<PAGE>

                                    FORM 10-Q



                       SECURITIES AND EXCHANGE COMMISSION
                               Washington DC 20549

                 QUARTERLY REPORT UNDER SECTION 13 OR 15 (d) OF
                       THE SECURITIES EXCHANGE ACT OF 1934

For quarter ended June 30, 1998
                  -------------

Commission file number 0-14506
                       -------


                     Pioneer American Holding Company, Corp.
           -----------------------------------------------------------
             (Exact name of registrant as specified in its charter)


         Pennsylvania                                      23-2319931
         ------------                                      ----------
(State or other jurisdiction of                         (I.R.S. Employer 
 incorporation or organization)                        Identification No.)

41 North Main Street, Carbondale  PA                           18407
----------------------------------------                     ---------
(Address of principal executive offices)                     (Zip Code)

                                 (717) 282-2662
                               ------------------
               (Registrant's telephone number including area code)

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by the Section 13 or 15 (d) of the Securities Exchange Act of 1934
during the preceding 12 months (or for such shorter periods 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 the number of shares outstanding of each of the issuer's classes of
common stock, as the latest practical date.

Common Stock, $1.00 Par Value--2,901,484 common shares as of June 30, 1998.









<PAGE>



                                      INDEX

                     PIONEER AMERICAN HOLDING COMPANY, CORP.
<TABLE>
<CAPTION>

PART I.  FINANCIAL INFORMATION

<S>                                                                                              <C>                                
         Item 1. Financial Statements (Unaudited)

                  Consolidated balance sheets--June 30, 1998
                    and December 31, 1997.................................................    Page  2-3
                                                                                            
                  Consolidated statements of income and comprehensive income--Three and     
                    Six months ended June 30, 1998 and 1997...............................      Page  4
                                                                                            
                  Consolidated statements of cash flows--Six months                         
                    ended June 30, 1998 and 1997..........................................    Pages 5-6
                                                                                            
                  Notes to consolidated financial statements--                              
                    June 30, 1998.........................................................   Pages 7-11
                                                                                            
         Item 2.  Management's Discussion and Analysis of Financial Condition               
                  and Results of Operations...............................................  Pages 12-15
                                                                                            
PART II.  OTHER INFORMATION                                                                 
                                                                                            
         Item 1.  Legal Proceedings.......................................................      Page 16
                                                                                              
         Item 2.  Changes in Securities...................................................      Page 16
                                                                                              
         Item 3.  Defaults upon Senior Securities.........................................      Page 16
                                                                                              
         Item 4.  Submission of Matters to a Vote of Security Holders.....................      Page 16
                                                                                              
         Item 5.  Other Information.......................................................      Page 16
                                                                                              
         Item 6.  Exhibits and Reports on form 8-K........................................      Page 16
                                                                                             
                                                                                           

         SIGNATURES.......................................................................      Page 17



</TABLE>


                                       1
<PAGE>




PIONEER AMERICAN HOLDING COMPANY CORP.
Consolidated Balance Sheets (Unaudited)
<TABLE>
<CAPTION>

                                                                       (Dollars in thousands)
----------------------------------------------------------------------------------------------------
                                                                     June 30,          December 31,
Assets                                                                 1998                  1997
----------------------------------------------------------------------------------------------------

<S>                                                                <C>                     <C>   
Cash and due from banks                                            $  15,049               14,918
Federal funds sold                                                     7,700                    0

Securities available for sale (cost of securities of
    $79,625 on June 30, 1998 and $95,591 on
    December 31, 1997)

     U.S. Treasury securities                                          2,002                1,999
     Federal agency mortgage backed obligations                       27,227               31,982
     Other obligations of Federal agencies                            36,243               50,252
     Obligations of states and political subdivisions                  8,921                8,828
     Other securities                                                  6,126                3,635
-------------------------------------------------------------------------------------------------
Total securities available for sale                                   80,519               96,696
-------------------------------------------------------------------------------------------------

Securities held to maturity(approximate market value of
     $57,850 on June 30, 1998 and $37,857 on
      December 31, 1997)

        Federal agency mortgage backed obligations                    41,195               19,083
        Other obligations of Federal agencies                          5,000                6,000
        Obligations of states and political subdivisions              11,302               12,296
-------------------------------------------------------------------------------------------------
Total securities held to maturity                                     57,497               37,379
-------------------------------------------------------------------------------------------------

Loans, net of unearned discount and deferred loan fees               221,996              212,342
Allowance for loan losses                                             (2,930)              (2,759)
-------------------------------------------------------------------------------------------------
Net loans                                                            219,066              209,583
-------------------------------------------------------------------------------------------------

Accrued interest receivable                                            2,905                3,168
Premises and equipment                                                 5,388                5,334
Other real estate owned                                                1,195                1,045
Other assets                                                           2,878                1,373
Cost in excess of fair value of net assets acquired
     (net of accumulated amortization of $933 June 30,
     1998 and $913 December 31, 1997)                                    610                  630
-------------------------------------------------------------------------------------------------

Total assets                                                       $ 392,807              370,126
=================================================================================================
</TABLE>


                                       2

<PAGE>


PIONEER AMERICAN HOLDING COMPANY, CORP.
Consolidated Balance Sheets, Continued (Unaudited)
<TABLE>
<CAPTION>

                                                                    (Dollars in thousands)
--------------------------------------------------------------------------------------------
                                                                  June 30,     December 31,
Liabilities and Stockholders' Equity                                1998           1997
--------------------------------------------------------------------------------------------
<S>                                                              <C>                  <C>   
Deposits:
     Demand - noninterest bearing                                $ 39,864             43,740
     NOW and Super NOW                                             27,783             30,679
     Savings                                                       57,856             52,783
     Money Market                                                  19,837             22,487
     Time                                                         147,641            143,954
--------------------------------------------------------------------------------------------
Total deposits                                                    292,981            293,643
--------------------------------------------------------------------------------------------

Accrued interest payable                                            2,355              2,103
Dividends payable                                                     551                544
Federal Funds Purchased                                                 0              2,350
Other borrowed money                                               60,245             37,073
Other liabilities                                                   2,122              1,015
--------------------------------------------------------------------------------------------

Total liabilities                                                 358,254            336,728
--------------------------------------------------------------------------------------------

Stockholders' equity:
     Common stock, $1 par value per share,
     25,000,000 shares authorized; 2,901,484 shares on
     June 30, 1998 and 2,862,874 on December 31, 1997
      issued and outstanding                                        2,901              2,863
     Additional paid-in capital                                    11,770             11,472
     Undivided profits                                             19,292             18,334
     Net unrealized holding gains on
        available for sale securities, net of taxes                   590                729
--------------------------------------------------------------------------------------------

Total stockholders' equity                                         34,553             33,398
--------------------------------------------------------------------------------------------





Total liabilities and stockholders' equity                       $392,807            370,126
============================================================================================
</TABLE>




                                       3

<PAGE>

PIONEER AMERICAN HOLDING COMPANY, CORP.
Consolidated Statements of Income and Comprehensive Income (Unaudited)
<TABLE>
<CAPTION>

                                                                       Three Months Ended                   Six Months Ended
                                                                       (Dollars in thousands)            (Dollars in thousands)
                                                                                             
-----------------------------------------------------------------------------------------------------------------------------------
                                                                       June 30,         June 30,        June 30,         June 30,
                                                                         1998             1997            1998             1997
-----------------------------------------------------------------------------------------------------------------------------------
Interest income:
<S>                                                                 <C>                 <C>                <C>                <C>  
      Interest and fees on loans                                    $ 4,790             4,546              9,474              8,953
      Interest on Federal funds sold                                     82                56                 91                170
      Interest on investments:
              Taxable                                                 1,933             1,770              3,982              3,350
              Non-taxable                                               276               257                558                478
-----------------------------------------------------------------------------------------------------------------------------------

Total interest income                                                 7,081             6,629             14,105             12,951
-----------------------------------------------------------------------------------------------------------------------------------

Interest expense:
      Interest on deposits                                            2,650             3,011              5,281              5,701
      Interest on Federal funds purchased                                 1                 0                 23                  0
      Interest on other borrowed money                                  889               314              1,709                571
-----------------------------------------------------------------------------------------------------------------------------------

Total interest expense                                                3,540             3,325              7,013              6,272
-----------------------------------------------------------------------------------------------------------------------------------
Net interest income                                                   3,541             3,304              7,092              6,679

Provision for loan losses                                               150               140                300                275
-----------------------------------------------------------------------------------------------------------------------------------

Net interest income after provision for loan losses                   3,391             3,164              6,792              6,404
-----------------------------------------------------------------------------------------------------------------------------------

Other operating income:
      Service charges on deposit accounts                               335               334                637                675
      Gain on sale of available for sale securities                       0                36                296                 36
      Gain on call of securities held to maturity                         0                 0                  0                  2
      ATM fees                                                          115                97                219                179
      Other income                                                      134               160                285                272
-----------------------------------------------------------------------------------------------------------------------------------

Total other operating income                                            584               627              1,437              1,164
-----------------------------------------------------------------------------------------------------------------------------------

Other operating expenses:
      Salaries and employee benefits                                  1,318             1,240              2,670              2,521
      Net occupancy expense of bank premises                            249               261                519                512
      Furniture and equipment expenses                                  193               174                362                341
      Data processing expense                                            61                60                124                122
      Other expenses                                                    893               736              1,713              1,561
-----------------------------------------------------------------------------------------------------------------------------------

Total other operating expenses                                        2,714             2,471              5,388              5,057
-----------------------------------------------------------------------------------------------------------------------------------

Income before income taxes and cumulative effect
      of change in accounting principle                               1,261             1,320              2,841              2,511

Income tax expense                                                      340               355                780                695
-----------------------------------------------------------------------------------------------------------------------------------

Net income                                                          $   921               965              2,061              1,816
===================================================================================================================================

Other comprehensive income net of tax
      Unrealized gain/loss on securities
        Unrealized holding gain arising during the period                13               845                 67                212
        Less reclassification adjustment for gains
            included in net income                                        3                (2)              (206)                (5)
        Comprehensive income                                            937             1,808              1,922              2,023
===================================================================================================================================

Earnings Per Share Data (based on net income):

Basic                                                               $  0.32              0.34               0.71               0.64
Diluted                                                                0.31              0.33               0.70               0.62
===================================================================================================================================
</TABLE>


                                       4

<PAGE>



PIONEER AMERICAN HOLDING COMPANY, CORP
Consolidated Statements of Cash Flows (Unaudited) 
<TABLE>
<CAPTION>


                                                                                      Six Months Ended
                                                                                   (Dollars in thousands)
--------------------------------------------------------------------------------------------------------------
                                                                                 June 30,            June 30,
                                                                                  1998                  1997
--------------------------------------------------------------------------------------------------------------
Cash flows from operating activities:
<S>                                                                               <C>                    <C>  
     Net income                                                                   $  2,061               1,816

     Adjustments to reconcile net income to net
        cash from operating activities:
            Net gain on call of securities                                               0                  (2)
            Net gain on securities available for sale                                 (296)                (36)
            Accretion of discount on securities
                and money market investments                                           (21)                (36)
            Amortization of premium on investment
                securities                                                             141                  38
            Provision for loan losses                                                  300                 275
            Increase in deferred loan fees                                             (62)                (20)
            Decrease (increase) in accrued interest receivable                         263                (546)
            Depreciation and amortization of premises
                and equipment                                                          419                 417
            Gain on sales of premises and equipment                                      0                  (5)
            Loss on sale of other real estate                                          113                  11
            Proceeds from the sale of mortgages
                and PHEAA loans                                                      2,560               1,701
            Net increase in mortgage and PHEAA loans
                 held for sale, excluding provision for
                loans losses and change in deferred
                loan fees                                                           (2,959)             (1,757)
            Gain on sale of mortgages and PHEAA loans                                  (20)                (16)
            Increase in other assets                                                (1,433)               (829)
            Amortization of goodwill                                                    19                  19
            Increase in accrued interest payable                                       252                 461
            Increase in other liabilities                                            1,107                 858
--------------------------------------------------------------------------------------------------------------
     Total adjustments to reconcile net income to net cash
        from operating activities                                                      383                 533
--------------------------------------------------------------------------------------------------------------
Net cash from operating activities                                                   2,444               2,349
--------------------------------------------------------------------------------------------------------------

Cash flows from investing activities:
     Proceeds from maturities and calls of securities
        held to maturity                                                             5,575               1,710
     Proceeds from maturities and calls of
        securities available for sale                                               10,827              17,251
     Proceeds from sales of securities available for sale                           12,012               2,025
     Purchases of securities held to maturity                                      (25,705)            (12,018)
     Purchases of securities available for sale                                     (6,685)            (33,722)
     Net increase in loans made to customers, excluding
        provision for loan losses and change in
        deferred loan fees                                                          (9,629)             (1,546)
     Acquisition of premises and equipment                                            (473)               (953)
     Proceeds from sale of premises and equipment                                        0                  35
     Proceeds from sale of other real estate                                            64                  78
--------------------------------------------------------------------------------------------------------------
Net cash used in investing activities                                              (14,014)            (27,140)
--------------------------------------------------------------------------------------------------------------
</TABLE>

                                       5

<PAGE>


PIONEER AMERICAN HOLDING COMPANY, CORP.
Consolidated Statements of Cash Flows, Continued (Unaudited)
<TABLE>
<CAPTION>

                                                                           Six Months Ended
                                                                        (Dollars in thousands)
--------------------------------------------------------------------------------------------------
                                                                  June 30,             June 30,
                                                                    1998                 1997
--------------------------------------------------------------------------------------------------
<S>                                                               <C>                 <C>   
Cash flows from financing activities:
     Net increase(decrease) in demand, NOW and Super NOW,
        savings, money market and time deposits                     $   (662)              5,322
     Dividends paid                                                   (1,095)               (962)
     Exercise of stock options                                           336                 273
     Federal funds purchased                                          (2,350)                  0
     Increase in other borrowed money                                 23,172              18,857
--------------------------------------------------------------------------------------------------

Net cash from financing activities                                    19,401              23,490
--------------------------------------------------------------------------------------------------

Net increase  in cash and cash equivalents                             7,831              (1,301)

Cash and cash equivalents at beginning of period                      14,918              21,028
--------------------------------------------------------------------------------------------------

Cash and cash equivalents at end of period                          $ 22,749              19,727
--------------------------------------------------------------------------------------------------

Supplemental Disclosure:
     Cash payments for interest                                        6,761               5,811
     Cash payments for income taxes                                    1,065                 700
     Transfer of assets from loans
        to other real estate                                             327                 304
     Net unrealized loss (gain) on securities
        available for sale                                               211                (315)
     Tax effect on unrealized loss (gain)
        on securities available for sale                                  72                (108)
==================================================================================================
</TABLE>

See accompanying notes to consolidated financial statements.











                                       6



<PAGE>



Notes to Condensed Consolidated Financial Statements

    (1)  Summary of Significant Accounting Policies:

    Business--Pioneer American Holding Company Corp. (the "Company") and its
wholly owned subsidiary, Pioneer American Bank, National Association ("Pioneer")
provide a wide range of banking services to individual and corporate customers
through its branch banks in Lackawanna, Luzerne, Wayne, Wyoming, Susquehanna and
Monroe counties in Northeastern Pennsylvania. Pioneer is subject to competition
from other financial institutions and other financial services companies.
Pioneer is subject to the regulations of certain federal agencies and undergoes
periodic examinations by those regulatory authorities.

    Basis of Financial Statement Presentation--The accompanying consolidated
financial statements were prepared in accordance with instructions to Form 10-Q,
and therefore, do not include information or footnotes necessary for a complete
presentation of financial position, results of operations and cash flows in
conformity with generally accepted accounting principles. However, all normal,
recurring adjustments which, in the opinion of management, are necessary for a
fair presentation of the financial statements, have been included. These
financial statements should be read in conjunction with the audited financial
statements and the notes thereto included in the Company's Annual Report for the
period ended December 31, 1997. The results for the six months ended June 30,
1998 are not necessarily indicative of the results that may be expected for the
year ended December 31, 1998. All material intercompany balances and
transactions between the Company and its subsidiary have been eliminated. In
preparing the financial statements, management is required to make estimates and
assumptions that affect the reported amounts of assets and liabilities as of
date of the balance sheet and revenues and expenses for the period. Actual
results could differ significantly from those estimates.

    Material estimates that are particularly susceptible to significant change
in the near-term relate to the determination of the allowance for loan losses
and the valuation of real estate acquired in connection with foreclosures or in
satisfaction of loans. In connection with the determination of the allowances
for loan losses and real estate owned, management obtains independent appraisals
for significant properties to the extent considered practical.

    Mortgage Loans Held for Sale--The Company has identified certain loans as
held for sale. These loans consist primarily of fixed rate residential mortgages
and are recorded at the lower of cost or estimated market value.

      Securities Available for Sale--Securities available for sale are accounted
for at fair value and the unrealized gains and losses are accounted for as a
separate component of stockholders equity, net of tax.

    Securities Held to Maturity--Securities held to maturity are carried at
cost, adjusted for the amortization of the related premiums or the accretion of
the related discounts into interest income using a method which approximates
level-yield over the estimated remaining period until maturity. The Company
believes it has the intent and ability to hold to maturity its portfolio of
securities held to maturity as part of its portfolio of long-term interest
earning assets.

    Interest Revenue and Expenses--Interest revenue and expenses are accrued on
various methods which approximate a level yield or cost when related to
principal amounts outstanding. Unearned discount on loans is amortized to income
by a method which also approximates a level yield on the principal amounts
outstanding.

    Loan Fees--Loan origination fees and direct loan origination costs are
recognized over the life of the related loan as an adjustment of the loan's
yield.

    Non-accrual Loans--The accrual of interest on loans is discontinued when
payment of principal or interest is considered doubtful of collection. Loans on
which payments are ninety days or more past due are considered non-accrual
unless the loan is both well secured and in the process of collection. When
interest accrual is discontinued, the interest receivable which was previously
credited to income is reversed.

    Allowance for Loan Losses--The provision for loan losses charged to
operating expenses reflects the amount deemed appropriate by management to
produce a reserve adequate to meet the present risk characteristics of Pioneer's
loan portfolio. Management's judgment is based on the evaluation of individual
loans and their overall risk characteristics, past experiences with respect to
the relationship of its loan losses to the loan portfolio, the assessment of
current economic conditions and other relevant factors.

    Management believes that the allowance for loan losses is adequate. While
management uses available information to make its evaluations, future
adjustments to the allowance may be necessary if economic conditions differ
substantially

                                       7
<PAGE>


Notes to Condensed Consolidated Financial Statements, continued

    (1)  Summary of Significant Accounting Policies, continued:

from the assumptions used in making the evaluations. In addition, various
regulatory agencies, as an integral part of their examination process,
periodically review Pioneer's allowance for loan losses. Such agencies may
require Pioneer to recognize additions to the allowances based on their
judgments about information available to them at the time of their examination.

    Premises and Equipment--Premises and equipment are stated at cost less
accumulated depreciation and amortization. Depreciation is computed on a
straight-line basis over the estimated lives of the related assets as follows:
building 20-33 years; building and land improvements 5-10 years; equipment 3-12
years; and leasehold improvements over 10-15 years. No depreciation is taken on
capital projects-in-progress until such projects are completed and placed in
service. Maintenance and repairs are charged to operations as incurred.

    Other Real Estate Owned--Other real estate owned consists of real estate
acquired through foreclosure and is stated at the lower of estimated fair value,
less estimated disposal costs, or cost. Allowances for declines in value
subsequent to acquisition were not necessary at June 30, 1998 and December 31,
1997. While management uses the best information available to make its
evaluations, future adjustments to the valuation of other real estate may be
necessary if economic conditions differ significantly from the assumptions used
in making the evaluation.

    Cost in Excess of Fair Value of Net Assets Acquired--Cost in excess of fair
value of net assets acquired arose from an acquisition in 1976 and is being
amortized on a straight-line basis over a period of 40 years.

Income Taxes--Deferred tax assets and liabilities are recognized for the future
tax consequences attributable to differences between the financial statement
carrying amounts of existing assets and liabilities and their respective tax
bases. Deferred tax assets and liabilities are measured using enacted tax rates
expected to apply to taxable income in the periods in which those temporary
differences are expected to be recovered or settled.

    Cash and Cash Equivalents--For purposes of reporting cash flows, cash and
cash equivalents include cash on hand, amounts due from banks, and Federal funds
sold. Generally, Federal funds are sold for one-day periods.

    Impaired Loans--As of June 30, 1998, the Company had impaired loans with a
total recorded investment of $2,085,000 and $1,922,000 on December 31, 1997. The
average recorded investment in impaired loans for the six month period ended
June 30, 1998 was $1,916,000 and $1,914,000 on December 31, 1997. As of June 30,
1998, the amount of recorded investment in impaired loans for which there is a
related allowance for credit losses and amount of the allowance is $900,000 and
$246,000, respectively, and $815,000 and $185,000 for December 31, 1997. The
amount of the recorded investment in impaired loans for which there was no
related allowance for credit losses at June 30, 1998 was $1,185,000 and
$1,107,000 on December 31, 1997. For purposes of applying the measurement
criteria for impaired loans under SFAS No. 114, as amended, the Company excludes
large groups of smaller-balance homogeneous loans, primarily consisting of
residential real estate loans and consumer loans, as well as commercial,
financial, and agricultural loans with balances less than $100,000. For
applicable loans, the Company evaluates the need for impairment recognition when
a loan becomes nonaccrual, or earlier if based on management's assessment of the
relevant facts and circumstances, it is probable that a creditor will be unable
to collect all assets due according to the contractual terms of the loan
agreement. The Company's policy for the recognition of interest income on
impaired loans is the same as for nonaccrual loans (described previously). Cash
receipts on impaired loans are not recognized as income, but are applied to
principal. Impaired loans are charged off when the Company determines that
foreclosure is probable and the fair value of the collateral is less than the
recorded investment of the impaired loan.

     In June 1997, the FASB issued SFAS No. 130, Reporting Comprehensive Income.
This statement establishes standards for the reporting and display of
comprehensive income and its components in a full set of general-purpose
financial statements. SFAS No. 130 requires that all items that are required to
be recognized as components of comprehensive income be reported in a financial
statement that is displayed with the same prominence as other financial
statements. The statement does not require a specific format for that financial
statement but requires that an enterprise display an amount representing total
comprehensive income for the period in that financial statement. SFAS No. 130 is
effective for fiscal years beginning after December 15, 1997. The Company has
included this new reporting information in its 1998 consolidated financial
statements as required.

                                        8

<PAGE>


Notes to Condensed Consolidated Financial Statements, continued

    (1)  Continued:

     In June 1997, the FASB issued SFAS No. 131, Disclosures About Segments of
an Enterprise and Related Information. SFAS No. 131 establishes standards for
the way that public business enterprises report information about operating
segments in annual financial statements and requires that those enterprises
report selected information about operating segments in interim financial
reports issued to shareholders. It also establishes standards for related
disclosures about products and services, geographic areas, and major customers.
SFAS No. 131 is effective for financial statements for periods beginning after
December 15, 1997. Management has not yet determined the impact, if any, of this
statement on the Company's future disclosures.

     In February 1998, the FASB issued SFAS No. 132, Employer's Disclosures
about Pensions and other Post Retirement Benefits. This statement revises
employer's disclosures about pension and other postretirement benefit plans. It
does not change the measurement or recognition of those plans. It standardizes
the disclosure requirements for pensions and other postretirement benefits to
the extent practicable, requires additional information on changes in the
benefit obligations and fair values of plan assets that will facilitate
financial analysis, and eliminates certain disclosures that are no longer as
useful as they were when FASB Statements No. 87, Employers' Accounting for
Pensions, No. 88, Employers' Accounting for Settlements and Curtailments of
Defined Benefit Pension Plans and for Termination Benefits, and No. 106,
Employers' Accounting for Postretirement Benefits Other Than Pensions, were
issued. SFAS No. 132 changes in disclosures and would not effect the financial
condition, operating results, or equity of the Corporation. This Statement is
effective for fiscal years beginning after December 15, 1997.

     In June 1998, the FASB issued SFAS No. 133, Accounting for Derivative
Instruments and Hedging Activities. This statement establishes accounting and
reporting standards for derivative instruments, including certain derivative
instruments embedded in other contracts, (collectively referred to as
derivatives) and for hedging activities. It requires that an entity recognize
all derivatives as either assets or liabilities in the statement of financial
position and measure those instruments at fair value. If certain conditions are
met, a derivative may be specifically designated as (a) a hedge of the exposure
to changes in the fair value of a recognized asset or liability or an
unrecognized firm commitment, (b) a hedge of the exposure to variable cash flows
of a forecasted transaction, or (c) a hedge of the foreign currency exposure of
a net investment in a foreign operation, an unrecognized firm commitment, an
available for sale security, or a foreign-currency-denominated forecasted
transaction. This Statement is effective for all fiscal quarters of fiscal years
beginning after June 15, 1999. Earlier adoption is permitted. The Company has
not yet determined the impact, if any, of this Statement, including its
provisions for the potential reclassifications of investment securities on
earnings, financial condition or equity.

     (2)  Securities Portfolio

    Securities available for sale at June 30, 1998 and December 31, 1997 are
summarized as follows:

<TABLE>
<CAPTION>


                                                                June 30,                          December 31,
                                                                 1998                                1997
                                                          Cost          Market Value           Cost        Market Value
                                                       ----------------------------------------------------------------
<S>                                                       <C>              <C>                <C>             <C>  
U.S. Treasury Securities                                  $ 1,999             2,002             1,998             1,999
Federal agency mortgage based
     obligations                                           26,979            27,227            31,650            31,982
Other obligations of Federal agencies                      35,947            36,243            49,835            50,252
Obligations of State and Political subdivisions             8,574             8,921             8,473             8,828
Other securities                                            6,126             6,126             3,635             3,635
                                                       ----------------------------------------------------------------

Securities available for sale:                            $79,625            80,519            95,591            96,696
                                                       ----------------------------------------------------------------

</TABLE>


    The adjustment in stockholders' equity for the unrealized gain of the
securities available for sale at June 30, 1998, net of tax, was $590. Included
in net deferred tax assets is $(304) for this same unrealized gain. Securities
held to maturity at June 30, 1998 and December 31, 1997 are summarized as
follows:



                                       9
<PAGE>



Notes to Condensed Consolidated Financial Statements, continued

    (2)  Securities Portfolio, continued

<TABLE>
<CAPTION>


                                                                 June 30,                         December 31,
                                                                  1998                               1997
                                                          Cost          Market Value           Cost        Market Value
                                                       ----------------------------------------------------------------
<S>                                                       <C>              <C>                <C>             <C>  
Federal agency mortgage based
     obligations                                          $41,195            41,258            19,083            19,294
Other obligations of Federal agencies                       5,000             4,999             6,000             5,977
Obligations of State and Political subdivisions            11,302            11,593            12,296            12,586
                                                       ----------------------------------------------------------------

Securities held to maturity:                              $57,497            57,850            37,379            37,857
                                                       ----------------------------------------------------------------
</TABLE>

(3)  Stockholders' Equity and Per Share Data

    The Company currently has one million shares of authorized, but unissued
preferred stock. At June 30, 1998 there were 25,000,000 shares of common stock
at $1 par value authorized with 2,901,484 shares issued and outstanding.

    Through June 30, 1998 the Company has issued and outstanding 106,518 options
to purchase shares of the Company, exercisable at between $8.00 to $13.00 per
share. Such options were issued with exercise prices equal to the market value
of the Company's common shares at the time of the grant. In the first quarter
38,610 options were exercised.

    In February 1997, the FASB issued SFAS No. 128, Earnings Per Share, which
was required to be adopted in both interim and annual financial statements for
periods ending after December 15, 1997. Accordingly, the Company has changed its
methodology for computing earnings per share and restated all prior period
amounts. SFAS 128 replaced primary and fully diluted earnings per share with
basic and diluted earnings per share. Under the new requirements for calculating
earnings per share, the dilutive effect of stock options will be excluded from
basic earnings per share but included in the computation of diluted earnings per
share.

    The following table sets forth the computation of basic and diluted earnings
per share (in thousands, except per share data):

<TABLE>
<CAPTION>

                                                             Three Months Ended                  Six Months Ended
                                                                  June 30,                           June 30,
                                                            1998             1997             1998             1997
                                                           ------           ------           ------           ------
Numerator:
<S>                                                        <C>                 <C>            <C>              <C>  
      Net income                                           $  921              965            2,061            1,816
                                                           ======           ======           ======           ======

Denominator:
      Denominator for basic earnings per share -
      weighted average shares                               2,901            2,845            2,884            2,837

Effect of dilutive securities:
      Employee stock options                                   56               95               67               99
                                                           ------           ------           ------           ------

Denominator for diluted earnings per share -
      adjusted weighted average shares and
      assumed conversion                                    2,957            2,940            2,951            2,936
                                                           ======           ======           ======           ======

Basic earnings per share                                   $ 0.32             0.34             0.71             0.64
                                                           ======           ======           ======           ======

Diluted earnings per share                                 $ 0.31             0.33             0.70             0.62
                                                           ======           ======           ======           ======
</TABLE>

    The market value of the common shares of the Company at June 30, 1998 was
$23.25.


                                       10
<PAGE>

Notes to Condensed Consolidated Financial Statements, continued


    (4) Other Matters

    The Company is currently working to resolve the potential impact of the year
2000 on the processing of data-sensitive information by the Corporation's
computerized information systems. The year 2000 problem is the result of
computer programs being written using two digits (rather than four) to define
the applicable year. Any of the Company's programs that have time-sensitive
software may recognize a date using "00" as the year 1900 rather than the year
2000, which could result in miscalculations or system failures. Based on
preliminary information, costs of addressing potential problems are estimated to
be $550,000. This cost is primarily associated with purchasing new equipment and
software which will be capitalized and amortized over a 5 year period. However,
if the Company, its customers or vendors are unable to resolve such processing
issues in a timely manner, it could result in a material financial risk.
Accordingly, the Company plans to devote the necessary resources to resolve all
significant year 2000 issues in a timely manner.







                                       11
<PAGE>




Financial Review Management's Discussion and Analysis of
  Financial Condition and Results of Operation

Highlights

    Total Assets were $392,807,000 at June 30, 1998 and $370,126,000 at December
31, 1997 which is an increase of $22,681,000 or 6.1%. Deposits decreased by
$662,000 from $293,643,000 at December 31, 1997 which is a decrease of .2% at
June 30, 1998. Total net loans as of December 31, 1997 stood at $209,583,000,
increasing by $9,483,000 or 4.5% to $219,066,000 at June 30, 1998.

    The average earning assets were $364,434,000 during the six months ended
June 30, 1998 and $328,950,000 during the six months ended June 30, 1997. This
is an increase of $35,484,000 or 10.8%. For the second quarter average earning
assets were $367,109,000 for 1998 and $332,276,000 for 1997, an increase of
$34,833,000 or 10.5%.

    Average total assets during the six months ended June 30, 1998 were
$387,349,000 and $351,580,000 for the six months ended June 30, 1997 and
$390,683,000 and $355,510,000 for the three months ended June 30, 1998 and 1997,
respectively. The return on average total assets was 1.0% for both six months
and three months ended June 30, 1998. The return on average total assets for
1997 was 1.0% and 1.1% for six and three months ended June 30, 1997. Return on
average equity for six and three months ended June 30, 1998 were 12.3% and
11.0%, respectively and for the same periods in 1997 were 11.9% and 12.6%.
Average equity was $33,471,000 for the first six months and $33,565,000 for the
second quarter of 1998 and $30,543,000 for the first six months and $30,649,000
for the second quarter of 1997.

    Net income increased $245,000 or 13.5% comparing the first six months of
1998 to the first six months of 1997. The increase in 1998 was driven by an
increase in total other operating income as well as an increase in net interest
income. These increases were offset by a lesser increase in total other
operating expense. Net income for the second quarter of 1998 decreased $44,000
or 4.6% compared to the same period of 1997. The decrease in 1998 was driven by
an increase in total other operating expense. This was partially offset by an
increase in net interest income.

    Net income per diluted share was $0.70 for the first six months of 1998 and
$0.62 for the first six months of 1997. Net income per diluted share for three
months ended June 30, 1998 and June 30, 1997 was $0.31 and $0.33, respectively.
Earnings per basic share were $0.71 and $0.64 for the six months ended June 30,
1998 and 1997, and $0.32 and $0.34 for the three months ended June 30, 1998 and
1997, respectively.

Available for Sale and Securities Held to Maturity

    A major factor in the increase of total assets at June 30, 1998 is the
increase in the Bank's securities portfolio of $3,941,000 or 2.9%. There was an
increase of $22,112,000 or 115.9% over December 31, 1997 in Federal agency
mortgage backed obligation securities held to maturity. Money used to purchase
these securities was borrowed from Federal Home Loan Bank of Pittsburgh.
Offsetting this increase was a decrease in the Bank's securities available for
sale of $16,177,000 or 16.7%. Management believed it was necessary to sell
securities as part of its program of constantly monitoring the securities and
loan portfolios in response to changes in the various risks that are applicable
to these assets and changes in the Company's asset/liability strategy. This also
put the Bank in a position to sell Federal funds of $7,700,000 at June 30, 1998
as compared to December 31, 1997 when the Bank purchased Federal funds of
$2,350,000.

Net Loans

    Net loans increased by $9,483,000 or 4.5% over December 31, 1997. This was
the second major factor in the increase of total assets. During the first
quarter of 1998 the Bank offered a special promotion on Home Equity loans. The
promotion was held in all 20 branch offices. Money used to finance these loans
was funded from a portion of the securities available for sale sold in the first
quarter of 1998. All other loan areas stayed fairly constant for the first six
months of 1998.

Other Borrowed Money

    Total liabilities were $358,254,000 at June 30, 1998 and $336,728,000 at
December 31, 1997 which is an increase of $21,526,000 or 6.4%. The increase in
total liabilities was the result of an increase in Other borrowed money of
$23,172,000 over December 31, 1997. Management borrowed $25,000,000 in January
of 1998 from Federal Home Loan Bank of Pittsburgh (which will mature in January
2008). The money borrowed was invested in mortgage backed securities. Bank
management believes that it was appropriate to take advantage of borrowing at a
rate lower than the rate

                                       12

<PAGE>



Financial Review Management's Discussion and Analysis of 
 Financial Condition and Results of Operation, continued

Other Borrowed Money, continued

received in investing in Federal agency mortgage backed obligation in both
available for sale and securities held to maturity.

Net Interest Income

    Net interest income for the first six months of 1998 increased $413,000 or
6.2% compared with the same period of 1997. While net interest income for the
second quarter of 1998 increased $237,000 or 7.2% over the second quarter of
1997. Total interest income increased $1,154,000 and $452,000 for six and three
months ended June 30, 1998. The increase in interest income was the result of an
increase in the total average of interest earning assets. Interest earning
assets were up $35,484,000 and $34,833,000 for the six and three months of 1998
compared to the same periods in 1997. The security portfolio provided $712,000
of the increase and the loan portfolio provided $521,000 for the six months
ended June 30, 1998. Total interest expense also increased $741,000 resulting in
a net increase of $413,000 or 6.2% in net interest income. During 1997 and the
first quarter of 1998 the Bank borrowed $65,000,000 from Federal Home Loan Bank
of Pittsburgh. The money borrowed was invested in mortgage backed securities and
also used to increase our loan portfolio. Offsetting the increase of interest
income for the six and three months ended June 30, 1998 was interest expense on
other borrowed money which was up $1,138,000 and $575,000, respectively for the
same period in 1997. Total interest expense on deposits decreased for both the
quarter and six months ended June 30, 1998 as compared to the prior year. This
was attributable to a decrease in total interest bearing deposits as well as a
$204,000 one-time charge taken in the second quarter of 1997 relating to the
under accrual of interest expense on certain interest bearing deposit accounts.

    In addition to gap management, the Company also uses simulation analysis to
help monitor and manage interest rate risk. In this analysis the Company
examines the result of a 200 basis point change in market interest rates and the
effect on net interest income. It is assumed that the change is instantaneous
and that all rates move in a parallel manner. Assumptions are also made
concerning prepayment speeds on mortgage loans and mortgage securities as well
as growth rates of deposit and loan portfolios. The results of this rate shock
are a useful tool to assist the Company in assessing interest rate risk inherent
in their balance sheet. Below are the results of this ratio shock analysis as of
June 30, 1998.


                                  Net Interest Rate       Percentage Change in
      Change in Rates               Income Change         Net Interest Income
      ---------------             -----------------       ---------------------
            +200                          509                     3.80%
           Static                         -                        -
            -200                       (1,334)                  (10.00%)


    A 200 basis point rise in interest rates results in a 3.8% increase in
interest income. A 200 basis point decrease in interest rates results in
a decrease in interest income due to optionality in the Company's securities
portfolio. In a falling rate environment it is assumed that certain of
the Company's securities would be called and the resulting cash flows would be
reinvested at the lower prevailing rates.

Provision / Reserve for Loan Losses and Nonperforming Loans
<TABLE>
<CAPTION>


                                                             Quarter Ended               Year Ended
                                                               June 30,                  December 31,
                                                                1998                        1997
                                                          -----------------------------------------
<S>                                                       <C>                             <C>      
Balance at beginning of period                            $   2,759,000                   2,750,000
Recoveries                                                       33,000                      73,000
Less:  Charge Offs                                              162,000                     599,000
Provision for Loan Losses                                       300,000                     535,000
----------------------------------------------------------------------------------------------------
Balance at end of period                                  $   2,930,000                   2,759,000
----------------------------------------------------------------------------------------------------
</TABLE>


    The provision for loan losses for the first six months of 1998 amounted to
$300,000 and $150,000 for the three months ended June 30, 1998. It was $535,000
at December 31, 1997 and $275,000 for the six months ended 1997, and $140,000


                                       13

<PAGE>


Financial Review Management's Discussion and Analysis of
Financial Condition and Results of Operation, continued

Provision / Reserve for Loan Losses and Nonperforming Loans, continued

for the three months ended June 30, 1997. Net charge offs for the first six
months of 1998 totaled $129,000 while net charge offs for December 31, 1997 were
$526,000. The significant increase in charge offs in 1997 was due to three
specific loans that were not fully collateralized. The ratio of net charge offs
during the first six months of 1998 to average loans outstanding during the same
period was .05% and for the twelve months ended 1997 was .26%.

    The reserve for loan losses at June 30, 1998 totaled $2,930,000, increasing
$171,000, 6.2% from $2,759,000 at December 31, 1997. The Company ratio of
reserve for loan losses to total loans outstanding was 1.3% at June 30, 1998,
and the same ratio as of December 31, 1997 was 1.3%.

    Non-performing loans are listed as follows:

                                     06/30/98             12/31/97
                                     --------             --------
Non Accrual                         $2,918,000           $2,596,000
90 Days and More Past Due            1,456,000            2,026,000
Restructured                           980,000              890,000
                                    ----------           ----------
                                    $5,354,000           $5,512,000

         The Company generally places a loan on a non-accrual status when, in
the opinion of management the borrower does not have the ability to meet the
original terms of the loan. The Company reserves the accrued interest on all
commercial loans over ninety days past due and these loans are included in the
non-accrual totals. Mortgages past due 90 days or more are placed in non-accrual
status unless the Bank considers the loan to be well secured and in the process
of collection. Consumer loans that are not secured by real estate are generally
charged off after 120 days past due.

    There are no impaired loans under SFAS No. 114 which are not included in
the above table.

    The loan loss reserve as of June 30, 1998 has been deemed adequate by
management. This amount is sufficient to cover inherent losses given the present
past due, nonperforming and classified levels. Determination of loan loss
reserve adequacy follows the guidelines in the Comptroller's Banking Circular
No.201(revised), including risk loss analysis, specific allocations for
problematic credits and provision for class loans, and the requirements of SFAS
No. 114, as amended.

Other Operating Income

    Other operating income for the first six months of 1997 was $1,164,000
increasing 23.5% to $1,437,000 reported for the first six months of 1998. There
was a gain recognized for the sale of securities available for sale in 1998 for
the first six months of $296,000 compared to $36,000 for the same period of
1997. ATM fees were slightly up for both six and three months ended June 30,
1998. Ten additional ATM machines were placed in service after the first quarter
of 1997, on which a surcharge per transaction has been collected. As of June
1998 the Bank has a total of 40 ATM machines. Other operating income for the
three months ended 1998 decreased $43,000 or 6.9%. The Company did not recognize
any gain or loss on the sale of securities available for sale in the second
quarter of 1998. There were gains of $36,000 in 1997 for the same period.

Other Operating Expenses

    Total other operating expenses were $5,057,000 in the first six months of
1997 while other operating expenses were $5,388,000 in the first six months of
1998 reflecting an increase of $331,000 or 6.5% for the first six months of
1998. For the second quarter of 1998 total other operating expense was up
$243,000 or 9.8% over the same period in 1997. The 1998 increase for both six
and three months ended June 30, 1998 was 5.9% and 6.3%. This increase was
attributable to normal salary increase, and an increase in full-time
equivalents. Other expenses increased by 9.7% for the six months ended June 30,
1998 and 21.3% for the second quarter. The largest increase was in total
professional fees. This expense was up $73,000 due to timing differences when
services were provided. This expense is attributable to the expense increase for
both six and three months ended June 30, 1998. The expense for automated teller
machines and related cardholder services increased $42,000 due to the growth in
automated teller machines. Other areas with increases over 1997 were postage up



<PAGE>

Financial Review Management's Discussion and Analysis of
Financial Condition and Results of Operation, continued

Other Operating Expenses, continued

$12,000, information services up $11,000 and expenses for directors fees up
$13,000. Net occupancy expense of bank premises, furniture and equipment
expense, and data processing expense for the six and three months ended June 30,
1998 remained fairly constant with a slight increase or decrease in each of the
categories as compared to the same period of 1997.

Income Taxes

    The provision for income taxes for the first six months of 1998 was $780,000
and $695,000 for the first six months of 1997. The effective rate for the first
six months of 1998 was 27.5% and 27.7% for the same period of 1997. The
effective rate for the second quarter was 26.9% for both 1998 and 1997. This
reflects the current tax rates and the level of income for the periods.

Capital Management and Liquidity and Rate Sensitivity

    The objectives of the Corporation's capital management policy place an
emphasis on both current financial positioning and future capital needs based on
anticipated growth. These objectives are maintained by management which monitors
its liquidity requirements through its asset/liability management program. This
program, with other management analysis, enables the bank to meet its cash flow
requirements and adapt to the changing needs of the Corporation's customers and
the requirements of regulatory agencies. As of June 30, 1998, the most recent
notification from the Office of the Comptroller of the Currency categorized the
Bank as well capitalized under the regulatory framework for prompt corrective
action. To be categorized as well capitalized the Bank must maintain minimum
total risk-based, Tier 1 risk-based, and Tier 1 leverage ratios of greater than
or equal to 10%, 6%, and 5%, respectively.

    The Corporation's principal source of liquidity has been short-term U.S.
Government and U.S. Agency obligations, and various corporate notes. Money
market investments and portfolio investments are kept liquid in order to
effectively match our current deposit structure. The Corporation is affected by
changes in the level of rates of interest. Earnings will be sensitive to
interest rate changes to the degree that the average yield on assets responds
differently to a change in interest rates than does average cost of funds.
Adequate liquidity affords the Corporation flexibility in meeting consumer loan
demand and deposit fluctuations.

    The Corporation actively manages the interest rate sensitivity
characteristics of its assets and liabilities to control the effects of changes
in the general level of interest rates upon net interest revenue. This is
accomplished by the asset/liability committee which consists of senior
management and the board of directors, who are responsible for management
decisions as to the asset/liability maturity mix.

Effects of Inflation

    Economic conditions are reviewed by management in a continuing effort to
adjust to the changing economic environment. The effects of these changes on the
banking industry as a whole in the Company's market area are reviewed by
management in order to compete at a level consistent with the goals of
profitability and sound management policy.

    Increases in the rate of inflation can increase longer term interest rates,
which can reduce the value of securities held to maturity, mortgage loans and
other fixed rate and term assets. Inflationary periods also may tend to increase
the borrowing needs of consumers, leading to requests for additional funds,
which can expand total loans above expected levels and therefore require
increased efforts to ensure the maintenance of adequate capital.

    The banking industry is affected by inflation in a different manner than
other industries, although certain changes have similar effects on both banks
and other business enterprises. Current economic indicators are moving in the
direction of possible inflationary changes. Interest rates have been fluctuating
in response to economic changes, which will affect the asset/liability policy of
the bank. Rates on deposits and loans are changed as necessary with
consideration of economic and market conditions. Our continuing efforts to
monitor all phases of the financial condition of all assets which can be
affected by inflation include the pricing of collateral on a regular basis.

                                       15

<PAGE>

Part II.

Item 1.  Legal Proceedings

The nature of the business of Pioneer American Holding Company Corp. and its
subsidiary, Pioneer American Bank, N.A., generates a certain amount of
litigation involving matters arising in the ordinary course of business.
However, in the opinion of management, there are no proceedings pending to which
Pioneer American or its subsidiary are parties or to which their property is
subject, which, if determined adversely, would be material in relation to
Pioneer American's results of operation, stockholder's equity, or financial
condition. In addition, no material proceedings are pending or are known to be
threatened or contemplated against Pioneer American or its subsidiary by
governmental authorities or other parties.

Item 2.  Changes in Securities

None

Item 3.  Default Upon Senior Executives

None

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

                  (a) The annual meeting of Pioneer American Holding Corp was
held on June 2, 1998

                  (b) Two directors were elected at this meeting for four year
terms as follows:

                                    John S. Guzey
                                    Margaret L. O'Connor

Item 5.  Other Information

Not applicable.

Item 6.  Exhibits and Reports on Form 8-K

None







                                       16
<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.


                                    PIONEER AMERICAN HOLDING COMPANY, CORP.

Date:  August 7, 1998               By   /s/ Donald A. Hoyle, Jr.
                                       ------------------------------------
                                         Donald A. Hoyle, Jr.
                                         President & C.E.O.

Date:  August  7, 1998              By   /s/ John W. Reuther
                                       ------------------------------------
                                         John W. Reuther
                                         Senior Executive Vice President &
                                         Chief Financial Officer








                                       17