U.S. SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   Form 10-QSB

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

For the quarterly period ended March 31, 1998.


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


Commission file number 0-13664

                            GRANGE NATIONAL BANC CORP
          PENNSYLVANIA                                    23-2314065
 ------------------------------             ------------------------------------
(State or other jurisdiction of             (I.R.S. Employer Identification No.)
 Incorporation or organization)


                   198 E. Tioga St., Tunkhannock, Pennsylvania
                   -------------------------------------------
                    (Address of principal executive offices)

                                 (717) 836-2100
                                ---------------
              (Registrant's telephone number, including area code)


Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12
months (or for such shorter 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
            ---  ----

                      APPLICABLE ONLY TO CORPORATE ISSUERS

State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practical date: 363,305


Transitional Small Business Disclosure Format (Check one): Yes      ;   No  X
                                                              ------      -----


<PAGE>




                    GRANGE NATIONAL BANC CORP. AND SUBSIDIARY

PART I.  FINANCIAL INFORMATION

ITEM 1.  Unaudited Financial Statements

<TABLE>
<CAPTION>

                                                                                                              Page
                                                                                                              ----
         <S>                                                                                                  <C>

         Consolidated Statements of Financial Position as
         of March 31, 1998 and December 31, 1997..................................................................2

         Consolidated Statements of Income and Comprehensive Income For the
         Three Months Ended March 31, 1998 and 1997...............................................................3

         Consolidated Statements of Changes to Stockholder's Equity For the Three Months
         Ended March 31, 1998 and 1997............................................................................4

         Consolidated Statements of Cash Flows For the Three Months ended
         March 31, 1998 and 1997..................................................................................5

         Notes to Consolidated Financial Statements...........................................................6 - 7

ITEM 2.  Management's Discussion and Analysis of Financial Condition.........................................8 - 11


PART II. OTHER INFORMATION:

ITEM 6.  Exhibits and Reports on Form 8-K........................................................................12


</TABLE>


<PAGE>






                    GRANGE NATIONAL BANC CORP. AND SUBSIDIARY
                 CONSOLIDATED STATEMENTS OF FINANCIAL POSITION,
                      March 31, 1998 and December 31, 1997

<TABLE>
<CAPTION>
                                                                        1998                         1997
                                                                     (UNAUDITED)                   (AUDITED)
                                                                     -----------                   ---------
<S>                                                                <C>                          <C>
ASSETS:
  Cash and due from banks...................................         $2,125,865                   $2,514,202
  Interest bearing deposits.................................          7,284,570                    2,417,987
  Investment securities, available for sale (Note 3)........         12,749,416                   13,001,723
  Investment securities, held to maturity (fair
    value 1998, $22,376,000; 1997, $25,316,000).............         22,828,536                   25,205,836
  Loans, net of unearned interest...........................         79,254,168                   76,995,428
  Less:  allowance for loan losses..........................            819,205                      767,475
                                                                   ------------                 ------------
         Loans - net........................................         78,434,963                   76,227,953
  Bank premises and equipment - net.........................          2,992,790                    3,028,098
  Other real estate.........................................            236,533                      149,795
  Accrued interest and other assets.........................          1,713,077                    1,730,580
  Premium on deposits.......................................            136,203                      140,460
                                                                   ------------                 ------------
    TOTAL ASSETS............................................       $128,501,953                 $124,416,634
                                                                   ============                 ============

LIABILITIES:
  Domestic deposits:
    Non-interest bearing deposits...........................        $16,394,618                  $14,675,828
    Interest bearing deposits...............................         97,019,203                   94,112,851
                                                                   ------------                 ------------
      Total deposits........................................        113,413,821                  108,788,679
  Other borrowed funds......................................          1,238,952                    2,279,294
  Accrued interest and other liabilities....................            793,906                      710,857
                                                                   ------------                 ------------

      Total liabilities.....................................        115,446,679                  111,778,830
                                                                   ------------                 ------------

STOCKHOLDERS' EQUITY:
  Preferred stock authorized 1,000,000 shares of $5 par;
    None issued............................................
  Common stock authorized 5,000,000 shares of
    $5 par value; 363,305 shares issued and
    outstanding in 1997 and 1996 (Note 4)..................           1,816,525                    1,816,525
  Additional paid-in capital...............................           2,052,158                    2,052,158
  Retained earnings........................................           9,099,283                    8,685,313

  Accumulated other comprehensive income...................              87,500                       84,000
                                                                   ------------                 ------------
      Total................................................          13,055,466                   12,637,996

    Treasury stock, 8 shares at cost.......................                (192)                        (192)
                                                                   ------------                 ------------
      Total stockholders' equity...........................          13,055,274                   12,637,804
                                                                   ------------                 ------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY.................        $128,501,953                 $124,416,634
                                                                   ============                 ============
</TABLE>

                 See Notes to Consolidated Financial Statements
<PAGE>

                    GRANGE NATIONAL BANC CORP. AND SUBSIDIARY
     CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME (UNAUDITED)

<TABLE>
<CAPTION>

                                                                                            Three Months Ended
                                                                                                 March 31
                                                                                       1998                      1997
                                                                                    ------------              ----------
<S>                                                                                <C>                        <C>

Interest Income:
  Interest and fees on loans....................................................    $1,745,116                $1,445,045
  Interest and dividends
    on investment securities....................................................       589,094                   508,128
  Interest on deposits in banks.................................................        24,424                    30,194
                                                                                   -----------                ----------
          Total interest income.................................................     2,358,634                 1,983,367
                                                                                   -----------                ----------
Interest Expense:
  Interest on deposits..........................................................     1,014,738                   838,943
  Interest on borrowed funds....................................................        23,866                    11,323
                                                                                   -----------                ----------
          Total interest expense................................................     1,038,604                   850,266
                                                                                   -----------                ----------
        Net interest income.....................................................     1,320,030                 1,133,101
      Provision for loan losses.................................................        75,000                    30,000
                                                                                   -----------                ----------
        Net interest income after
          provision for loan losses.............................................     1,245,030                 1,103,101
                                                                                   -----------                ----------
Other Income:
  Service charges and other income..............................................       189,202                   132,819
                                                                                   -----------                ----------
          Total other income....................................................       189,202                   132,819
                                                                                   -----------                ----------
Other Expenses:
  Salaries and employee benefits................................................       431,290                   370,610
  Occupancy expense.............................................................        89,921                    63,762
  Equipment expense.............................................................        75,437                    55,457
  Other operating expense.......................................................       233,614                   241,323
                                                                                   -----------                ----------
          Total other expenses..................................................       830,262                   731,152
                                                                                   -----------                ----------
Income before income taxes......................................................       603,970                   504,768

Provision for income taxes......................................................       190,000                   143,000
                                                                                   -----------                ----------
Net income......................................................................      $413,970                  $361,768
                                                                                   -----------                ----------
Other comprehensive income, net of tax:
  Unrealized gains on securities:
     Unrealized holding gain (loss) arising during period.......................        $3,500                  ($76,000)
                                                                                   -----------                ----------
  Other comprehensive income....................................................        $3,500                  ($76,000)
Comprehensive income............................................................      $417,470                  $285,768
                                                                                   -----------                ----------
                                                                                   -----------                ----------
Earnings per share (Note 4).....................................................         $1.00                     $0.88
                                                                                   -----------                ----------
                                                                                   -----------                ----------
Weighted average common shares..................................................       412,754                   412,754


</TABLE>




                 See Notes to Consolidated Financial Statements
<PAGE>

                    GRANGE NATIONAL BANC CORP. AND SUBSIDIARY
     CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (UNAUDITED)
               FOR THE THREE MONTHS ENDED MARCH 31, 1998 AND 1997

<TABLE>
<CAPTION>
                                                                      1998                         1997
                                                                   -----------                  -----------
<S>                                                                <C>                          <C>
STOCKHOLDERS' EQUITY, January 1.......................             $12,637,804                  $10,939,858

COMMON STOCK, $5.00 PAR VALUE
Options exercised.....................................                                                5,145

ADDITIONAL PAID-IN CAPITAL
Options exercised.....................................                                               18,851

RETAINED EARNINGS
Net income............................................                 413,970                      361,768

ACCUMULATED OTHER COMPREHENSIVE INCOME
Other comprehensive income, net of tax................                   3,500                      (76,000)

TREASURY STOCK
Reissuance of common stock (3 shares).................                                                   50
                                                                   -----------                  -----------

STOCKHOLDERS' EQUITY, March 31.......................              $13,055,274                  $11,249,672
                                                                   ===========                  ===========
</TABLE>

                 See Notes to Consolidated Financial Statements
<PAGE>

                    GRANGE NATIONAL BANC CORP. AND SUBSIDIARY
                      CONSOLIDATED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
FOR THE THREE MONTHS ENDED MARCH 31,                                                        1998                1997
------------------------------------                                                       ------              ------
<S>                                                                                      <C>                  <C>
OPERATING ACTIVITIES:
 Net income.....................................................................           $413,970             $361,767
 Adjustments to reconcile net income to net cash
  provided by operating activities:
   Depreciation and amortization................................................             73,107              194,653
   Provision for loan losses....................................................             75,000               30,000
   Decrease in deferred income taxes............................................             (5,000)             (45,900)
 Changes in operating assets and liabilities:
  Increase (decrease) in accrued interest income and other assets...............             22,503              (38,167)
  Increase in accrued interest expense and other liabilities....................             83,049              103,591
                                                                                         ----------           ----------
  NET CASH PROVIDED BY
   OPERATING ACTIVITIES.........................................................            662,629              605,944
                                                                                         ----------           ----------

INVESTING ACTIVITIES:
 Purchase bank premises and equipment...........................................            (33,542)            (454,902)
 Increase in other real estate..................................................            (86,738)
 Purchase of securities "available for sale"....................................           (473,612)            (540,948)
 Decrease in mortgage-backed securities "available for sale"....................            200,848
 Redemptions of securities "available for sale".................................            528,571               81,118
 Redemptions of securities "held to maturity"...................................          2,359,314            2,104,949
 Decrease (increase) in mortgage-backed securities "held to maturity"...........             17,986             (778,779)
 Increase in loans to customers.................................................         (2,282,010)          (2,721,043)
 Increase in deposits in banks..................................................         (4,866,583)          (5,205,317)
                                                                                         ----------           ----------
  NET CASH USED IN
   INVESTING ACTIVITIES.........................................................         (4,635,766)          (7,514,922)
                                                                                         ----------           ----------

FINANCING ACTIVITIES:
 Increase in deposits before interest credited..................................          3,828,323            6,421,564
 Decrease in borrowed funds.....................................................         (1,040,342)            (595,347)
 Interest credited to deposits..................................................            796,819              550,459
 Decrease in treasury stock.....................................................                                      50
 Issuance of common stock.......................................................                                  23,997
                                                                                         ----------           ----------
  NET CASH PROVIDED BY
   FINANCING ACTIVITIES.........................................................          3,584,800            6,400,723
                                                                                         ----------           ----------

NET INCREASE (DECREASE) IN CASH AND
 CASH EQUIVALENTS...............................................................           (388,337)            (508,255)

CASH AND CASH EQUIVALENTS, January 1............................................          2,514,202            2,566,232
                                                                                         ----------           ----------

CASH AND CASH EQUIVALENTS, March 31.............................................         $2,125,865           $2,057,977
                                                                                         ==========           ==========
SUPPLEMENTARY SCHEDULE OF CASH FLOW INFORMATION:
 Cash paid during the year for
  Interest......................................................................           $215,702             $162,868
  Income taxes..................................................................            $75,000             $225,000
 Non-cash investing activities:
  Unrealized gains (losses) on securities.......................................             $9,000            ($123,000)
</TABLE>

                 See Notes to Consolidated Financial Statements


<PAGE>


                    GRANGE NATIONAL BANC CORP. AND SUBSIDIARY

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

1.  BUSINESS COMBINATION AND PRINCIPLES OF COMBINATION:

         Grange National Banc Corp. (Company) was organized and incorporated
         under the laws of the Commonwealth of Pennsylvania on October 2, 1984,
         for the purpose of becoming a bank holding company. On April 30, 1985
         the Company acquired the Grange National Bank of Wyoming County (Bank)
         pursuant to a plan of reorganization and merger. The Bank became a
         wholly owned subsidiary of the Company, and each outstanding share of
         Bank common stock was converted into one share of Company common stock.
         The accompanying consolidated financial statements include the accounts
         of the Company and its wholly owned subsidiary (Bank) with the
         reorganization accounted for as a pooling of interests.

2.  BASIS OF PRESENTATION:

         The accompanying unaudited consolidated financial statements have been
         prepared in conformity with the accounting principles and practices
         reflected in the annual financial statements, and reflect all
         adjustments which are normal and recurring and, in the opinion of
         management, necessary for a fair presentation of the results of
         operations for the interim periods. The results of operations reported
         in interim financial statements are not necessarily indicative of
         results to be expected for the year.

3.  COMPREHENSIVE INCOME:

         In 1997, the Financial Accounting Standards Board issued Statement No.
         130 "Reporting Comprehensive Income," which is effective for years
         beginning after December 15, 1997. This statement establishes standards
         for reporting and display of comprehensive income and its components in
         a full set of general-purpose financial statements. The purpose of
         reporting comprehensive income is to report a measure of all changes in
         equity that result from recognized transactions and other economic
         events of the period other than transactions with owners in their
         capacity as owners. Prior to the issuance of this statement, some of
         those changes in equity were displayed in a statement that reports the
         results of operations, while others were included directly in a
         statement of financial position. The 1997 financial statements have
         been restated where applicable to reflect the adoption of SFAS No. 130.

4.  STOCK OPTIONS:

         In January 1994, the Board adopted an Employee Stock Option Plan in
         which common stock options may be granted to all officers and key
         employees of the Company. The aggregate number of shares which may be
         issued upon exercise of the options under the plan is 20,000. Options
         are exercisable up to one-third in the second year after the date of


<PAGE>

         grant, up to two-thirds in the third year after the date of grant and
         up to 100% in the fourth year after the date of grant, with options
         expiring at the end of ten years after the date of grant. Options were
         granted at various times during 1994, at prices ranging from $24.00 to
         $57.50 per share.

         The Board of Directors also adopted a Stock Option Plan for
         non-employee Directors which will be available to all non-employee
         members of the Board of Directors. The aggregate number of shares which
         may be issued upon exercise of the options under the Director's plan is
         20,000 shares and are exercisable in part from time to time beginning
         one year after the date of grant and expiring ten years thereafter. The
         Plan provides for adjustments to the number of options to compensate
         for stock dividends and splits. Accordingly all effected figures have
         been adjusted to reflect stock dividends. April 1, 1994 and 1997,
         options to purchase 1,029 shares of common stock, at $23.32 and $42.00,
         per share, respectively, were automatically granted to each
         non-employee Director under this plan expiring April 1, 2004. Of these
         options, 1,029 have been exercised.

         The Board of Directors adopted an additional Stock Option Plan (the
         "Plan") in November 1995 covering the employees and directors. The Plan
         authorizes the grant of options to purchase not more than 56,105 shares
         of Common Stock under the Plan. Options granted under the Plan are
         intended to be either incentive stock options or nonstatutory stock
         options. As of April 30, 1998 options for 56,105 shares of Common Stock
         having an exercise price of $31.86 were outstanding (1,747 options did
         not vest and lapsed) and 6,702 shares were available for future option
         grants under the Plan. Of the 49,403 shares of Common Stock outstanding
         for options, 37,050 shares of Common Stock were issued as incentive
         stock options. The remaining shares outstanding for options were
         granted to each non-employee director equally as nonstatutory stock
         options.

         PREFERRED STOCK:

         The Company authorized 1,000,000 of preferred stock at $5 par value. At
         December 31, 1996 and March 31, 1997, no shares were issued nor
         outstanding.


<PAGE>

MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION:

Net income for the three months ending March 31, 1998 totaled $414,000 which is
a 14% increase over the $362,000 reported for the same period in 1997. Net
interest income for the three months ending March 31, 1998 increased by $187,000
to $1,320,000 compared to $1,133,000 for the same period in 1997. This
constitutes an increase of 17% over the previous year. Interest income for this
period increased by $375,000 or 19% compared to 1997, and interest expense
increased as well by $189,000 or 22% compared to 1997.

The increase in interest income has been principally from interest on loans
which increased $300,000 or 21% compared to the same period last year. Interest
income from investment securities increased by $81,000 or 16% compared to the
same period last year. Interest rates on loans have remained fairly stable since
March of 1997. Although the New York prime rate has not changed since March of
1997, competitive pressures have reduced the Bank's spread to the prime on new
loans. Management has increased its purchases of longer term municipal bonds and
purchased some mortgage-backed bonds to increase the yield of the bond
portfolio. The municipal bonds currently being purchased, mostly have maturities
of between eight and ten years, and are classified as "available for sale". If
interest rates increase significantly these bonds could be sold. Interest on
deposits in banks decreased by $6,000 from $30,000 to $24,000 due to lower
balances and lower rates.

The increase in interest expense is due to the increase in interest bearing
deposits during the first quarter of 1998 as compared to the first quarter of
1997, as well as a slight increase in the rate paid to depositors. The average
total sources to fund earning assets increased by $15,909,000, from $99,417,000
to $115,326,000 in 1998, while the average interest rate increased from 3.42% to
3.60%, respectively.

The increase in deposits continues to provide funds for loans and liquidity.
Loan demand during the first quarter was somewhat mild as loans increased
$2,259,000 or 3% from $76,995,000 in at December 31, 1997 to $79,254,000 at
March 31, 1998. Loan demand appears to be picking up as the second quarter
begins. Balances of investment securities declined during the first quarter with
a decrease of $2,630,000 or 7% since December 31, 1997. Interest bearing
deposits at banks increased by $4,867,000 to $7,285,000 from $2,418,000 due to
deposits flowing in and management holding off on investing the funds due to low
rates on securities, and increased loan demand is anticipated.

The provision for loan loss during the three months ending March 31, 1998 was
$75,000 compared to $30,000 for the same period in 1997, as management tries to
keep the allowance for loan losses in line with the size of the loan portfolio.
The allowance for loan losses was $819,000 and $767,000 at March 31, 1998 and
December 31, 1997, respectively. This represents 1.03% and 1.00% of total loans,
195% and 171% of non-performing loans, and 124% and 128% of non-performing
assets, respectively. Management performs a quarterly analysis of the Bank's
potential loan losses on a "worst case" basis. A loan review process is
performed by an independent loan review officer on a continuing basis. This
information is closely reviewed by the


<PAGE>



Board of Directors and used to evaluate the adequacy of the loan loss reserve in
order to provide coverage for identifiable losses, provide coverage for
unexpected losses, and to keep the size of the reserves in proportion to the
growing size of the loan portfolio. The following sets forth loans past due 90
days or more on which interest has continued to be accrued for March 31, 1998
and December 31, 1997.

                                   March 1998                 December 1997
                                               (In thousands)
Real estate mortgages                 $230                         $311
Commercial                              14                            1
Installment
                                      ----                         ----
                Total                 $244                         $312
                                      ====                         ====

Non-accrual loans increased from $136,000 at December 31, 1997 to $177,000 at
March 31, 1998. The overall quality remains very good, and management expects
non-performing assets to remain at substantially the same levels as a proportion
of loans.

Investments in securities and deposits in banks increased by $2,237,000 or 6 %
from December 31, 1997 to March 31, 1998. The average rate earned on available
for sale, held to maturity and deposits in banks were 6.38%, 7.24% and 5.56% for
the three months ended March 31, 1998, as compared to 5.95%, 6.64% and 5.44% for
the three months ended March 31, 1997. As of March 31, 1998, the fair value of
the Bank's investments classified as held to maturity exceeded their amortized
value by $145,000, and the fair value of investments classified as available for
sale exceeded their amortized value by $138,000. This is reflected as an
increase in the Bank's equity of approximately $88,000, net of deferred tax
effects.

Slightly lower interest rates at March 31, 1998 account for the unrealized gain
on the available for sale securities reflected on the balance sheet. Rates are
expected to change from day to day, but remain fairly level. This will result in
minimal impact on the fair value of securities available for sale. As the Bank
extends the length of the securities it purchases, interest rate changes will
have greater impact on the fair value of those securities. This interest rate
risk is offset by higher yields on the securities. The Bank continues to
purchase short to moderate maturities, generally five to ten years for fixed
rate securities.

Management continues to purchase only high quality investments to minimize
credit risk to the value of the Bank's investments. There have been no adverse
credit valuations on any of the investments. Although investment opportunities
exist which will produce higher yields, they generally contain higher credit or
interest rate risk.

The addition of loan, insurance agency and administrative employees, along with
annual raises attributed to the increase in salary expense. In addition,
numerous on going expenses associated with the February 1997 opening of the Back
Mountain office and the January 1997 computer upgrade and associated software
conversion did not begin to be expensed until after the first quarter of 1997.
This accounts for the 1998 increase in salary, occupancy, and equipment
expenses. Salaries and employee benefits have increased by $60,000 or 16% from
$371,000 to


<PAGE>

$431,000, occupancy expense increased $26,000 or 40% from $64,000 to $90,000 and
equipment expense increased $20,000 or 36% from $55,000 to $75,000. Other
operating expenses increased $7,000 or 3% from $241,000 to $234,000. During 1997
other operating expenses included approximately $49,000 in expenses for
advertising associated with the opening of the Back Mountain office.

Management performs an interest rate and liquidity analysis on a monthly basis
to monitor the Bank's interest rate sensitivity gap and liquidity needs. These
reports are reviewed by the Board of Directors and used to formulate ways to
improve the Bank's interest rate gap. The Bank continues to place great emphasis
on adjustable rate loan products, such as variable rate home equity loans and
annually adjustable mortgage loans as well as adjustable rate and short term
investments, in order to minimize interest rate risk.

Since 1991 the Comptroller of the currency has required all national banks to
meet certain "Risk Based Capital" standards. These standards weight certain
assets based on the risk of the asset, and also includes certain off-balance
sheet items. The table below sets forth the Bank's Tier 1 and Tier 2 capital,
risk adjusted assets (including off-balance sheet items) and the Bank's
risk-based capital ratios under the guidelines, for March 31, 1998 and December
31, 1997.

(In thousands, except ratios)                                   1998     1997
Tier I capital:
     Shareholders' equity.................................... $12,919   $12,414
Tier II capital:
     Loan loss reserve.......................................     819       767
                                                               ------   -------
Total Qualifying Capital..................................... $13,738   $13,181
                                                               ======    ======
Risk-adjusted assets (including off balance sheet items)..... $79,099   $76,937

Tier I Capital Ratio (4.00% required)........................   16.39%    16.14%
Total Capital Ratio (8.00% required).........................   17.37%    17.13%



<PAGE>

                    GRANGE NATIONAL BANC CORP. AND SUBSIDIARY
               AVERAGE BALANCES, INTEREST INCOME/EXPENSE AND RATES

<TABLE>
<CAPTION>

                                                                  THREE MONTHS ENDED                       THREE MONTHS ENDED
                                                                    MARCH 31, 1998                           MARCH 31, 1997
                                                           ------------------------------------      ----------------------------
                                                              (1)         Interest    Average          (1)     Interest  Average
                                                            Average        Income/   Interest        Average    Income/  Interest
(Dollars in thousands)                                      Balance        Expense     Rate          Balance    Expense    Rate
----------------------                                    ---------       --------   --------       ---------  --------- ---------
<S>                                                      <C>              <C>        <C>            <C>         <C>      <C>

INTEREST EARNING ASSETS:

 Loans:
  Mortgages............................................   $43,157             $952      8.82%        $35,942     $795     8.85%
  Installment..........................................     5,058              134     10.60           5,083      134    10.54
  Commercial...........................................    29,283              672      9.18          22,904      529     9.24
                                                         --------           ------                   -------    -----
    Total loans........................................    77,498            1,758      9.07          63,929    1,458     9.12
                                                         --------           ------                   -------    -----
 Securities available for sale:
  U.S. Treasury securities.............................     6,545               99      6.05          11,410      171     5.99
  U.S. government agencies.............................     3,598               58      6.45
  Municipal bonds......................................     2,232               42      7.53
 Other securities......................................       533                7      5.25             412        5     4.85
                                                         --------           ------                   -------    -----
      Total available for sale.........................    12,908              206      6.38          11,822      176     5.95
                                                         --------           ------                   -------    -----
 Securities held to maturity:

  U.S. government agencies.............................    17,662              320      7.25          17,333      280     6.46
  Municipal bonds......................................     4,039               65      6.44           3,740       70     7.49
  Other securities.....................................     2,120               35      6.60             388        6     6.19
                                                         --------           ------                   -------    -----
    Total held to maturity.............................    23,821              420      7.05          21,461      356     6.64
                                                         --------           ------                   -------    -----

 Deposits in banks.....................................     1,726               24      5.56           2,205       30     5.44
                                                         --------           ------                  -------     -----
      TOTAL............................................  $115,953            2,408      8.31         $99,417    2,020     8.13
                                                         --------           ------                   -------    -----
                                                         --------           ------                   -------    -----
INTEREST BEARING LIABILITIES:
 Deposits:
  NOW and super-NOW....................................   $11,185               58      2.07          $9,270       46     1.98
  Savings and money market.............................    26,554              179      2.70          24,618      167     2.71
  Certificates of deposit..............................    56,126              775      5.52          46,153      623     5.40
  Other time deposits..................................       200                3      6.00             200        3     6.00
                                                         --------           ------                   -------    -----
    Total deposits.....................................    94,065            1,015      4.32          80,241      839     4.18
 Other borrowed funds..................................     1,564               24      6.14             823       11     5.35
                                                         --------           ------                   -------    -----
      TOTAL............................................    95,629            1,039      4.35          81,064      850     4.19
Non-interest bearing
 funds, net (2)........................................    20,324                                     18,353
                                                         --------                                    -------
TOTAL SOURCES TO FUND
EARNING ASSETS.........................................  $115,953            1,039      3.58         $99,417      850     3.42
                                                         --------           ------                   -------    -----
                                                         --------           ------                   -------    -----

NET INTEREST/YIELD.....................................                     $1,369      4.72%                  $1,170     4.71%
                                                                            ------                             -----
                                                                            ------                             -----


</TABLE>

(1) Average balances are daily averages. (2) Demand deposits, stockholders's
equity and other non-interest bearing liabilities less non-interest earning
assets.

Non-accrual loans are reflected in the loan balances, but contributing no
interest income.

NOTE - Tax exempt interest income has been converted to a tax equivalent basis
at the U.S. federal income tax rate of 34%. See Notes to Consolidated Financial
Statements 12

<PAGE>

PART II.  OTHER INFORMATION

ITEM 6.   EXHIBITS AND REPORTS ON FORM 8-K

     (a)      Exhibits

              Exhibit 27 - Financial Data Schedule

     (b)      Reports on Form 8-K

     (ii)     Statement re: computation of earnings per share:

              Primary earnings per share is computed by dividing net income
              by the weighted average number of shares of common stock and
              common stock equivalents outstanding during the quarter. Stock
              options are considered common stock equivalents and are
              included in the computation of the number of shares
              outstanding using the treasury stock method. The number of
              shares used to calculate earnings per share for the periods
              presented are as indicated in each period.

During the current fiscal quarter, there have been no events of a nature
required to be filed on Form 8-K.

                                   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.

                                           GRANGE NATIONAL BANC CORP.
                                           (Registrant)


Date       May 14, 1998                    /s/ Thomas A. McCullough
    -----------------------------              -------------------------
                                               Thomas A. McCullough
                                               President
                                               Chief Executive Officer
                                               Chief Financial Officer

Date       May 14, 1998                    /s/ Philip O. Farr
    -----------------------------              ------------------------
                                               Philip O. Farr
                                               Chief Accounting Officer