SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C.  20549

                                    FORM 10-K
                                   (Mark One)

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

                  For the fiscal year ended December 31, 2001.
                                            -----------------

                                       OR

          [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]

                For the transition period from      to        .
                                               ----------------

                         Commission file number 0-15237
                                                -------

                        HARLEYSVILLE NATIONAL CORPORATION
                        ---------------------------------
             (Exact name of registrant as specified in its charter)
<TABLE>
<CAPTION>
<S>                                                  <C>
Pennsylvania. . . . . . . . . . . . . . . . . . . .          23-2210237
---------------------------------------------------  -------------------
(State or other jurisdiction of . . . . . . . . . .   (I.R.S.  Employer
incorporation or organization . . . . . . . . . . .  Identification No.)

483 Main Street, Harleysville, Pennsylvania . . . .               19438
---------------------------------------------------  -------------------
(Address of principal executive offices . . . . . .           (Zip Code)

Registrant's telephone number, including area code:      (215) 256-8851)
</TABLE>
        Securities registered pursuant to Section 12(b) of the Act:  N/A

                              Name of each exchange
               Title of each class            on which registered

                      .             N/A               N/A.
                       ---------------- ------------------

           Securities registered pursuant to Section 12(g) of the Act:

                          Common Stock, $1.00 par value
                          -----------------------------
                                 Title of Class

Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the  preceding  12  months  (or  for such shorter period that the Registrant was
required  to  file  such  reports)  and  (2)  has  been  subject  to such filing
requirements  for  the  past  90  days.
Yes  X  .  No.
   ---

Indicate  by  check mark if disclosure of delinquent filers pursuant to Item 405
of  Regulation  S-K  is  not contained herein, and will not be contained, to the
best  of  registrant's  knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form  10-K.  (  )

PAGE 1

State  the  aggregate  market value of the voting stock held by nonaffiliates of
the  registrant.  The  aggregate  market value shall be computed by reference to
the  price  at  which the stock was sold, or the average bid and asked prices of
such  stock,  as of a specified date within 60 days prior to the date of filing.

                      $376,222,000 as of February 22, 2002

Indicate  the  number  of  shares  outstanding of each class of the registrant's
classes  of  common  stock,  as  of  the  latest  practicable  date.

 18,586,503  shares of Common Stock, $1 par value per share, were outstanding as
of  February  22,  2002.


                      DOCUMENTS INCORPORATED BY REFERENCE:

1.  Portions  of  the  Registrant's Annual Report to Shareholders for the fiscal
year  ended December 31, 2001 are incorporated by reference into Parts I, II and
IV  of  this  report.

2.  Portions  of  the  Registrant's  Definitive  Proxy Statement relating to the
Annual  Meeting  of  Shareholders  to  be held April 9, 2002 are incorporated by
reference  into  Part  III  of  this  report.

PAGE 2
<TABLE>
<CAPTION>
                                          HARLEYSVILLE NATIONAL CORPORATION
                                              INDEX TO FORM 10-K REPORT
<S>                        <C>                                                              <C>
                           PAGE
                           ---------------------------------------------------------------
I.. . . . . . . . . . . .  PART I.

  Item 1. . . . . . . . .  Business                                                          4
  Item 2. . . . . . . . .  Properties                                                       15
  Item 3. . . . . . . . .  Legal Proceedings                                                16
  Item 4. . . . . . . . .  Submission of Matters to a Vote of Security Holders              16

II. . . . . . . . . . . .  PART II.

  Item 5. . . . . . . . .  Market for Registrant's Common Stock and Related Shareholder     17
                            Matters
  Item 6. . . . . . . . .  Selected Financial Data                                          17
  Item 7. . . . . . . . .  Management's Discussion and Analysis of Financial Condition and  17
                            Results of Operations
  Item 7.A. . . . . . . .  Quantitative and Qualitative Disclosure about Market Risk        17
  Item 8. . . . . . . . .  Financial Statements and Supplementary Data                      17
  Item 9. . . . . . . . .  Changes in and Disagreements with Accountants on Accounting and  17
                            Financial Disclosure

III.. . . . . . . . . . .  PART III.

  Item 10.. . . . . . . .  Directors and Executive Officers of the Registrant               18
  Item 11.. . . . . . . .  Executive Compensation                                           18
  Item 12.. . . . . . . .  Security Ownership of Certain Beneficial Owners and Management   18
  Item 13.. . . . . . . .  Certain Relationships and Related Transactions                   18

IV. . . . . . . . . . . .  PART IV.

  Item 14.. . . . . . . .  Exhibits, Financial Statement Schedules and Reports on Form 8-K  19

  Signatures. . . . . . .                                                                   22
</TABLE>

PAGE 3
PART  I

Item  1.  Business.
-------

History  and  Business
----------------------

       Harleysville  National  Corporation,  a  Pennsylvania  corporation  (the
Corporation),  was  incorporated  in  June  1982.  On  January  1,  1983,  the
Corporation became the parent bank holding company of Harleysville National Bank
and  Trust  Company (HNB), established in 1909, a wholly owned subsidiary of the
Corporation.  On  February  13,  1991,  the  Corporation  acquired  all  of  the
outstanding  common  stock of Citizens National Bank (CNB), established in 1903.
On June 1, 1992, the Corporation acquired all of the outstanding stock of Summit
Hill  Trust  Company  (Summit  Hill).  On September 25, 1992, Summit Hill merged
into  CNB  and  is now operating as a branch office of CNB.  On July 1, 1994 the
Corporation  acquired  all  of  the  outstanding stock of Security National Bank
(SNB),  established in 1988.   On March 1, 1996, the Corporation acquired all of
the  outstanding  common stock of Farmers & Merchants Bank ("F & M").  F & M was
merged  into  CNB  and is now operating as a branch office of CNB.  On March 17,
1997, the HNC Financial Company was incorporated as a Delaware Corporation.  HNC
Financial  Company's  principal  business  function  is to expand the investment
opportunities of the Corporation.  On January 20, 1999, the Corporation acquired
all of the outstanding stock of Northern Lehigh Bancorp, Inc., parent company of
Citizens  National Bank of Slatington.  Citizens National Bank of Slatington was
merged  into  CNB.  On  April  28,  2000,  the  Corporation  acquired all of the
outstanding  common  stock  of Citizens Bank and Trust Company (CB & T).  CB & T
was  merged  into  CNB.  On  March  30,  2001,  HNC  Reinsurance  Company  was
incorporated  as an Arizona Corporation.  HNC Reinsurance Company functions as a
reinsurer  of  consumer loan credit life and accident and health insurance.  The
Corporation is primarily a bank holding company that provides financial services
through  its  three  bank  subsidiaries.   Since  commencing  operations,  the
Corporation's  business  has  consisted  primarily  of managing HNB, CNB and SNB
(collectively  the Banks), and its principal source of income has been dividends
paid  by  the  Banks.  The  Corporation  is registered as a bank holding company
under  the  Bank  Holding  Company  Act  of  1956.

       The  Banks are national banking associations under the supervision of the
Office  of  the  Comptroller  of  the Currency.  The Corporation and HNB's legal
headquarters  are  located at 483 Main Street, Harleysville, Pennsylvania 19438.
CNB's  legal  headquarters  is  located  at  13-15  West Ridge Street, Lansford,
Pennsylvania  18232.  SNB's legal headquarters is located at One Security Plaza,
Pottstown,  Pennsylvania  19464.  HNC  Financial Company's legal headquarters is
located  at  2751 Centerville Road, Suite 3164, Wilmington, Delaware 19808.  HNC
Reinsurance  Company's  legal headquarters is located at 101 North First Avenue,
Suite  2460,  Phoenix,  AZ  85003.

       In  addition  to  historical  information,  this  Form  10-K  contains
forward-looking  statements.  We  have  made  forward-looking statements in this
document, and in documents that we incorporate by reference, that are subject to
risks  and  uncertainties.  Forward-looking  statements  include the information
concerning  possible  or  assumed  future  results of operations of Harleysville
National  Corporation  and  its  subsidiaries.  When  we  use  words  such  as
"believes,"  "expects,"  "anticipates,"  or  similar  expressions, we are making
forward-looking  statements.

        Shareholders  should note that many factors, some of which are discussed
elsewhere  in  this  document  and  in  the  documents  that  we  incorporate by
reference,  could affect the future financial results of the Corporation and its
subsidiaries  and  could  cause  actual  results to differ materially from those
expressed  in  the  forward-looking  statements  contained  or  incorporated  by
reference  in  this  document.  These  factors  include  the  following:
<TABLE>
<CAPTION>
<S>              <C>
* . . . . . . .  operating, legal and regulatory risks;

* . . . . . . .  economic, political and competitive forces affecting our banking,
* . . . . . . .  securities, asset management and credit services businesses; and

* . . . . . . .  the risk that our analyses of these risks and forces could be incorrect
* . . . . . . .  and/or that the strategies developed to address them could be
                 unsuccessful.
</TABLE>

PAGE 4

      As  of  December  31,  2001,  the  Corporation  had  total  assets  of
$2,208,971,000, total shareholders' equity of $189,349,000 and total deposits of
$1,746,862,000.

      The  Banks  engage  in  the  full-service  commercial  banking  and  trust
business,  including  accepting  time  and  demand  deposits, making secured and
unsecured  commercial  and  consumer  loans,  financing commercial transactions,
making  construction  and  mortgage  loans  and performing corporate pension and
personal  investment  and  trust  services.  Their  deposits  are insured by the
Federal  Deposit Insurance Corporation to the extent provided by law.  The Banks
have  39  branch  offices  located in Montgomery, Bucks, Chester, Berks, Carbon,
Wayne,  Monroe, Lehigh, Northampton and Schuylkill counties, Pennsylvania, 22 of
which  are  owned  by  the  Banks and 17 of which are leased from third parties.

      The Banks enjoy a stable base of core deposits and are  leading community
banks in their service areas.  The Banks believe they have gained their position
as  a  result  of  a  customer-oriented  philosophy  and  a strong commitment to
service.  Senior  management  has  made  the  development of a sales orientation
throughout  the  Banks  one  of  their  highest  priorities  and emphasizes this
objective  with  extensive  training  and  sales  incentive programs.  The Banks
maintain  close  contact with the local business community to monitor commercial
lending  needs  and  believe  they respond to customer requests quickly and with
flexibility.  Management  believes  these competitive strengths are reflected in
the  Corporation's  results  of  operations.

      As  of  December  31,  2001,  the  Corporation  and  the  Banks  employed
approximately  578  full-time  equivalent employees.  The Corporation provides a
variety  of  employment  benefits  and  considers  its  relationships  with  its
employees  to  be  satisfactory.

Competition
-----------

      The  Banks  compete  actively  with  other  eastern Pennsylvania financial
institutions,  many  larger  than  the  Banks,  as  well  as  with financial and
non-financial  institutions  headquartered  elsewhere.  The  Banks are generally
competitive  with all competing institutions in their service areas with respect
to  interest rates paid on time and savings deposits, service charges on deposit
accounts,  interest  rates  charged  on  loans,  and  fees and charges for trust
services.  At  December 31, 2001, HNB's legal lending limit to a single customer
was  $17,817,000  and  CNB's and SNB's legal lending limits to a single customer
were  $5,983,000  and  $2,270,000,  respectively.  Many of the institutions with
which  the  Banks compete are able to lend significantly more than these amounts
to  a  single  customer.

Supervision  and  Regulation  -  The  Registrant
------------------------------------------------

       In  November, 1999, the Gramm-Leach-Bliley Financial Modernization Act of
1999  (Modernization Act) became law.  The Modernization Act allows bank holding
companies  meeting  management, capital and Community Reinvestment Act standards
to  engage  in  a  substantially broader range of nonbanking activities than was
permissible  before  enactment,  including  underwriting  insurance  and  making
merchant  banking  investments in commercial and financial companies.  It allows
insurers  and  other  financial  services  companies  to  acquire banks; removes
various  restrictions that  currently apply to bank holding company ownership of
securities firms and mutual fund advisory companies; and establishes the overall
regulatory  structure  applicable  to bank holding companies that also engage in
insurance  and  securities  operations.  The  Corporation  currently believes it
meets  the  requirements  for  the  broader  range  of  activities  that will be
permitted  by  the  Modernization  Act.

        The Modernization Act also modified law related to financial privacy and
community  reinvestment.  The  privacy  provisions  generally prohibit financial
institutions,  including  the  Corporation,  from disclosing nonpublic financial
information to nonaffiliated third parties unless customers have the opportunity
to  "opt  out"  of  the  disclosure.

PAGE 5

Pending  Legislation
--------------------

       Management  is not aware of any other current specific recommendations by
regulatory  authorities or proposed legislation which, if they were implemented,
would  have  a material adverse effect upon the liquidity, capital resources, or
results of operations, although the general cost of compliance with numerous and
multiple federal and state laws and regulations does have, and in the future may
have,  a  negative  impact  on  the  Corporation's  results  of  operations.

Effects  of  Inflation
----------------------

       Inflation  has  some impact on the Corporation's and the Banks' operating
costs.  Unlike  many  industrial  companies,  however,  substantially all of the
Banks'  assets  and  liabilities  are monetary in nature.  As a result, interest
rates  have  a  more  significant  impact  on  the  Corporation's and the Banks'
performance  than  the  general level of inflation.  Over short periods of time,
interest  rates  may  not  necessarily move in the same direction or in the same
magnitude  as  prices  of  goods  and  services.

Effect  of  Government  Monetary  Policies
------------------------------------------

       The  earnings  of  the  Corporation  are and will be affected by domestic
economic  conditions  and  the monetary and fiscal policies of the United States
government and its agencies.  An important function of the Federal Reserve is to
regulate  the  money  supply  and interest rates.  Among the instruments used to
implement  those  objectives  are  open  market  operations  in  United  States
government  securities  and  changes in reserve requirements against member bank
deposits.  These  instruments  are  used  in  varying  combinations to influence
overall  growth  and  distribution  of bank loans, investments and deposits, and
their  use  may  also  affect  rates  charged  on  loans  or  paid for deposits.

       The Banks are members of the Federal Reserve and, therefore, the policies
and  regulations  of  the  Federal  Reserve  have  a  significant  effect on its
deposits,  loans  and  investment growth, as well as the rate of interest earned
and  paid,  and are expected to affect the Banks' operations in the future.  The
effect of such policies and regulations upon the future business and earnings of
the  Corporation  and  the  Banks  cannot  be  predicted.

Environmental  Regulations
--------------------------

       There  are  several  federal  and  state  statutes  which  regulate  the
obligations  and  liabilities  of  financial  institutions  pertaining  to
environmental  issues.  In addition to the potential for attachment of liability
resulting  from  its  own  actions,  a  bank  may  be  held liable under certain
circumstances  for  the  actions  of  its borrowers, or third parties, when such
actions  result in environmental problems on properties that collateralize loans
held  by  the  bank.  Further, the liability has the potential to far exceed the
original  amount  of  a  loan  issued  by  the  bank.  Currently,  neither  the
Corporation  nor  the Banks are a party to any pending legal proceeding pursuant
to any environmental statute, nor are the Corporation and the Banks aware of any
circumstances  that  may  give  rise  to  liability  under  any  such  statute.

Supervision  and  Regulation  -  Banks
--------------------------------------

       The  operations  of  the  Banks are subject to federal and state statutes
applicable  to  banks  chartered under the banking laws of the United States, to
members  of  the  Federal Reserve and to banks whose deposits are insured by the
FDIC.  The  Banks'  operations  are  also subject to regulations of the OCC, the
Federal  Reserve and the FDIC. The primary supervisory authority of the Banks is
the  OCC,  who regularly examines the Banks.  The OCC has authority to prevent a
national  bank  from  engaging  in unsafe or unsound practices in conducting its
business.

       Federal  and  state  banking  laws  and  regulations  govern, among other
things,  the  scope  of  a bank's business, the investments a bank may make, the
reserves  against  deposits  a  bank  must  maintain,  loans  a  bank  makes and
collateral  it  takes,  the  activities  of  a  bank with respect to mergers and
consolidations  and  the  establishment  of  branches.

PAGE 6

       As  a subsidiary bank of a bank holding company, the Banks are subject to
certain  restrictions  imposed  by  the Federal Reserve Act on any extensions of
credit  to  the  bank holding company or its subsidiaries, or investments in the
stock  or other securities as collateral for loans.  The Federal Reserve Act and
Federal  Reserve  regulations  also  place  certain  limitations  and  reporting
requirements  on extensions of credit by a bank to principal shareholders of its
parent holding company, among others, and to related interests of such principal
shareholders. In addition, such legislation and regulations may affect the terms
upon  which any person becoming a principal shareholder of a holding company may
obtain  credit  from  banks  with  which  the  subsidiary  bank  maintains  a
correspondent  relationship.

       Under  the  Federal Deposit Insurance Act, the OCC possesses the power to
prohibit  institutions  regulated by it (such as the Banks) from engaging in any
activity that would be an unsafe and unsound banking practice or would otherwise
be  in  violation  of  the  law.

       Under  the  Community  Reinvestment  Act  of 1977, the OCC is required to
assess  the record of all financial institutions regulated by it to determine if
these  institutions are meeting the credit needs of the community, including low
and moderate income neighborhoods, which they serve and to take this record into
account  in  its  evaluation of any application made by any of such institutions
for, among other things, approval of a branch or other deposit facility,  office
relocation,  a  merger  or  an  acquisition  of  bank  shares.  The  Financial
Institutions  Reform,  Recovery  and  Enforcement Act of 1989 amended the CRA to
require, among other things, that the OCC make publicly available the evaluation
of  a  bank's  record  of  meeting  the  credit  needs  of its entire community,
including low and moderate income neighborhoods.  This evaluation will include a
descriptive  rating  like  "outstanding",  "satisfactory", "needs to improve" or
"substantial noncompliance" and a statement describing the basis for the rating.
These  ratings  are  publicly  disclosed.

       Under  the  Bank  Secrecy Act, banks and other financial institutions are
required to report to the Internal Revenue Service currency transactions of more
than  $10,000  or  multiple transactions of which a bank is aware in any one day
that  aggregate in excess of $10,000.  Civil and criminal penalties are provided
under the Bank Secrecy Act for failure to file a required report, for failure to
supply  information  required  by  the Bank Secrecy Act or for filing a false or
fraudulent  report.

       The  Federal  Deposit  Insurance  Corporation  Improvement  Act  of  1991
requires that institutions must be classified, based on their risk-based capital
ratios  into  one  of  five  defined  categories,  as  illustrated  below,  well
capitalized,  adequately  capitalized,  undercapitalized,  significantly
undercapitalized  and  critically  undercapitalized.

<TABLE>
<CAPTION>
                                Total       Tier 1                 Under a
                                Risk        Risk      Tier 1      Capital
                                Based       Based     Leverage     Order or
                                Ratio       Ratio      Ratio       Directive
                                -----  ------  --------  ---------
<S>                             <C>        <C>        <C>         <C>

CAPITAL CATEGORY
------------------------------
Well capitalized . . . . . . .  >10.0      >6.0       >5.0         NO
                                -----  ------  --------
Adequately capitalized . . . .  > 8.0      >4.0       >4.0*
                                -----    ------     --------
Undercapitalized . . . . . . .  < 8.0      <4.0       <4.0*
Significantly undercapitalized  < 6.0      <3.0       <3.0
Critically undercapitalized. .                        <2.0
</TABLE>

*3.0  for  those  banks  having  the  highest  available  regulatory  rating.

      In the event an institution's capital deteriorates to the undercapitalized
category  or  below,  FDICIA  prescribes  an  increasing  amount  of  regulatory
intervention,  including:  the  institution  of a capital restoration plan and a
guarantee  of  the  plan by a parent institution; and the placement of a hold on
increases  in  assets,  number of branches or lines of business.  If capital has
reached  the  significantly  or  critically  undercapitalized  levels,  further
material restrictions can be imposed, including restrictions on interest payable
on  accounts,  dismissal  of  management  and,  in  critically  undercapitalized
situations,  appointment  of  a  receiver.  For  well  capitalized institutions,

PAGE 7

FDICIA  provides  authority for regulatory intervention where the institution is
deemed  to  be  engaging  in unsafe or unsound practices or receives a less than
satisfactory  examination  report rating for asset quality, management, earnings
or  liquidity.  All  but  well  capitalized  institutions  are  prohibited  from
accepting  brokered  deposits  without  prior regulatory approval. Under FDICIA,
financial  institutions  are  subject  to increased regulatory scrutiny and must
comply  with  certain  operational,  managerial and compensation standards to be
developed  by  Federal  Reserve  Board  regulations.  FDICIA  also  requires the
regulators to issue new rules establishing certain minimum standards to which an
institution  must  adhere  including  standards  requiring  a  minimum  ratio of
classified  assets  to  capital, minimum earnings necessary to absorb losses and
minimum  ratio  of  market  value  to book value for publicly held institutions.
Additional  regulations  are  required  to  be  developed  relating  to internal
controls, loan documentation, credit underwriting, interest rate exposure, asset
growth  and  excessive  compensation,  fees  and  benefits.

       Annual  full-scope,  on site regulatory examinations are required for all
the FDIC-insured institutions except institutions with assets under $100 million
which  are  well capitalized, well-managed and not subject to a recent change in
control,  in  which case, the examination period is every 18 months.  Banks with
total  assets  of $500 million or more, as of the beginning of fiscal year 1993,
are required to submit to their supervising federal and state banking agencies a
publicly available annual audit report. The independent accountants of such bank
are  required  to  attest  to  the accuracy of management's report regarding the
internal  control  structure  of  the  bank.  In  addition,  such banks also are
required  to  have  an independent audit committee composed of outside directors
who are independent of management, to review with management and the independent
accountants, the reports that must be submitted to the bank regulatory agencies.
If  the  independent  accountants  resign or are dismissed, written notification
must  be  given  to  the  bank's supervising government banking agencies.  These
accounting  and  reporting reforms do not apply to an institution such as a bank
with total assets at the beginning of its fiscal year of less than $500 million,
such  as  CNB  or  SNB.

       FDICIA  also  requires  that  banking  agencies reintroduce loan-to-value
ratio  regulations  which  were  previously  repealed  by  the  1982  Act.
Loan-to-values  limit  the amount of money a financial institution may lend to a
borrower, when the loan is secured by real estate, to no more than a percentage,
set  by  regulation,  of  the  value  of  the  real  estate.

       A  separate  subtitle  within  FDICIA, called the "Bank Enterprise Act of
1991",  requires  "truth-in-savings"  on  consumer  deposit  accounts  so  that
consumers  can make meaningful comparisons between the competing claims of banks
with  regard  to deposit accounts and products.  Under this provision, a bank is
required  to  provide  information  to  depositors concerning the terms of their
deposit  accounts,  and  in particular, to disclose the annual percentage yield.
The  operational cost of complying with the Truth-In-Savings law had no material
impact  on  liquidity,  capital  resources  or  reported  results of operations.

       While  the  overall  impact  of  fully implementing all provisions of the
FDICIA  cannot  be  accurately  calculated,  Management  believes  that  full
implementation  of  the  FDICIA  had  no  material  impact on liquidity, capital
resources  or  reported  results  of  operation  in  future  periods.

       From  time  to  time, various types of federal and state legislation have
been proposed that could result in additional regulation of, and restriction on,
the  business of the Banks.  It cannot be predicted whether any such legislation
will  be  adopted or, if adopted, how such legislation would affect the business
of  the  Banks.  As  a  consequence  of  the  extensive regulation of commercial
banking  activities  in  the  United States, the Banks' business is particularly
susceptible  to  being  affected by federal legislation and regulations that may
increase  the  costs  of  doing  business.

Statistical  Data
-----------------

       The  information  for  this  item  is listed below and is incorporated by
reference  to  pages  22  through  30  of  the  Corporation's  Annual  Report to
Shareholders  for  the  year ended December 31, 2001 which pages are included at
Exhibit  (13)  to  this  Annual  Report  on  Form  10-K.

PAGE 8

INVESTMENT  PORTFOLIO
The  following  shows  the  carrying  value  of  the  Corporation's  investment
securities  held  to  maturity:

<TABLE>
<CAPTION>

(Dollars in Thousands)                              2001       2000       1999
                                                   -------   -------   -------
<S>                                                <C>        <C>         <C>
U. S. Treasury notes. . . . . . . . . . . . . . .  $     -    $   500   $ 1,000
Obligations of states and political subdivisions.   22,997     25,803    21,450
Mortgage-backed securities. . . . . . . . . . . .    2,552      3,437     1,792
Other securities. . . . . . . . . . . . . . . . .      550      1,101     1,303
                                                   -------    -------   -------
    Total . . . . . . . . . . . . . . . . . . . .  $26,099    $30,841   $25,545
                                                   =======    =======   =======
</TABLE>

  The  following  shows  the  carrying  value  of  the  Corporation's investment
securities  available  for  sale:

<TABLE>
<CAPTION>

(Dollars in Thousands)                                2001        2000       1999
                                                    --------   --------    --------
<S>                                                 <C>         <C>        <C>
U. S. Treasury notes. . . . . . . . . . . . . . .   $ 31,093    $ 40,359   $ 48,567
Obligations of other U.S. Government agencies
     and corporations . . . . . . . . . . . . . .     26,980      38,610     49,574
Obligations of states and political subdivisions.    180,659     195,073    172,172
Mortgage-backed securities. . . . . . . . . . . .    406,178     227,483    164,071
Other securities. . . . . . . . . . . . . . . . .     61,462      69,094     70,966
                                                   --------    --------    --------
    Total . . . . . . . . . . . . . . . . . . . .   $706,372    $570,619   $505,350
                                                    ========    ========   ========
</TABLE>

There  are  no  significant  concentrations  of  securities (greater than 10% of
shareholders'  equity) in any individual security issuer.  The maturity analysis
of  investment  securities  held to     maturity, including the weighted average
yield  for  each  category  as  of  December  31,  2001,  is  as  follows:

<TABLE>
<CAPTION>
                                     Under     1 - 5      5 - 10      Over
                                    1 year     Years      Years     10 years    Total
----------------------------  --------------  --------  ----------  -------   -------
<S>                                 <C>       <C>       <C>         <C>         <C>
(Dollars in thousands)
Obligations of states and
  political subdivisions:
  Carrying value . . . . . .  $     2,351     $10,205   $   6,521   $3,920   $22,997
  Weighted average yield . .        9.19%      8.57%        8.74%    8.10%     8.60%
  Weighted average maturity.                                                 6 yrs 3 mos
Mortgage-backed securities:
  Carrying value . . . . . .           -        1,277          -     1,275     2,552
  Weighted average yield . .           - %      7.31%          -%    6.98%     7.14%
  Weighted average maturity.                                                 7 yrs 10 mos
Other securities:
  Carrying value . . . . . .           -         550           -       -         550
  Weighted average yield . .           -%      6.83%           - %    - %       6.83%
  Weighted average maturity.                                                 1 yr  9 mos
Total:
  Carrying value . . . . . .  $    2,351     $12,032    $   6,521   $5,195   $26,099
  Weighted average yield . .        9.19%      8.36%        8.74%    7.82%     8.42%
  Weighted average maturity.                                                 6 yrs 3mos
</TABLE>

PAGE 9

    The  maturity  analysis  of  securities  available  for  sale, including the
weighted  average  yield for  each  category,  as  of  December  31,  2001  is
follows:

<TABLE>
<CAPTION>

Under                                         1 - 5     5 - 10      Over
(Dollars in thousands)             1 year     Years     years     10 years    Total
                                  --------    -----     -----     --------  --------
<S>                                <C>       <C>       <C>       <C>         <C>
U.S. Treasury notes:
  Amortized cost                   $11,938   $ 17,894   $  -     $    -      $ 29,832
  Weighted average yield             6.68%      6.11%      - %        - %      6.34%
  Weighted average maturity.                                                   1 yr 2 mos
Obligations of other U.S.
  Government agencies and
  corporations:
  Amortized cost                    18,158      8,290       -         -        26,448
  Weighted average yield             5.11%      7.63%       -%        -%        5.90%
  Weighted average maturity.                                                     0 yrs 7 mos
Obligations of states and
  political subdivisions:
  Amortized cost                     4,293     31,395    39,527    106,228    181,443
  Weighted average yield             8.33%      8.26%     7.74%      7.71%      7.81%
  Weighted average maturity.                                                     12 yrs 9 mos
Mortgage-backed securities:
  Amortized cost                    37,923    253,980    35,082     74,778    401,763
  Weighted average yield             5.31%      5.97%     6.42%      6.25%      5.99%
  Weighted average maturity.                                                     5 yrs 4 mos
Other securities:
  Amortized cost                        -     22,772     8,072     29,066     59,910
  Weighted average yield                -%     6.32%     6.51%      6.82%      6.62%
  Weighted average maturity.                                                     9 yrs 6 mos
Total:
  Amortized Cost                   $72,312   $334,331   $82,681   $210,072   $699,396
  Weighted average yield             5.65%      6.26%     7.06%      7.07%      6.52%
  Weighted average maturity.                                                     7 yrs 4 mos
</TABLE>

LOANS
The  following  table  shows  the  composition  of  the  Banks'  Loans:
<TABLE>
<CAPTION>
 (Dollars  in  thousands)                      December  31,
                                              -------------
                              2001        2000        1999       1998      1997
                           ----------  ----------  ----------  --------  --------
<S>                        <C>         <C>         <C>         <C>       <C>
Real estate . . . . . . .  $  417,891  $  369,831  $  368,177  $338,332  $276,683
Commercial and industrial     349,138     296,168     282,799   259,161   247,811
Consumer loans. . . . . .     439,288     427,518     372,359   294,001   277,731
Lease financing . . . . .     107,617     116,088      94,909    68,753    55,413
                           ----------  ----------  ----------  --------  --------
     Total loans. . . . .  $1,313,934  $1,209,605  $1,118,244  $960,247  $857,638
                           ==========  ==========  ==========  ========  ========
</TABLE>

  The  following  table  details  maturities  and  interest  sensitivity of real
estate,  commercial  and  industrial, consumer  loans  and  lease  financing  at
December  31,  2001:

PAGE 10
<TABLE>
<CAPTION>
                                   Within     1 -  5     Over
(Dollars in thousands)             1 year     Years    5 years    Total
                                   ------    -----    -------   --------
<S>                                <C>       <C>       <C>      <C>
Real estate                        $158,695  $200,817  $58,379  $  417,891
Commercial and industrial           286,831    62,307        -     349,138
Consumer                            245,297   193,991        -     439,288
Lease financing                      75,452    32,165        -     107,617
                                   --------  --------  -------  ----------
     Total                         $766,275  $489,280  $58,379  $1,313,934
                                   --------  --------  -------  ----------

Loans with variable or
    Floating interest rates        $335,983  $ 44,088  $     -  $  380,071
Loans with fixed predetermined
    interest rates                  430,292   445,192   58,379     933,863
                                   --------  --------  -------  ----------
     Total                         $766,275  $489,280  $58,379  $1,313,934
                                   ========  ========  =======  ==========
</TABLE>

The  following  table details those loans that were placed on nonaccrual status,
were  accounted for as troubled debt restructuring or were delinquent by 90 days
or  more  and  still  accruing  interest:

<TABLE>
<CAPTION>
(Dollars in thousands)             December 31,
                                  ------------

                      2001    2000    1999    1998    1997
                     ======  ======  ======  ======  ======
<S>                  <C>     <C>     <C>     <C>     <C>
Nonaccrual loans     $6,354  $5,370  $3,690  $3,741  $3,749
Delinquent loans      1,926     514     565   1,643   2,678
                     ------  ------  ------  ------  ------
       Total . .     $8,280  $5,884  $4,255  $5,384  $6,427
                     ======  ======  ======  ======  ======
</TABLE>

ALLOWANCE  FOR  LOAN  LOSSES

A  summary  of  the  allowance  for  loan  losses  is  as  follows:
<TABLE>
<CAPTION>

(Dollars  in  thousands)                                 December  31,

                                   2001         2000         1999        1998       1997
                                -----------  -----------  -----------  ---------  ---------
<S>                             <C>          <C>          <C>          <C>        <C>
Average loans. . . . . . . . .  $1,264,750   $1,166,684   $1,031,055   $894,758   $815,891
                                ===========  ===========  ===========  =========  =========

Allowance, beginning of period  $   15,210   $   14,887   $   14,245   $ 13,107   $ 11,684
                                -----------  -----------  -----------  ---------  ---------
Loans charged off:
  Commercial and industrial. .         494          123          108        217         66
  Consumer . . . . . . . . . .       2,594        1,470          632        647      1,064
  Real estate. . . . . . . . .         498          610          833        442        544
  Lease financing. . . . . . .       1,075          450          226        145         78
                                -----------  -----------  -----------  ---------  ---------
  Total loans charged off. . .       4,661        2,653        1,799      1,451      1,752
                                -----------  -----------  -----------  ---------  ---------
Recoveries:
  Commercial and industrial. .          38           60           28         94        113
  Consumer . . . . . . . . . .         607          289          112        100        128
  Real estate. . . . . . . . .         328          274           96         89        264
  Lease financing. . . . . . .         106           41           52         18         18
                                -----------  -----------  -----------  ---------  ---------
  Total recoveries . . . . . .       1,079          664          288        301        523
                                -----------  -----------  -----------  ---------  ---------
Net loans charged off. . . . .       3,582        1,989        1,511      1,150      1,229
                                -----------  -----------  -----------  ---------  --------
Provision for loan losses. . .       3,930        2,312        2,153      2,288      2,652
                                -----------  -----------  -----------  ---------  ---------
Allowance, end of period . . .  $   15,558   $   15,210   $   14,887   $ 14,245   $ 13,107
                                ===========  ===========  ===========  =========  =========
Ratio of net charge offs to
  Average loans outstanding. .       0.28%        0.17%        0.15%      0.13%      0.15%
                                ===========  ===========  ===========  =========  =========
</TABLE>

The following table sets forth an allocation of the allowance for loan losses by
category.  The  specific  allocations  in  any  particular  category  may  be
reallocated  in  the  future  to  reflect then current conditions.  Accordingly,
management  considers  the  entire allowance to be available to absorb losses in
any  category.

PAGE 11
<TABLE>
<CAPTION>

 (Dollars  in  thousands)                              December  31,
                                                      -------------
                              2001              2000                1999                1998                1997
                              ----              ----                ----                ----                ----
                            Percent            Percent             Percent             Percent             Percent
                  Amount   of Loans   Amount   of Loans   Amount   of Loans   Amount   of Loans   Amount   of Loans
                  -------  ---------  -------  ---------  -------  ---------  -------  ---------  -------  ---------
<S>               <C>      <C>        <C>      <C>        <C>      <C>        <C>      <C>        <C>      <C>
Real estate. . .  $ 2,874        32%  $ 3,116        31%  $ 2,661        33%  $ 3,059        35%  $ 3,246        32%
Commercial
  and industrial    5,482        26%    7,021        24%    6,775        25%    5,999        27%    6,029        29%
Consumer . . . .    5,432        34%    4,450        35%    4,634        33%    4,635        31%    3,461        32%
Lease financing.    1,770         8%      623        10%      817         9%      552         7%      371         7%
                  -------   -------  --------  --------  --------  --------  --------  ---------  -------  ---------
       Total . .  $15,558       100%  $15,210       100%  $14,887       100%  $14,245       100%  $13,107       100%
                  =======  =========  =======  =========  =======  =========  =======  =========  =======  =========
</TABLE>

Allowance  for  Credit  Losses:

The Bank uses the reserve method of accounting for credit losses. The balance in
the  allowance  for  loan  and  lease losses is determined based on management's
review and evaluation of the loan portfolio in relation to past loss experience,
the  size  and  composition  of  the  portfolio,  current  economic  events  and
conditions,  and  other pertinent factors, including management's assumptions as
to  future  delinquencies, recoveries and losses. Increases to the allowance for
loan  and  lease  losses are made by charges to the provision for credit losses.
Credit  exposures  deemed  to be uncollectible are charged against the allowance
for  credit losses. Recoveries of previously charged-off amounts are credited to
the  allowance  for  credit  losses.

While  management  considers  the  allowance  for  loan  and  lease losses to be
adequate  based  on  information  currently  available,  future additions to the
allowance may be necessary due to changes in economic conditions or management's
assumptions  as  to future delinquencies, recoveries and losses and management's
intent with regard to the  disposition of loans and leases. In addition, the OCC
as an integral part of their examination process, periodically review the Bank's
allowance  for  loan losses. The OCC may require the Bank to recognize additions
to  the  allowance for credit losses based on their judgements about information
available  to  them  at  the  time  of  their  examination.

The  Bank's  allowance  for loan and lease losses is the accumulation of various
components  that  are calculated based on various independent methodologies. All
components  of  the  allowance  for  credit losses are an estimation. Management
bases  its  recognition  and  estimation  of each allowance component on certain
observable data that it believes is the most reflective of the underlying credit
losses  being  estimated.  The  observable  data  and  accompanying  analysis is
directionally consistent, based upon trends, with the resulting component amount
for  the  allowance for loan and lease losses. The Bank's allowance for loan and
lease  losses  components  include  the following: historical loss estimation by
loan  product  type  and  by risk rating within each product type, payment (past
due)  status,  industry  concentrations, internal and external variables such as
economic  conditions,  credit policy and underwriting changes, competence of the
loan  review  process  and  other  historical loss model imprecision. The Bank's
historical loss component is the most significant component of the allowance for
loan  and  lease  losses,  and  all  other allowance components are based on the
inherent  loss  attributes  that  management  believes  exist  within  the total
portfolio  that  are  not  captured  in  the  historical  loss  component.

The  historical  loss  components  of  the  allowance  represents the results of
analyses  of  historical  charge-offs and recoveries within pools of homogeneous
loans,  within  each  risk rating and broken down further by segment, within the
portfolio.

The  historical  loss  components of the allowance for commercial loans is based
principally  on  current  risk  ratings,  historical  loss  rates  adjusted,  by
adjusting  the risk window, to reflect current events and conditions, as well as
analyses  of other factors that may have affected the collectibility of loans in
the  commercial portfolio. The Bank analyzes all commercial loans that are being
monitored  as  potential credit problems, via Watchlist Memorandum, to determine
whether  such  loans  are  individually  impaired,  with  impairment measured by
reference  to  the  collateral  coverage  and  /  or  debt service coverage. The
historical  loss  component  of  the  allowance  for  consumer  loans  is  based
principally  on  loan  payment status, retail classification and historical loss
rates  adjusted,  by  adjusting  the  risk window, to reflect current events and
conditions.

PAGE 12

The  industry  concentration component is recognized as a possible factor in the
estimation  of  credit losses. Two industries represent possible concentrations:
commercial  real  estate  and  automobile  dealers.  No  specific  loss-related
observable  data  is  recognized  by management currently, therefore no specific
factor  is  calculated  in  the  reserve  solely  for  the  impact  of  these
concentrations,  although  management  continues  to carefully consider relevant
data  for  possible  future  sources  of  observable  data.

The  historic  loss  model  imprecision  component (soft factors and unallocated
portion)  reflects management's belief that there are additional inherent credit
losses  based  on  loss  attributes not adequately captured in the statistical /
historical  loss  component  and  is  an assessment of information delay and its
impact  on  the  timeliness of the risk rating process and loss recognition. The
principal  observable  data  utilized  by  management  as the driver of the loss
recognition  and measurement of this component is an internal management measure
of  the age of financial information used in the borrower debt service analysis.
This  is  also  a  key  judgmental component, as experiential data confirms that
measurable  losses  lag  the  empirical model as a downward credit cycle begins.

DEPOSIT  STRUCTURE

The following table is a distribution of average balances and average rates paid
on  the  deposit  categories  for  the  last  three  years:

<TABLE>
<CAPTION>
                                                       December 31,
                                                      ------------
  (Dollars in thousands)             2001                   2000               1999
                                     ----                   ----               ----

<S>                           <C>         <C>          <C>         <C>    <C>       <C>
                              Amount      Rate         Amount      Rate   Amount    Rate
                              ----------  -----------  ----------  -----  --------  -----
Demand - noninterest-bearing  $  219,368       --%     $  204,778    --%  $192,659    --%
Demand - interest-bearing. .     158,666     1.03%        155,925  1.30%   152,298  1.34%
Money market and savings . .     543,153     2.88%        470,003  3.47%   415,018  2.95%
Time -- under $100,000 . . .     463,455     5.63%        421,692  5.56%   390,340  5.30%
Time -- $100,000 or greater.     214,873     5.17%        184,383  6.12%   117,621  5.12%
                              ----------               ----------         --------
         Total . . . . . . .  $1,599,515               $1,436,781        $1,267,936
                              ==========              ===========        ==========
</TABLE>

     The  maturity  distribution of certificates of deposit of $100,000 and over
as  of  December  31,  2001,  2000  and  1999,  is  as  follows:

<TABLE>
<CAPTION>
(Dollars  in  thousands)                  December  31,
                                          -------------

                                    2001      2000      1999
                                  --------  --------  --------
<S>                               <C>       <C>       <C>
Three months or less . . . . . .  $111,896  $ 80,221  $ 73,530
Over three months to six months.    76,491    45,877    31,432
Over six months to twelve months    21,369    21,626    20,055
Over twelve months . . . . . . .    24,793    25,144     9,962
                                  --------  --------  --------
       Total . . . . . . . . . .  $234,549  $172,868  $134,979
                                  ========  ========  ========
</TABLE>

NET  INTEREST  INCOME

       For  analytical purposes, the following table reflects tax-equivalent net
interest  income  in  recognition  of the income tax savings on tax-exempt items
such  as interest on municipal securities and tax-exempt loans.  Adjustments are
made  using  a  statutory  federal  tax  rate  of  35%.

PAGE 13

<TABLE>
<CAPTION>
 (Dollars  in  thousands)          Year  ended  December  31,

                                   2001      2000      1999
                                 --------  --------  --------
<S>                              <C>       <C>       <C>
Interest income . . . .       .  $138,679  $131,811  $114,167
Interest expense. . . . .          64,937    65,774    50,649
                                 --------  --------  --------
Net interest income . . .          73,742    66,037    63,518
Tax equivalent adjustment           5,792     5,844     5,671
                                 --------  --------  --------
Net interest income . . .        $ 79,534  $ 71,881  $ 69,189
                                 ========  ========  ========
</TABLE>

       The  rate  volume  analysis  set  forth  in the following table, which is
computed  on  a  tax-equivalent basis (tax rate of 35%), analyzes changes in net
interest  income  for  the last three years by their rate and volume components.
<TABLE>
<CAPTION>

                                     2001 over (under) 2000       2000 over (under) 1999
                                      due  to  changes  in         due  to  changes  in
                                      ---------------------        ---------------------
   (Dollars in thousands)             Net                         Net
<S>                                 <C>       <C>       <C>      <C>       <C>       <C>
                                    Change    Rate      Volume   Change    Rate      Volume
                                    --------  --------  -------  --------  --------  --------
INTEREST INCOME:
   Investment securities (1) . . .  $ 2,621   $(3,754)  $ 6,375  $ 5,069   $ 1,677   $ 3,392
   Loans (1) . . . . . . . . . . .    3,973    (3,848)    7,821   12,958     1,694    11,264
   Other rate-sensitive assets . .      222      (174)      396     (210)      405      (615)
                                    --------  --------  -------  --------  --------  --------
       Total . . . . . . . . . . .    6,816    (7,776)   14,592   17,817     3,776    14,041
                                    --------  --------  -------  --------  --------  --------

INTEREST EXPENSE:
   Savings deposits. . . . . . . .   (1,079)   (2,945)    1,866    4,065     2,348     1,717
   Time deposits . . . . . . . . .    2,469    (1,495)    3,964    8,035     2,410     5,625
   Borrowings and other interest-
     bearing liabilities . . . . .   (2,227)   (2,571)      344    3,025     1,638     1,387
                                    --------  --------  -------  --------  --------  --------
       Total . . . . . . . . . . .     (837)   (7,011)    6,174   15,125     6,396     8,729
                                    --------  --------  -------  --------  --------  --------
Changes in net interest income . .  $ 7,653   $  (765)  $ 8,418  $ 2,692   $(2,620)  $ 5,312
                                    ========  ========  =======  ========  ========  ========
</TABLE>

(1)  The  interest earned on nontaxable investment securities and loans is shown
on  a  tax  equivalent  basis.

       Tax-equivalent  net interest income was $79,534,000 for 2001, compared to
$71,881,000  for  2000,  an  increase of $7,653,000, or 10.6%.  This increase in
tax-equivalent  net  interest  income  was  primarily  due to the net $8,418,000
increase  related  to volume, partially offset by a decrease related to interest
rates  of  $765,000.  Total  interest income increased $6,816,000, the result of
higher  volumes in each earning asset category, partially offset by lower rates.
The  2001  average  investment  and  loan  volumes  increased  17.5%  and  8.4%
respectively.  The  growth in the loan portfolio was primarily in commercial and
real  estate  loans.  The  increase  in  investment securities was funded by the
strong  growth  in  deposits.

       Total  interest  expense decreased $837,000 during 2001 or 1.3%, compared
to  2000.  This decrease was the result of the Federal Reserve lowering interest
rates 475 basis points during 2001, partially offset by increased volumes in all
interest-bearing  liability categories. The average volumes of savings deposits,
time  deposits and borrowings and other interest-bearing liabilities grew 12.1%,
11.9% and 3.4%, respectively.  Borrowings and other interest-bearing liabilities
include  federal  funds  purchased,  FHLB  borrowings,  securities  sold  under
agreements  to  repurchase  and  U.S.  Treasury  notes.

       The 2000 tax-equivalent net interest income was $71,881,000, a $2,692,000
increase  compared to $69,189,000 for 1999.  This increase in tax-equivalent net
interest income was primarily due to the $5,312,000 increase related to volumes,
partially  offset  by  the $2,620,000 decrease in net interest income related to
rates.  The  growth  in  earning  asset  volumes  was  in  loans  and investment
securities.  The interest-bearing liabilities volume growth was due to increases
in  all  categories.

PAGE 14

Item  2.  Properties.
--------------------

       The principal executive offices of the Corporation and of HNB are located
in Harleysville, Pennsylvania in a two-story office building owned by HNB, built
in  1929.  HNB  also  owns  the  buildings  in  which twelve of its branches are
located  and  leases space for the other eleven branches from unaffiliated third
parties  under  leases  expiring  at  various times through 2036.  The principal
executive  offices  of  CNB are located in Lansford, Pennsylvania in a two-story
office  building  owned  by  CNB.  Citizens owns nine of the buildings where its
branches  are  located and leases two branches.  The principal executive offices
of SNB are located in Pottstown, Pennsylvania, in a building leased by SNB.  SNB
leases  four  branches,  and  owns its Pottstown Center branch.   HNC Investment
Company  leases  an  office  in  Wilmington,  Delaware.  HNC Reinsurance Company
leases  an  office  in  Phoenix,  Arizona.


<TABLE>
<CAPTION>



OFFICE                 OFFICE LOCATION                                   OWNED/LEASED
<S>                    <C>                                               <C>
Harleysville. . . . .  483 Main Street, Harleysville, PA                 Owned

Skippack. . . . . . .  Route 73, Skippack, PA                            Owned

Limerick. . . . . . .  Ridge Pike, Limerick, PA                          Owned

North Penn. . . . . .  Welsh & North Wales Rd., North Wales, PA          Owned

Gilbertsville . . . .  Gilbertsville Shopping Center, Gilbertsville, PA  Leased

Hatfield. . . . . . .  Snyder Square, Hatfield, PA                       Leased

North Broad . . . . .  North Broad Street, Lansdale, PA                  Owned

Marketplace . . . . .  Marketplace Shopping Center, Lansdale, PA         Leased

Normandy Farms. . . .  Morris Road, Blue Bell, PA                        Leased

Horsham . . . . . . .  Babylon Business Center, Horsham, PA              Leased

Meadowood . . . . . .  Route 73, Worcester, PA                           Leased

Collegeville. . . . .  364 Main Street, Collegeville, PA                 Owned

Sellersville. . . . .  209 North Main Street, Sellersville, PA           Owned

Trainers Corner . . .  Trainers Corner Center, Quakertown, PA            Leased

Quakertown Main . . .  224 West Broad Street, Quakertown, PA             Owned

Spring House. . . . .  1017-1031 N. Bethlehem Pike, Spring House, PA     Owned

Red Hill. . . . . . .  400 Main Street, Red Hill, PA                     Owned

Doylestown. . . . . .  500 East State Road, Doylestown, PA               Leased

Audubon . . . . . . .  2624 Egypt Road, Audubon, PA                      Owned

PAGE 15

Chalfont. . . . . . .  251 West Butler Avenue, Chalfont, PA              Leased

Royersford. . . . . .  440 W. Linfield-Trappe Road, Royersford, PA       Owned

Souderton . . . . . .  702 Route 113, Souderton, PA                      Leased

Foulkeways. . . . . .  1120 Meetinghouse Road, Gwynedd, PA               Leased

Citizens. . . . . . .  13-15 West Ridge Street, Lansford, PA             Owned

Summit Hill . . . . .  2 East Ludlow Street, Summit Hill, PA             Owned

Lehighton . . . . . .  904 Blakeslee Blvd, Lehighton, PA                 Owned

Farmers & Merchants .  1001 Main Street, Honesdale, PA                   Owned

McAdoo. . . . . . . .  25 North Kennedy Drive, McAdoo, PA                Owned

Slatington. . . . . .  502 Main Street, Slatington, PA                   Owned

Slatington Handi-Bank  705 Main Street, Slatington, PA                   Owned

Lehigh Township . . .  4421 Lehigh Drive, Walnutport, PA                 Owned

Palmerton . . . . . .  372 Delaware Avenue, Palmerton, PA                Owned

Kresgeville . . . . .  Route 209, Kresgeville, PA                        Leased

Allentown . . . . . .  1602-1604 Allen Street, Allenton, PA              Leased

Pottstown . . . . . .  One Security Plaza, Pottstown, PA                 Leased

Pottstown . . . . . .  1450 East High Street, Pottstown, PA              Leased

Pottstown . . . . . .  930 North Charlotte Street, Pottstown, PA         Leased

Pottstown . . . . . .  Rt. 100 and Shoemaker Road, Pottstown, PA         Owned

Boyertown . . . . . .  Rt. 100 and Baus Road, Boyertown, PA              Leased
</TABLE>


       In  management's  opinion,  all  of  the  above  properties  are  in good
condition  and  are  adequate  for  the  Registrant's  and  the Banks' purposes.

Item  3.  Legal  Proceedings.
-----------------------------

       Management,  based  on consultation with the Corporation's legal counsel,
is  not aware of any litigation that would have a material adverse effect on the
consolidated  financial  position  of the Corporation.  There are no proceedings
pending  other  than the ordinary routine litigation incident to the business of
the  Corporation  and  its  subsidiaries  - Harleysville National Bank and Trust
Company,  The  Citizens  National  Bank of Lansford, Security National Bank, HNC
Financial  Company  and  HNC  Reinsurance  Company.  In  addition,  no  material
proceedings  are  pending  or are known to be threatened or contemplated against
the  Corporation  and  the  Banks  by  government  authorities.

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

       No  matter  was  submitted during the fourth quarter of 2001 to a vote of
holders  of  the  Corporation's  Common  Stock.

PAGE 16
                                     PART II

Item  5.  Market  for  the  Registrant's  Common  Stock  and Related Shareholder
--------------------------------------------------------------------------------
Matters.
--------

       The  information  required  by  this Item is incorporated by reference to
pages  17 and 31 of the Corporation's Annual Report to Shareholders for the year
ended December 31, 2001, which pages are included at Exhibit (13) to this Annual
Report  on  Form  10-K.


Item  6.  Selected  Financial  Data.
------------------------------------

       The  information  required  by  this Item is incorporated by reference to
page  22  of  the Corporation's Annual Report to Shareholders for the year ended
December  31,  2001,  which  pages  are  included at Exhibit (13) to this Annual
Report  on  Form  10-K.


Item 7.  Management's Discussion and Analysis of Financial Condition and Results
--------------------------------------------------------------------------------
of  Operations.
--------------

       The  information  required  by  this Item is incorporated by reference to
pages  22  through 30 of the Corporation's Annual Report to Shareholders for the
year  ended  December 31, 2001, which pages are included at Exhibit (13) to this
Annual  Report  on  Form  10-K.

Item  7.A.  Quantitative  and  Qualitative  Disclosure  about  Market  Risk.
----------------------------------------------------------------------------

       The  information  required  by  this Item is incorporated by reference to
pages  26,  27 and 28 of the Corporation's Annual Report to Shareholders for the
year  ended  December 31, 2001, which pages are included at Exhibit (13) to this
Annual  Report  on  Form  10-K.


Item  8.  Financial  Statements  and  Supplementary  Data.
---------------------------------------------------------

       The  information  required  by  this Item is incorporated by reference to
pages  6  through  21 of the Corporation's Annual Report to Shareholders for the
year  ended  December 31, 2001, which pages are included at Exhibit (13) to this
Annual  Report  on  Form  10-K.


Item  9.  Changes  in  and  Disagreements  with  Accountants  on  Accounting and
--------------------------------------------------------------------------------
Financial  Disclosure.
---------------------

       None.

PAGE 17

PART  III

Item  10.  Directors  and  Executive  Officers  of  the  Registrant.
-------------------------------------------------------------------

       The  information  required by this Item with respect to the Corporation's
directors  is  incorporated  by  reference  to  pages  8  through  11  of  the
Corporation's  Proxy Statement relating to the Annual Meeting of Shareholders to
be  held  April  9,  2002.

<TABLE>
<CAPTION>

Executive  Officers  of  Registrant
-----------------------------------
Name                             Age   Position
-------------------------------  ---   ----------------------------------------------------------
<S>                              <C>   <C>
Walter E. Daller, Jr.. . . . .   62    Chairman of the Board, President and Chief Executive
                                       Officer of the Corporation.

Demetra M. Takes . . . . . . .   51    President and Chief Operating Officer of Harleysville
                                       since 1998, prior position was Executive Vice
                                       President and Chief Operating Officer of Harleysville.

Thomas D. Oleksa . . . . . . .   48    President and Chief Executive Officer of Citizens.

Fred C. Reim, Jr.. . . . . . .   58    President and Chief Executive Officer of Security
                                       National Bank since 1998, prior position was Senior
                                       Vice President of Harleysville.

Gregg J. Wagner. . . . . . . .   41    Executive Vice President and Chief Financial Officer since
                                       2000, prior position was Senior Vice President of Finance.

Mikkalya B. Murray . . . . . .   46    Executive Vice President and Chief Credit Officer since.
                                       2000, prior position was Senior Vice President of Loan
                                       Administration
</TABLE>

      The  rules  of  the  Securities  and  Exchange Commission require that the
Corporation  disclose late filings of reports of stock ownership (and changes in
stock  ownership)  by  its directors and executive officers.  To the best of the
Corporation's  knowledge,  there  were  no  late  filings  during  2001.

Item  11.  Executive  Compensation.
----------------------------------

       The  information  required  by  this Item is incorporated by reference to
pages  12 through 20 of the Corporation's Proxy Statement relating to the Annual
Meeting  of  Shareholders  to  be  held  April  9,  2002.

Item  12.  Security  Ownership  of  Certain  Beneficial  Owners  and Management.
-------------------------------------------------------------------------------

       The  information  required  by  this Item is incorporated by reference to
pages  8  and  9  of  the  Corporation's  Proxy Statement relating to the Annual
Meeting  of  Shareholders  to  be  held  April  9,  2002.

Item  13.  Certain  Relationships  and  Related  Transactions.
-------------------------------------------------------------

       The  information  required  by  this Item is incorporated by reference to
page  23  of the Corporation's Proxy Statement relating to the Annual Meeting of
Shareholders  to  be  held  April  9,  2002, and to page 14 of the Corporation's
Annual  Report  to Shareholders for the year ended December 31, 2001, which page
is  included  at  Exhibit  (13)  to  this  Annual  Report  on  Form  10-K.

PAGE 18
PART  IV
--------

<TABLE>
<CAPTION>
<S>                                                                                             <C>
Item 14.  Exhibits, Financial Statement Schedules and Reports on Form 8-K.
--------------------------------------------------------------------------

(a)  Financial Statements, Financial Statement Schedules and Exhibits Filed:

   (1)  Consolidated Financial Statements
                                                                                                  Page
   Harleysville National Corporation and Subsidiary:
   Consolidated Balance Sheets as of  December 31, 2001 and 2000 . . . . . . . . . . . . . . .      6*

   Consolidated Statements of Income for the Years Ended December 31, 2001, 2000 and 1999. . .      7*

   Consolidated Statements of Shareholders' Equity for the Years Ended December 31, 2001, 2000      8*
      and 1999

   Consolidated Statements of Cash Flows for the Years Ended December 31, 2001, 2000 and 1999.      9*

   Notes to Consolidated Financial Statements. . . . . . . . . . . . . . . . . . . . . . . . .  10-21*

   Independent Auditors' Report. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .     21*

   (2)  Financial Statement Schedules
</TABLE>

       Financial  Statements  Schedules  are  omitted  because  the  required
information  is  either  not  applicable,  not  required,  or the information is
included  in  the  consolidated  financial  statements  or  notes  thereto.

--------------------------------------------------------------------------------
       *Refers to the respective page of the Annual Report to Shareholders.  The
Consolidated Financial Statements and Notes to Consolidated Financial Statements
and  Auditor's  Report  thereon  on  pages  6  to  21  of  the  Annual Report to
Shareholders, are incorporated herein by reference and attached at Exhibit 13 to
this  Annual  Report  on  Form 10-K.  With the exception of the portions of such
Annual  Report  specifically incorporated by reference in this Item and in Items
1,  5,  6, 7 and 8, such Annual Report shall not be deemed filed as part of this
Annual Report on Form 10-K or otherwise subject to the liabilities of Section 18
of  the  Securities  Exchange  Act  of  1934.

PAGE 19

<TABLE>
<CAPTION>

(3)  Exhibits
Exhibit  No.     Description  of  Exhibits
-----------      -------------------------
<C>        <S>

    (3.1)    Harleysville National Corporation Articles of Incorporation, as amended. (Incorporated by reference
           to Exhibit 3(a) to the Corporation's Registration Statement No. 33-65021 on Form S-4, as filed on
           December 14, 1995.)

    (3.2)    Harleysville National Corporation By-laws. (Incorporated by reference to Exhibit 3(b) to the
           Corporation's Registration Statement No. 33-65021 on Form S-4, as filed on December 14, 1995.)

   (10.1)    Harleysville National Corporation 1993 Stock Incentive Plan. (Incorporated by Reference to Exhibit
           4.3 of Registrant's Registration Statement No. 33-57790 on Form S-8, filed with the Commission on
           October 1, 1993.)

   (10.2)    Harleysville National Corporation Stock Bonus Plan.  (Incorporated by Reference to Exhibit 99A of
           Registrant's Registration Statement No. 33-17813 on Form S-8, filed with the Commission on
           December 13, 1996.)

   (10.3)    Supplemental Executive Retirement Plan.  (Incorporated by Reference to Exhibit 10.3 of
           Registrant's Annual Report in Form 10-K for the year ended December 31, 1997, filed with the
           Commission on March 27, 1998.)

   (10.4)    Walter E. Daller, Jr., Chairman, President and Chief Executive Officer's employment agreement.
           (Incorporated by Reference to Registrant's Registration Statement on Form 8-K, filed with the
           Commission on March 25, 1999.)

   (10.5)    Demetra M. Takes, President and Chief Operating Officer of Harleysville employment agreement.
           (Incorporated by Reference to Registrant's Registration Statement on Form 8-K, filed with the
           Commission on March 25, 1999.)

   (10.6)    Vernon L. Hunsberger, Senior Vice President/CFO and Cashier's employment agreement.
           (Incorporated by Reference to Registrant's Registration Statement on Form 8-K, filed with the
           Commission on March 25, 1999.)

   (10.7)    Harleysville National Corporation 1998 Stock Incentive Plan. (Incorporated by Reference to
           Registrant's Registration Statement No. 333-79971 on Form S-8 filed with the Commission on June
           4, 1999.)

   (10.8)    Harleysville National Corporation 1998 Independent Directors Stock Option Plan.  (Incorporated by
           Reference to Registrant's Registration Statement No. 333-79973 on Form S-8 filed with the
           Commission on June 4, 1999.)

     (11)    Computation of Earnings per Common Share.   The information for this Exhibit is incorporated by
           reference to page 12 of the Corporation's Annual Report to Shareholders for the year ended.
           December 31, 2001, which is included as Exhibit (13) to this Form 10-K Report

     (12)    Statements Re: Computation of  Ratios.  The information for this exhibit is incorporated by
           reference to page 1 of the Corporation's Annual Report to Shareholders for the year ended
           December 31, 2001, which is included as Exhibit (13) to this Form 10-K Report.

     (13)    Excerpts from the Corporation's 2001 Annual Report to Shareholders. (This excerpt includes
           only page 1 and pages 6 through 31 which are incorporated in this Report by reference.)

PAGE 20

     (21)    Subsidiaries of Registrant.

     (23)    Consent of Grant Thornton LLP, Independent Certified Public Accountants.

                (b)
           During the quarter ended December 31, 2001, the Registrant filed a Form 8-K containing the third
           quarter of 2001 earnings press release.
</TABLE>

PAGE 21
                                   SIGNATURES
                                   ----------

       Pursuant  to  the  requirements of Section 13 or 15 (d) 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.

                        HARLEYSVILLE NATIONAL CORPORATION
<TABLE>
<CAPTION>
<S>                        <C>  <C>

Date:  March 8, 2002. . .  By:  /s/ Walter E. Daller, Jr.
                                -------------------------
                                    Walter E. Daller, Jr.
                                    President
</TABLE>


       Pursuant to the requirements of the Securities Exchange Act of 1934, this
report  has  been  signed  below  by  the  following  persons  on  behalf of the
Registrant  and  in  the  capacities  and  on  the  dates  indicated.
<TABLE>
<CAPTION>
Signature                                       Title                     Date
--------------------------------  ---------------------------------  --------------
<S>                               <C>                                <C>

/s/ LeeAnn Bergey . . . . . . . . Director                           March 14, 2002
--------------------------------
LeeAnn Bergey

/s/ Walter E. Daller, Jr.. . . .  Chairman of the Board, President    March 8, 2002
--------------------------------
Walter E. Daller, Jr.. . . . . .  and Chief Executive Officer and
                                  Director (Principal Executive
                                  Officer)

/s/ Harold A. Herr . . . . . . .  Director                           March 14, 2002
--------------------------------
Harold A. Herr


/s/ Vernon L. Hunsberger . . . .  Treasurer (Principal Financial     March 14, 2002
--------------------------------
Vernon L. Hunsberger . . . . . .  and Accounting Officer)


/s/ Thomas S. McCready . . . . .  Director                           March 14, 2002
--------------------------------
Thomas S. McCready


/s/ Henry M. Pollak. . . . . . .  Director                           March 14, 2002
--------------------------------
Henry M. Pollak


/s/ Palmer E. Retzlaff . . . . .  Director                           March 14, 2002
--------------------------------
Palmer E. Retzlaff


/s/ James A. Wimmer. . . . . . .  Director                           March 14, 2002
--------------------------------
James A. Wimmer


/s/ William M. Yocum . . . . . .  Director                           March 14, 2002
--------------------------------
William M. Yocum
</TABLE>

PAGE 22

<TABLE>
<CAPTION>
<S>             <C>
EXHIBIT INDEX
--------------
                Exhibit
               ----------------------------------------------------------------------------------
(13) . . . . .  Excerpts from the Corporation's 2001 Annual Report to Shareholders
                (This excerpt includes only page 1 and pages 6 through 31, which are incorporated
                in this Report by reference.)

(21) . . . . .  Subsidiaries of Registrant

(23) . . . . .  Consent of Grant Thornton LLP, Independent Certified Public Accountants.

(99) . . . . .  Additional Exhibits.
                None.
</TABLE>
PAGE 23