EXHIBIT 10.1

                      SEVERANCE AGREEMENT

     THIS AGREEMENT is made on the 22nd day of March, 1995, by and between
HANOVER BANCORP INC., a Pennsylvania bank holding company, with offices at
25 Carlisle Street, P.O. Box 513, Hanover, Pennsylvania 17331 (the
"Corporation"), BANK OF HANOVER AND TRUST COMPANY, a Pennsylvania Bank with
offices at 25 Carlisle Street, P.O. Box 513, Hanover, Pennsylvania, 17331
(the "Bank") and J. BRADLEY SCOVILL, an adult individual who resides at
Hanover, PA ("Executive").
     WHEREAS, Executive is the President and CEO of the Bank, and is an
integral part of the management team of the Bank; and
     WHEREAS, as a result of changes in federal and state banking laws,
there has been a dramatic increase in the number of mergers and other
acquisitions of Pennsylvania banks.  While the Bank and Corporation remain
committed to the policy of remaining an independent bank, they recognize
that they might nevertheless be acquired as a result of an unsolicited
takeover attempt or in a negotiated transaction.  Executive will play a
critical role in any such acquisition, as it falls principally upon his and
the other members of Management to vigorously and aggressively represent
and protect the interests of the shareholders of the Bank and Corporation;
and
     WHEREAS, the Bank and Corporation believe that Executive should not be
forced to sacrifice his future financial security in order to fulfill his
responsibilities to the shareholders.  The Boards of Directors of the Bank
and Corporation have carefully considered this problem and have determined
that it should be addressed.  Specifically, the Boards of Directors have
concluded that basic financial protection should be provided to Executive
in the form of certain limited severance benefits payable in the event that
he is discharged or resigns following, and for reasons relating to a change
in control of the Bank and/or Corporation; and
     WHEREAS, the purpose of this Agreement is to define these severance
benefits and to specify the conditions under which they are to be paid.
This Agreement is not intended to affect the terms of Executive's
employment at will in the absence of a change in control of the Bank and/or
Corporation.  Accordingly, although this Agreement will take effect upon
execution as a binding legal obligation of the Bank and/or Corporation, it
will become operative only upon a change in control of the Bank as that
concept is defined below.

                          WITNESSETH:

     NOW, THEREFORE, in consideration of Executive's continuing service to
the Bank and Corporation and of the mutual covenants and undertakings
hereinafter set forth, and intending to be legally bound, the parties
hereby agree as follows:
     1.   Undertakings of the Bank and Corporation
          The Bank and Corporation shall provide to Executive the severance
benefits specified in Paragraph 5 below in the event that at any time
following a change in control of the Bank and/or Corporation:
          (a)  Executive is discharged by the Bank, other than for Cause
pursuant to Paragraph 3 below; or
          (b)  Executive resigns from the Bank and Corporation for Good
Reason pursuant to Paragraph 4 below.
          (c)  Executive's employment needs to have been terminated within
one (1) year of a change in control in order for him to receive any
benefits under this Agreement.
     2.   Change in Control
          (a)  For purposes of this Agreement, a Change in Control of the
Bank or Corporation shall mean a change in control of the kind that would
be required to be reported in response to Item 1 of Form 8-K promulgated by
the Securities and Exchange Commission ("SEC") under the Securities
Exchange Act of 1934, and as in effect on the date hereof.
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          (b)  Without Limitation of the foregoing, a Change in Control of
the Bank or Corporation shall be deemed to have occurred upon the
occurrence of any of the following events:
          (1)  Any person or group of persons acting in concert, shall have
     acquired, directly or indirectly, beneficial ownership (as defined in
     Rule 13d-3(a) of the SEC) of forty (40%) percent or more of the
     outstanding shares of the voting stock of the Bank or Corporation;
          (2)  The composition of the Boards of Directors of the Bank or
     Corporation shall have changed such that during any period of two
     consecutive years during the terms of this Agreement, the persons who
     at the beginning of such period were members of the Boards of
     Directors cease for any reason to constitute a  majority of the Boards
     of Directors, unless the nomination or election of each director who
     was not a director at the beginning of such period was approved in
     advance by directors representing not less that two-thirds of the
     directors then in office who were directors at the beginning of the
     period; or
          (3)  The Bank or Corporation shall be merged or consolidated with
     or its assets purchased by another corporation and as a result of such
     merger, consolidation or sale of assets, less than a majority of the
     outstanding voting stock of the surviving, resulting or purchasing
     corporation is owned, immediately after the transaction, by the
     holders of the voting stock of the Bank or Corporation outstanding
     immediately before the transaction.
     3.   Discharge for Cause
          (a)  The Bank or Corporation may at any time following a Change
in Control discharge Executive for Cause, in which event Executive shall
not be entitled to receive the severance benefits specified in Paragraphs 5
and 6 below.
          (b)  For purposes of this Agreement, the Bank or Corporation
shall have Cause to discharge Executive only under the following
circumstances:
               (i)  Executive shall have committed an act of dishonesty
     constituting a felony and resulting or intending to result directly or
     indirectly in gain or personal enrichment at the expense of the Bank
     or Corporation; or
               (ii) Executive shall have deliberately and intentionally
     refused (for reasons other than incapacity due to accident or physical
     or mental illness) to perform his duties to the Bank or Corporation
     for a period  of 30 consecutive days following the receipt by him of
     written notice from the Bank or Corporation setting forth in detail
     the facts upon which the Bank or Corporation relies in concluding that
     Executive has deliberately and intentionally refused to perform such
     duties.
     4.   Resignation for Good Reason
          (a)  Executive may at any time following a Change in Control
resign from the Bank and Corporation for Good Reason, in which event
Executive shall be entitled to receive the severance benefits specified in
Paragraphs 5 and 6 below.
          (b)  For purposes of this Agreement, Executive shall have Good
Reason to resign under the following circumstances:
               (i)  The Bank or Corporation, without Executive's prior
     written consent, shall have changed or attempted to change in any
     significant respect the authority, duties, compensation, benefits or
     other terms or conditions of Executive's employment; or
               (ii) Executive shall have determined in good faith and in
     his sole and absolute discretion that he is unable to work
     harmoniously and effectively with the new management of the Bank and
     Corporation or that he is otherwise unable effectively to carry out
     her duties and discharge his responsibilities to the Bank and
     Corporation.
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     5.   Severance Benefits
          The severance benefits to be provided to Executive by the Bank
and Corporation under this Agreement are as follows:
          (a)  The Bank shall pay to Executive each month during the
Severance Benefit Period an amount equal to one-twelfth his base annual
salary.  Executive's base annual salary shall be deemed to be that annual
salary (as further defined in '280G of the Tax Code) that is being paid to
Executive on January 1st of the year in which the Change of Control shall
occur.  The payment is to be made on or before the 15th day of the next
following month.  It is understood that the Bank shall withhold from the
payment such amounts as may be required under any applicable federal, state
or local law.
          (b)  The Bank and Corporation shall at their expense provide to
Executive throughout the Severance Benefit Period life, medical, health,
accident and disability insurance and a survivor's income benefit in form,
substance and amount which is in each case substantially equivalent to that
provided to him before the commencement of the Severance Benefit Period,
whichever Executive shall in each case select.
     6.   Severance Benefit Period
          The Severance Benefit Period shall commence upon the effective
date of Executive's discharge (for reasons other than Cause) or resignation
(for Good Reason) and shall terminate upon the expiration of a period of a
period of 1.5 (18 months) years.
     7.   Mitigation and Setoff
          Executive shall be required to mitigate the amount of any payment
or benefit provided for in Paragraph 5 above by seeking employment or
otherwise in a substantially similar position and the Bank and Corporation
shall be entitled to setoff against the amount of any payment or benefit
provided for in Paragraph 5 above by any amounts earned by Executive in
other employment during the Severance Benefit Period.
     8.   Successors and Parties in Interest
          (a)  This Agreement shall be binding upon and shall inure to the
benefit of the Bank and Corporation and their successors and assigns,
including, without limitation, any corporation which acquires, directly or
indirectly, by purchase, merger, consolidation or otherwise, all or
substantially all of the business or assets of the Bank and Corporation.
Without limitation of the foregoing, the Bank and Corporation shall require
any such successor, by agreement in form and substance satisfactory to
Executive, expressly to assume and agree to perform this Agreement in the
same manner and to the same extent that it is required to be performed by
the Bank and Corporation.  Failure to obtain such assumption and agreement
shall serve as Good Reason for termination under Paragraph 4.
          (b)  This Agreement is binding upon and shall inure to the
benefit of Executive, his heirs and personal representatives.
          9.   Rights Under Other Plans
          This Agreement is not intended to reduce, restrict or eliminate
any benefit to which Executive may otherwise be entitled at the time of his
discharge or resignation under any employee benefit plan of the Bank and
Corporation then in effect.
     10.  Termination
          This Agreement may not be terminated except by mutual consent of
the parties, as evidenced by a written instrument duly executed by the
Bank, Corporation and Executive.
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     11.  Notices
          All notices and other communications required to be given
hereunder shall be in writing and shall be deemed to have been given or
made when hand delivered or when mailed, certified mail, return receipt
requested, to the Bank, Corporation, or to Executive, as the case may be,
at their respective addresses set forth above.
     12.  Severability
          In the event that any provision of this Agreement shall be held
to be invalid or unenforceable by any court of competent jurisdiction, such
provision shall be deemed severable from the remainder of the Agreement and
such holding shall not invalidate or render unenforceable any other
provision of this Agreement.
     13.  Governing Law, Jurisdiction and Venue
          This Agreement shall be governed by and construed in accordance
with the laws of the Commonwealth of Pennsylvania.  In the event that any
party shall institute any suit or other legal proceeding, whether in law or
in equity, arising from or relating to this Agreement, the courts of the
Commonwealth of Pennsylvania shall have exclusive jurisdiction and venue
shall lie exclusively in the Court of Common Pleas of York County.
     14.  Entire Agreement
          This Agreement constitutes the entire agreement between the
parties's concerning the subject matter hereof and supersedes all prior
written or oral agreements or understandings between them.  No terms or
provision of this Agreement may be changed, waived, amended or terminated,
except by written instrument duly executed by the Bank, Corporation and by
Executive.
     IN WITNESS WHEREOF, this Agreement is executed the day and year first
above written.


ATTEST:                            HANOVER BANCORP INC.

/s/ Gerald M. Warner, Secretary              By  /s/ Terrence L. Hormel


                                   BANK OF HANOVER AND TRUST COMPANY



                                             By /s/ Terrence L. Hormel


WITNESS:


Beverly A. Schimp                               /s/  J. Bradley Scovill
42764
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