396 1,437,507
------- --------- -------- ------- ------ -------- ---------
24,433 97,140 73,453 21,253 7,334 - 655,696
------- --------- -------- ------- ------ -------- ---------
24,433 97,140 73,453 21,253 7,334 - 655,696
------- --------- -------- ------- ------ -------- ---------
88,935 120,406 238,310 (14,056) 1,207 266,396 781,811
15,766 28,458 95,298 - 3,206 (256,493) -
------- --------- -------- ------- ------ -------- ---------
104,701 148,864 333,608 (14,056) 4,413 9,903 781,811
215,961 2,088,680 454,669 18,943 121,425 256,493 6,169,433
------- --------- -------- ------- ------ -------- ---------
$320,662 $2,237,544 $ 788,277 $ 4,887 $125,838 $ 266,396 $6,951,244
======= ========= ======== ======== ======= ======== =========
</TABLE>
-3 (cont)-
<PAGE>
THE FIRST NATIONAL BANK OF CHESTER COUNTY -
RETIREMENT SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1999 AND 1998
NOTE A - DESCRIPTION OF PLAN
The following brief description of The First National Bank of Chester
County - Retirement Savings Plan is provided for general purpose only.
Members should refer to the Plan agreement for more complete
information.
GENERAL
Effective January 1, 1999, the Plan has been amended and restated in
its entirety. The Plan is subject to the provisions of the Employee
Retirement Income Security Act of 1974 (ERISA).
MEMBERSHIP IN THE PLAN
Each employee who was participating in the prior plan on December 31,
1994, shall automatically continue as a member. Each other employee who
is an eligible employee as of the effective date shall become a member
of the Plan on such date.
Eligible employee for purposes of 401(K) deferrals means any employee
who has been employed for at least one continuous year and is scheduled
to complete 1,000 hours of service during each plan year. The 401(k)
deferral requirement is available to all employees with 90 days of
service.
EMPLOYER FIXED CONTRIBUTIONS
Each plan year the employer shall contribute an additional contribution
to the fund on account of each member equal to 3% of the member's
compensation up to $30,000, plus 6% of the member's compensation in
excess of $30,000 of the member's compensation. The contribution shall
only be made for members who have completed one year of service, are
employed on the last day of the plan year and complete 1,000 hours of
service during the plan year. The contribution for a member shall be
made whether or not a basic contribution was made for such member.
MEMBER ACCOUNTS
All contributions by or on behalf of a member shall be deposited to the
appropriate account established for each member. As of each valuation
date, the accounts of each member shall be adjusted to reflect any
realized and unrealized gains or losses and income or expense of the
fund according to nondiscriminatory procedures uniformly applied based
on the value of the member's accounts as of the preceding valuation
date.
-4-
<PAGE>
NOTE A - DESCRIPTION OF PLAN (continued)
CONTRIBUTIONS
Each member may authorize the employer to reduce his compensation by
any whole percentage up to 15%. Each eligible employee shall file a
written election form with the Plan administrator specifying the
portion of his compensation that is to be contributed to the plan as a
basic contribution.
The employer shall make a matching contribution for each member, which
shall equal $0.75 for each $1.00 allocated to such member's basic
contribution up to 5% of the member's eligible compensation. The amount
of employer matching contributions may be increased or decreased at the
discretion of the board, provided that reasonable notice is provided to
members giving them the opportunity to change their elective deferral
percentage.
VESTING
Effective July 1, 1999, all members in the plan prior to July 1, 1999
shall have a fully vested interest in his basic contribution accounts
matching contribution account, additional fixed contribution account,
and rollover account at all times. Members entering the plan after July
1, 1999, will vest for employer contributions determined on the basis
of the member's number of years of service, according to the following
schedule:
Vesting Schedule
----------------
Years of Service Percentage
---------------- ----------
Less than 1 0%
1 but less than 2 33%
2 but less than 3 66%
3 or more 100%
PARTICIPANT NOTES RECEIVABLE
Participants may borrow from their fund accounts a maximum equal to the
lesser of $50,000 or 50 percent of their account balance. The loans are
currently being repaid over a five-year period. The loans are secured
by the balance in the participant's account and bear a reasonable rate
of interest. Interest rates range from 8.5% to 9.7%. Principal and
interest are paid ratably through payroll deductions.
PAYMENT OF BENEFITS
On termination of service, a member may elect to receive either a
lump-sum amount or installments over a period not to exceed ten years.
-5-
<PAGE>
NOTE B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BASIS OF ACCOUNTING
The financial statements of the Plan are prepared under the accrual
method of accounting.
PAYMENT OF BENEFITS
Benefits are recorded when paid.
VALUATION OF INVESTMENTS
If available, quoted market prices are used to value investments.
Employer securities contributed to the plan shall be valued at a price
which, in the judgement of the Plan administrator, does not exceed the
fair market of such securities. The determination of fair market value
shall be made in good faith by the Plan administrator.
CASH AND CASH EQUIVALENTS
For purposes of these financial statements, the Plan considers all
money market funds to be cash equivalents.
USE OF ESTIMATES
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets,
liabilities, and changes therein, and disclosure of contingent assets
and liabilities. Actual results could differ from those estimates.
NOTE C - PLAN TERMINATION
Although it has not expressed any intent to do so, the employer has the
right at any time to terminate the Plan by delivering to the Trustee
and Administrator written notice of such termination. In the event of
Plan termination, participants, as stated, are 100% vested in their
accounts.
NOTE D - TAX STATUS
The trust established under the Plan to hold the Plan's assets is
qualified pursuant to the appropriate section of the Internal Revenue
Code, and, accordingly, the trust's net investment income is exempt
from income taxes. The Plan has obtained a favorable tax determination
letter from the Internal Revenue service and the Plan sponsor believes
that the Plan continues to qualify and to operate as designed.
-6-
<PAGE>
NOTE E - INVESTMENTS
The Plan's investments are held by a bank-administered trust fund. The
following table presents the fair values of those investments.
Investments that represent 5% or more of the Plan's net assets are
separately identified.
<TABLE>
<CAPTION>
December 31, 1999
-----------------
Investments at Fair Value as Number of
Determined by Quoted Market Price Shares Fair Value
--------------------------------- --------- ----------
<S> <C> <C>
Vanguard Index Trust 500 5,825 $ 788,277
Fidelity Equity Income II 35,687 976,743
Fidelity Emerging Markets fund 407 4,887
Fidelity Advisor Growth Opportunities Fund 30,592 1,424,074
T Rowe Price International Stock Fund 16,850 320,662
Bank certificates of deposit - 645,000
First Chester County Corp 110,496 2,237,544
Notes receivable - 125,838
------- ---------
TOTAL INVESTMENTS $6,523,025
=========
</TABLE>
<TABLE>
<CAPTION>
December 31, 1998
-----------------
Investments at Fair Value as Number of
Determined by Quoted Market Price Shares Fair Value
--------------------------------- ------ ----------
<S> <C> <C>
Vanguard Index Trust 500 3,990 $ 454,669
Fidelity Equity Income II 30,022 900,055
Fidelity Emerging Markets fund 2,687 18,943
Fidelity Advisor Growth Opportunities Fund 25,903 1,298,265
T Rowe Price 14,407 215,961
Bank certificates of deposit - 695,000
First West Chester Corp 104,434 2,088,680
Notes receivable - 121,425
------- ---------
TOTAL INVESTMENTS $5,792,998
=========
</TABLE>
During the years ended December 31, 1999 and 1998, the Plan's
investments (including investments bought, sold and held during the
year) appreciated/(depreciated) in value as follows:
<TABLE>
<CAPTION>
1999 1998
---- ----
<S> <C> <C>
Investments at Fair Value as
Determined by Quoted Market Price
Mutual funds $ 12,615 $343,974
Investments at Estimated Fair Value
Common stock 23,098 347,522
-------- --------
Net appreciation in fair value $ 35,713 $691,496
======== ========
</TABLE>
-7-
<PAGE>
NOTE F - RECONCILIATION OF FINANCIAL STATEMENTS TO FORM 5500
The following is a reconciliation of net assets available for benefits
according to the financial statements to Form 5500:
<TABLE>
<CAPTION>
<S> <C> <C>
Net assets available for benefits per the
financial statements $6,951,244 $6,169,433
Less accrued investment income (19,880) (21,835)
--------- ---------
Net assets available for benefits per
Form 5500 $6,931,364 $6,147,598
========= =========
</TABLE>
-8-
<PAGE>
OTHER FINANCIAL INFORMATION
<PAGE>
THE FIRST NATIONAL BANK OF WEST CHESTER -
RETIREMENT SAVINGS PLAN
SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
DECEMBER 31, 1999
<TABLE>
<CAPTION>
Face Value Fair
or Shares Description Cost Value
---------- ------------ ---------- ----------
<S> <C> <C> <C>
Mutual Funds
30592.348 Fidelity Advisor Growth $1,245,290 $1,424,074
Opportunity Fund
406.533 Fidelity Emerging Markets 6,258 4,887
Fund
35686.602 Fidelity Equity Income II 932,358 976,743
Fund
16850.35 T Rowe Price International 245,920 320,662
Stock Fund
5824.849 Vanguard Index 637,003 788,277
Trust 500 --------- ---------
Total Mutual Funds $3,066,829 $3,514,643
========= =========
Common Stocks
110,496 First West Chester Corp. $1,294,240 $2,237,544
---------- ----------
Total Common Stocks $1,294,240 $2,237,544
========== ==========
Bank Certificates of Deposit
20,000 Certificate of Deposit $ 20,000 $ 20,000
6.80 03/23/00
25,000 Certificate of Deposit 25,000 25,000
6.75 05/25/00
20,000 Certificate of Deposit 20,000 20,000
6.30 07/25/00
20,000 Certificate of Deposit 20,000 20,000
6.20 08/31/00
20,000 Certificate of Deposit 20,000 20,000
6.20 09/21/00
20,000 Certificate of Deposit 20,000 20,000
6.05 12/18/00
10,000 Certificate of Deposit 10,000 10,000
5.90 01/11/01
10,000 Certificate of Deposit 10,000 10,000
6.06 07/16/01
15,000 Certificate of Deposit 15,000 15,000
6.06 08/23/01
15,000 Certificate of Deposit 15,000 15,000
6.09 10/03/01
10,000 Certificate of Deposit 10,000 10,000
6.10 11/19/01
<FN>
----------------------------------
See accompanying auditor's report.
</FN>
</TABLE>
-9-
<PAGE>
THE FIRST NATIONAL BANK OF CHESTER COUNTY -
RETIREMENT SAVINGS PLAN
SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES (CONTINUED)
DECEMBER 31, 1999
<TABLE>
<CAPTION>
Face Value Fair
or Shares Description Cost Value
----------- ------------ -------- -------
<S> <C> <C> <C>
10,000 Certificate of Deposit 10,000 10,000
6.10 12/18/01
50,000 Certificate of Deposit 50,000 50,000
6.10 01/16/02
10,000 Certificate of Deposit 10,000 10,000
6.10 02/11/02
15,000 Certificate of Deposit 15,000 15,000
6.10 03/03/02
65,000 Certificate of Deposit 65,000 65,000
6.30 04/16/02
15,000 Certificate of Deposit 15,000 15,000
6.16 06/30/02
30,000 Certificate of Deposit 30,000 30,000
6.10 07/14/02
10,000 Certificate of Deposit 10,000 10,000
6.10 10/03/02
25,000 Certificate of Deposit 25,000 25,000
6.00 12/16/02
40,000 Certificate of Deposit 40,000 40,000
5.90 03/02/03
40,000 Certificate of Deposit 40,000 40,000
5.90 03/13/03
50,000 Certificate of Deposit 50,000 50,000
5.90 05/04/03
40,000 Certificate of Deposit 40,000 40,000
5.85 06/17/03
20,000 Certificate of Deposit 20,000 20,000
5.85 07/02/03
10,000 Certificate of Deposit 10,000 10,000
5.30 10/29/03
30,000 Certificate of Deposit 30,000 30,000
5.30 12/09/04 ------ ------
Total Certificates of Deposit $645,000 $645,000
======= =======
Cash and Cash Equivalents
Money Market Obligations $161,823 $161,823
------- -------
TOTAL CASH AND
CASH EQUIVALENTS $161,823 $161,823
======= =======
<FN>
----------------------------------
See accompanying auditor's report.
</FN>
</TABLE>
-10-
<PAGE>
THE FIRST NATIONAL BANK OF CHESTER COUNTY -
RETIREMENT SAVINGS PLAN
SCHEDULE OF REPORTABLE TRANSACTIONS IN EXCESS OF
5% OF BEGINNING ASSETS
FOR THE YEAR ENDED DECEMBER 31, 1999
<TABLE>
<CAPTION>
Purchase Sales Realized
Description Price Proceeds Gain/(Loss)
----------- --------- ---------- ------------
<S> <C> <C> <C>
Series of transactions in one issue
Money Market obligations
$1.00/sh $1,476,572 - -
Money Market obligations
$1.00/sh 1,434,691 1,434,691 -
<FN>
----------------------------------
See accompanying auditor's report.
</FN>
</TABLE>
-11-
<PAGE>
THE FIRST NATIONAL BANK OF WEST CHESTER -
RETIREMENT SAVINGS PLAN
AUDITED FINANCIAL STATEMENTS
DECEMBER 31, 1998 AND 1997
<PAGE>
CONTENTS
--------
PAGE
----
INDEPENDENT AUDITORS' REPORT 1
AUDITED FINANCIAL STATEMENTS
Statements of Net Assets Available
for Benefits 2
Statement of Changes in Net Assets
Available for Benefits 3
Notes to Financial Statements 4 - 7
OTHER FINANCIAL INFORMATION
Supplemental Schedules 8 - 13
<PAGE>
INDEPENDENT AUDITORS' REPORT
----------------------------
To the Board of Trustees of
The First National Bank of West Chester -
Retirement Savings Plan
West Chester, PA 19381
We have audited the accompanying statements of net assets available for benefits
of The First National Bank of West Chester Retirement Savings Plan as of
December 31, 1998 and 1997, and the related statement of changes in net assets
available for benefits, for the year then ended, December 31, 1998. These
financial statements are the responsibility of the Trustees of The First
National Bank of West Chester - Retirement Savings Plan. Our responsibility is
to express an opinion on these financial statements based on our audit.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by the
trustees as well as evaluating the overall financial statement presentation. We
believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets available for benefits of the Retirement
Savings Plan as of December 31, 1998 and 1997, and the changes in net assets
available for benefits for the year then ended December 31, 1998, in conformity
with generally accepted accounting principles.
Our audits were performed for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedules are presented
for the purpose of additional analysis and are not a required part of the basic
financial statements but are supplementary information required by the
Department of Labor's Rules and Regulations for Reporting and Disclosures under
the Employee Retirement Income Security Act of 1974. These supplemental
schedules are the responsibility of the Plan's management. The supplemental
schedules have been subjected to the auditing procedures applied in the audits
of the basic financial statements and, in our opinion, are fairly stated in all
material respects in relation to the basic financial statements taken as a
whole.
/s/ Ogorek & Company
----------------------------
OGOREK & COMPANY
CERTIFIED PUBLIC ACCOUNTANTS
June 4, 1999
<PAGE>
THE FIRST NATIONAL BANK OF WEST CHESTER -
RETIREMENT SAVINGS PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
DECEMBER 31, 1998 AND 1997
ASSETS 1998 1997
---- ----
Investments, at fair value
Mutual funds $2,887,893 $1,891,707
Bank certificates of deposit 695,000 485,000
Common stock 2,088,680 1,587,960
Notes receivable 121,425 42,687
--------- ---------
TOTAL INVESTMENTS 5,792,998 4,007,354
--------- ---------
Receivables
Employer's fixed contributions 210,403 205,085
Employees' contributions 15,694 15,416
Employer matching contribution 8,209 8,754
Accrued interest income 6,630 4,271
Accrued dividend income 15,557 15,224
--------- ---------
TOTAL RECEIVABLES 256,493 248,750
--------- ---------
Cash and cash equivalents 119,942 119,002
--------- ---------
TOTAL ASSETS 6,169,433 4,375,106
--------- ---------
NET ASSETS AVAILABLE FOR BENEFITS $6,169,433 $4,375,106
========= =========
---------------------------------------
The accompanying notes are an integral part of these financial statements.
-2-
<PAGE>
THE FIRST NATIONAL BANK OF WEST CHESTER-
RETIREMENT SAVINGS PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
(WITH FUND INFORMATION)
FOR THE YEAR ENDED DECEMBER 31, 1998
<TABLE>
<CAPTION>
Federated Fidelity Advisor
Short-Term FNB of West Fidelity Equity Growth
US Government Chester Income II Opportunities
Fund CD Fund Fund Fund
------------- ----------- --------------- ---------------
<S> <C> <C> <C> <C>
ADDITIONS TO NET ASSETS ATTRIBUTED TO:
INVESTMENT INCOME
Net appreciation/(depreciation) in
Fair value of investments $ - $ - $ 81,250 $ 185,997
Interest - 32,802
Dividends 8,588 78,227 60,577
-------- --------- --------- ---------
TOTAL INVESTMENT INCOME 8,588 32,802 159,477 246,574
-------- --------- --------- ---------
CONTRIBUTIONS
Employer's fixed contribution
Employer's 1,615 8,182 19,166 27,203
Employee's 3,569 38,217 67,167 80,028
Rollovers 25,389 74,116 25,102 50,712
-------- --------- --------- ---------
TOTAL CONTRIBUTIONS 30,573 120,515 111,435 157,943
-------- --------- --------- ---------
TOTAL ADDITIONS 39,161 153,317 270,912 404,517
-------- --------- --------- ---------
DEDUCTIONS FROM NET ASSETS ATTRIBUTED TO:
Benefits paid to participants - 11,630 79,441 91,236
--------- --------- --------- ---------
TOTAL DEDUCTIONS - 11,630 79,441 91,236
--------- --------- --------- ---------
NET INCREASE PRIOR TO INTERFUND TRANSFERS 39,161 141,687 191,471 313,281
Interfund transfers (38,221) 68,313 45,440 45,904
--------- --------- --------- ---------
NET INCREASE/(DECREASE) 940 210,000 236,911 359,185
NET ASSETS AVAILABLE FOR BENEFITS:
Beginning of year 119,002 485,000 663,144 939,080
--------- --------- --------- ---------
End of year $ 119,942 $ 695,000 $ 900,055 $1,298,265
========= ========= ========= =========
</TABLE>
_______________________________________
The accompanying notes are an integral part of these financial statements.
-3-
<PAGE>
THE FIRST NATIONAL BANK OF WEST CHESTER-
RETIREMENT SAVINGS PLAN (continued)
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
(WITH FUND INFORMATION)
FOR THE YEAR ENDED DECEMBER 31, 1998
<TABLE>
<CAPTION>
T. Rowe Price FNB of Vanguard Fidelity Participants
International West Chester Index 500 Market Notes
Stock Fund Stock Fund Fund Fund Fund Other Total
---------- ---------- ---- ---- ---- ----- -----
<S> <C> <C> <C> <C> <C>
$ 18,197 $ 347,522 $ 65,705 $ (7,175) $ - $ - $ 691,496
- - - - 6,161 6,630 45,593
15,345 32,282 7,448 - - 15,557 218,024
--------- ----------- ------- -------- --------- -------- ---------
33,542 379,804 73,153 (7,175) 6,161 22,187 955,113
--------- ----------- ------- -------- --------- -------- ---------
- - - - - 210,403 210,403
9,528 76,862 29,627 - - 8,209 180,392
26,240 67,034 55,911 - - 15,694 353,860
1,312 51,697 89,515 - - - 317,843
--------- ----------- ------- -------- --------- -------- ---------
37,080 195,593 175,053 - - 234,306 1,062,498
--------- ----------- ------- -------- --------- -------- ---------
70,622 575,397 248,206 (7,175) 6,161 256,493 2,017,611
--------- ----------- ------- -------- --------- -------- ---------
7,715 17,356 15,906 - - - 223,284
--------- ----------- ------- -------- --------- -------- ---------
7,715 17,356 15,906 - - - 223,284
--------- ----------- ------- -------- --------- -------- ---------
62,907 558,041 232,300 (7,175) 6,161 256,493 1,794,327
18,881 (57,321) 96,345 (3,168) 72,577 (248,750) -
--------- ----------- ------- -------- --------- -------- ---------
81,788 500,720 328,645 (10,343) 78,738 7,743 1,794,327
134,173 1,587,960 126,024 29,286 42,687 248,750 4,375,106
--------- ----------- -------- -------- --------- -------- ---------
$ 215,961 $ 2,088,680 $ 454,669 $ 18,943 $ 121,425 $ 256,493 $6,169,433
========= =========== ======== ======== ========= ======== =========
</TABLE>
3 (cont)
<PAGE>
THE FIRST NATIONAL BANK OF WEST CHESTER -
RETIREMENT SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1998 AND 1997
NOTE A - DESCRIPTION OF PLAN
The following brief description of The First National Bank of West
Chester - Retirement Savings Plan is provided for general purpose only.
Members should refer to the Plan agreement for more complete
information.
GENERAL
Effective January 1, 1995, the Plan has been amended and restated in
its entirety. The Plan sponsor has amended the Plan to include a 401(K)
Plan with a regular fixed contribution. The 401(K) Plan name has been
changed to the Retirement Savings Plan. The Plan is subject to the
provisions of the Employee Retirement Income Security Act of 1974
(ERISA).
MEMBERSHIP IN THE PLAN
Each employee who was participating in the prior plan on December 31,
1994, shall automatically continue as a member. Each other employee who
is an eligible employee as of the effective date shall become a member
of the Plan on such date.
Eligible employee for purposes of 401(K) deferrals means any employee
who has been employed for at least one continuous year and is scheduled
to complete 1,000 hours of service during each plan year. During 1997,
the 401(k) deferral requirement was reduced to 90 days of service.
EMPLOYER FIXED CONTRIBUTIONS
Each plan year the employer shall contribute an additional contribution
to the fund on account of each member equal to 3% of the member's
compensation up to $30,000, plus 6% of the member's compensation in
excess of $30,000 of the member's compensation. The contribution shall
only be made for members who have completed one year of service, are
employed on the last day of the plan year and complete 1,000 hours of
service during the plan year. The contribution for a member shall be
made whether or not a basic contribution was made for such member.
MEMBER ACCOUNTS
All contributions by or on behalf of a member shall be deposited to the
appropriate account established for each member. As of each valuation
date, the accounts of each member shall be adjusted to reflect any
realized and unrealized gains or losses and income or expense of the
fund according to nondiscriminatory procedures uniformly applied based
on the value of the member's accounts as of the preceding valuation
date.
-4-
<PAGE>
NOTE A - DESCRIPTION OF PLAN (continued)
CONTRIBUTIONS
Each member may authorize the employer to reduce his compensation by
any whole percentage up to 15%. Each eligible employee shall file a
written election form with the Plan administrator specifying the
portion of his compensation that is to be contributed to the plan as a
basic contribution.
The employer shall make a matching contribution for each member, which
shall equal $0.75 for each $1.00 allocated to such member's basic
contribution up to 5% of the member's eligible compensation. The amount
of employer matching contributions may be increased or decreased at the
discretion of the board, provided that reasonable notice is provided to
members giving them the opportunity to change their elective deferral
percentage.
VESTING
A member shall have a fully vested interest in his basic contribution
account, matching contribution account, additional fixed contribution
account and rollover account at all times.
PAYMENT OF BENEFITS
On termination of service, a member may elect to receive either a
lump-sum amount or installments over a period not to exceed ten years.
NOTE B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
VALUATION OF INVESTMENTS
If available, quoted market prices are used to value investments.
Employer securities contributed to the plan shall be valued at a price
which, in the judgement of the Plan administrator, does not exceed the
fair market of such securities. The determination of fair market value
shall be made in good faith by the Plan administrator.
CASH AND CASH EQUIVALENTS
For purposes of these financial statements, the Plan considers all
money market funds to be cash equivalents.
USE OF ESTIMATES
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets,
liabilities, and changes therein, and disclosure of contingent assets
and liabilities. Actual results could differ from those estimates.
-5-
<PAGE>
NOTE C - INVESTMENTS
The Plan's investments are held by a bank-administered trust fund. The
following table presents the fair values of those investments.
Investments that represent 5% or more of the Plan's net assets are
separately identified.
<TABLE>
<CAPTION>
December 31, 1998
-----------------
Investments at Fair Value as Number of
Determined by Quoted Market Price Shares Fair Value
--------------------------------- --------- ----------
<S> <C> <C>
Vanguard Index Trust 500 3,990 $ 454,669
Fidelity Equity Income II 30,022 900,055
Fidelity Emerging Markets fund 2,687 18,943
Fidelity Advisor Growth Opportunities Fund 25,903 1,298,265
T Rowe Price 14,407 215,961
Bank certificates of deposit - 695,000
First West Chester Corp 104,434 2,088,680
Notes receivable - 121,425
---------
TOTAL INVESTMENTS $5,792,998
=========
</TABLE>
<TABLE>
<CAPTION>
December 31, 1997
-----------------
Investments at Fair Value as Number of
Determined by Quoted Market Price Shares Fair Value
--------------------------------- --------- ----------
<S> <C> <C>
Vanguard Index Trust 500 1,399 $ 126,024
Fidelity Equity Income II 24,552 663,144
Fidelity Emerging Markets fund 3,051 29,286
Fidelity Advisor Growth Opportunities Fund 22,164 939,080
T Rowe Price 9,998 134,173
Bank certificates of deposit - 485,000
First West Chester Corp 48,120 1,587,960
Notes receivable - 42,687
---------
TOTAL INVESTMENTS $4,007,354
=========
</TABLE>
During the years ended December 31, 1998 and 1997, the Plan's
investments (including investments bought, sold and held during the
year) appreciated/(depreciated) in value as follows:
<TABLE>
<CAPTION>
1998 1997
---- ----
<S> <C> <C>
Investments at Fair Value as
Determined by Quoted Market Price
Mutual funds $343,974 $169,412
Investments at Estimated Fair Value
Common stock 347,522 460,046
-------- -------
Net appreciation in fair value $ 691,496 $629,458
======== =======
</TABLE>
-6-
<PAGE>
NOTE D - PLAN TERMINATION
Although it has not expressed any intent to do so, the employer has the
right at any time to terminate the Plan by delivering to the Trustee
and Administrator written notice of such termination. In the event of
Plan termination, participants, as stated, are 100% vested in their
accounts.
NOTE E - TAX STATUS
The trust established under the Plan to hold the Plan's assets is
qualified pursuant to the appropriate section of the Internal Revenue
Code, and, accordingly, the trust's net investment income is exempt
from income taxes. The Plan has obtained a favorable tax determination
letter from the Internal Revenue Service and the Plan sponsor believes
that the Plan continues to qualify and to operate as designed.
-7-
<PAGE>
OTHER FINANCIAL INFORMATION
<PAGE>
THE FIRST NATIONAL BANK OF WEST CHESTER -
RETIREMENT SAVINGS PLAN
SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
DECEMBER 31, 1998
<TABLE>
<CAPTION>
Face Value Fair
Or Shares Description Cost Value
--------- ----------- ---- -----
<S> <C> <C> <C>
Mutual Funds
25903.125 Fidelity Advisor Growth $ 977,935 $1,298,265
Opportunity Fund
2686.985 Fidelity Emerging Markets 44,184 18,943
Fund
30021.857 Fidelity Equity Income II 755,766 900,055
Fund
14406.994 T Rowe Price International 202,022 215,961
Stock Fund
3990.077 Vanguard Index 391,639 454,669
--------- ---------
Trust 500
Total Mutual Funds $2,371,546 $2,887,893
========= =========
Common Stocks
104,434 First West Chester Corp. $1,132,052 $2,088,680
--------- ---------
Total Common Stocks $1,132,052 $2,088,680
========= =========
Bank Certificates of Deposit
30,000 Certificate of Deposit $ 30,000 $ 30,000
6.00 07/07/99
20,000 Certificate of Deposit 20,000 20,000
6.00 08/22/99
20,000 Certificate of Deposit 20,000 20,000
6.65 12/30/99
20,000 Certificate of Deposit 20,000 20,000
6.80 03/23/00
25,000 Certificate of Deposit 25,000 25,000
6.75 05/25/00
20,000 Certificate of Deposit 20,000 20,000
6.30 07/25/00
20,000 Certificate of Deposit 20,000 20,000
6.20 08/31/00
20,000 Certificate of Deposit 20,000 20,000
6.20 09/21/00
20,000 Certificate of Deposit 20,000 20,000
6.05 12/18/00
10,000 Certificate of Deposit 10,000 10,000
5.90 01/11/01
10,000 Certificate of Deposit 10,000 10,000
6.06 07/16/01
</TABLE>
__________________________________
See accompanying auditor's report.
-8-
<PAGE>
THE FIRST NATIONAL BANK OF WEST CHESTER -
RETIREMENT SAVINGS PLAN
SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES (CONTINUED)
DECEMBER 31, 1998
<TABLE>
<CAPTION>
Face Value Fair
Or Shares Description Cost Value
--------- ----------- ---- -----
<S> <C> <C> <C>
15,000 Certificate of Deposit 15,000 15,000
6.06 08/23/01
15,000 Certificate of Deposit 15,000 15,000
6.09 10/03/01
10,000 Certificate of Deposit 10,000 10,000
6.10 11/19/01
10,000 Certificate of Deposit 10,000 10,000
6.10 12/18/01
50,000 Certificate of Deposit 50,000 50,000
6.10 01/16/02
10,000 Certificate of Deposit 10,000 10,000
6.10 02/11/02
15,000 Certificate of Deposit 15,000 15,000
6.10 03/03/02
65,000 Certificate of Deposit 65,000 65,000
6.30 04/16/02
15,000 Certificate of Deposit 15,000 15,000
6.16 06/30/02
30,000 Certificate of Deposit 30,000 30,000
6.10 07/14/02
10,000 Certificate of Deposit 10,000 10,000
6.10 10/03/02
25,000 Certificate of Deposit 25,000 25,000
6.00 12/16/02
40,000 Certificate of Deposit 40,000 40,000
5.90 03/02/03
40,000 Certificate of Deposit 40,000 40,000
5.90 03/13/03
50,000 Certificate of Deposit 50,000 50,000
5.90 05/04/03
40,000 Certificate of Deposit 40,000 40,000
5.85 06/17/03
20,000 Certificate of Deposit 20,000 20,000
5.85 07/02/03
10,000 Certificate of Deposit 10,000 10,000
5.30 10/29/03
10,000 Certificate of Deposit 10,000 10,000
6.10 12/18/01 ------- -------
Total Certificates of Deposit $695,000 $695,000
======= =======
Cash and Cash Equivalents
Money Market Obligations $119,942 $119,942
------- -------
TOTAL CASH AND
CASH EQUIVALENTS $119,942 $119,942
======= =======
</TABLE>
__________________________________
See accompanying auditor's report.
-9-
<PAGE>
THE FIRST NATIONAL BANK OF WEST CHESTER -
RETIREMENT SAVINGS PLAN
SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
DECEMBER 31, 1997
<TABLE>
<CAPTION>
Face Value Fair
Or Shares Description Cost Value
--------- ----------- ---- -----
<S> <C> <C> <C>
Mutual Funds
Fidelity Advisor Growth
22163.785 Opportunity Fund $ 752,818 $ 939,080
Fidelity Emerging Markets
3050.665 Fund 50,082 29,286
Fidelity Equity Income II
24551.797 Fund 567,095 663,144
T Rowe Price International
9997.986 Stock Fund 137,462 134,173
Vanguard Index
1399.181 Trust 500 127,119 126,024
---------- ---------
Total Mutual Funds $ 1,634,576 $ 1,891,707
========== ==========
Common Stocks
48,120 First West Chester Corp. $ 923,259 $ 1,587,960
---------- ----------
Total Common Stocks $ 923,259 $ 1,587,960
========== ==========
Bank Certificates of Deposit
30,000 Certificate of Deposit $ 30,000 $ 30,000
6.00 07/07/99
20,000 Certificate of Deposit 20,000 20,000
6.00 08/22/99
20,000 Certificate of Deposit 20,000 20,000
6.65 12/30/99
20,000 Certificate of Deposit 20,000 20,000
6.80 03/23/00
25,000 Certificate of Deposit 25,000 25,000
6.75 05/25/00
20,000 Certificate of Deposit 20,000 20,000
6.30 07/25/00
20,000 Certificate of Deposit 20,000 20,000
6.20 08/31/00
20,000 Certificate of Deposit 20,000 20,000
6.20 09/21/00
20,000 Certificate of Deposit 20,000 20,000
6.05 12/18/00
</TABLE>
__________________________________
See accompanying auditor's report.
-10-
<PAGE>
THE FIRST NATIONAL BANK OF WEST CHESTER-
RETIREMENT SAVINGS PLAN
SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES (CONTINUED)
DECEMBER 31, 1997
<TABLE>
<CAPTION>
Face Value Fair
Or Shares Description Cost Value
--------- ----------- ---- -----
<S> <C> <C> <C>
10,000 Certificate of Deposit 10,000 10,000
5.90 01/11/01
10,000 Certificate of Deposit 10,000 10,000
6.06 07/16/01
15,000 Certificate of Deposit 15,000 15,000
6.06 08/23/01
15,000 Certificate of Deposit 15,000 15,000
6.09 10/03/01
10,000 Certificate of Deposit 10,000 10,000
6.10 11/19/01
10,000 Certificate of Deposit 10,000 10,000
6.10 12/18/01
50,000 Certificate of Deposit 50,000 50,000
6.10 01/16/02
10,000 Certificate of Deposit 10,000 10,000
6.10 02/11/02
15,000 Certificate of Deposit 15,000 15,000
6.10 03/03/02
65,000 Certificate of Deposit 65,000 65,000
6.30 04/16/02
15,000 Certificate of Deposit 15,000 15,000
6.16 06/30/02
30,000 Certificate of Deposit 30,000 30,000
6.10 07/14/02
10,000 Certificate of Deposit 10,000 10,000
6.10 10/03/02
25,000 Certificate of Deposit 25,000 25,000
-------- --------
6.00 12/16/02
Total Certificates of Deposit $ 485,000 $ 485,000
======== ========
Cash and Cash Equivalents
Money Market Obligations $ 118,436 $ 118,436
Cash on hand 566 566
-------- --------
TOTAL CASH AND
CASH EQUIVALENTS $ 119,002 $ 119,002
======== ========
</TABLE>
__________________________________
See accompanying auditor's report.
-11-
<PAGE>
THE FIRST NATIONAL BANK OF WEST CHESTER -
RETIREMENT SAVINGS PLAN
SCHEDULE OF REPORTABLE TRANSACTIONS IN EXCESS OF
5% OF BEGINNING ASSETS
FOR THE YEAR ENDED DECEMBER 31, 1998
<TABLE>
<CAPTION>
Purchase Sale Realized
Description Price Proceeds Gain/(Loss)
----------- -------- ----------- ------------
<S> <C> <C> <C>
Series of transactions in one issue
Fidelity Advisor Growth Opp.
Shares purchased 5,101 $ 235,245 $ - $ -
First West Chester Corp.
Shares purchased 7,037 237,235 - -
Vanguard Index Trust 500
Shares purchased 2,691 272,870 - -
Money market obligations
$1.00/sh 1,224,125 - -
Money market obligations
$1.00/sh 1,222,618 1,222,618 -
</TABLE>
__________________________________
See accompanying auditor's report.
12
<PAGE>
THE FIRST NATIONAL BANK OF WEST CHESTER-
RETIREMENT SAVINGS PLAN
SCHEDULE OF REPORTABLE TRANSACTIONS IN EXCESS OF
5% OF BEGINNING ASSETS
FOR THE YEAR ENDED DECEMBER 31, 1997
<TABLE>
<CAPTION>
Purchase Sales Realized
Price Proceeds Gain/(Loss)
----- -------- -----------
Description
-----------
<S> <C> <C> <C>
Series of transactions in one issue
First West Chester Corp.
Shares purchased 5,381 $ 176,425 $ - $ -
Fidelity Advisor Growth Opp.
Shares purchased 11328.756 203,255 - -
Fidelity Equity Income II
Shares purchased 10082.569 175,912 - -
Vanguard Index Trust 500 142,872 - -
Money Market obligations
$1.00/sh 1,026,763 - -
Money Market obligations
$1.00/sh 1,045,966 1,045,966 -
</TABLE>
----------------------------------
See accompanying auditor's report.
-13-
<PAGE>
Index to Exhibits
Exhibits
--------
23.1 Consent of Dittmer & Battaglia 1999 and 1998 Reports
23.2 Consent of Ogorek & Graham 1998 and 1997 Reports
<PAGE>
AUDITOR'S CONSENT
We consent to the incorporation by reference in the registration
statement of First Chester County Corporation on Form S-8 (File No. 333-15733)
of our report dated June 9, 2000 on our audit of The First National Bank of
Chester County Retirement Savings Plan as of December 31, 1999 and 1998, which
reports are included in this annual report on Form 11-K.
DITTMER & BATTAGLIA
Kennett Square, Pennsylvania
Dated: June 22, 2000 By:/s/Dittmer & Battaglia
------------------ ----------------------
<PAGE>
AUDITOR'S CONSENT
We consent to the incorporation by reference in the registration
statement of First West Chester Corporation on Form S-8 (File No. 333-15733) of
our reports dated June 4, 1999 and June 9, 1998 on our audits of The First
National Bank of West Chester Retirement Savings Plan as of December 31, 1998
and 1997, and for the years then ended, and as of December 31, 1997 and 1996,
and for the years then ended, respectively, which reports are included in this
annual report on Form 11-K.
OGOREK & GRAHAM
West Chester, Pennsylvania
Dated: June 28, 1999 By:/s/Ogorek & Graham
------------------ -----------------------
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